Business Schools Blamed For VW Ethical Lapse & Bad ‘Bro’ Price Hikes

Drug company CEO Martin Shkreli - CBC photo

Drug company CEO and consummate ‘bro’ Martin Shkreli                                                 – CBC photo

Are business schools sending “moral midgets” out into the world to recklessly plunder without regard for honesty and human decency? Certainly, recent news suggests you don’t have to dig too deep into the business world to unearth leaders who appear more likely to pluck a Tootsie Roll from a five-year-old’s fist and sell it for 30% of retail than to ensure their factory workers are treated fairly or their products don’t lay waste to Mother Nature. And blaming B-schools for failing to teach students to behave ethically is nothing new – many commentators laid responsibility for the global financial crisis at the doorsteps of MBA programs, for instance. But revelations of late concerning egregiously reprehensible behavior by corporate leaders have now prompted an Emory University ethicist to loose a new blast of criticism.

“That far too much of the world’s corporate leadership is driven by moral midgets who have been educated far beyond their capacities for good judgment should be obvious after observing the events of the past week,” writes Edward Queen, director of Emory’s Turner Program in Ethics and Servant Leadership. “For the past five to six decades, epigones of Milton Friedman have been emphasizing that the only duty of a corporation is return on investment. This lesson, drilled into generations of business school graduates, now drives tsunamis of corporate malfeasance.

“Observational and anecdotal evidence suggests that business students are not only impaired in their moral judgments but that significant percentages of them have severely impaired moral imaginations. By this I mean not only do they make bad ethical decisions, but they actually are incapable of identifying an ethical situation when they are presented with one.”


Queen hangs his argument on the news about Volkswagen’s emissions-testing scandal, and the 5,000% price hike by Turing Pharmaceuticals for a drug used to combat malaria and to treat toxoplasmosis, a disease that can affect people with compromised immune systems, such as AIDS patients. Fallen VW CEO Martin Winterkorn studied metallurgy in school rather than business. Martin Shkreli, the Turing CEO and consummate entitled “bro,” has a bachelor’s degree in business administration from Baruch College. While it is perhaps a stretch to blame business schools for VW’s calculated deception, Queen argues that the auto giant’s malfeasance is a symptom of a profit-at-any-cost culture that business schools feed into without properly instilling ethics in students. Never mind the debate over whether people learn ethics in their home and place of work rather than school.

Still, Queen teaches ethics to graduate and undergraduate business students, and has interviewed numerous business ethics faculty members over the past decade. It appears, he writes, that “when business students are presented with an ethics case, that is a case where they have been told that there is an ethical problem, 20% to 30% of the students cannot find or identify the ethical issue.”


So, what’s wrong with young people today, that so many are ethically vapid? In an interview, Queen points to an over-emphasis on tolerance, that makes it very difficult for many people to even say something is wrong. Students are entering business schools “almost as kind of blank slates in terms of ability to think about, to argue about, the good,” Queen says in an interview. “So for business school students, they get into these programs and there’s a lot of cultural realities that strengthen the thing about value is monetized, and on top of that, the kind of overwhelming message they’ve been getting: the only thing that matters is return on investment.

“Even if they may have a business ethics class, that’s not reinforced by the other messages they’re getting either in the school, from their peers, perhaps even from the business world as a whole.”

  • dergo

    why 2cents erased his comments?

  • C. Taylor

    Take an action that reduces growth in productivity from 2.0%, (obtained using the above method) to 1.7%. Now project the effect for your grandkids at age twenty–you know, the children had at the age of thirty by your children which you had at the age of thirty. That’s fifty years out, give or take a couple.

    GDPperHour(future) = GDPperHour(today)*e^rt

  • 2cents

    tell ya what, why don’t you forecast global gdp based on productivity growth in 30 years and if you miss by 1% you owe me the amount you miss by. if you hit, i’ll give you everything I own. growth is real, short term growth is predictable, but believing long term productivity is the only element you need to monitor is neive and dangerous.

    It’s a descriptive term today, but you can regress every thing you want to try to determine a long term “r” and you’ll almost certainly be wrong. probably not terribly off, but we don’t live ina vacuum where r stays constant 30 years into the future unless you’re China making up growth numbers.

