Thursday, November 12, 2009

The Failure of Business Schools.

Aristotle distinguishes between two categories of virtue: intellectual and moral. These virtues are differentiated in line with his perception of the soul. Intellectual virtue includes scientific knowledge (episteme), technical understanding (techne), intuitive reason and practical and philosophic wisdom. Business schools tend to concentrate on episteme and techne in order to inculcate students with the most up to date tools in which to enter a competitive and profit oriented social paradigm. The intellectual virtues acquired are a consequence of teaching and can only blossom through experience, whereas moral virtue is acquired by habituation. The exercise of intellectual virtue allows us to make choices that are based on understanding, practical wisdom and good sense—resulting in judgments that are fair and equitable. Intellectual virtues are required to allow for the habituation of moral virtue which in turn facilitates actions that are aimed towards attainment of an end which all men have in common—happiness (eudemonia). Rational deliberation using the intellectual virtues and actions that incorporate moral virtue are the means by which this end is attained. I believe this is where our education system—not exclusively business schools—fail to indoctrinate students towards recognizing the teleological nature of mankind.

In his critique of modernity MacIntyre (1984) points out that society has lost the concept of a teleological purpose to life and, in lieu of pursuing eudaimonia, has directed the actions of man towards a tainted and shortsighted goal—one directed towards the fulfillment of self-interest with little or no consideration directed towards the community. The cultural milieu of emotivism has produced a society where moral judgment is not grounded n any rational method but merely results from the projection of personal preferences in the most convincing of manners. Emotivism can be best understood by the embodiment of what is the moral life through the roles archetypal characters play in society. MacIntyre utilizes three typical characters to present his argument: the rich aesthete, the manager and the therapist. It is in the role of manager that we find the rationale of producing graduates of business schools. “The manager represents in his character the obliteration of the distinction between manipulative and non-manipulative social relations” (MacIntyre 1984: 30). The manager treats ends as given, concentrating his intellectual skills on technique and effectiveness.

While business schools have excelled at producing graduates that demonstrate competence in engineering investment products based on complex mathematical models (derivatives, ETFs, Swaps etc.) and implementing their exceptional ability at marketing and optimizing productivity, little has been done to enlighten the student as to how to use his/her acquired intellectual virtues in a manner which promotes morality. Although students leave the university environment excelling with intellectual resources, there is no attempt being made to demonstrate how these attributes can be used to habituate excellence of character that serve to better oneself and the community. Business schools tend to minimize their responsibility to indoctrinate students with a sense of moral obligation or a proclivity towards the pursuit of moral excellence. Since business practices take place within a corporate community, business ethics education should focus on the role and responsibilities of an individual within such a community. Although it can be argued that ethics cannot be ‘taught’—it is a cop-out that virtue cannot be taught. It is the connection between intellectual virtue and moral virtue that our business schools have chosen to shirk.
I believe that professors of business ethics provide an essential aspect to the education of future captains of industry and that the subject of business ethics should be taken much more seriously by those who are responsible for the determination of the curriculum at business schools. Too often business ethics courses are considered by students to be an annoying but necessary elective that is required for graduation. Practical reasoning and business ethics should be requisite courses at all business schools and the importance of them should be stressed so as to compel the student to comprehend the vital connection between intellectual virtue and moral virtue.


  1. I have come to the conclusion that business schools, and to similar extent, higher education, have become a repository of fads. I tend to see that bubbles are normally caused by the latest fads taught at schools. As you've mentioned - statistical models based on physics was one of these. Yet nobody really thought through that models work on hard sciences because God does not change the laws of physics but human behavior does given a set of circumstances.

    Prior to WWII - universities saw themselves as places to educate well rounded men. A liberal arts education gave them a background of what Western civilization's foundations are, and dare I say, a moral basis for them to understand the world around them.

    Schools today dismiss such foundations under the guise of relativism - believing that all cultures and moral codes are equal. Until such a time whereby the building blocks of a classical education are brought back, you will see this problem continue.

  2. I could not agree with you more. Perhaps you have read After Virtue by Alasdair MacIntyre. In it he discusses the doctrine of emotivism in which moral judgments are nothing but expressions of preference, attitude or feeling. He goes on to critique the Enlightenment project and the consequences of its failure--including the generalizations of social science. So many of the problems encountered in contemporary culture is eloquently dealt with in this important tome. If you have not had a chance ot read it, I suggest you do.