Should MBA Programs Include Business Ethics and Leadership in their Core Curriculum?

Try to get a lawyer to do something unethical and you are likely to hear, “I could get disbarred for that.” Doctors have the Hippocratic oath. Run afoul of it and your doctoring days may be over and your license revoked. Police officers are bound by the law enforcement code of ethics taught at police academies across the country. Ethics and leadership are core to the training and indoctrination of military service men and women.

How about project managers? If you want to keep your certification as a project management professional (PMP), well, you better abide by the PMI Code of Ethics and Professional Conduct, which calls upon PMPs to be responsible, respectful, fair, and honest. PMI backs up their commitment to leadership and ethics with questions on their certification exam.  You know the quote:

“You can’t improve what you don’t measure.” - Peter Drucker 

How about the mission of Beta Gamma Sigma (BGS), the International Business Honor Society? The organization has four parts to their mission statement. Examining two of the four, ethics is one and leadership is the other.

After a long lead in, here’s my question, “if lawyers, doctors, police officers, military service men and women, PMP’s, and BGS all embed leadership and ethics into their core values, training, and curriculum, why do so many MBA programs not?” Should MBA programs be responsible to educate and promote ethics and leadership as a part of pumping out our future business leaders?  

Let’s look at the data collected on the core curriculum of the top 150 MBA programs according to U.S. News, Figure 1.

Figure 1: Ethics and Leadership Core Curriculum Data

As Figure 1 shows, two-thirds of the top 150 MBA programs include business ethics as a core requirement. Less than half include leadership as a core requirement, and only a third have both.  A full one-quarter are what I call “neither” schools. 

Table 1 lists the top 20 MBAs by US News ranking that offer both leadership and business ethics courses as a part of their core curriculum --- good on them.

Table 1: Top 20 MBA Programs Offering Leadership and Ethics Training as Core Courses

During my MBA training at one of the best MBA programs in the country, I heard “maximize profit” a bazillion times. I honestly don’t recall a single reference to leadership or ethics as a part of the curriculum.  My MBA program was at a “neither” school. 

I would like to posit this hypothesis for consideration.

“MBA programs that don’t embrace leadership and ethics as essential to business administration, run the risk of influencing students to devalue their humanity when making business decisions. “

Take the example of the prisoner dilemma as applied to “global warming” during one of my MBA classes.  Let’s say two countries can either cut green-house admissions or not. The payout table looks like the one shown in Figure 2.

 Figure 2: Prisoner Dilemma for Greenhouse Gas Emissions

As taught in the MBA program, rational actors would choose column “6,6” and not cut green-house gas emissions.  The assumption is that each country is beholden to their self-interest which means neither can be trusted to cut gas emissions at the expense of cheaper energy; therefore, logic demands that rational actors not cut emissions for fear of becoming economically disadvantaged.  

How can it possibly be rational to engage in mutual self-destruction of the planet and all of humanity along with it?  Maybe that makes sense if greed is the basis of self-interest.  Otherwise, it is a bit nonsensical. Rationally, both countries should have the moral and ethical leadership to cut greenhouse gas emissions for the sake of us all.  Here is where leadership and ethics training add perspective to the “rational actor” equation, counter-balancing money-driven self-interest with moral leadership.  

I get that it’s math.  Nash equilibrium, blah blah blah.  I get that students should be able to parse theoretical implications into a framework for decision-making that balances morality and ethics.  Nevertheless, I wonder over time if the drum beat of profit maximization without the counter-balance of leadership and ethics, in some way, devalues and desensitizes impressionable young minds to what it ultimately means to be a conscientious business leader.   

Maybe you think me a crazy person. But, here is an anecdotal story for you. In 2010, I found myself in a fierce debate with a recent graduate of a world-class “neither” MBA program.  It was about whether firefighters should let a person’s house burn down if the homeowner was behind on paying his annual fee for fire services. You can find the story here:

https://www.youtube.com/watch?v=dJyjNiL4zZg

In the story, firefighters stood by and watched a family’s home burn to the ground, because the owner missed a payment. Even when the homeowner explained that it was an honest mistake and he would pay the fire services fee on the spot, if only they’d save his home, no aid was rendered.  In the mind of the MBA graduate, not only was it appropriate to let the house burn, but it was also necessary. Sound economic principles demanded it.  As he explained to me, had the firefighters relented and put the fire out, more residents would be likely to betray their commitment to pay the annual fee.  With an increased number of free-riders, the fire department would lose revenue and, therefore, be less equipped to service the residents of the community. I explained that Gene Cranick and his family lost all their possessions. They watched in horror as their three dogs and a cat burn to death. The MBA graduate was unmoved. My spirit sank as my inner voice wondered how this person had gotten so lost.  

During my negotiation course, one of my electives, a non-zero number of my classmates had no problem lying to win at the scenario-based negotiations during class. After witnessing this, my professor posed a poignant question, “if you are willing to lie to win a negotiation in class when nothing is at stake, would you be more or less willing to lie in the real world with $100 million on the line?” An MBA program should produce graduates for which that question need never be asked.

As much as I have enjoyed my MBA education, some programs don’t value leadership and ethics as core learning objectives.  My question to them would be what’s the goal --- to follow the mathematics principles and business strategies for maximizing profits, or to produce the best business leaders for the next generation? 

In my humble opinion, capitalism untethered from a moral and ethical basis is doomed.  We live in a time where income inequality is growing. More people have less and work more.  Life expectancy is falling.  The finite planet, Earth, is suffering.  If there is ever a time that we need more ethical and moral business leaders, it’s now.  MBA programs can do their part by weaving ethics and leadership into all their classes and including ethics and leadership in their core curriculum. 

The upside is, as shown in Figure 3, the data suggests teaching both is consistent with higher program rankings whereas teaching neither is consistent with lower ones. 

Figure 3: Ethics and Leadership vs. Average Program Ranking

For completeness, below is a list of the MBA programs that do not include leadership or business ethics in their core curriculum.

 Table 2: Top 20 MBA Programs NOT Offering Leadership or Ethics as Core Courses

Comments are welcome. Let me know if there is a need for a correction.