    Done with responding to this btw so go nuts with the last word

  • C. Taylor

    2cents wrote: “if you could simplify **growth rate** into a single number, but you seem smart enough to understand that the application of **this theory** is immensely complex and nuanced”

    “GDP(future) = GDP(today)*e^rt” is a description of the effects of the growth we experience in capitalist societies. It is not a theory. And, amazingly enough, we can project the effects of reducing growth. The only long run option for a better future is to improve productivity. The rate at which we do so has significant meaning for your grandchildren.

  • 2cents

    Not a single thing I’ve said has been growth is theoretical.

  • C. Taylor

    You are saying growth is theoretical. I am saying growth is real. History agrees with me.

    I provided clear examples in case you simply don’t understand what growth is. Here is one more.

    If I plant a grain of rice and get 1,000 next year; next year I can plant 1,000, and get 1,000,000. This is growth.

  • 2cents

    you probably would have loved 1880-1910 US too (and may not understand why that’s bad…) but we’re still not talking about the same thing.

  • C. Taylor

    It is a matter of investing in growth or misallocating capital to non-productivity-increasing ends. The difference has great meaning. I made it simple. A rice plant grown from a single seed, can produce 5000 grains of rice–or much more.

    There once was a great man who fiercely loved his people and was loved in return. He saw the corruption of greed resulting in his people being downtrodden and used at the whim of foreign powers. He stopped the hemorrhaging of his land through revolution and thereafter sought to improve the lot of his people in the world. His name was Mao Zedong. And he did not understand economics.

    Mao decided China should export rice. So corrupt local officials seeking to curry favor pretended their villages and regions produced more rice than they actually did. Because of this, much of the rice that was needed to feed the local people was sold in export markets. This resulted in a terrible famine and many died. That scenario I provided above is quite close to the experience of those villagers.

    Later, another great man saw the benefits of allowing villagers to trade in eggs, chickens, rice, and other products of their land. His name was Deng Xiaoping and he is famous for saying, “不管黑猫白猫,捉到老鼠就是好猫”–it doesn’t matter if a cat is black or white as long as long as it catches mice. Thanks to Deng’s embrace of capitalist practices, today hundreds of millions of Chinese are joining the middle class.

    Growth works. Reducing growth in productivity so you can have an apple you don’t need today prevents your grandchildren from having three extra apples tomorrow.

  • 2cents

    Are you specifically protesting welfare with this statement? The morally superior answer is to invite the man to work on the farm assuming that increases output, sure. We’re not talking about the same thing apparently fyi.

  • C. Taylor

    It’s simple math. To put it on the level of a layman:

    You are planting a crop vital to preventing the starvation of your village. A stranger happens by and requests you feed him with the seed. Do you feed the stranger or plant the crop and feed the village? There is no replacement for the seed.

    If you feed the stranger, the village will die, if you feed the village, the stranger will die.

    Which is morally superior?

  • 2cents

    Sure, if you could simplify growth rate into a single number, but you seem smart enough to understand that the application of this theory is immensely complex and nuanced, yet your statement above seems to indicate that effective allocation of short and medium term capital drives this, which equates to early Milton Freedman ideology that have been shown grossly oversimplified. It’s not wrong in a vacuum, but in reality there are factors that effect growth that are much more diverse (what factions of consumers spend most, what are the spending on? if demographics change long term, what trends does that dictate for capital allocation? Will the fed shrink the money pool? Will excess searches for high growth rates continue to feed overvaluations?). Come back to reality bud.

  • C. Taylor

    It’s known as growth and has been empirically demonstrated. The basic growth formula is this:

    GDP(future) = GDP(today)*e^rt

    Multiply by any given amount you decide should be spent on non-productive ends.

  • banative

    C Taylor, you had me at “increasing the long run productivity in an economy benefits all”

  • 2cents

    I take back what I said below… You somehow missed the last 30 years in economic research and push 1970s Chicago-style economic theories that work only in a vacuum. And the guy below mistakes what social impact actually is?


    for your information, the GMAT score is inversely proportional to the length of the penis.

