`Eruditio ex Lawyers: A New Path towards Trust and Excellence

in Business Education

Randy M. Ataide, JD
Professor of Entrepreneurship
Fermanian School of Business
Point Loma Nazarene University

*This paper is for review only and may not be published,

disseminated, printed or otherwise used by the reader without
the advance written approval of the author.

Abstract: This paper will examine the allegation that Schools of

Business “drifted” into the 2008 global economic crisis through a lack
of leadership and reform that culminated in a widespread perception of
a breach of trust by the public. It will propose that business schools
should consider a philosophical reorientation to embrace elements of
what is known as “the citizenship model.” Schools of Business will then
be encouraged to incorporate some specific components of graduate
legal education, which may lead to significant improvement in business
education quality, reputation and trustworthiness. The author, both a
member of the California State Bar Association and an alumnus of
Harvard Business School, will utilize historical and current research
supplemented with practical counsel from four law school and practice
tenets. The paper will conclude with a recommendation of
collaboration between accreditation agencies and a new organization
modeled on the American Law Institute, successfully utilized by the
legal academy and profession for nearly a century.

Introduction: For over 20 years research has provided a critique of

schools of business (“SoB”) education, especially for the MBA, and
called for significant changes in business school practices. This
criticism now serves as fresh fodder for the debate of the relevancy
and role of the SoB in causing the global economic crisis, and if the
SoB has the capacity, willingness or ability to reform. An example of
this criticism is the charge from Joel M. Podolny, the former Dean of the
Yale School of Management and present Dean of Apple University who
asserts “Business schools provide students with many technical skills,
but they appear to do little, or nothing, to foster responsibility and
accountability. Society implicitly trusted MBA’s to do no harm when it
allowed financial markets to operate in a relatively unregulated fashion
—but its faith has been betrayed. As a result, there’s an active distrust
of business schools and their graduates.”(Podolny 2009, 7)

1
The lack of trust and the criticism by Podolny and others towards SoB’s
is not generic or without specificity towards particular fields and
institutions. “One of the root problems with business schools is that too
many are infected with assumptions that reinforce and bring out the
worst in human beings. In particular, the logic and discipline of
economics usually rule the roost at business schools.” (Sutton 2009,
26) Often, Harvard Business School and other prominent SoB’s are
singled out for their complicity with comments such as “I think that the
root cause of the problem is a way of thinking and acting by leaders
who graduated from the leading business schools worldwide, including
Harvard Business School. Therefore, business schools are directly
responsible for the current economic and financial crisis, which has led
to the biggest contraction in the U.S., because HBS graduates led the
nation to the state of collapse.” (Fryer, 2009, 74) The criticism and
evaluation is not limited to U.S. based SoB’s, for SoB’s across Europe
are reconsidering many elements of their programs including
curriculum, length of program and partnerships and alliances. In an
April 9, 2009 article in The Independent, Professor Chris Bones, Dean
of the Henley Business School of the University of Reading, U.K., wrote
“The MBA industry must reform itself. It’s easy to teach theoretical and
quantitative stuff. But you don’t get a lot of reality and certainly don’t
get today’s reality.”

In all fairness, there are variations of this criticism that move beyond
the SOB. For example, media icon Steve Forbes of Forbes media has
alleged that mark-to-market accounting was the “principal reason” of
the financial crisis (Pozen 2009, 85), while the Wall Street Journal on
September 18, 2008 noted fairly early in the crisis that credit default
swaps, excessive credit for both business and consumers, and related
factors that transmuted traditional notions of risk were the primary
culprits. According to the Washington Post, on March 26, 2009 U.S.
Treasury Secretary Geithner stated that there was a massive failure in
regulatory oversight and would propose plans that included a clear
reassertion of regulation of the financial system , a view which has
been consistently re-emphasized by senior members of the Obama
Administration to the present day. In all likelihood, the crisis was the
result of a combination of factors, but the simple reality is that while
some may not view the SOB as being the sole or primary cause, few
are proclaiming the innocence of the SOB. Indeed, a recent survey of
Harvard Business Review readers found that approximately 50% of
respondents either agreed or strongly agreed with the statement “B
Schools share a large part of the blame for the current economic
crisis.”(McGrath 2009, 61)

The temptation exists that this criticism and perception of a breach of

trust is primarily a concern for the largest and most prominent SoB’s

2
such as Harvard Business School, The Marshall School of Business at
University of Southern California, the Massachusetts Institute of
Technology, etc. It is widely believed that the graduates of these large
SoB’s , in their dominance of Wall Street, Fortune 500 companies and
governmental positions, are the institutions who caused the crisis and
therefore smaller SoB’s, both private and public, will be spared the
criticism. However, Administrators, Dean and faculty of the smaller
SoB’s need to recognize that while the criticism may not be directed at
their own roles and institutions, that the impact of the breach of trust
of the larger SoB’s may be just as if they had indeed participated in
causing the crisis. We can reasonably deduce this by the impact of
employment on the larger SoB’s graduates, many who have been
displaced out of Wall Street and major firms towards secondary job
markets, ordinarily the domain of the smaller SoB’s. The independent
MBA Career Services Council, a group composed of dozens of SoB’s of
all sizes, both public and private, reported that approximately 70% of
all SOB’s noted a significant downturn in employment for graduates.
(Damast 2008) An additional risk to the smaller SoB’s is the financial
consequences of the crisis to the overall institution or University, and
it has been predicted that the full impact of the financial crisis will not
likely be fully appreciated by universities for many years to come with
pressing challenges of liquidity, governmental support, financing of
debt, etc. (NACUBO & AGB 2009) For private Christian Colleges, the
Council of Christian Colleges and Universities President recently stated
that financial health and long-term viability and the dual impact of
costs and market forces are two of the top three issues facing Christian
higher education. (Corts 2009)

The SoB’s cannot turn a blind eye to these issues. There has also been
a call by business leaders to the SoB’s to participate in this dialogue as
an essential stakeholder, and an effort to “assemble leading academics
in the area of trust to begin to fill the sizable knowledge gap in the
understanding of the dynamics of public trust and deliver actionable
knowledge to practitioners.” (Bolton et al. 2009, 7) Some have also
called us to reconsider the continuing relevance of the most venerable
of SoB prophets, Peter Drucker, by posing the question “What Would
Peter Say?” “His first comment might be ‘I told you so’—and he would
have every right to say that...Drucker rarely named or blamed
individuals; he saw root causes in the design of organizations—in their
structures, processes, norms and routines.” (Kanter 2009, 65) This
paper will attempt to validate Drucker’s critique of organizational
design, and while the issues of trust in business education is not a new
topic nor are the recommendations contained in this paper necessarily
groundbreaking, what is new is the profound shift that has occurred in
the public perception of trustworthiness of our graduates and the

3
practices, tools, attitudes and behaviors that they exhibit in the
marketplace.

