It might appear a benign transformation were it not for the specter of Enron, where MBAs Jeffrey Skilling (Harvard 1979) and Andrew Fastow (Northwestern 1987) apparently pursued such a strategy to the hilt, with disastrous results.
The Aspen Institute survey of 1,978 MBA students who graduated in 2001 from 13 leading B-schools -- including Carnegie Mellon, Columbia, the University of Pennsylvania, and Northwestern -- asked what a company's top priorities should be. Some 75% cited maximizing value for shareholders, 71% said satisfying customers, and 33% put a high priority on producing high-quality goods and services.
Only 5% thought the top goals should include improving the environment, and just 25% said creating value for their local communities. Two years earlier, when these students started B-school, 68% had opted for shareholder value, 75% cited customer satisfaction, and 43% voted for producing quality goods and services.
SHAPING ATTITUDES. The schools say students apparently aren't learning what's being taught. "We try to promote a view that takes into account the environment and the long-term interests that shareholders and society share," says Robert Swieringa, dean of the Johnson Graduate School of Management at Cornell University. In fact, respondents to the Aspen study said they think they'll be more responsive to such issues than the current generation of executives.
Still, the survey implies that these up-and-coming execs may not turn out to be significantly more responsive -- an issue that concerns Aspen and other groups that monitor the effects of corporate actions on society. The attitudes of MBAs should also be of concern to the executives who hire them, as well as to the creators of B-school curriculums, says Jennifer Welsh, university lecturer in international relations at Oxford University and manager of the research project.
Judith Samuelson, executive director of the ISIB, which supports faculty research into corporate leadership, adds that "business school is a primary environment where students shape their attitudes about corporate values." She sees the survey's findings as troubling because "we have a painful example in Enron of what can happen, in the extreme, when share price is the only measure of success for a company."
CUT AND RUN. The study reveals that not all MBAs think alike: More women than men (14% vs. 7%) judge a company by its ethical standards when considering a job offer, while more men than women (79% vs. 67%) see financial returns as a company's primary goal. Women are more likely than men (55% vs. 47%) to place a high value on a company's willingness to invest in employees and make a positive impact on society, while men see as their top personal and professional priorities starting or developing their own business and earning high compensation. Indeed, 31% of men equate good compensation with a high quality of life, vs. 21% of women.
Perhaps the most disquieting tendency the researchers unearthed is that MBAs say they would leave companies whose values they can't stomach rather than staying and trying to exert a positive influence. "Most MBAs indicate that they would simply opt out and find another job," the report says. "The Enron fiasco is showing that there are going to be serious cases where an organization's values are disputed, or disregarded," notes Welsh. "What do we want people to do in those situations? Not run away. We want them to stick up for their values and try to resolve the conflict."
Some experts blame the inclination of MBAs to cut and run partly on the fact that the schools primarily teach them how to change organizations when they're in a position to do so from the top down, not how to agitate for change from the middle up. Yet Debra E. Meyerson, a visiting professor of organizational behavior at Stanford University's graduate school of business and author of the new management book Tempered Radicals, argues employees can find ways to remake organizations without forfeiting their values.
BOTTOM-LINE EFFECT. MBAs move on because "they don't see an alternative to leaving," she says. "But a huge number of alternatives allow people to act on their values. There's a gigantic spectrum between silence and whistleblowing. There's room for speaking up, challenging norms, and encouraging learning." Meyerson says if hastily scheduled business trips or weekend meetings intrude on the family time of managers, they should suggest alternatives that may, in the long run, help other employees balance their work and life as well.
One sure way to turn both companies and MBAs into fans of strong ethics: Put a number on what having pristine values adds to the bottom line, says Priscilla Wisner, an assistant professor of world business at Thunderbird -- the American Graduate School of Management in Glendale, Ariz. Academic journals won't even publish articles on such matters, Wisner adds, "unless you can prove that corporate responsibility improves the bottom line and drives shareholder value."
She says that's true even though the mainstream press is full of recent examples where corporate irresponsibility has had the opposite effect. Wisner, who's in the midst of a research project involving roughly 215 companies, says she's digging up proof that corporations that are managed responsibly and that act as good citizens enjoy a significant financial return.
Until that idea becomes widely accepted, however, B-schools are unlikely to go much beyond the stray ethics courses they currently offer when it comes to teaching strong corporate values. And until then, the philosophy MBAs live by is less likely to be "Doing well by doing good" than "Show me the money." By Mica Schneider in New York