They Need Time To Build The Strength And Sophistication

They Need Time To Build The Strength And Sophistication

They Need Time To Build The Strength And Sophistication

Copyright © 2023 by Kari Foster

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : WHAT DOES THAT MEAN?

CHAPTER 2 : MANAGE YOURSELF

CHAPTER 3 : OVERVIEW OF YOU

CHAPTER 4 : DISCRIMINANT PRICING IS STEALTHY BEHAVIOR

CHAPTER 5 : ZAPPOS' MESMERIZED AND FASCINATED EMPLOYEES

CHAPTER 1 : WHAT DOES THAT MEAN?

Once you get accepted to HBS, you try to empty your bank account to get financial aid.

"Sorry, I still don't quite understand. Buy a BMW to receive financial benefits?

When you list assets on your financial aid application form, you don't have to list your car, but you do have to list any savings and real estate. So, you buy a car for $20,000, maybe you get another $20,000 in financial aid, so basically HBS buys you a BMW. If you don't buy a car, it costs you $20,000 in your savings account.

But don't they check? I think if you are found to have lied on your application for benefits, you could be expelled from school.

But this is not perjury. It's also not about transferring all your money into your parents' account and then applying for benefits.

So your personal account is empty.

Yes.

Unbelievable. How many people have done that?

Everyone, and Wall Street consulting firms, know how to do that. It doesn't always work, but many people have tried.

In the ad, HBS says that nearly half of its students receive financial aid and that the average aid is $10,000 per year. Some people, like Bob, got more, but because he had four children and used to fly Stealth bombers. You deserve it. And I received a $3,000 grant for my first year of study. The thought of young Wall Street guys lying on pension applications, with their parents and local BMW dealers accomplices, disappointed me.

***

No matter how hard we try, business can never erase the fact that it is a place where thieves, cheaters, and deceitful people practice. The challenge of business is to curb theft, deception and fraud. HBS also contributed to those fraudulent actions. The class of 1985 graduated during the great stock market boom, with 65 people convicted of violating securities laws. The most recent spectacular incident of HBS is Jeff Skilling, CEO of Enron Corporation. In the late 1990s, working for Enron was what MBAs always wanted. When Skilling visited HBS, he was welcomed as a hero, with students cheering him and faculty following him to learn and write articles about him and his extraordinary money-making machine. Under him, other Harvard MBAs within Enron successfully modeled themselves after him. When everything was good, they were geniuses, when it all fell apart, Skilling went to jail, and the school's reputation suffered.

In 2003, the subject of leadership and corporate responsibility was included in the mandatory program for students to discuss the dangers of chasing money despite ethics. It was time to approach the moral compass I had read about in the previous months and was a controversial topic in discussions of money and power. Mr. Joseph Badaracco directly guided us. He won a Rhode Scholarship at Oxford, received both a master's and doctoral degree from this school and became a business ethicist. A few weeks every year, he goes to Japan to teach, with a generous salary that all lecturers dream of. He was clearly different from the athletic types on campus, with his sloping shoulders, rubber-soled shoes, and a dreamy look like he was in the library or fishing on a calm New England lake. He is proud to have the leisurely, leisurely life of a Harvard teacher. He gives the impression that teaching ethics in business schools is one of the most leisurely jobs in the world.

Before that, people looked down on this subject. Financial experts say it takes away valuable time spent researching derivative structures. For aspiring entrepreneurs, it has nothing to do with creativity and cash flows. Only people who like to gossip expect this subject, they just like to talk nonsense and will soon destroy any company within reach. Bo likes this subject for a particular reason: he doesn't have to waste time preparing lessons. Case studies are often brief and without data. So just read through it.

Harvard, with a statement from Tom Piper, a professor at the school, responded to those who doubted that ethics education had a place in a business school. In Can Ethics Be Teached?, he wrote: We resolutely reject this assertion. Students are in the process of developing an awareness of capitalism, business practices, leadership abilities, and finding appropriate solutions to ethical dilemmas in business. This is a period of inquiry and reflection... They need time to build the strength and sophistication to be able to accept the ethical dilemma, to visualize it and to realize the harmful effects that can arise. avoidable and unavoidable. It takes time to train determined and courageous individuals ready to take action. Mr. Badaracco also wrote a book about business ethics, a book called Defining Moments: When Managers Must Choose Between Right and Right. The book describes the ambiguous situations in which most ethical decisions are made. Those decisive moments come without warning, he warns us. Therefore, we always have to be prepared, practice character and ethics in everything."

