Copyright by John T. Reed

I am an MBA graduate of Harvard Business School (’77C). So is my wife (’78E). I am also a graduate of West Point (’68). Harvard Business School is often called the “West Point of American Business.”

West Point has long had a Cadet Honor Code which, when I was there, said,

A cadet will not lie, cheat, or steal.

West Point has since added non-toleration to the code. That was implicit when I was a cadet.

Harvard Business School-created MBA oath

Apparently, a group of more recent Harvard MBA students has created an MBA counterpart to the Cadet Honor Code.

Why?

It appears, to offset the greedy, immoral image MBAs have acquired in the last three decades. Also, to be politically correct. Although Harvard MBA are more conservative than most university students nationwide, they are more favorably inclined toward liberal, politically correct bullshit than most non-Harvard MBAs would expect. I attended from 1975 to 1977. That was shortly after the Vietnam War. I was a Vietnam veteran. So were many of my classmates. But by far the majority were anti-war, draft dodgers.

Someone (not Churchill) once said,

If a man is not a liberal at age 20, he has no heart. If he is not a conservative at age 40, he has no brain.

Harvard MBAs are closer to 20 than 40. This MBA oath is not much more than evidence of that.

The MBA oath, and my comments, follow:

THE MBA OATH	John T. Reed comments about the MBA Oath
As a manager, my purpose is to serve the greater good	Bullshit! One of the ways I used my MBA was to coach baseball, football, soccer, and volleyball teams. My purpose with those teams was to win ethically. My purpose managing business employees was to live up to our contractual obligations to our customers, attract new customers, and be as efficient as possible. Shortly after I graduated from West Point, I created my own personal Reed Code modeled after the West Point Honor Code but broader. It says: • Tell the truth • Keep your promises. • Treat others as you want to be treated. I taught that to my sons including putting a framed copy of it in each of their rooms. I would not claim it cannot be improved upon, but it beats the hell out of this politically-correct, collectivist MBA oath. The most articulate critic of this “serve the greater good” mind set was probably Ayn Rand. Her objectivist philosophy condemned it. In her novels The Fountainhead and Atlas Shrugged, her heroes (Howard Roark and John Galt respectively) angrily and eloquently denounced the notion that they were supposed to live their lives for “society.” Audio-video portions of their soliloquies on the subject are at the links I attached to their names earlier in this paragraph. I generally agree with Rand on this issue. The MBA oath purpose is an air head liberal notion of how private companies should think—MBAs trying to impress their non-MBA peers with their politically correct saintliness. Like I said: Bullshit!
by bringing people and resources together to create value that no single individual can create alone.	Uh, Oooookay. That is just the definition of a manager isn’t it—a grandiose version of the definition? You only create organizations of multiple people when you are unable to accomplish the tasks you want to accomplish alone. But I doubt any manager searched the world over making sure there was no single individual who combined the skills that you have to get from multiple people in your own organization. There are some one-man-band, triple threat types out there.
Therefore I will seek a course that enhances the value my enterprise can create for society over the long term.	No. I will set my goals, whether they be long or short term, and they will relate to me, my family, friends, relatives, and colleagues, not “society.” The word “society” seems to have no meaning other than as leftist straw man to be beat up on or as an obfuscating all-purpose motive.
I recognize my decisions can have far-reaching consequences that affect the well-being of individuals inside and outside my enterprise, today and in the future.	True, but again a bit grandiose if you run a candy store on Main Street.
As I reconcile the interests of different constituencies,	Constituencies? That a politician’s perspective. Like I said, this is politically-correct bullshit. You have legal and moral obligations to shareholders, colleagues, and customers, but you are not seeking their votes or affection like the MBA students who wrote this oath seem to be.
I will face choices that are not easy for me and others.	Poor babies. Welcome to planet earth. How is this statement relevant to MBAs but not the entire rest of the teenage and adult populations worldwide?
Therefore I promise: I will act with utmost integrity and pursue my work in an ethical manner.	Oh, really? Well, you’d better read the following chapters in my book Succeeding: 16. Reputation 17. Values 36. Working for other people 40. Making an honest living 43. Conflict and conflict avoidance The basic problem is no man can be more honest than his boss. His boss, in turn, cannot be more honest than his boss. And so on. So no one can be more honest that anyone above him in the chain of command. The longer the chain of command, the more dishonest the most dishonest member of it is. The combination of human nature and bureaucracy almost always requires going along to get along. Furthermore, many industries are inherently dishonest. Generally, those are the industries that give a lot of money to politicians. In short, if you insist on “acting with utmost integrity,” as I do, you need to be self-employed or work for a very small, very honest organization. The vast majority of MBAs signing the MBA Oath have no intention of avoiding dishonest organizations. And when they are inside the bellies of those beasts, they will not dare to act with integrity because if they do, they will be fired very soon after they refuse to go along with some dishonest act desired by their boss. This is the Hypocritic Oath. Very few of the MBAs signing this oath are going into companies small enough to allow them to “act with utmost integrity.” Most Harvard MBAs were in the business world before coming to Harvard. They know that. So that majority of the people signing this oath know signing it is a hypocritical act.
I will safeguard the interests of my shareholders, co-workers, customers and the society in which we operate.	Goes without saying and applies to everyone not just MBAs.
I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves.	ditto
I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise.	ditto
I will take responsibility for my actions,	How’s about the group that created this oath posting and keeping up to date the names of oath signers who have publicly taken responsibility for their actions. I expect that will be a blank Web page for years and years.
and I will represent the performance and risks of my enterprise accurately and honestly.	This is a valid MBA oath provision, but again, this provision has long been the law of the land. Also, I have just spent several years studying risk management. There are many risks where the financial world has been in such a big hurry to capitalize on a new product, they they simply did not bother to analyze the risks. The oath needs to specify that they should disclose the known and knowable risks. That is, do the necessary analysis and back testing and such on the risks of new products.
I will develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the well-being of society. I will strive to create sustainable economic, social, and environmental prosperity worldwide. I will be accountable to my peers and they will be accountable to me for living by this oath. This oath I make freely, and upon my honor.	Pap