  • C. Taylor

    The idea being well compensated–and or pursuing capitalist ends–makes one morally bankrupt is founded in a broad misunderstanding of economics.

    Increasing the long run productivity in an economy benefits all stakeholders–including those relying on tax handouts. So increasing the share of GDP spent on welfare today takes multiples away from welfare recipients down the road.

    Individuals acting in the markets, in banks, and in other capitalist enterprises who increase long run productivity are fundamentally improving the lot of future generations. Intermediately improving the productivity/future lot of their respective enterprises justifies appropriate compensation. And countless enterprises make a point of being good citizens.

    Sensationalism in the media washes over the myriad of good which capitalists benefit society with by blowing the actions of a few bent individuals out of proportion. Any quick perusal of MBA admissions advice on this website will quickly come across the fact that admissions teams screen out such individuals to the best of their ability.

  • EmbarrasedDukeUndergrad

    Can we just stop for a second….FUQUA’S average GMAT was 695 bahahahahahahahahaha. Like really? I would love to sit through a class and see the quality of that conversation. I think most of my peers at Booth could clear that without studying. Lol 695 smh.

  • CallingItLikeItIs

    Hmmm….I think the MBA has been around for 115 years, but business people (and all people) have been doing nefarious and morally dubious things to earn an extra buck for thousands of years.

    Also, the assertion that MBAs are trending towards “social enterprises” is misleading at best. The Bain study states that 50%+ MBAs plan to “work in social impact”, but if you review any top MBA employment report you will see that 1-2% of class goes into social impact work (e.g. 1.9% at Wharton, 1% at Kellogg). This is because MBAs are polished and savvy i.e. we know everyone wants to hear about how we don’t care about prestige and how we want to have social impact so we say it.

    More importantly, we have changed what “social impact” means i.e. Theranos (the embattled diagnostics startup) is “democratizing” healthcare by providing cheaper blood tests than incumbents, which used to just be called “cost cutting” 10 years ago – e.g. how many generic drug manufacturers were “social impact” companies “democratizing” meds? And wait Theranos needs capital to “democratize” healthcare so guess who else is part of the “social impact” ecosystem – that’s right the investment bank that advised Theranos and the growth equity firms that invested. Everyone is making social impact! And we can do it while still becoming billionaires! No longer do we actually have to work at a nonprofit or be Mother Theresa to be in the Social Services sector. Us business people are amazing at reconciling cognitive dissonance when it comes to morality. Rollert’s Silicon Valley culture is different than Wall Street culture is classic “This Time is Different” logic. SV is just as wealth-seeking as Wall Street or else what is with everyone’s fascination with valuations and so-called Unicorns?

  • DeeFan

    Tongue in cheek 8-))

  • JohnAByrne

    Hmmm…..a “bro” ranking? Think I’ll pass on that one. Agree it would be good fun, though.

  • DeeFan

    If you don’t have a moral compass before business school, you won’t have one afterwards.

    The Stanford fiasco shows the lack of moral compass at the leadership level of a major university. Moral compass is not just doing right, but also sticking your head in the sand to make believe you don’t know of an ethics issue.

    Having said that, on the MBA level have an ethics question on the essay part – that would be interesting, unless the adcom claims it doesn’t have the time or the substantive capability.

    On the employer front, some companies have the reputation of being ‘bro shops’. I suppose though that some bro’s are ethical and some are not.

    John, how about a survey to rank the most bro employers? Good fun.

  • 2cents

    Honestly I find it offensive that this article gets the time of day here. Even if you remove the spurious relationship between VW and Shreki and MBAs (there is none) and prescribe that attitude to a “Greed takes all” world, finding causation between a two year degree most individuals achieve near the age of 30 (long after moral definitions become engrained) with moral capacity within a society (or industry) is egregious and “morally vapid” in itself. Yes, a degree which allows individuals to advance in business will attract people of multiple colors, in particular those who may lack a moral compass. But he might as well be saying having more police in a city causes more violence. Add to it that the increasing motivation of the current generation to move away from the greed is good mentality as a whole, and you’re comparing generational trends to moral laggards that still improve on the past. Dr. Queen wrote a puff piece for click bate. way to prove your academic merit.