Ethical MBA Students- Keys to Future Success

The rise of the 'ethical' MBA student

Historically, students chose to practice even further education into MBA programs as a quick route to boosting their career and paychecks, according to the article I just read. Yet, recently a new Green MBA program at Marbella University tries to take a new and more ethical approach to educating the future leaders of the world.

"According to a recent survey of the mindset and aspirations of MBA applicants by career and education specialists QS TopMBA.com, the number of MBA candidates searching for an "ethical" MBA degree or one that has sustainability and social responsibility at its core has increased dramatically over five years."

The article also states that people don't want to work for unethical companies in controversial industries such as tobacco or defense. Instead, there is an increasing number of MBA graduates applying for UNPAID positions in non-profit organizations.

"Humanity and the world need new leaders and experts to resolve the global problems. The MBA programs at Marbella University entail a vanguard approach to international business with a strong focus on 'human factors' and the complexity of today's global business world." 

Our keynote speaker during Business Week, CFO of COUNTRY Financial Dave Magers, had something to say that I think relates heavily to this topic as well. He states that they hired people from the start with high integrity. Here are students who are looking to work for the better of the world as a whole, instead of just trying to boost their own profits right off the bat.

I think that these students are displaying what we all should strive for. According to page 388 of our book, "...attending to others is the primary building block of moral leadership," also, "Effective leaders see their own personal vision as an important part of something larger than themselves - a part of the organization and the community at large."

These students see that their service to the Green movement, using their Green MBA Program knowledge, and their unpaid time is all given to these non-profit organizations and the world as a whole. I think it is inspiring and something to think about. Maybe the world isn't so unethical as we have seen in the past, and maybe if future leaders act as altruistically (working for the better of others) as these students, we are all in store for a better world.

-Melissa Beechy

Ethics in Organizations

This article was interesting to me because it brought up relevant question in today's business environment; who is responsible for individual unethical decisions in organizations, the individual or the organization? The paper talks about how most ethical discussions take into account only the "individualistic approach" to moral responsibility. This says that each individual is responsible for their own actions and are in charge of changing the behavior themselves. On the other hand, the paper mentions a less talked about approach in the "communal approach." Here individuals are viewed not by themselves, but as members of communities that are partially responsible for the behavior of their members. The article says that it is necessary to take both of the approaches into account to explain ethics in the organization.

I think this relates closely to our discussion about virtue-based leadership and utilitarianism. Virtue based leadership tells leaders not to tell people what to do, but who to be. While utilitarianism is creating the greatest good for the greatest number of people. These are relevant to this article because they are how I feel a leader should act in an organization. Rather than focus on whether or not to look at the individualism approach or communal approach, look at both. Leaders need to strive to be virtue-based leaders and preach to their followers how to act, but also to be utilitarianism and have their organization create the greatest amount of good for the most people. By doing this, they cover both parts of ethical leadership, rather than placing the blame on the organization or individual.

This is closely related to the google executive who supposedly created all the turmoil in Egypt. Who's fault is this really? The organizations? Or the individual? Do you think that Utilitarianism and Virtue based leadership is a good match for this article, or do you feel there are better theories to help leaders in organizational ethics?


http://www.scu.edu/ethics/publications/iie/v2n1/

-Ryan Schaumburg

Emergent Leadership in Japan

The following article describes the recent situation in Japan. During this time of crisis, it may be hard to pick out particular leaders or even to say if there is any leadership taking place. This isn't anything new to Japan. In fact, the article pointed out that Japan has went through four Prime Ministers in the past four years. This is an astounding number of leaders that have failed in leading the country. It is crucial that in this time of great need, a leader emerges and aids the nation during their time of grief.

This situation reminds me a lot about what we learned about emergent leadership when studying the 9/11 situation. People came together out of the woodwork to help the situation. Although I think it would benefit Japan to have a public leader, I think citizens emerging as leaders is just as important. In fact, the everyday people of Japan and other volunteers are likely to make the biggest difference.