This is basically a “money is the root of all evil” oath.

Here is a pertinent portion of “Francisco’s” money speech from Ayn Rand’s book Atlas Shrugged.

Let me give you a tip on a clue to men's characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.

"Run for your life from any man who tells you that money is evil. That sentence is the leper's bell of an approaching looter. So long as men live together on earth and need means to deal with one another--their only substitute, if they abandon money, is the muzzle of a gun.

"But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich--will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt--and of his life, as he deserves.

Slippery slopes only

If someone is serious about a real MBA oath that is not just some innocuous politically correct public relations stunt, it needs to address only the slippery slopes unique to MBA careers. Career moral codes should offer guidance for those unique aspects of the profession where there are temptations to behave immorally. The “represent the performance and risks” clause above is the correct sort of subject matter for such a code.

My real estate teachings on ethics

My books about real estate investment have chapters and subheads about the ethical dangers of different investment strategies. For example, in my book How to Buy Real Estate for at Least 20% Below Market Value, I warn readers against misrepresenting the fair market value of the building being purchased. Making a below-market price cash offer for a property being foreclosed is ethical. Telling a person being foreclosed that you are offering fair market value when you are offering less is not ethical. There is a powerful temptation to lie because it increases the percentage of bargain properties you buy.

Another example would be warning those who want to go into new construction that permit-approval officials expect bribes in many jurisdictions. My advice is not to do business in those places.

My real estate writings also generally urge my readers to apply the know-your-customer suitability rules of the securities markets to deals where the other party in being asked to sign a complex document like seller financing by laymen or any sort of option. Experience has shown in both the securities markets and real estate that people think they understand such arrangements when, in fact, they do not. You should only do such deals with financially-sophisticated parties. I define sophisticated in considerable detail in my various writings on the subject. With the exceptions of syndication deals, suitability is utterly ignored in real estate. That’s immoral and wrong.

I have also written books on football and baseball and they have strong advice on the coaching counterparts regarding safety of the players, teaching players to cheat (like holding in football), and so on. A number of articles at my Web site discuss at length ethics in real estate, the military, and football and baseball.

Writing a behavior code that is nothing by a rehash of the Boy Scout oath combined with the mission statement of some lefty do-gooder group is a waste of everyone’s time and an embarrassment to the management profession. If I were hiring MBAs nowadays, I would ask if the applicant had signed the MBA Oath and, if so, throw them out of my office.

A reader directed me to an article in the HARBUS (Harvard Business School newspaper) on the MBA oath. In 1976-7, I was the main columnist in that paper. The HarBus column on the MBA oath is similar to this Web article. The author of the HarBus column is, probably not surprisingly, a graduate of the U.S. Naval Academy, the arch rival of my alma mater, the U.S. Military Academy. Coincidentally, the HarBus column was published the same week I published this Web article, but I was not aware of it until a West Point (’03) Harvard Business section (85 students) mate of the USNA author brought it to my attention. Here is the column: http://media.www.harbus.org/media/storage/paper343/news/2009/09/28/Viewpoints/Mba-Oath.An.Oath.And.Its.Flaws-3785526.shtml#2

John T. Reed