Therefore, this paper is an attempt to heed these calls and to spur

additional dialogue both internally and externally to the SoB, and the
primary focus of this paper will be in asking ourselves if a starting point
of the discussion should be the underlying philosophical approach and
design of the SoB’s. Information will be presented that urges the SoB
to understand the depth and reasons for this breach of trust, and to
seriously consider drawing from the much longer experience of a fellow
professional school, the Schools of Law. Certain key elements of
graduate legal education and the practice of law may provide
significant progress towards restoring trust in the SoB. In doing so, it is
desired that likeminded and similarly situated SoB’s (such as the
membership of an organization like the ACBSP), will be encouraged to
initiate further examination of the topic of trust and excellence of
contemporary business education and how to restore it.

The Loss of Trust: In 2009, The Marist College Institute for Public
Opinion conducted a survey that found that citizens were more likely
than business executives to express a downbeat opinion on the
direction and practices of corporate America, demonstrating that
there is a significant gap between the perceptions of business leaders
and the public. Key findings of the Marist survey were that more than
three-quarters of Americans said the moral compass of corporate
America is pointing in the wrong direction, compared to only 58
percent of business executives. Also, a majority of Americans gave
corporate America the grades of D or F for honesty and ethics and
rated the country's business leadership as "poor.” Interestingly,
business leaders provided self-grades of C and B marks for their
honesty and ethics. Even though there has been a slight rise in public
perception of the trustworthiness of business in the past few months,
it is likely tied to the tentative economic and stock market recovery,
and that nearly 70% of the public believes that it will be “business as
usual” when the recession ends.1
Why such grim attitudes towards the trustworthiness of businesses and
business leaders? Regardless of how one view’s the critics or
defenders of business education, it is useful to remember that trust
and trustworthiness is at the heart of the practices of the free market
economic system and that the breach of that trust usually has
calamitous results. Societal economic trust is what social scientist
Francis Fukuyama defines as “the expectation that arises within a
community of regular, honest, and cooperative behavior, based on
commonly shared norms,” and is what enables economic prosperity at
all levels and variations of the free market. The routine interactions

4
and transactions of our economy, from the simple paying of a bill to
the much more complex endeavor of corporate finance are all based
upon the foundation of trust and “indicates that a certain basic level of
honesty, practiced as a matter of habit rather than rational calculation,
is fairly widespread throughout society.” Nobel Laureate economist
Kenneth Arrow places these notions of trust as an essential action
within the social system: (Trust) is “extremely efficient; it saves a lot of
trouble to have a fair degree of reliance upon other people’s word …
Trust and similar values, loyalty or truth-telling, are examples of what
economists would call ‘externalities.’ They are goods; they are
commodities; they have real practical economic value; they increase
the efficiency in the system, enable you to produce more goods or
more of whatever values you hold in high esteem.” (Fukuyama 1995,
152)

The simply reality that all within the business community face, and one
which the SOB’s cannot ignore for it relates to curriculum, hiring,
research and related issues, is that it is upon the question of trust that
enormously important and far-reaching public policy decisions are
being made and will continue to be made that will impact business
education and practice for decades to come. In the post-Enron era, a
2004 CEO survey on the issue of public trust identified trustworthiness
as the most important and overarching ethics issue facing business.
Not only did CEO’s identify “regaining the public trust” as the single
most important ethics issue facing business, each of the top five
responses cited strongly related to public trust. One of the U.S.
Congressional responses to the breach of trust during the early part of
this decade was the passage of the Sarbanes-Oxley Act, which
President Bush described as “the most far-reaching reforms of
American business practices since Franklin Roosevelt was President.”
(Bolton et al., 15) The impact of these “reforms” is high as the annual
cost of Sarbanes-Oxley has been estimated to be $35 billion to
American companies, while the cost of business compliance with
existing governmental regulations is $1.1 trillion, or more than 10% of
GDP annually. (Covey 2007, 38-40) Ironically, recent surveys have
shown that there has there been no increase in the public level of
trustworthiness among firms since the implementation of Sarbanes-
Oxley and other regulatory oversight actions2, and that increasing
oversight of firms may actually lead to a reduction in personal
attitudes of trustworthiness among employees of businesses. (Kramer
1999, 591) However, the reality of a vastly more regulated business
environment is quite likely as 2010 unfolds.

Amidst these increasing public and legislative calls for additional

regulation of business, it is important to recognize the ultimate source
of these cries-the great breach of trust and loss of confidence by the

5
public in business organizations, leaders, decision-making and
systems. “At the heart of this question is a deep anxiety about whether
or not the public still trusts capitalism to be the best form of social
cooperation. Trust and liberty are at the heart of the capitalist concept.
As The Guardian columnist Simon Caulkin has observed, ‘Trust is
something business can’t do without …. It isn’t some fuzzy nice to-
have; it’s the lubricant without which the City [i.e., the London financial
markets] and Wall Street are as frozen as a rusted motor. If there is
debt or credit, there has to be trust.’” (Bolton et al. 2009, 8) The
current lack of trust in business did not occur overnight, nor will it
likely resolve itself quickly. However, the evidence is clear that the
SoB’s were given fair warning by many reputable sources that some
correction in our approach to business education was in order.

Historical Drift: By some standards of measurement one could come

to the conclusion that the SoB is one of the greatest successes of the
20th century. Issuance of SoB degrees at both the undergraduate and
graduate level and membership in academic associations such as the
Academy of Management and publications by SoB faculty has never
been higher. (McGrath 2005) Huge amounts of donor gifts to fund SoB
programs, the advent and popularity of executive education and the
internationalization of the SoB are also frequently cited as but a few
examples of positive developments. (Pfeffer and Fong, 2002) But past
numerical and financial growth for the SoB only delayed or temporarily
deflected the criticism. The global economic crisis has clearly changed
all of the previous equilibrium.

