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September 10, 2006

Comments

Mike

I actually wrote an Admissions Essay on this very topic for Harvard Business School. Subsequently I did not get accepted, so I can only assume that HBS does not agree with my position ;-)
Here it is:

Question: In your career, you will have to deal with many ethical issues. What are likely to be the most challenging and what is your plan for developing the competencies you will need to handle these issues effectively?

In the world of publicly traded corporations, management teams face a constant struggle to balance the short term expectations imposed by Wall Street with the long term strategic goals of the business. As we have seen all too often in the headlines, some business managers become susceptible to these pressures and engage in unethical business practices, such as overstating their company’s revenues or failing to fully disclose known liabilities. My career goal is to lead a large technology company as a chief executive and I will need to approach similar pressures in a manner consistent with my ethical principles.

The most important competency needed for dealing with many ethical issues cannot be developed as an adult. To handle these issues effectively and preserve the credibility of my business, my first step is to remember the lessons of my childhood. I was raised in a strong family that placed a high value on character. I believe deeply in living a life of integrity, honesty and compassion. It is essential that I hold true to these values and consider them a foundation from which I make not only life, but also business decisions.

This foundation of ethical principles is strengthened through experience and learning. I would like to further study a new Wall Street paradigm, one that reduces the significance of short term results in favor of strategic growth and investment. Influential industry icons such as Warren Buffett and even the founders of Google have made it clear to the investment community that managing a company effectively requires a longer term view. In its IPO filing document, Google has stated that the company will not issue quarterly earnings estimates to investors and analysts. Google cites that the pressure to keep earnings in line with Wall Street forecasts forces management teams to “accept smaller, but predictable, earnings rather than larger and more unpredictable returns.” My views on this topic continue to evolve, but I am inclined to believe that an approach similar to the one proposed by Google could be an effective means of reducing the temptation of unethical accounting practices.

Ultimately, I know that my HBS experience will play an influential role in my leadership development. I look forward to engaging my HBS peers and professors on this topic and formulating a solution which meets the needs of the investment community for transparency while at the same time encouraging long term investment.

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