Global Strategy - blog

Imperial College has far less exciting high profile speakers in the areas of business and social sciences than its UK peers. However, this week I had the opportunity to see a lecture by Daniel Goleman (of the emotional intelligence fame) who one of our professors had convinced to speak at the Imperial while traveling to London for some conference. By co-incidence, I had also taught half a session (60 minutes) on ethics in strategic management -- something the business school accreditation bodies are insisting on. These occasions provoked me to write my first blog post here.

I begin with Goleman. He suggests that effective leaders have high emotional intelligence. Ability to manage others depends on emphathy, which can be divided into three areas: understanding the other's viewpoint, understanding the other's emotions, and feel with the other. In passing, he notes that sociopaths lack the last one, where the understanding of the others facilitates manipulation (Hitler, anyone?). For Goleman, the lack of work ethics and self control is based on poor self awareness, yet another aspect of emotional intelligence. The story is cheap, sunshine humanism: high emotional intelligence makes you a good human being and ultimately the best possible manager.

Kets de Vries and many others provide a compelling alternative explanation. In his study of successful managers, de Vries found that many top managers fulfilled the clinical criteria of sociopaths: they were good in pulling strings but largely lacked the concern for others. Relatedly, I recently read an article by a psychologists who treats bankers. He said a majority of investment bankers lack of self-awareness and work obsessively because of a pathological need to show their competence to others. No cheap humanism here: best possible human being is not always the best possible manager, and vise versa.

 My students had also internalized the model of cheap sunshine humanism, which insists that doing good and doing well is ultimately compatible. I tried to press students to consider situations where responsibilities towards your shareholders and ethical concerns conflict, using an example of a plant in a developing country that fulfills lawful requirements but pollutes the nearby river. The concensus anwer was evasive: polluting the river would also make your workforce sick so it makes no sense in business terms either. Every ethical choice disappears because somehow the ethical option provides the greatest shareholder returns. I tried to remind them that IBM subsidiaries facilitated the holocaust and the firm has never been punished.

Cheap humanism is compelling in business settings. A tradeoff between money and goodness is distressing, while people are quick to embrace unidimensional worldview where good is good is good. This is after all probably the reason why the invisible hand and Reagan's trickle-down economics have prevailed.

I am at loss with teaching ethics. I am fairly certain, however, that my students shouldn't be closing their eyes and pretend that ethical issues in strategic decisionmaking are unproblematic.