It is widely believed that the rapid growth of the SoB resulted at least
in part from severe criticism directed towards the SoB of the 1950’s. In
an early and intriguing vision of the “Business School of Tomorrow” the
SoB was urged to look well into the future, specifically 1980. Professor
G.L. Bach of the Carnegie Institute of Technology noted “the certainty
of change and the uncertainty of its direction and outcome” and
offered the prescription towards “orderly, analytical problem solving
abilities” and the integration of “faculty members brought in, at least
experimentally, from other disciplines, especially from the behavioral
sciences and mathematics.” (Bach 1958, 362-363) Shortly after Bach’s
work, the 1959 issuance of the Gordon and Howell Report created an
even greater reaction by SoB leadership. Few could ignore the report
which "described American business education as a collection of trade
schools lacking a strong scientific foundation.”(Bach, ibid) This led to a
profound and rapid movement towards modeling the SoB along the
lines of the traditionally heavily research orientation of other academic
departments, with strong focus on quantitative and statistical
methods. In short, the SoB made a dramatic and rapid movement
towards a scientific paradigm. This movement exists to this very day,

6
and regardless of its shortcomings it must at least be given some
credit for the professionalization of the SoB.

However, twenty years later the research orientation readily embraced

by the SoB began to be seriously questioned. In 1989, Porter and
McKibbin noted the conservative nature that had overtaken the SoB,
leading to a closed nature just at the moment in time when innovations
in curriculum, internationalization, and a broader perspective were
needed most. They concluded that the SoB was much more likely to
ignore the need for change, and predicted that this inability to alter
existing power structures and organizations would cause the SoB to
“drift into the 21st century.” (Cummings1990, 695-96) This drift may
also stem from challenges to the SoB Deans in the 1980-1990’s, for
they could be coping with a series of unique challenges, sometimes
compared to that of a University President more so than other Deans.
These challenges could include SoB faculty that becomes “rationally
apathetic” i.e., faculty that concentrates on their own personal
research and teaching and effectively cede authority to the Dean for
primary management and leadership of the SoB. (Bolton 1996, 493)

Into this philosophical tug-of-war entered the creation in 1988 of SoB

rankings by publications such as Business Week and U.S. News and
World Report. Prior to the advent of these rankings, the primary
measurement of SoB primacy was through scholarly output using
traditional methods of publications in peer-reviewed journals,
government agencies or private “think-tanks.” (McGrath 2005) No less
than the leading SoB accreditation body, the Association to Advance
Collegiate Schools of Business, has concluded that such rankings have
had serious negative effects on the SoB. (Duncan 2005) Regardless of
how one views such third-party rankings, they have nonetheless
placed at least some pressure on SoB’s to change and adapt to market
pressures, and some schools have attempted to respond to the trends
in the rankings. However, in-depth research of the 25 leading U.S SoB’s
of this period in the post-ranking period showed no clear advantage
being created through SoB’s that initiated various strategic changes
including concentrations, emphases and structures. (Segev et al.1999,
550)

With many voices offering conflicting information, recommendations

and results, hindsight now provides one the opportunity to conclude
that the “drift” of the SoB as it entered the 21st century was
foreseeable. While the vestiges of the Bach and Gordon and Howell
research clearly remained entrenched in the SoB, formidable and
credible voices had articulated for a significant period of time a
competing vision to the scientific model of the SoB. But University and
SoB leadership seemed generally unable to render significant change,

7
and even when strategic change was implemented the results were
unclear at best. Thus, the prevalent and drifting SoB was caught
between these two visions and was ill-prepared to weather the severe
storm of the global economic crisis of 2008.

To be fair, it should be observed that while the SoB is the current

recipient of much of the criticism, it was predicted in 1993 that the
university generally would struggle as the new century dawned. “For
the foreseeable future, no society or culture is likely to create an
entirely new social or cultural institution with the scope or complexity
of the modern university. Thus, it is unlikely that the idea of the
university in the 21st century will be radically different from the
universities we now observe. But there are reasons to believe that
opportunities for significant change will be present in the first decade
of the 21st century. The university will be bigger, perhaps, but it is
unlikely to be better. Indeed we may question if many universities will
be good enough for the 21st century.” (Fincher 1993, 28, 34)
Nonetheless, the vision, operation and ultimately the future of the SoB
is adrift, and to return to its rightful place as a trustworthy institution
and voice for the 21st century, SoB leadership must collectively act with
humility and confidence, using either existing structures such as
accreditation bodies, or creating new structures if the existing ones are
not amenable to re-imagination.

Drifting into Crisis: In 2001, the AACSB took note of the drift of the
SOB and created the Management Education Task Force, which was
tasked with “identifying the challenges that face business schools
worldwide and recommending institutional responses.” The Task
Force’s 2002 report titled “Management Education at Risk” noted that
“The marketplace for business schools today is characterized by
relentless change. Increasing competition from non-accredited schools
and globalization of the business education market are among the root
causes of the instability. Management education is at risk, and industry
wide leadership is needed to position business schools to respond to
emerging priorities and challenges.” (Olian 2002, 6) In response to this
report, the AACSB leadership in turn created several additional
committees that would seek recommendations and actions that AACSB
schools could adopt.

However, where the AACSB and its member schools came out on the
debate of reform was quite clear. It concluded that “Even more
importantly, the scholarship role of business faculty is an essential and
irreplaceable function because societies and markets turn to business
schools for knowledge advances that reflect academic traditions of
theory and method,” and a survey of their member institutions
concluded that the leading factor driving change at their institutions

8
was the shortage of doctoral faculty, ranking more important than
rapid changes in the economy, globalization, available resources, and
many other considerations. (Olian 2002, 2, 14) In light of the historical
position and membership of the AACSB, these findings are predictable,
if not disconcerting and prophetic of why the SoB now is viewed as
culpable in the global economic crisis. However, whatever
shortcomings one may find with the AACSB Report, it appears to be the
only accreditation body or association that has collectively acted to
research and report on the issues of risk to the SoB.

