>Thank you very much and good fortune.<
You're welcome and thank you.
I have copied below the text I sent to Dr. Rosen on this issue.
--------------------
In late 1990 the company's controller approached me and shared with me a disturbing fact-we were heading out of business because we were fast approaching our line of credit at the bank. He begged me to do something to save the company. I said to him "Why are you telling me? Tell the directors." I was an Associate, one level below Director. He told me that he has "told them numerous times but they are incapable of taking action." What should I have done for my company and myself?
>Dr. Rosen: I have heard from too many grads who have tried to implement, carryout, or influence "the way things are done," only to be rejected, intimidated, and even worse in their own organizations. They are "beaten down" for their efforts to be whistle-blowers, change pioneers or the like.<
I made the decision to help my company since I owned 1% of the 220 employee engineering design firm. Fortunately for me I had started an Executive MBA program in January, 1991. As I was learning in the classroom I was applying it in the workplace.
I learned during the last class on the last day of the MBA program that we should not be a change agent unless the CEO asks us to do it and only if he'll fire the first manager or executive who gets in the way of the change. I made a huge mistake by becoming a change agent for a firm that did not want to change. I was downsized 6 weeks before graduation.
After I left in May 1992, the company's banker went to my brother the CPA and advisor to business and industry for insight into how to deal with a problem client not knowing that my brother's brother, me, worked there for 20 years. In fact, the banker didn't tell my brother the name or size of the company, the business of the company, the location of the company or anything else about the company other than the behavior of the board of directors. The banker was maintaining client confidentiality. My brother said to her "That is the XYZ company." She fell out of her chair so to speak. She wanted to know how he knew. He said "my brother worked there for 20 years and told me the same story."
A few months later a senior Director asked the remaining Associates "why have you all been so quiet at our Director/Associate's meetings?" A future company president responded "Where is Gately?"
Employees learn quickly when acquiescence is rewarded and confrontation is punished.
The Director/Associate's meetings were started because of my agitation to save the company from bankruptcy. My fellow Associates knew what I had done since I had asked all of them to help. I asked them to tell their directors that we were planning to meet to help the company. The day after our first meeting the board started the Director / Associate meetings. I think they started the meetings to control us.
At the first meeting Bob B. who was one of my fellow Associates and who had told me he was not going to say a word because he did not trust the Directors not to hold a grudge said "I want to discuss communications between Directors and Associates." Before Bob B. could continue a Director said "Bob, before you continue let me just tell you that a recent Directors meeting we all agreed that we have good communications with our Associates." Bob B. responded "Communication between the Directors and the Associates is terrible." For the next 18 months the meetings went downhill. The president and other directors spent too much time telling us that the problems we perceived were not really problems as if we were too stupid to know a problem when it hit us in the head.
Some directors believed that confrontations are bad so they avoided confrontations at all costs.
My advice to business school professors is to teach their students that they are not personally responsible for fixing the ailing companies that they may work for in the future. Advise them to wait until they are the CEO and/or are asked by the CEO to be the change agent. Business school graduates need to know when to bail out of dysfunctional organizations.
>Our job needs to address what can be done to create those new ethics, values and rewards needed to turn this around and make "business ethics" less of an oxymoron.<
The discussion on ethics in business is very interesting yet distressing, see my letter to Robert Weisman, below.
It is interesting because unethical behavior by managers causes harm to not only the organization but also employees, former employees, future successful employees that were not hired, customers, clients, vendors, society, etc.
It is distressing because business schools want to fix a problem of the heart that was created by a lifetime of learning outside the classroom and sometimes in the classroom where cheating is rewarded.
I have a problem with business schools that say or imply that their graduates will be good managers. Well educated yes but not necessarily good managers.
In the 1989 article "Transforming the Engineer into a Manager: Avoiding the Peter Principle" Civil Engineering Practice, Fall 1989. The author, Dr. Neil Thornberry a Professor at Babson College, asserts that young engineers are judged on technical merit and accomplishment, and that promotions go to the technically proficient and verbally expressive engineers, while less technically proficient and verbally expressive engineers wait their turn.
Dr. Thornberry found that for a group of engineers the most talkative, competent engineer gets the first promotion into management. The second most talkative, competent engineer gets the second promotion into management. However, the third most talkative, competent engineer makes the best manager. Managers need to listen more than they talk. Now let us presume that a growing company keeps promoting their most talkative competent engineers into management. What do we have? The best technical experts no longer doing the work and the best managers not in management and if they are in management they report to someone who is less capable of managing effectively.
Do convicted business managers and executives offer the excuse that their business schools failed to teach them right from wrong? I think not. We can tell they knew right from wrong by the great lengths they went to to hide their unethical and illegal behaviors.
Perhaps the problem is that business schools want to believe that everyone is good and if only they can show them how to be good they will be good. It doesn't work that way.
Some business school students were unethical before they entered the school and some will be unethical after they graduate. Schools may think they'll have big impact but I don't think so.
If we operate at the university level on the basis of trust, we are teaching the unethical students that they can cheat without worrying about being caught. The ethical students will wonder why they don't cheat since their fellow students are cheating and getting grades they don't deserve.
Most all managers are ill-equipped to actually manage their direct reports even if they are well educated.
Finally, the problem is not how business schools educate their students but how employers hire their managers, see below. How do such unethical managers get hired and how do they survive on the job?
Robert Gately