The course on leadership and corporate responsibility divides the responsibilities of company leaders into three categories: economic responsibility, legal responsibility and ethical responsibility. We must meet the standards of all three categories above if we are to meet our immediate and long-term financial responsibilities without violating the law. We know that American courts take fiduciary responsibilities very seriously. Even the slightest breach of trust with an investor or financial partner is judged. We must remember the equation M x F = D. That is, the court's decision (D) is a product of the legal model (M) and the rational reality (F).

The first class debate erupted when discussing deception in business. In 1968, the Harvard Business Review published an article by Albert Z. Carr titled Is Business Morally Deceptive? The article caused a wave of debate. The author compared business to playing poker. In this game, bluffing is a completely legal action. According to him, the ethical and lifestyle standards of many successful businessmen are different from the ethical standards of business because they understand that business is not an arena to show off morality but a game with its own principles. . You can win this game if you use tricks you would never use on your spouse, children, friends; Such awareness makes life more peaceful and simple. But some people believe that business is fundamentally unethical.

Joe, a ranked poker player and one-time potato chip seller, sat behind me, agreeing with Carr's opinion. On the other side of the classroom, Lisa was seething with discontent. She lived in Louisville, Kentucky and after graduating, she immediately entered a career in marketing household cleaners. Whenever it comes to ethical dilemmas, she is always the first to express her opinion: the most important thing is to do the right thing no matter what the cost. If you want to build a factory in rural China, under no circumstances should you bribe, no matter what the local customs are, because bribery is wrong, without reason. What is there to justify that action? If you drill for oil in Nigeria, there is no reason not to turn over all the profits to the locals who accuse you of exploiting them. There is no debate about the cost of economic development. You must do the ethical thing. If you discover that hackers have broken into your credit card system but have not taken anything, you must immediately notify the responsible people. There is no reason to hide information, you must be honest, the market will compensate you. And even if you don't get compensated, you'll sleep well knowing you did the right thing. Raised in the atmosphere of a major American corporation, she has become a fierce defender of morality.

If you hire people, and their jobs depend on you, you can't treat business like a game of cards, she said, pressing her fingers firmly on the table. If they find out what you're doing, they won't trust you anymore.

But if you're a good card player, you don't explain your tricks, Joe protested. How will you play to win in the long run? In business, it's crazy to be completely open about what you do. You have to keep some secrets and sometimes deception is the way to keep secrets. You don't lie, break the law, or cheat others to get their money. You're protecting what's yours from people who are playing the same game. If you don't cheat, you will lose money for a long time."

Eric, the leader of an advertising business, chimed in: I think, as long as you feel comfortable. I mean if you want to cheat, lie or whatever you want to call it, in one area of life, you can do it in other areas as well. If you want to deceive, that's fine, but sowing the wind will reap the storm. But you can certainly find aspects of business where people don't play business.

Where?, Joe asked.

Who knows. Maybe in non-governmental organizations, for example, Eric replied.

Mr. Badaracco was very interested. He said that managers who studied at HBS really like to debate this topic because it goes to the essence of the work they do. Advertisements that exaggerate product quality, machines that are specifically designed to fail just one day after the warranty expires, promises of delivery when the machines do not have enough capacity for basic production. Basically, everyone in the business industry boasts about the path they are taking, agrees when they are not ready, makes false promises, and exaggerates. Call it cheating or whatever, but the business environment is not suitable for honest people.

When I was a journalist, I had to work with public relations agencies. I often wonder if they exist because today's mass media have become so diverse, complex and sinister, or because people in companies have lost the ability to speak simple English. Both sides blame each other while public relations experts reap the rewards. Today, the giants among companies, so proficient and excellent in many aspects, can reach even the miserable people who only watch television and read newspapers when interacting with advertising staff. fox. The discussion about fraud in business has gone to the heart of the matter. The business world has become so accustomed to the rules and language of its own special game of deception and evasion that it seems to have forgotten the honesty, plain speaking, and straightforward behavior that most people use. number of outsiders in transactions. When a business leader talks about off-the-books asset accounting, does he know that most people outside the business world immediately think it is fraud? Or is that just a habit of the business world? After all, aren't we all bluffing?

After a few months at HBS, I was torn between the perception that business was evil and a deep understanding and sympathy for what entrepreneurs did. HBS went through the same struggle. The school's reputation is such that it is sometimes blamed for some of the industry's worst scandals. But anyone who has been there cannot doubt the serious approach the school takes to solving real problems. When schools try to organize, quantify, and establish frameworks for nebulous problems, it seems ridiculous. But sometimes, the school's approach also brings great results. Although it may seem silly to rate an employee's leadership ability on a scale of 1 to 5, businesses still do it because it helps them build a better business. I understand that before quantifying any unquantifiable factor, I need to reassess whether it is truly unquantifiable or not.

