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A walk down memory lane…

… at Fortune, whose editors explain, in reprinting an article from 1986, that “with the hedge fund manager Raj Rajaratnam fighting insider trading charges in a Manhattan courtroom and one of Warren Buffett’s top executives, David Sokol, resigning under suspicions about his personal trades, the lessons from the 1980s still ring true.”

… [T]he business school ethicists may be as much a part of the problem as of the solution. Their main message starts off with the reasonable exhortation that the future managers in their classes must prevent the creation of cultures of corruption at the outfits they’ll help run. Corporate cultures powerfully affect employee behavior, students rightly are told, so you mustn’t have reward systems that encourage misreporting of revenue and expenses or that promote cheating on government contracts. But in practice all this talk about how employees are creatures of their culture ends up by tacitly accepting the notion that the individual employee really can’t be held personally responsible for his actions. The result is to genuflect piously to the idea of ethics without requiring any person to be ethical.

Margaret Soltan, April 3, 2011 10:42AM
Posted in: beware the b-school boys

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