Article Reading Notes

Format:
 Two
-page
,
single space, block
format
, justified margins, 12
-point font
 APA bibliographic citation of the work as your ‘title’
Content:
•
Thesis
– identify the central lesson the author is trying to teach
• Central pillars
– define and discuss at least three major learning outcomes
• Discussion
– reflection on the article
impact on the future manager
– in other words,
why does this reading matter

THE HIPPOCRATIC OATH OF THE MANAGER:
GOOD OR BAD IDEA?
By Sean D. Jasso, Ph.D. ©
Philosophy for Business, January 2010, Issue 56
In a 2009 Financial Times commentary, Michael Skapinker addresses a growing movement of business
school students taking formal oaths promising to pay equal attention to “shareholders, co‐workers,
customers and the society in which we operatei.” In essence, new MBAs affirm to adhere to a stakeholder
approach to management as opposed to the age‐old “shareholder first philosophy.” The oath is intended
to mirror the Hippocratic Oath taken by the newly graduated medical doctor, the attorney’s oath taken by
the newly appointed lawyer to the bar, or the oath taken by the new CPAii. The ‘MBA Oath’ received
momentum recently at Harvard Business School through the scholarship and inspiration of professors
Rakesh Khurana and Nitin Nohria in which the two argue that “the answer to business’s crisis is to turn
management into a profession like medicine or lawiii.” Khurana and Nohria’s vision is noble indeed, but
nobility and practicality are not always aligned nor may they always be prudent. Skapinker remains
skeptical about the trend of MBA oaths, but the apparent movement opens the door for serious reflection
and discussion about what management really is and can or should practitioners of management publicly
affirm primum non nocere? – “above all, not knowingly to do harm.”
What is Management – Really?
This question has been defined, grappled, adjusted, improved, refined, and customized for over a
hundred years. Harvard, for example, just recently celebrated the centennial of its Business School in
2008 and is often considered the epicenter for management higher education. A wide literature
addresses management from various schools of thought from the scientific, behavioral, to the
organizational to name just a few. Among the more famous and perhaps practical philosophers of
management is Peter F. Drucker who identified management as both a discipline and practice indeed not
easy to master due to the nonlinear complexity of producing what management is designed to do –
produce effective results. Among the great innovations of the last hundred years that have moved society
forward is in fact management. At the same time, many other thinkers in the field believe that
management has become out dated and has a wide canvas to improve its very meaning. Scholars like
Gary Hamel for example, see the necessity for management as a technology where not only is the
stakeholder approach a norm, but more importantly, strategic decision making up to and including CEO
succession can happen at the employee level – indeed, revolutionaryiv. No matter what school of
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The Hippocratic Oath of the Manager: Good or Bad Idea?
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thought, management remains the cornerstone of organizational productivity and progress. Simply put,
without it, entrepreneurship could never flourish, organizations would flounder, and resources would be
squandered. Indeed, fueling the need for management is competitionv – the energy that forces
organizations to strive to create the best value for all of its stakeholders with the aim of earning value for
itself.
Within this competitive environment there are winners and losers and the winners most often owe their
achievement to effective management. At the very foundation of management lies the virtue and reality
of the forces of markets – the economic arena where risk and strategy bare fruit or failure. There is little
debate that markets which are well regulated and open to competition have borne results for the
stakeholder environment – wealth for owners and investors, employment opportunities for the best
qualified and innovative products and services for customers around the world. Most scholarship and
practicing managers would agree that the successful organization that produces goods and services for
society has evolved into a stakeholder entity. Most managers, employees, educators, policy makers,
owners, investors, suppliers, and customers would sensibly agree that the enterprise of the 2000s can
only flourish when all of the various stakeholders listed above are perceived as partners in the
organization’s sustainabilityvi. In fact, the ‘shareholder first’ approach to running a business has seen
alternative movements that put the ‘customer first’ whereby providing a world class customer experience
yields customer loyalty and a higher probability of sustainable revenues. We have even seen trends in
putting the ‘employee first’, the ‘nation first’, and the ‘environment first’. All of these ‘firsts’ are
admirable, but in the end none are sustainable without the broader stakeholder approach. Regardless of
the trend, at the center of any enterprise is its purpose – usually created, defined, and mobilized by an
entrepreneur and grown by the manager. Most support the idea that the world’s great products,
services, and solutions have been created by entrepreneurs energized by a freedom of risk taking, fueled
by the virtue of competition, launched by practitioners of management to facilitate the growth of the
idea, and yes – supported by a return on investment for all engaged in the game.
