Do Business Schools Incubate Criminals? I Don’t Think So

As you might imagine, when I saw the headline Do Business Schools Incubate Criminals? floating around the Internet, I got more than a tad nervous. Given what I do for a living, I started to wonder if the RCMP would soon be dropping by to arrest me for aiding and abetting. However, once I started reading the articles in question, I relaxed a little bit. Both make very broad and questionable claims, and I found neither to be completely convincing. However, they both raise points that are worth considering for business degree programs, and, I would contend, for degree programs in general.

The discussion was started by an article by Luigi Zingales, an entrepreneurship and finance professor at the University of Chicago Booth School of Business. (Thanks to Eric the Teamster on Twitter for sending the link to the article.) Zingales argues that graduate programs in business are at least partially responsible for the behaviour of those involved in recent high-profile banking and finance scandals. His evidence for this is:

– two of those convicted in relation to these scandals (Anil Kumar and Rajat Gupta) have MBA degrees from major business schools (Wharton and Harvard).

– business schools teach ethics as dilemmas and as an organization-level issue; thus, students do not learn that ethical behaviour is their personal responsibility, and do not understand what kind of behaviour is simply wrong.

– too many economists see their subject as “divorced from morality”; thus, the way economics is taught makes students selfish.

– a separate ethics class taught by a “typically low-ranking professor” isn’t enough in a business degree program; there should be an ethical component in all core classes, which “tend to be taught by the most respected professors”.

Then Yves Smith responded over at Truthout. Smith labeled the Zingales piece as “backwards” but nevertheless raised a whole other set of complaints about business schools:

– business schools “are a combination of finishing school and employment agency” and are lagging behind changes in cultural norms which are now starting to recognize elites as “openly corrupt”.

– most MBA students “probably majored in economics” as undergraduates, and therefore are more inclined to be selfish.

– business schools are just one manifestation of the “atomization” that encourages people to think and act for themselves and not for the greater good.


Coming soon to a business school near you, apparently. (Credit: Wikipedia)

As a faculty member in a business school, I suppose I should feel guilty about my apparent complicity in these evils. And I’ll cut both of these authors some slack in that they’re obviously exaggerating somewhat to get their points across. But while I would be the last person to argue that business programs’ curricula are flawless, the holes in the reasoning in both of these articles are big enough to drive a loaded Brinks truck through.

Part of Zingales’ proof for his position is the fact that some (two) of the people recently convicted of business-related crimes had business degrees. But if MBA programs are teaching, nay, encouraging their graduates to go forth and cheat, there should be thousands of other MBA grads clogging up the court system. Perhaps Zingales would argue that they just haven’t been caught yet because financial systems are under-regulated. But in my local paper today there are stories about a doctor and a lawyer being convicted of crimes related to the practice of their profession. Medical schools and law schools also have ethics as part of their curricula – and doctors and lawyers have an even stronger ethical component in their practice than business people do, because their professional licensing bodies enforce ethical standards and regulations. So should we conclude that medical and law schools incubate criminals too, because their graduates are also committing crimes despite their ethical training?

I don’t know the motivation for Kumar and Gupta’s actions, or whether they had ethical misgivings about their actions. But in my experience, if a student is determined to be Gordon Gekko when they go into the workplace, it’s very difficult to counteract that attitude, no matter how much ethical content is in a program’s curriculum. I’m also not too thrilled with Zingales’ contention that ethics courses are usually taught by low-ranked professors – implying that the course is therefore also perceived as unimportant – and that there’s no ethical component in core course content. Neither of these has been my experience – instructors ranging from full professors to sessionals teach the ethics courses, and ethical issues are discussed in most, if not all, courses.

Smith takes things in the opposite direction,  but is equally unconvincing. The lack of factual accuracy bothers me  – a quick Google search found this article indicating that most MBA students have not majored in economics as undergraduates. And I’d agree that what’s taught in business schools is not always reflective of society as a whole – for example, I don’t see “Managing Occupy and the 99%” courses springing up in business programs, even though the Occupy movement is probably one of the biggest business-related stories of the past year. However, I would challenge Smith to find any academic discipline without some degree of disconnect from society, either because of inertia in updating program content, or because of selectivity (every degree program can’t be about everything). I would agree that business programs provide lots of pre- and post-graduation networking opportunities – but, on the other hand, I can think of plenty of fine arts degree programs whose graduates tend to hire graduates from the same program. So again, I don’t think this is a problem particular to business schools.

There is a lot that business schools can be criticized for, but blaming them for complicity in encouraging financial fraud and the general downfall of civilization doesn’t wash. I would hope that both Zingales and Smith would fail any student assignment which made such broad claims and unsupported arguments as they have presented in their respective articles. Critical thinking and analytical rigour is maybe what business schools, business programs, and business students need most of all if we want to see change.

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