***

Gregor, a friend of mine who teaches at a business school in Europe, explains that MBAs are more like scientists. They learn everything about the world and one hopes they will not abuse it. Biologists learn about biology in the hope that they will not create biological weapons. Similarly, MBAs are allowed to study accounting on the condition that they do not manipulate company revenues and avoid taxes. But the sign of businessmen who do not have business ethics is that they generally do not violate the law because they always have their hands in the draft law. They make the laws, through lobbyists, so they don't have to violate them. He mentioned an ethical failure that I had forgotten about: the generous compensation of trustees. That is the amount of money that a talented general director pays himself after successfully completing a job. But in the US and Europe, a growing number of mediocre CEOs pay themselves as if they were sports superstars, appropriating shareholder wealth to feed themselves. Your comment made me think of a series of issues that could be considered under the umbrella of business ethics.

We wrestled with this issue in another lively discussion in the leadership and corporate responsibility class about the scope of a business's responsibilities. In this discussion, we read an article by economist Milton Friedman arguing that the only social responsibility of a business is to increase its profits. At that time, businesses pay taxes, reward employees and then let the government and individuals carry out the social responsibilities they find reasonable. Friedman strongly opposes the notion that companies should contribute to museums or send employees to work in homeless shelters. He said that action was robbing shareholders of money. British author Charles Handy argues otherwise. He said that the company includes all employees, meaning the company must have the responsibility of responsible people. Making a profit is not enough, they also have a responsibility to serve the community. In addition to economic purposes, companies must have ethical purposes. The best employees want to work for companies with good cultures, not companies that are only focused on increasing profits. Considering the mutual influence between business and the state, it is an unjust act for corporate leaders to suggest that the government set laws for them to simply obey. The business sector has a duty to help the government draft the best laws, not laws that benefit the company or the industry.

We went back and forth in class, half of the class fighting for the interests of shareholders and individual corporate duties, the other half advocating for corporate social responsibility. Mr. Badaracco seemed satisfied, and when summing up the lecture, he said that the most reasonable solution is to compromise between the two extremes above.

***

While we were studying business ethics, the school also encountered an ethical problem. When applying to school, most of the transactions between you and the school will be through email. You are invited to an interview by email. You will be notified of your admission via email. As a result, people often open their mailboxes to find out the results. This year, a hacker tried to infiltrate the website that stores admission information and peek at his results. But instead of keeping it a secret, this guy posted a simple four-step process to hack the website in BusinessWeek magazine's MBA newsletter. Of course, there are many people who have followed that instruction. When they found out, HBS decided not to accept them anymore.

Mr. Badaracco conducted a poll in class to find out our views. About three-quarters of the class thought the school's decision was incorrect. Only those with extreme moral views enthusiastically support the school administration. Everywhere, people hotly debated this issue until Principal Clark made a statement in Harbus newspaper:

I would like to make HBS's decision regarding candidates who illegally accessed the website: ApplyYourself Inc. Records enrollment information. This behavior is unethical and is a breach of trust that cannot be justified by rational explanations. Any applicant found to have done this will not be admitted to the school. Our mission is to educate principled managers who will make a difference in the world. To achieve that, candidates must have a variety of skills and qualities, including integrity, judgment and a strong moral compass. Those who illegally entered the above website could not overcome this challenge.

In the next issue of the magazine, class of 2006 student Aaron Bigbee objected and expressed his feelings. Is it really hacking as Mr. Clark said, cutting and pasting some instructions from a public bulletin into a website address? The actions of these candidates did not cause anyone any harm. They do not violate HBS regulations.

To claim that a relatively minor ethical lapse should disqualify someone from attending HBS condemns me and the majority of people I know here, Bigbee wrote. I understand that the school needs to uphold the spirit of proper ethical conduct. But punishing a harmless behavior with arbitrary decisions is not the way to go. We must apologize for this mistake, establish a clear standard for the future, and not punish those people. That would be an admirable moral precedent. Nothing happened after Bigbee's post. Prospective candidates were warned to wait for the results and not try to find out in any way that would be considered illegal intrusion. But the voting results in the leadership and corporate responsibility course show that MBA students think the school's response is excessive and too complacent.

***

Although negotiation is very important in business, we only studied it briefly in the second semester. The lecturer is Mr. James Sebenius, a member of the founding team of Blackstone Private Joint Stock Company. He aroused our curiosity with random comments like back then, Concorde was my bus and the Four Seasons restaurant was my canteen. Unlike other teachers, he likes to dominate the lesson. The teacher's reason is because the class