Management – A Profession?
Before we get to the bottom of ‘good or bad idea’ of MBAs taking oaths, the first question is whether the
MBA might in fact already be recognized as a profession akin to medicine, law or accounting. Properly
defined, a ‘profession’ is an occupation that requires significant study, preparation, and specialization of a
particular field. Like the noted professions, the MBA does require significant study of a wide field of
knowledge. The field of ‘business administration’ is purposely general – hence, the “general manager.”
The MBA is a unique degree exposing students to the wide scope of all of the major skills required to run
an organization – economics, law, accounting, finance, marketing, operations, quantitative analysis,
organizational behavior, strategy and ethics are among the standards. Programs have evolved over the
years to include emphases in each of the above as well as leadership, entrepreneurship, global issues, and
an array of electives upon demand. Upon successful completion of the master’s in business
administration is the new MBA whose academic, occupation, and demographic background is among the
Sean D. Jasso, Ph.D.
The Hippocratic Oath of the Manager: Good or Bad Idea?
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most diverse student bodies of the professional school programs of most universities. It is not uncommon
to see young and older graduates who have little to advanced experience in every field imaginable at a
traditional MBA commencement.
Professions are also characterized as ‘practices’– for example, a doctor practices medicine and a lawyer
practices law. The implication is that the profession is more of an ‘art’ – never fully perfected and never
fully evolved. Schools of business like Harvard are well known for their approach to teaching business –
closer to a science rather than an art. The case method – a Harvard signature approach to teaching – is a
scientific model that teaches students to follow a template based on real scenarios. To provide further
intellectual diversity for students seeking business education, many schools over the years recognize
‘management’ to be the art and ‘business’ to be the science. I suggest an artful balance of both.
Adding support to the idea of the ‘practice’ of management is the well known philosophy coined by Peter
Drucker himself. Drucker professed that management was to be viewed and practiced as a ‘liberal art’
because the effective manager must use a wide set of liberal skills from politics, sociology, history,
philosophy, to psychology, among many others, to make the best decision for the organizationvii. Like the
art of medicine and law, the multitude of variables impacting a management decision is always changing
requiring artful adaptation by a professional. So to this end, I would argue that management is already a
profession whether one has an MBA or not. One is not required to have a certification to be an
entrepreneur or to even run a company – this is the great beauty and flexibility of the market system and
its bounty of creative opportunity. However, the value of the MBA is that one has successfully completed
the rigorous and formal process of learning the critical and analytical thinking required of managers. Can
these skills be learned independently of the business school? Perhaps. But society has and continues to
put significant value upon the individual with formal, certified management training. This is evident in the
traditional market‐based salaries for MBAs that remain competitive even at all levels of the economic
business cycle. Most importantly, however, the MBA who has critical thinking skills – the product of a
rigorous university program – continues to be the highest value added resource within any organization.
The MBA Oath – Yes or No?
Now to the question of whether the new MBA should take an oath. Indeed, an oath can add symbolic
meaning to the commencement of a new journey. Most would agree that a marriage without a vow is
not a marriage, new citizenship without an oath is not official, and a presidential inauguration without an
oath (though mandated by the Constitution) is simply impossible to imagine. Returning to Skapinker’s
commentary introduced above – his Financial Times article does incorporate a balanced debate. Where
the Harvard management professors assert that the MBA should be a professional license to practice
management, Skapinker counters this idealism with a dose of reality suggesting that any trend toward
Sean D. Jasso, Ph.D.
The Hippocratic Oath of the Manager: Good or Bad Idea?
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Hippocratic Oaths of MBAs is only as good as the movement grows beyond the university. In fact, there is
no apparent sweeping demand from the large stakeholder environment mandating managers to have a
certificate or license on their office wall affirming one’s oath to do no harm. Moreover, and perhaps most
relevant, there exists no authentic regulatory board (analogous to the medical, legal, and accounting
professions) to monitor the fair practice and fiduciary responsibility of the oath‐mandated manager.
Rather, stakeholders simply want to see results attained within the rule of law, within the good
governance of the firm, and within the fair playing field of the marketviii. Indeed, the purest moral
certification is beyond even the MBA degree and the practicing manager who bares its name. As noted
above, it remains the simple influence of competition – fair, dynamic, and value‐centered – that affirms all
the certification needed where buyers and sellers negotiate and make deals based on good information,
product utility and price. When this exchange is pure, the ethic of commerce and the morality of the
market require no oath other than a simple hand shakeix. When this sacred exchange is broken by fraud,
complacency or incompetence, consumers will simply demand new markets to replace the old.