In sharp contrast to the 2002 AACSB Report, in 2005, it was alleged

that SoB’s had adopted an “inappropriate--and ultimately self-
defeating—model of academic excellence “and that “curriculum was
the effect and not the cause of what ails the modern business school.”
(Bennis and O’Toole 2002, 1) Just as the global economic crisis began
to take shape in the first few months of 2008, the Haas School of
Business at UC Berkeley issued its own report on the challenges and
risks to the SoB, calling for a “problem-centered multi-disciplinary
approach.” As to the issue of teaching, the Haas paper clearly differed
from the AACSB: “Considerable innovation has taken place in MBA
teaching, by emphasizing social skills, leadership, teamwork and
negotiation, cross-functional thinking, global perspectives, and
multicultural sensitivity. However, the dominant role of academically
oriented faculty will remain a limiting factor if the subject requires
clinical intuition and nuance. Few business academics have ever
founded or run a company, served on corporate boards, or conducted
significant consulting beyond lectures or limited case studies. Although
they can play an important role in separating wheat from chaff, and
help build a cumulative knowledge base, they may not get at the core
issues that managers struggle with.” (Schoemaker 2008, 129)

This uneasy tension within the SoB’s was shattered on September 15,
2008 when the venerable investment-banking firm Lehman Brothers,
tracing its roots back to 1847, filed for bankruptcy protection after the
Federal Reserve and the Treasury Department refused financial
assistance. It was the largest bankruptcy ever in the U.S., but the more
important events are what happened in the wake of the Lehman
collapse. First, a financial panic threatened to shatter the global free
market system, followed by an unprecedented and hugely expensive
effort by governments on both sides of the Atlantic to stabilize and
repair the damage. While the economic collapse of companies and
even countries accelerated, with some level of irony on October 13,
2008, Harvard Business School’s held its 100th Anniversary Celebration
and Global Business Summit and over 2,000 alumni and business
leaders attended the multi-day event. Out of this event Harvard
Business School entered a reflective period and spent the months of

9
April and May 2009 in a “fierce, weeks-long debate on the subject
among business school professors, business leaders, MBA’s, HBR
readers, and the public at large.” The result of this debate was “How
To Fix Business Schools,” a comprehensive report of 18 short articles
with commentary on five sections including “Are B Schools to Blame?”
and “Blame the Economists?” (Fryer 2009) More than 30,000 readers
participated in the discussion.

From this broadly focused report, three general themes emerged at

HBS. First, that SoB’s inevitably attract competitive, ambitious people
with widely variant ethical standards, and the impression is that
personal financial gain is often a primary focus of these students.
Second, that SoB curriculum needs to be changed and that modern
management requires a broader spectrum of knowledge, experience,
and skills than is currently taught. Finally, SoB’s need to refine the
processes of filtering students they admit and provide enhanced
ethical training or requirements prior to graduation. (Fryer 2009, 4)

Thus, we have a list of concerns that need addressing from many of

the leading SoB’s in the world, as well as from the business community
and public at large. Will we be able to act upon these concerns, having
shown little capacity for reform in the past? Or rather than addressing
individual issues, would it be more appropriate and effective if there
were a philosophical and organizational change of perspective?

A Citizenship Model: Over 100 years ago, renowned citizen-scholar

William Rainey Harper, President of the University of Chicago,
proclaimed that “It is the university that, with impartial judgment,
condemns in democracy the spirit of corruption, which now and again
lifts up its head, and brings scandal upon democracy’s fair name.” A
more contemporary statement of the role of the University, although in
no way repudiating Harper’s vision, is that “The function of such
universities is to preserve, transmit and develop knowledge on the one
hand and on the other to produce citizens capable of taking an active,
critical part in the governance of their society” (Poff 2007, 26-27)

But within the broader scope and mission of a University, what is the
unique role of a SoB? Is it independent of or interdependent to the
broader institution? Should it exist as being “above and beyond” the
methods and practices of the application of its “arts” by its graduates,
generally immune to the criticism facing the business community? It
would seem not, for “A business school is a community of scholars
committed to organizational excellence, to improving the quality of
education offered to students—including present and future corporate
executives, and to provide the educational services of business
efficiently and effectively. To borrow the phrasing of Manville and

10
Ober, a school of business is a ‘company of citizens’ engaged in noble
work. How business school faculty model their commitment to
excellence, how they create ethical and moral relationships, and how
they ultimately apply management principles in achieving their
missions is critically important—especially in times of profound
change.” (Caldwell et al. 2007, 114-118)

One possible step towards creating renewed trust and confidence in

the SoB’s is to recall once again Drucker’s view that flaws, problems
and crises in the business community typically lay in the design of
organizations and their philosophical principles that drove the
organizational design. (Kanter 2009, 65) But if the existing model is
deeply flawed, what is the model that should take its place? Or is the
model so flawed to be beyond redemption? I would contend that the
existing model, while under great strain, is indeed suitable to function
properly in the contemporary business world. However, a philosophical
re-orientation is required, and it is likely one that can only be created,
led and implemented by the highest levels of SoB administration. What
is needed is a clearer incorporation of traditional notions of citizenship
into the SoB’s and their curriculum, voice, vision, scholarly research
and activities.

Such “notions of citizenship” inherently rely upon many things but

often focus upon several key skills. One is the ability to think and
respond critically, demonstrating the capacity to integrate and
synthesize vast amounts of materials in a coherent and cogent way.
Another key skill is the capacity to reason through morally ambiguous
or competing interests and issues, with a clear vision of the higher
ideals and values at play in a particular business setting or decision.
These do not guarantee a positive result but can enhance the
possibility of a result that is viewed as not compromising the trust of
the decision makers, systems and institutions.

Although not without its critics (Wood and Lodgson 2002, 59-94), one
version of the citizenship model has been offered by Solomon and
others. This view urges that the SoB’s needs to incorporate elements
of the “Aristotelian Virtue Ethics Model” which possesses six key
elements (Caldwell and Boyle 2007, 7):

Vision – The ability to correctly identify factors of essential importance

for future
success and to anticipate future needs and conditions.
Relevance – The applicability of concepts and information to practical
situations and
conditions.

