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Business School Pablum

Wordcount in EGADE’s Decalogue for the Economic & Business Refounding of Mexico

Yesterday the EGADE Business School, which touts its ranking as the top business school in Latin America, published 10 commandments for the “economic and business refounding of Mexico” (Decálogo para la Refundación Económico-Empresarial de México).

The document is striking because in its analysis and prescription it completely avoids mentioning tax and competition policy.

The Mexican economy has been a pathetic failure for decades in terms of creating more and better paying jobs. It has been, however, very successful in creating a robber baron billionaire class that has immiserated tens of millions of the country’s citizens.

In reaching this tragic state of affairs in Mexico’s economy there are two key points of State failure: free-reining anti-competitve behavior on the part of large business interests and a tax system so favorable to capital that one would think it was designed to rival that of offshore tax havens and not to serve 130 million citizens in an OECD member country.

It is quite sad to see a university — an institution that should prize critical thinking and debate in the community — become devoted to training economic bureaucrats and apologists of a profoundly unjust social order.

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Business

Moral Eunuchs in the Corporation and Beyond

The following is excerpted from Moral Mazes: Bureaucracy and Managerial Work, an article authored by Robert Jackall and published in the September-October 1983 issue of the Harvard Business Review.

“The hallmarks of the emerging modern production and distribution systems were administrative hierarchies, standardized work procedures, regularized timetables, uniform policies, and centralized control—in a word, the bureaucratization of the economy.

This great transformation produced the decline of the old middle class of entrepreneurs, free professionals, independent farmers, and small independent businessmen—the traditional carriers of the old Protestant Ethic—and the ascendance of a new middle class of salaried employees whose chief common characteristic was and is their dependence on the big organization.

The bureaucratic ethic contrasts sharply with the original Protestant Ethic. The Protestant Ethic was the ideology of a self-confident and independent propertied social class. It was an ideology that extolled the virtues of accumulating wealth in a society organized around property and that accepted the stewardship responsibilities entailed by property. It was an ideology where a person’s word was his bond and where the integrity of the handshake was seen as crucial to the maintenance of good business relationships. Perhaps most important, it was connected to a predictable economy of salvation—that is, hard work will lead to success, which is a sign of one’s election by God—a notion also containing its own theodicy to explain the misery of those who do not make it in this world.

By analyzing the kind of ethic bureaucracy produces in managers, one can begin to understand how bureaucracy shapes morality in our society as a whole.

Except at blame time, managers do not publicly criticize or disagree with one another or with company policy. The sanction against such criticism or disagreement is so strong that it constitutes, in managers’ views, a suppression of professional debate. The sanction seems to be rooted principally in their acute sense of organizational contingency; the person one criticizes or argues with today could be one’s boss tomorrow.

As it happens, the guidance they receive from each other is profoundly ambiguous because what matters in the bureaucratic world is not what a person is but how closely his many personae mesh with the organizational ideal; not his willingness to stand by his actions but his agility in avoiding blame; not what he believes or says but how well he has mastered the ideologies that serve his corporation; not what he stands for but whom he stands with in the labyrinths of his organization.

Such adeptness at inconsistency, without moral uneasiness, is essential for executive success.

In this way, because moral choices are inextricably tied to personal fates, bureaucracy erodes internal and even external standards of morality, not only in matters of individual success and failure but also in all the issues that managers face in their daily work. Bureaucracy makes its own internal rules and social context the principal moral gauges for action.”