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Some observers believe that the corporate social
responsibility movement is making progress. Others are more cynical
and think that CSR is nothing but an elaborate PR mechanism for big
business. The recent string of setbacks among large mortgage and
banking firms in the US does not present a reassuring picture.
Analysts trace the current financial mess to imprudent, though
initially lucrative, investments in low-quality (sub-prime)
mortgages made by large and well-established companies who should
have known better. The cost of this in jobs and economic stability
around the world, including the Philippines, is still impossible to
calculate.
One may argue that promoting
business ethics is an impossible proposition because greed and
self-interest is the dominant motivation for business activity. The
sub-prime crisis of today and the Enron crisis of a decade ago are
just highly visible manifestations of a broad belief in the business
world that greed is good and the ethics of self-interest is the only
reasonable norm for business leadership.
I disagree. Professional values
of technical competence, service and concern for the public interest
are also viable complements to self-interest. If business managers
can be trained in the way that doctors are trained to care for the
health of their patients, over and above any pecuniary
consideration, ethically responsible behavior can be a more common
norm.
Rakesh Khurana, in his book From
Higher Aims to Hired Hands, explains that the belief in providing a
sound professional education to business managers was the basis for
the founding of the first university-based business school in the
United States—the Wharton School of the University of Pennsylvania
founded in 1881. Simon Patten, director of the Wharton School,
believed that there could be “no full discussion of economic
problems without bringing political moral principles into relation
with the economic.” What Patten and the other leaders of the early
business schools, such as Harvard Business School, wanted was to
deploy a cadre of highly trained individuals who would master the
technical demands of even the largest business operations but always
with an overriding consideration of the social impacts of business
decisions—in short professional business leaders. The modern
master of business administration degree, or the MBA, is descended
from the programs of these early business schools.
The reasoning behind professional
business education is straightforward. Just as doctors wield awesome
power over the well-being of individuals and society through their
ability to prescribe medicines and to use a scalpel, business
managers wield similarly broad powers (some would say even much more
than doctors) over the well-being of many people and society as a
whole. Think about it: Who decide whether or not to produce and
market a milk product, chemically tainted or not? Who decide whether
or not to use women wearing almost nothing in highway billboards to
push the sales of, ironically, clothing? Who decide whether or not
to boost company profits by depriving workers of benefits and
security tenure? Who decide to chase revenue targets by investing in
low-quality loans? Business managers. Therefore, it is prudent for
society to prepare business leaders who have the competence and
character to make such decisions wisely for the common good as well
as the good of the company.
While the intent of the founding
fathers of business schools was wonderful in theory, the actual
challenge of producing such MBAs is formidable. In fact, a number of
the most ethically notorious corporations, including Enron, were
known to be top MBA recruiters. Enron’s former CEO and CFO, both
intimately involved in engineering the fatally flawed financial
strategy of the energy company, were MBAs from top schools. 
(To be continued)
Dr. Benito Teehankee is the Sen.
Benigno S. Aquino, Jr. associate professor of business and
governance at the Ramon V. del Rosario Sr. Graduate School of
Business of De La Salle University-Manila. He may be emailed at teehankeeb@dlsu.edu.ph.
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