11
Responsiveness – The degree to which individual needs and situations
are taken into
consideration and responded to on a timely basis.
Excellence – The degree to which best practices are followed in
meeting the needs of
affected stakeholders.
Balance – The ability to incorporate the understanding of conflicting
demands while
pursuing desired outcomes.
Integrity – Congruence in matching behaviors with express and implied
commitments
which make up the duties owed.

The challenge to the SoB is in determining an appropriate

organizational form to uphold these elements, and to do so within the
larger operating environment of the overall university. Certainly,
university functions that focus upon institutional effectiveness,
outcomes and related areas would not necessarily object to the
specific points of the Virtue Ethics Model and would likely not be
opposed to them for the SoB. A greater challenge may be that other
academic programs, specifically philosophy, religion, history, pre-law,
etc., may perceive that the SoB is infringing upon their own operating
purposes. Nonetheless, this should not preclude the SoB from
considering the Virtue Ethics Model. And the SoB does not need to look
far for another branch of professional education to draw from.

Eruditio ex Lawyers: Learning from Lawyers: Support for a

philosophical change by SoB’s has previously been articulated,
pointing out that the movement towards the scientific oriented
academic units is incongruent with the field of business and
management. If correct, this incongruence may predict that some
reforms will not produce the desired result of restoring the trust of the
SoB. Thus, it is argued that SoB reform should instead consider other
professional schools as the primary guide to reform. Bennis and
O’Toole have forcefully argued this point with “Ultimately, however, we
believe business schools would reap the greatest benefit from
emulating the most innovative law schools. The law is a broad-based
activity drawing upon many of the same disciplines relevant to
business: economics, psychology, accounting, politics, philosophy,
history, sociology, language, literature, and so on. Law schools,
however, have not succumbed to physics envy and the scientism it
spawns. Instead, they tend to reward excellence in teaching and in
pragmatic writing. Research is an important component of legal
practice and education, but most of it is applied research, and its
validity is not equated with the presence of a scientific patina…Is the
research important? Is it useful? Is it interesting or original? Is it well

12
thought-out, well argued, and well designed? All of these queries seem
more appropriate as standards for appraising the work of business
school faculties than the narrowly defined standard of scientific
rigor.”(Bennis and O’Toole 2005, 7)

What would such “emulation” of law schools look like? I am proposing

that SoB’s should consider four specific integrations of legal education
and practice into business education, each which clearly relate to the
professional fields and practice more so than the dominant academic
model now utilized by SOB’s. These four integrations are:

• Standardized certification of professional practices.

• Continuing Education requirements including standardized
ethical curriculum
• Integrated case studies with historical documentation
• Faculty with high levels of practitioner skills.

First and likely of greatest importance is the creation of long overdue

standardized and widely recognized certification of professional
practices, particularly in the field of management. It has been
continually emphasized as a primary expectation of the SoB since their
inception over 100 years ago and the contention that managers are a
true profession such as in law or medicine fails any reasonable amount
of scrutiny. (Kuhrana and Nohria 2008) While the venerable Peter
Drucker strongly objected to such certification and fearing that
management certification would cause great damage to the profession
and the free-market economy (Drucker 1954), from the outset his view
was criticized for decentralizing and confusing the practice of business
management and leadership (Baker 1955, 458-60) which has
continued unabated to the present era. (Gribbins and Hunt 1978;
Kuhrana and Nohria 2008). It has even been observed that the issue of
professional certification is such an unsettled topic that it is unlikely
that arguments can be mustered to persuade either side. (Hays and
Duke 1996, 426-427)

But the question remains: Within the so-called “professions,” while

physicians seek health for their patients, and lawyers seek justice for
their clients, one must ask without a standardized professional
certification and widely agreed to standards, what do business
managers and leaders seek? What is business education’s intention for
its practitioners, customers and society as a whole? If the answer is to
create value for shareholders and stakeholders, this seems wholly
insufficient to attain a professional certification and standing compared
to other professions. The global economic crisis has also shown that

13
the interpretations of value creation have gone, in too many instances,
far astray from acceptable societal and organizational behavior.

It has been proposed that the analogous role to the physicians and
attorney’s code for managers is that they should be “agents of
society’s interests” and while the specificity could and should be
debated, a sustained effort by the SoB’s is needed to bring
professional clarity to the field. (Kuhrana and Noria 2008, 5) Of course,
for the practice of law in any state the general certification is
accomplished through the bar examination of suitable candidates, of
which the historical passing rate (in California) is 50% for first-time
takers. But the recent phenomenon of specializations within a field
such as family law, estate planning, criminal defense, etc. required
that another entire set of American Bar Association or state association
certification standards is now in effect.3 Developing and implementing
a standardized test is a formidable but not impossible task for the
SoB’s to accomplish, and the debate on this topic needs to move from
the academic and practitioner research world into a broader discussion
among all stakeholders.

The second proposal is that of continuing education requirements for

business professionals in all SoB disciplines, including standardized
ethics curriculum. These activities would also need to include
participatory activities with other practitioners. This practice has been
long established by law schools, lawyers and bar associations all in
concerted action, and generally speaking the rule is 25 hours of
certified continuing education per compliance period following
graduation (usually every 2-3 years), certified by the individual lawyer
to the association. To be fair, there is a significant question as to the
effectiveness of the dominant curriculum and pedagogy of teaching
ethics in law school, noting that “latent curriculum forces ethical
instruction to defeat its own purpose,” however no viable alternative
pedagogy has yet been widely introduced. (Pipkin 1979, 275)
Nonetheless, these ethical requirements have not proven onerous to
the practice of law, and some flexibility in reporting and compliance as
well as a limited amount of self-study continuing education is allowed
as well as online, video and audio options.4

While continuing education is up to the individual (or firm for whom the
individual lawyer is employed), the curriculum reality of law schools
nearly always involves extensive clinical requirements such as
clerking, legal research, etc., course work on professional responsibility
and the operation of the legal certification associations; and
professional ethics. Thus, continuing education is precisely that—a
continuation of an existing practice that began in the law school and a
profession's willingness and ability to hold its members to professional

14
and ethical standards are central to the maintenance of its professional
status and privileges. When the basis of public trust in a profession are
threatened, when its practitioners are widely perceived to be
dishonest, un-trustworthy, or insufficiently expert, society will move to
undermine that profession's autonomy, increase its accountability,
and, in the extreme, limit its exercise or perhaps even abolish it.
(Pipkin 1979) This threat to the SoB’s is not as far-fetched as perhaps it
once might have seemed.

