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It's time to make management a true profession.

Rakesh Khurana1, Nitin Nohria

  • 1Harvard Business School, Boston, USA.

Harvard Business Review
|October 1, 2008
PubMed
Summary
This summary is machine-generated.

Management must professionalize by adopting ethical codes and formal education to rebuild public trust. This approach, similar to medicine and law, can enhance integrity without stifling creativity, balancing shareholder and stakeholder interests.

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Area of Science:

  • Business Ethics
  • Organizational Behavior
  • Management Theory

Background:

  • Public trust in business has eroded, leading to a crisis of legitimacy for managers.
  • Professionalization is proposed as a solution, drawing parallels with established professions like medicine and law.
  • True professions adhere to codes of conduct, enforced through formal education and professional institutions.

Purpose of the Study:

  • To argue for the professionalization of management as a means to regain public trust and legitimacy.
  • To explore the role of professional codes of ethics and education in ensuring managerial integrity and competence.
  • To address the challenge of establishing a universally accepted code of ethics for management.

Main Methods:

  • Conceptual analysis and argumentation based on the characteristics of established professions.
  • Comparative analysis with professions such as medicine and law.
  • Examination of the dualistic debate between shareholder primacy and stakeholder theory in management.

Main Results:

  • Professionalization through codes and education can foster trust and integrity in management.
  • Ethical codes are unlikely to hinder entrepreneurial creativity; they may even stimulate it.
  • A consensus on management's social purpose is challenging, with divided views on shareholder wealth maximization versus stakeholder accountability.

Conclusions:

  • Management should adopt professional standards, including a code of ethics and formal education, to restore public trust.
  • A successful code of ethics must reconcile the goals of shareholder value creation with stakeholder accountability.
  • Professionalization offers a path for management to fulfill its social contract with society.