Archive for June, 2010

We still have a lot to learn

June 21st, 2010 by under Uncategorized. No Comments.

I was watching the news coverage of Tony Hayward’s Congressional hearing the other day and was agitated by his obstinate refusal to respond rationally to any question put to him. I wondered if he was truly clueless about what actually happened in the Gulf or was just trying to soberly insult the committee with statements like: “I am not a drilling engineer”, “I wasn’t part of the decision-making process”, “I had no prior knowledge”… How could he shy away from the responsibility just like that? Is he not the chief executive officer? Is it not his job to be the “part of the decision making process”, not even after more than 700 safety violations in the last three years? And that reminded me of the saying; “An executive is a person who always decides; sometimes he decides correctly, but he always decides”. So even if he was not part of the decision making process, he is still to be blamed for the explosion on the Deepwater Horizon, its aftermath and the absence of a reliable process for stemming the leak. A day after the hearing, he is relieved of his duties in the Gulf and soon after he is found at a yacht race, perhaps celebrating “his life back”, when the people he left behind in the Gulf cannot even think about fishing, let aside yachting. I don’t know about others, but for me a lot of wrong people are a little too comfortable !

I understand, the role of politics and legislation could be debated upon here and the regulatory authorities should also bear the brunt of the blame. As we found out in the case of financial institutions and health care industry, relaxed standards and a lack of regulations are part of the problem. I believe that corporate malpractices, such as WellPoint’s (Anthem Blue Cross) and the ones used by Credit Rating agencies fueling the housing bubble, should be made punishable law. But I don’t believe that laws and regulations alone can turn things around. Smart and greedy will always find a way to bend the laws or work around them and even influence the lawmaking process. There is a strong call for bringing morality into corporate conduct. We all know that whatever is legit is not necessarily ethical. So are we only required to meet the law and not care about the moral and ethical implications of our actions? I remember spending hours on the ‘Google in China’ case where we discussed the need of ethical leadership for Google versus merely following the laws of the country. I don’t have problem with corporations finding out new complicated ways to make money, but does it have to be at the expense of lives of others? Is it necessary to cause wreckage on earth in order to grow progressively? Isn’t that the same greed that led us to the worst financial crisis since the Great Depression? I remember looking at the housing prices a few years ago and wondering what’s going on; loans were offered to almost anyone, mortgage fraud was on the rise, debt was another name for the wealth and it seemed like a giant casino with everyone gambling on the housing.  And the guys in charge of all this, overlooking the crazy feast, just chose to ride the bubble instead of being the ones to stand up and burst it before all hell broke loose. I am not sure how they could live with themselves but I know they found a way, while the rest of us suffered. Lives were ruined and trillions were lost, with empty homes mocking the misery of homeless.

But there is no reason we cannot believe that it can now be different. We cannot just sit back and always wait for a catastrophe to happen before we react retrospectively to outlaw the evil practices. Nor can we simply allow ourselves to take unethical and inhumane actions in the name of short term profits as long as they are within the laws. It’s about time that we start owning the responsibility and address our ills, it’s about time to reinvent and renew our ethical values. We don’t always need laws to tell us it is illegal to inflict pains and suffering. True, law has enforcement power, but shouldn’t decency come from within. Here at Smith during the last year, I sensed the urgency growing around to have business ethics as an essential part of an MBA toolkit. We went through an extensive core course “Social Responsibility in Business” where business cases with ethical issues were discussed. Frameworks and theories from different schools were used to discuss scenarios involving intellectual property, employee management, customer relationship, environmental sustainability, government interventions, human rights and more. Center for Social Value Creation and Net-Impact at Smith School are dedicated to engage students with projects to bring positive economic, social and environmental changes. MBA students have been frequently involved with TeamMBA events to serve the community. Recently, Smith MBA students kicked off a movement to encourage fellow MBAs to embrace MBA oath, a pledge to create value responsibly and ethically. And it’s heartening to say that more and more business schools are taking such initiatives and putting emphasis on the significance of business ethics. So while I hope that the laws will be reformed and enforced, and the guilty will be punished, I believe that at the same time we can all lift ourselves individually and collectively to confront the challenges of corporate world more ethically. Right now, we certainly don’t have “too many” people working to save the world !!