The third proposal relates to the use of case studies, long employed by
many SoB’s, but with an enhancement that business education
currently lacks: historical documentation. Case studies have been long
recognized in a wide variety of teaching contexts as having utility and
it has been forcefully argued that they are the method that is
comprehensive and has a clear relationship to common sense. When
case studies are done poorly they can become practically meaningless,
full of guesswork and misinterpretation, but when used well it is
believed that they are the “most revealing method of all.” (Olson 1939,
483) However, business cases lack an essential component that law
schools and lawyers have access to: cumulative historical context. One
of the primary tools that any law student or lawyer frequently turns to
are the historical summaries, often presented chronologically with
great detail. Often referred to as “Restatements” they enable a reader
to spend as much time as necessary to see the development of a
particular tenet or principle of law, using specific laws, cases,
commentary and rulings as the driving forces. This broader context
allows the student or lawyer to see the genesis, complexities and
nuances of a particular result or holding, and is a clear and widely
recognized and cited reference. Within the state of California, a large
jurisdiction with a high level of complexity, there is its own set of
summaries known as “Witkin’s Summary of California Law.”5 Thus,
they provide an “anchor” for the legal profession, providing a caution
to rapid change in practices and procedures but simultaneously
ensuring that the foundation of the law is never detached from the
contemporary practice.

On the other hand, business cases are somewhat artificial and

certainly are at best an incomplete history, and even with the use of
teaching notes that are sometimes available, they often bear little
resemblance to the legal case that inspired their SoB creation and use.
It has been observed that in case studies, business students do not
have access to “the knowledge tools necessary to properly assess a
case” (Mitnick 2009, 62) as well as creating a sense of personal
detachment for the student. (Leone 1989, 706-708) While use of cases
is not without its own criticism in law schools, the restatements are
useful in trying to establish coherent patterns in the law which

15
ultimately provides a foundation of common understanding.6 By
contrast, do we ever try to assemble what actual business practice
might tell us about what good managers should do? (Mitnick 2009, 65-
66) Thus, the case study supplemented with easily accessible historical
restatements should be considered to improve SoB teaching and
application.

Finally, the fourth proposal is for the SoB to utilize faculty with a higher
level of practitioner skills, much as law schools do. While there has
been progress in this area at some schools in the past decade, as
previously noted in the AACSB report, the scholarship role in traditional
research and methods remains firmly entrenched as the dominant
mindset. This does not mean that we have erred in embracing
scientific methods and knowledge but rather that the error has come in
rejecting other forms of knowledge and scholarship. “The distinction
between a profession and an academic discipline is crucial. In our view,
no curricular reforms will work until the scientific model is replaced by
a more appropriate model rooted in the special requirements of a
profession.” (Bennis and O’Toole 2005, 7)

But can such “special requirements” of a profession realistically be

modeled and taught by professors who have never actually
participated in their field of expertise? Studies have demonstrated the
comparatively large percentage of law professors who have had
practical experience in the legal profession. About 67% of law
professors have engaged in some form (usually five years or more) of
law practice before assuming a teaching position, while the remainder
have clerked for judges (nearly always the very rigorous federal
system) or been solely engaged in the study and teaching of law. This
percentage of professors with practitioner experience (about 75%) is
much higher than many SoB’s. (Fossum 1990, 510-512) Time and time
again, voices from within and outside of the SoB call for this focus upon
practical education, and it has been wryly observed that while stories
about mice losing their cheese or penguins fleeing melting icebergs
sell millions of copies, most of what SoB faculty publish isn’t even cited
by other academics. (McGrath 2009, 58)

Each of these four proposals is not groundbreaking in and of

themselves, and there is a significant body of material to draw upon to
use as examples, discussion pieces and potential action items. Lack of
material is not the problem—the will to act by the SoB is. Thus, it is a
valid question—how and who should lead the change? In my view, this
role should be taken by the accreditation bodies in conjunction with
another newly created institution with a long history of service to the
legal profession, serving as an inspiration and model to the SoB and
profession.

16
A New Partner for Accreditation Agencies: The mission
statements of the two leading SoB accreditation agencies indicate their
desire to be a global leader in management education. For the AACSB,
its mission is that AACSB International advances quality management
education worldwide through accreditation and thought leadership.7
The mission of the ACBSP is that “ACBSP develops, promotes, and
recognizes best practices that contribute to continuous improvement
of business education and accredits qualified business programs.”8
Within legal education, the highest level of American law school
accreditation is issued by the American Bar Association (“ABA”), with
more than 400,000 members and several hundred ABA accredited law
schools. The ABA provides accreditation, continuing legal education,
information about the law, programs to assist lawyers and judges in
their work, and initiatives to improve the legal system for the public,
with a stated mission “To serve equally our members, our profession
and the public by defending liberty and delivering justice as the
national representative of the legal profession.”9 These are obviously
noble ideals and worthy goals.

But beyond accreditation standards, the study and practice of any

profession makes use of other organizations and associations which
create, interpret, further and sometimes even enforce the professional
standards. Continuing education by private and publicly chartered
groups, academic research, conferences, academic and practitioner
publications, all are active and important stakeholders. But the
practice of law has an additional ally which the study and practice of
business presently lacks, and which could assist the SOB’s in regaining
trust. The American Law Institute (“ALI”), founded in 1923, occurred
after a study conducted by a group of prominent American judges,
lawyers, and teachers identified several major defects in American law,
namely its uncertainty and its complexity. In a scenario quite similar to
the financial crises of our present era, the practice of law in the early
1900’s had produced a "general dissatisfaction with the administration
of justice” which at least in part stemmed from the lack of agreement
on fundamental principles of the common law, and its application
among variant jurisdictions, fields and settings. The study
recommended that a lawyer’s organization be formed "to promote the
clarification and simplification of the law and its better adaptation to
social needs, to secure the better administration of justice, and to
encourage and carry on scholarly and scientific legal work."10

Through diligent efforts over many years, the ALI became the leading
independent organization in the United States producing scholarly
work to clarify, modernize, and otherwise improve the law with an
invitation only membership limited to no more than 4000 highly
qualified and respected lawyers, judges, and law professors. The ALI

17
drafts, discusses, revises, and publishes Restatements of the Law,
model statutes, and principles of law that are enormously influential in
the courts and legislatures, as well as in legal scholarship and
education, and in recent years its influence has grown significantly
internationally. While obviously composed of a membership widely
drawn from the ABA, it exists and operates wholly independent of the
ABA.

