Pedro Molina

Can Business Be Ethical?

In his 1962 book Capitalism and Freedom, the economist Milton Friedman wrote that any business has only one social responsibility: "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game." But that view is now being replaced with a vision of business management as an ethics-driven profession.

MELBOURNE – Something new is happening at Harvard Business School. As graduation nears for the first class to complete their Master of Business Administration since the onset of the global financial crisis, students are circulating an oath that commits them to pursue their work “in an ethical manner”; “to strive to create sustainable economic, social, and environmental prosperity worldwide”; and to manage their enterprises “in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves.”

The wording of the new MBA oath draws on one adopted in 2006 by the Thunderbird School of Global Management, based in Arizona. Nevertheless, the fact that it has been taken up by the world’s most famous business school is significant.

As of this writing, about 20% of the Harvard graduating class have taken the oath. That will, of course, prompt cynics to ask: “What about the other 80%?”  But those who have taken the oath are part of a larger turn toward ethics that has followed the recent flood of revelations of dishonesty and greed in the financial sector. Interest in business ethics courses has surged, and student activities at leading business schools are more focused than ever before on making business serve long-term social values.

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