This concept is directly related back to what we recently learned about the complexity theory. This theory involves the concept of open systems. Open systems made up of a large number of active elements that are diverse in both form and capability. Japan serves as the open system in this case, and was disrupted when the adaptive tension reached beyond the critical values it could sustain. This resulted in chaos and uncertainty. This far from equilibrium state led into emergent self organization. People have taken on roles that they normally wouldn't, and are working together for the common good. Being thrown into a situation, much like the catastrophe in Japan, results in emergent leaders being formed.

Although this article is criticizing the fact that there are no leaders stepping up and taking charge in this situation, I believe that once time passes people will realize that there were thousands of leaders. What do you think? Do you think that leaders will emerge and be recognized as time goes by, or do you think there is a complete lack of leadership- both by public officials and citizens?


http://www.msnbc.msn.com/id/42114871/ns/world_news-asia-pacific/

- Kelly Moran

Why Alibaba's CEO had to go

As stakeholder's are starting to hold companies up to maintaining corporate social responsibilities, more companies are being revealed as fraudulent. This specific article is a perfect example of this.  The Internet firm Alibaba-Taobao has been a company that many people looked up to thanks to "its success and to it's brash, charismatic founder and chairman."  Jack O' Ma started the online commerce company in the late 90s and has become one of the most prominent Chincese companies.  They went on Hong Kong's stock exchange in 2007 and raised $1.7 billion right behind Google and eBay.  This would be a sound of success for the company until the inner-workings of the company had recently been revealed.

Alibaba recent report: "2,326 high volume sellers who pay a fee to the company to peddle their wares on the site -- 'gold suppliers,' as they're called-- defrauded customers over the course of to years."  These people could not have created such fraud to customers without the assistance of Alibaba employees.  Once reported both the CEO, David Wei and COO, Elvis Lee, both resigned on the same day.  It's unfortunate that neither leader of the company could accept the responsibility of their fradulent actions.  Of course, the public needs to recognize that just like in Enron's case, fraud becomes a culture of an organization and it is more accepted by leaders who accept these behaviors.  It has been known that business ethics in China are still being reviewed and going into progress, although not fully there yet.  The fact that two years had passed without stakeholders nor employees reporting the fraud is astounding.

The article refers to the founder of Alibaba to be charismatic, as mentioned above.  As we learned in class, a characteristic of a charismatic leader is "a special personality chqaracteristic that gives a person super human or exceptional powers and is reserved for few, is of divine origin, and results in the person being treated as the leader," (Northouse, 173).  This idea sets the tone for the company.  If leaders portray an unethical practice, the chances of the followers accepting this idea from a charismatic leader are high. According to House's charismatic theory, there are effects that show the direct result of charismatic leadership including; follower trust in the leader's ideology, similarity between the followers' beliefs and leaders' beliefs, unquestioning acceptance of the leaeder, expression of affection toward the leader, follower obedience, identification with the leader, heightened goals for followers, and increased follower confidence in goal achievement.  Obviously, follower trust with a charismatic leader has led to his employees making unethical decisions. This also alighs with the similarity between the leader's beliefs along with the followers.  Because he was accepting of exchanging inside information, his followers believed it was not only ethical, but accepted through the culture of the firm.

Do you guys believe that if Jack O' Ma's charismatic leadership offered it's followers a more ethical approach, this situation could have been avoided?

Also, what do you think about the CEO and COO resigning?  Does this set yet another ethical dilemma for the company that shows they can't own up to their responsibilities?


http://tech.fortune.cnn.com/2011/02/22/why-alibabas-ceo-had-to-go/

-Lauren Mowers

Good, Bad, or just Ugly?

After looking at several articles on the topic of David Sokol I have a real good understanding of the issues he is facing and whether they are unethical or not.  David Sokol is a former top executive of Berkshire Hathaway and there were some questions raised about whether Sokol was participating in insider trading while working with the firm.

It all started when Sokol recommended to Warren Buffett to use the companies cash to buy out the company Lubrizol.
"According to The Wall Street Journal, Sokol's initial interest in Lubrizol was piqued during a Dec. 13 meeting with Citigroup bankers to discuss a list of "possible transactions." According to Dealbook, Sokol bought 2,300 shares of Lubrizol on Dec. 14, which he then sold on Dec. 21."
These actions started to raise question when Sokol bought 96,060 additional shares on January 5th.  The very next week he pitched the idea to Buffett to purchase Lubrizol.  Just two months later Berkshire's board announced the $9.7 billion it spent to acquire Lubrizol boosting Sokol's stock holdings by 27%.  After Buffett soon realized what had happened he removed Sokol from Berkshire in fear of public embarrassment.