Upon its creation, the first major project that the ALI embarked upon
was creating the original Restatements of the Law, primarily in the
areas of contracts, securities, property and related areas. This was no
small task for it took over 20 years to complete the first version, and
within a few years of its completion, the second version was
undertaken.11 However, the lasting value of the Restatements and their
ability to provide stability, consensus and a uniform scholarly and
practitioner voice to the practice of law cannot be underestimated, and
no doubt this stability has in turn provided a higher level of
trustworthiness for the field of law than it would otherwise have.

There is no similar organization that the SoB accreditation agencies

can rely upon. The similarly named American Management Association
and American BusinessPersons Associations provides training,
seminars, financial services discounts, merchandise discounts but
cannot in any way be construed as being a collaborator to the ACBSP
and AACSB that the ALI is to the ABA.12 Perhaps the most similar
business organization in function to the ALI is the Academy of
Management (“AOM”), with the stated primary mission “to enhance
the profession of management by advancing the scholarship of
management and enriching the professional development of its
members.” However, the AOM’s membership is far greater with over
18,000 members, and membership is generally available to anyone for
a fee that ranges from $65-$185, depending on the status of the
applicant, and is a “member-driven society.”13 While there are some
similarities to the ALI, the AOM’s scope of interests, strategic mission
and functions, its breadth and scope of mission is too broad as to be
comparable to the “clarification, simplification, administration and
enforcement” role of the ALI. Thus, the SoB’s should consider, just as
the legal community did nearly 90 years ago, the creation of a joint
commission of highly regarded scholars and practitioners who could
investigate the possibility of an organization similar to the ALI, but in
service to the oOB’s, business community and public. While not
definitive in all areas of the practice of law, the ALI is widely regarded
as having an outstanding reputation and credibility as a powerful voice
and arbiter of ideal legal standards, conduct and practice. A similar
organization could be a powerful and compelling ally of the existing
SoB accreditation agencies.

18
Conclusion: This paper is intended to hold accountable the stated
missions of our Schools of Business and their accreditation bodies and
advocates. This is a stewardship that has been severely shaken by the
events of the past few years, and it will take effort, leadership and
resources to restore the level of excellence and the bond of trust that
society, shareholders and stakeholders expect of our profession. The
AACSB clearly states its organizational philosophy through its
statement on “Thought Leadership” which holds that the “AACSB is
regarded as the world's most respected and informed voice regarding
significant issues in management education.”14 Similarly, the “ACBSP
will be the global leader enhancing the quality of business schools and
programs focused on teaching excellence.”15 Tested and successful
models and tools utilized by the legal academy and practitioners are
available for the AACSB and the ACBSP to consider, which would
include not only program and practice changes but a new highly
credible organization based on the American Legal Institute model.

The breach of the public trust now compels additional discussion,

consideration and ultimately action to bring a new standard of
excellence to business education. It is the primary intention of this
paper to ask the SoB leadership to consider these proposals as a useful
starting point for reflection, dialogue, and self-examination. Although
the work required for such self-examination is formidable, the
importance of SoB’s honoring their stewardship and trust-building
duties are critical. While financial resources and time may be limited,
SoB’s have the opportunity to create new value for all stakeholders,
with new structures, models and collaborations. Resources will be
needed, but the greater need is for clear leadership from the SoB’s.

Endnotes

19
1
“Trust in Business Rises Globally, Driven by Jumps in US and Other Western Economies.”
http://www.scribd.com/full/25827302?access_key=key-x9q37hmaxnm7cevdung
(accessed April 15, 2010)

2
2005 World Economic Forum Global Opinion Poll conducted by GlobeScan and the BBT/Gallup
Trust in Business Index, October 25, 2007.
http://www.globescan.com/news_archives/WEF_trust2005.html (accessed April 15, 2010)
3
American Bar Association. “A Concise Guide To Specialty Certification.”
http://www.abanet.org/legalservices/specialization/downloads/June2007_Concise_Guide_Final.pdf
(accessed November 14, 2009)
4
California State Bar Association. http://calbar.ca.gov/state/calbar/calbar_generic.jsp?
cid=10962&id=5085#education (accessed November 14, 2009)
5
Witkin Legal Institute. http://www.witkin.com/pages/witkin_library_pages/witkin_lib.htm (accessed
April 14, 2010)
6
For a brief survey of the Restatement of Contract Law see
http://en.wikipedia.org/wiki/Restatement_(Second)_of_Contracts#External_links
7
The Association to Advance Collegiate Schools of Business. http://www.aacsb.edu/ (accessed
November 23, 2009)
8
The Association of Collegiate Business Schools and Programs.
http://www.acbsp.org/p/st/ld/sid=s1_001 (ccessed November 23, 2009)
9
American Bar Association. http://www.abanet.org/about/?gnav=global_about_lead (accessed April
17, 2010)

American Legal Institute. http://www.ali.org/index.cfm?fuseaction=about.creation (accessed April

10

18, 2010)
11
American Legal Institute. http://www.ali.org/index.cfm?fuseaction=about.instituteprojects
(accessed April 18, 2010

American Bar Association. http://www.aba-assn.com/ and http://www.amanet.org/ (accessed

12

April 18, 2010)

Academy of Management. http://www.aomonline.org/aom.asp?ID=&page_ID=36 (accessed April

13

19, 2010

The Association to Advance Collegiate Schools of Business. http://www.aacsb.edu/ (accessed

14

November 20, 2009)

15
Association of Collegiate Business Schools and Programs.
http://www.acbsp.org/p/st/ld/sid=s1_001
(accessed November 20, 2009)

References
Bach, G. L. (1958) Observations on the Business School of Tomorrow.
Management Science 4: (4) 351-364.