At the core of the Harvard professors’ vision is an economy where market failure is erased or minimized
by the licensed practitioner. This is noble, but unrealistic. Additionally, the Harvard vision appears to
suggest that a fiduciary responsibility by one’s managerial oath be infused as a guarantee to his or her
client’s best interest which comes before individual profitx. Again, this is noble, but unrealistic. This
idealism is already infused in a well regulated market system whereby profit incentivizes the producer to
innovate and compete for the sustainability of the organization made possible only by strategically
connecting to the consumer by marketing products and services with the right quality, at the right price,
at the right location, within the rule of law. Should the enterprise seek an alternative strategy outside of
this consumer‐driven market, the evidence is strong that revenues will fall, costs will rise, and profits will
diminish. No oath can guide this arena of exchange better than the existing social contract.
The MBA is a manager of risk for the benefit of a complex, multi‐stakeholder constituency. For example,
terminating thousands of employees for the sustainability of the firm up to and including macroeconomic
development is often a necessary management decision even as difficult or unpopular the consequences
might be. The question for society is whether a manager’s decision would be any different if an oath
affirming his or her honor to do no harm would make a difference and, most importantly for whom?
Skapinker’s article begins with a focus on the trend of schools of business incorporating the oath into their
programs and the Harvard professors seem to exploit a down economy influenced by corporate
corruption as one of the reasons behind the crisis.
In a market based economy where business, government, and society are interdependent, the idea of
requiring MBAs to take an oath to effectively manage an organization’s assets and liabilities for the good
of society is much like asking new parents to take an oath affirming they will do no harm, minimize risk,
and ensure a holistic balance of the child’s development for the good of humanity. Simply put, good
managers will navigate the organization toward results and ineffective managers will be expelled by the
most powerful measure of them all – the consumer and the owner each demanding value for their
Sean D. Jasso, Ph.D.
The Hippocratic Oath of the Manager: Good or Bad Idea?
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investment. As stated in the opening, the purpose of this article is for all stakeholders of the business
enterprise to engage in a debate of serious reflection as to what management means in society –
particularly in the society of tomorrow. There is no disagreement that the general welfare of a global
community linked by markets requires good management practiced by ethical decision makers. Yet, what
remains to be seen is to what degree consumers of this market system place on the authenticity of those
who earn a degree in management. Though the Hippocratic Oath of the Manager may inspire new MBAs
to do no harm, the validity of the good manager is much deeper than any oath. As stated throughout this
article, the well regulated, dynamic, and competitive market will take care of the bad behavior.
At the dawn of the new decade in an era where globalization of trade and ideas shows only forward
momentum, the effective manager will be the one who embraces the freedom of opportunity with the
responsibility of managing risk for a wide stakeholder environment dependent on the firm’s sustainability.
So, to answer our original riddle of the management oath – good or bad idea? As argued, the oath need
not take place at the commencement of a degree, but rather in the quiet of the manager’s heart because
the morality of the market is nothing without the morality of the good man or the good woman. Perhaps
the better question we must ask of managers is actually the simplest of them all – what do you stand for?
i
Financial Times, June 23, 2009
ii
Khurana, Rakesh and Nohria, Nitin (2008) Harvard Business Review (October), pp. 70‐77.
iii
Financial Times, June 23, 2009
iv
Hamel, Gary (2007). The Future of Management (with Bill Breen). Boston, MA: Harvard Business School
Press.
v
Porter, Michael (2008). On Competition: Updated and Expanded Edition. Boston, MA: Harvard Business
School Press.
vi
Carroll, Archie B., and Buchhotz, Ann K. (2008). Business and Society: Ethics and Stakeholder
Management, 7th Ed. Florence, KY: South‐Western Cengage.
vii
Drucker, Peter F. (2008) Management: Revised Edition (with Joseph A Maciariello). New York, NY:
Harper Collins.
viii
De Kluyver, Cornelis A. (2009). A Primer on Corporate Governance. Williston, VT: Business Expert Press.
ix
Zak, Paul J, Ed. (2008). Moral Markets: The Critical Role of Values in the Economy. Princeton, NJ:
Princeton University Press.
x
Khurana, Rakesh and Nohria, Nitin (2008) Harvard Business Review (October), p. 72.
Sean D. Jasso, Ph.D.
The Hippocratic Oath of the Manager: Good or Bad Idea?
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