These behaviors represent what we consider insider trading, which by definition states, insider trading requires the perpetrator to possess "material nonpublic information at the time he bought or sold the stock and to have breached a duty to his employer.  Different lawyers have assessed the situation and have suggested that Sokol would be not found in violation, because at the time of the purchase of the stocks he did not know if Berkshire was going to buy out Lubrizol.  This is a very gray area being that the facts point fingers at Sokol because of his large profits he incurred during his last months at Berkshire. 

This is a clear issue of unethical behavior and I feel that David Sokol portrays the theory of Ethical Egoism.  His actions show that he is more concerned with the greater good for himself.  This theory is usually good when it is applied to the entire organization as a means to maximize profits.  However when one single person  revolves all of their decisions around that mentality, there is room for error, and unethical behavior seems inevitable. 

The biggest question is do you think that David Sokol is unethical in his ways of conducting business?
Do you think that he was in violation of insider trading, even though technically by law he was not?

Below are all of the articles I read over to gain full knowledge on the topic:

http://www.dailyfinance.com/story/market-news/warren-buffett-successor-david-sokol-resigns-lubrizol-stock-trade/19898158/

http://seekingalpha.com/article/261170-what-david-sokol-s-departure-means-for-berkshire-hathaway

http://blogs.forbes.com/frederickallen/2011/04/04/sokols-behavior-under-buffett-unethical-executives-agree/

A Win-Win Situation

http://www.businessweek.com/magazine/content/11_15/b4223025579541_page_2.htm

Still in the topic of ethics when companies are going green. In the article ”Why Sustainability Is Winning over CEOs”, Duane Stanford states that executives are trying to come up with innovative ways to realize meaningful cost savings, and at the same time go easier on the environment. He argues that being socially responsible has typically meant handing out checks, but now it has the premise that saving the planet can save big bucks: “Sustainability has emerged as a factor in determining which companies win in the marketplace, and smart CEOs are investing in a more rigorous approach to the environment."

For me, as a costumer, it is nice to read about companies going green. They seem to be more eco-conscious, but the aim of a company is profit maximization, and going green for the sake of going green is a conflict of interest. The question is if these CEOs’ green approach only maintains as long the costs can be reduced. This focus reminds me of ethical egoism, which is an approach where leaders make decisions regarding moral conduct. Ethical Egoism states that a person should act to create the greatest good for herself. In a business context it is the same as making decisions to achieve the goal of maximizing profits.

Ryan mentions in an earlier blog post that Big box retailers as Wal-Mart are violating less green “sins” than green specialty shops. Wal-Mart is an example of a company that is in the front line of the green movement in this article too. Stanford argues that Wal-Mart has realized that they are saving money by working with retailers to reduce packaging, which translates into lower freight and warehouse costs. It seems as if Wal-Mart can achieve its goal of maximizing profits by going green, but are the ethical egoism a sustainable approach to actually improve the environment? What happens when the costs cannot be reduce anymore?

The article also presents PepsiCo’s CEO, Indra K. Nooyi and her strategy “Performance with Purpose”, which links green efforts in all businesses to the bottom line. Nooyi and her strategy have been mentioned before in this blog by Kelly, when she states that "Performance with purpose” means to generate profit and remain socially responsible at the same time. Stanford quotes an official from PepsiCo: "We are able to do the right thing for the organization from a financial return and significantly reduce our greenhouse gases". In this example, you can argue that Stanford’s description of the CEOs’ green focus has a more utilitarian approach. Utilitarianism means that we should behave in order to create the greatest good for the greatest number. Nooyi and other CEOs seem to maximize social benefits, while minimizing social costs, when they focus on realizing cost savings, while they at the same time go easier on the environment.

Based on the examples in the article, do you think that these CEOs have an ethical egoism approach or a more utilitarian approach? That CEOs and companies can save money by being green is a “win-win” situation, but which leadership style do you think would help a CEO to maintain this green focus?

-      Eva-Lena Juhlin