MBAs: Public Enemy No. 1?

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For business schools, the question of complicity in the crisis is a tricky one. Those who maintain that business schools are to blame are admitting a serious error in pedagogical judgment. Those who say the poor judgment of executives with MBAs who were implicated in the current crisis was entirely of their own making—the product of innate values and decades of on-the-job training—run an even bigger risk. "MBAs created a dominant view of business and its language and tools," says Angel Cabrera, president of Thunderbird School of Global Management (Thunderbird Full-Time MBA Profile). "To say we have no responsibility is to say the MBA is irrelevant."

Complicating matters is the fact that the business leaders with MBAs who were at the heart of the crisis all received their degrees 30 years ago—long before the schools' current curriculums were developed, long before the current faculty arrived on the scene, and long before the rankings. Those men and women are products of an educational system that no longer exists. If business schools are to blame, then reform—in whatever form it takes—may be 30 years too late.

For many in the business school community, the very notion of culpability is ludicrous.

At a panel discussion in Orlando last month, Richard Cosier, dean of Purdue University's Krannert School of Management (Krannert Full-Time MBA Profile), said all AACSB-accredited schools teach ethics, integrity, and social responsibility—and therefore are not to blame for the crisis. "It is my opinion that business schools will continue to produce students who will be part of the solution rather than the problem," he added. Sydney Finkelstein, professor of leadership and strategy at Dartmouth's Tuck School of Business (Tuck Full-Time MBA Profile) agrees. "We don't create CEOs, and we don't destroy companies in business school," Finkelstein says. The best MBA programs, he says, remain valuable. "We live in a world of organizations," he says. "The single best place to go to understand how organizations function and can be improved is in the business school environment."

Ethical Conundrums

Warren Bennis, distinguished professor of business administration at the USC Marshall School of Business (Marshall Full-Time MBA Profile), agrees that you can not lay the blame for the crisis on business schools. But he also says that business schools have to do a better job of teaching transparency and what it means to be an honest business leader. "We have not provided enough information on the practical world of business or the ease with which you can slip into greed and hubris," he says. "We need to better prepare [students]."

For many business school critics, the problem with how MBA programs approach the sorts of ethical conundrums that can result in global economic catastrophes is that in many cases they're treated as an afterthought. By creating ethics electives, programs have made it possible to spend two years in business school without pondering right and wrong in any systematic way—they've made integrity optional. Cabrera says ethics must be integrated into all MBA coursework, and include practical solutions to ethical problems students will face in their post-MBA careers.

Such an approach is consistent with an idea that has surfaced in recent years to professionalize the MBA degree. Advocates of this approach say the MBA should include many of the same elements that degrees in law and medicine incorporate—such as making the degree mandatory for certain positions, competency testing similar to the bar exam for lawyers, and most important a sense of responsibility to society. At Thunderbird, MBA students are required to sign an oath—and repeat it aloud, in unison, at graduation—in which they promise "to strive to act with honesty and integrity," among other things. Says Cabrera: "The MBA is the ultimate professional qualification for management just as the MD is the ultimate qualification for medicine."

Guided Self-Interest

Of course, a business school equivalent of the Hippocratic Oath doesn't guarantee that MBA graduates will do no harm. But it can't hurt, especially if the business school reforms that now seem inevitable go well beyond a simple oath. Khurana says the idea of self-interested leadership, as it's now advanced in the business school world and practiced in the world of business, must give way to something new: servant leadership with a focus not on self-aggrandizement, but "guided self-interest."

John Fernandes, the president and CEO of AACSB, says business schools are not to blame for the crisis, but he is certain that any reforms undertaken in the wake of the crisis will be a step in the right direction. "Business schools take this very seriously," he adds. "Whatever they can do to make better leaders, they will do. They're not teaching people to steal."

Di Meglio is a reporter for Businessweek.com in Fort Lee, N.J.