Bennis, Warren G., and O’Toole, James. 2005. ‘How Business Schools Lost Their
Way.’ Harvard Business Review., May.

Bolton, Allan. (1996) The Leadership Challenges in Universities: The Case of

Business Schools. Higher Education 31(4) 491-506.

Bolton, Roger; Freedman, R. Edward; Harris, Jared; Moriaty, Brian; Nash, Laura;
Wing, Michael. (2009) The Dynamics of Public Trust in Business—Emerging
Opportunities for Leaders: A Call to Action to Overcome the Present Crisis of Trust
in Business. Arthur W. Page Society and Business Roundtable Institute for
Corporate Ethics.

Caldwell, Cam; Boyle, Mary-Ellen. (2007) Academia, Aristotle, and the Public
Sphere-
Stewardship Challenges to Schools of Business. Journal of Academic Ethics 5 5-20.

Caldwell, Cam; Clapham, Stephen E.; and Davis, Brian. (2007) Rights,
Responsibilities, and Respect: A Balanced Citizenship Model for Schools of
Business. Journal of Academic Ethics 5 105-120.

Casile, Maureen, and Davis-Blake, Alison. (2002) When Accreditation Standards

Change: Factors Affecting Differential Responsiveness of Public and Private
Organizations. The Academy of Management Journal 45 (1) 180-195.

Corts, Paul R. (2009) Top Ten Issues In Christian Higher Education. Council of
Christian Colleges and Universities.
http://www.cccu.org/professional_development

Covey, Stephen M.R.. 2007. “The Business Case for Trust,” Chief Executive 226
38–40. June.

Cummings, Larry. (1990) Reflections on Management Education and

Development: Drift or Thrust into the 21st Century? The Academy of Management
Review 15: (4) 695-96.

Damast, Alison. 2008. Crisis Hits the Business Schools

http://www.businessweek.com/magazine/content/08_47/b4109040188487.htm
November 13

Duncan, Robert B., Chairman. (2005) The Business Schools Ranking Dilemma: A
Report from a Task Force of AACSB’s International’s Committee on Issues in
Higher Education. AACSB International.
Fincher, Cameron. (1993) The Idea of the University in the 21st Century: An
American Perspective. British Journal of Educational Studies Vol. 41 No. 1 pp. 26-
45.

Fossum, Donna. (1980) Law Professors: A Profile of the Teaching Branch of the
Legal Profession . American Bar Foundation Research Journal 5 (3) 501-554.

Fryer, Bronwyn, Edited by. 2009 How To Fix Business Schools: The HBR Debate.
Harvard Business Review Special Edition Harvard Business School Publishing.

Fukuyama, Francis. 1995. Trust: The Social Virtues and the Creation of Prosperity
New York: Simon and Schuster, 152.

Gribbins, Ronald E., and Hunt, Shelby D. (1978) Is Management a Science?

Academy of Management 3 (1) 139-144.

Hays, Steven W., and Duke, Bruce. (1996) Professional Certification in Public
Management: A Status Report and Proposal. Public Administration Review 56 (5)
425-432.

Kanter, Rosabeth Moss. 2009. What Would Peter Say? Harvard Business Review.
May.

Kramer, Roderick M. “Trust and Distrust in Organizations: Emerging Perspectives,

Enduring Questions” Annual Review of Psychology 50 (1999) 591.

Kuhrana, Rakesh, and Nohria, Nitin. 2008 It’s Time To Make Management A True
Profession. Harvard Business Review. October.

Leone, Robert A. (1989, Autumn) Teaching Management without Cases Journal of

Policy Analysis and Management 8 (4) 704-711

McGrath, Rita. (2009) Academics: Get Real! How to Fix Business Schools: The HBR
Debate. Harvard Business Review Special Edition. Harvard Business School
Publishing, 26.

McGrath, Rita. (2005) No Longer a Stepchild: How The Management Field Can
Come Into Its Own. Academy of Management Journal. 50 (6) 1365-1378.

Mitnick, Barry M. (2009) The Case Against the Case Method. How To Fix Business
Schools: The HBR Debate. Harvard Business Review Special Edition. Harvard
Business School Publishing. 68-69.

National Association of College and University Business Officers (NACUBO), and

the Association of Governing Boards of Colleges and Universities (AGB) 2009 ‘The
Financial Downturn and Its Impact on Higher Education Institutions.’
http://www.nacubo.org/Business_and_Policy_Areas/Finance/Financial_Downturn_To
olkit_and_Resources.html
Olian, Judy, Chairperson. (2002) Management education at Risk: A Report of the
Management Task Force to the AACSB International Board of Directors. AACSB
International.

Olson, Willard C. (1939) The Case Method. Review of Educational Research 9 (5)
483-490.

Pfeffer, Jeffrey, and Fong, Christina T. (2002) The End of Business Schools? Less
Success Than Meets The Eye. Academy of Management Learning and Education,
1-2.

Pipken, Ronald M. (1979) Law School Instruction in Professional Responsibility: A

Curricular Paradox. American Bar Foundation Research Journal, 4: (2) 247-275.

Poff, Deborah C. (2007, November) Duties Owed in Serving Students: The

Importance of Teaching Moral Reasoning and Theories of Ethical Leadership in
Educating Business Students. Journal of Academic Ethics 5: 25-31.

Pozen, Robert C. 2009 Is It Fair to Blame Fair Value Accounting for the Financial
Crisis? Harvard Business Review. November.

Schoemaker, Paul J.H. (2008) The Future Challenges of Business: Rethinking

Management Education. California Management Review 50:(3).

Segev, Eli, Raveh, Adi, and Farjoun, Moshe. (1999) Conceptual Maps of the
Leading MBA Programs in the United States: Core Courses, Concentration Areas,
and the Ranking of the School. Strategic Management Journal 20(6)

Sutton, Robert I. (2009). Do Economists Breed Greed and Guile? How to Fix
Business Schools: The HBR Debate. Harvard Business Review Special Edition.
Harvard Business School Publishing, 26.

Wood, D. J., & Logsdon, J. M. (2002). Business citizenship: from individuals to

organizations. Business Ethics Quarterly 12(3) 59–94.