Page 280 - Introduction to Business

254 PART 2 Managing Business Behavior

Ethics in Business

Goodbye to an Ethicist

There is a telling story about Marvin Chicago-based James O. McKinsey & Co. in 1933,
Bower, the legendary leader of when it had only 18 professionals in two locations.
McKinsey & Co., who died on Jan. 22, 2003, at age After McKinsey’s death in 1937, Bower
99. It says much about the bedrock values of this reestablished the firm in New York and served as its
unassuming man, who was known as the father of managing director from 1950 to 1967. His vision for
management consulting. McKinsey came straight from his experiences at
In the 1950s, Bower was summoned to Jones Day, where he had worked as a lawyer. He
Los Angeles by billionaire Howard Hughes, who wanted to bring the professional standards of a top
wanted him to study Paramount Pictures. During the law firm to what was then called management
visit, Hughes was in a magnanimous mood and engineering.
drove the fledgling consultant around in his ancient Bower also insisted that the success of his firm
Chevy, even giving him a late-night tour of the brought personal obligations. Louis V. Gerstner Jr.,
Spruce Goose, the massive wooden plane Hughes the former IBM chairman who had spent 11 years at
developed during the war. McKinsey, remembers Bower marching into his office
But Bower sensed that nothing good could come one day 35 years ago. “What are you going to do to
of working for Hughes. He found the entrepreneur’s give something back?” Bower asked. “Come with
approach to business “so unorthodox and so me.” Recalls Gerstner: “We went together to a
unusual” that he felt he would never be able to help meeting on public school reform, something I’m still
Paramount. Instead of taking the assignment and involved in.”
reaping a big fee, he walked away. In a Jan. 23 e-mail to McKinsey employees,
The move was classic Bower. He built McKinsey current Managing Director Rajat K. Gupta wrote:
into a global consulting powerhouse by insisting that “Many of us will continue to make choices for the
values mattered more than money. He preached the rest of our professional careers based in large part
notion that consulting was not a business but a on the question we often ask ourselves: ‘What would
profession, arguing that, like the best doctors and Marvin have done?’” It’s a good question—one any
lawyers, consultants should put the interests of their manager in the world might ask.
clients first, conduct themselves ethically, and insist
Source: From John A. Byrne, “Commentary: Goodbye to an
on telling clients the truth, not what they wanted to Ethicist,” Business Week. Issued February 10, 2003. Reprinted from
hear. Business Week by special permission. Copyright © 2003 by The
McGraw-Hill Companies, Inc.
That was as unusual then as it is today. But so
was Bower, a towering figure at McKinsey and in the
larger world of consulting. At McKinsey, Bower
helped to move consulting from shop-floor efficiency Questions
studies to major strategy reviews for top-tier 1. Marvin Bower of McKinsey & Company was a
corporations. He created one of the world’s most legendary leader who believed that consulting
productive leadership factories, producing hundreds was not a business but a profession. Explain
of corporate CEOs and presidents. In the mid-1950s, what he meant by that statement.
he was the first to systematically recruit raw talent off 2. Within the context of this chapter, what does the
B-school campuses, helping to give the MBA degree article mean by saying that Marvin Bower moved
new cachet. He was, after all, a Harvard lawyer and McKinsey from “shop-floor efficiency studies” to
MBA himself, who joined the New York office of “major strategic reviews” of corporations?

corporate leaders in particular. A number of cases that involved earnings manipu-
lation by executives of major corporations, most notoriously John Rigas of Adelphia
Communications, Joseph Beradino of the now-defunct Arthur Andersen, Kenneth
Lay of Enron Corporation, and many others, have devastated shareholders and
employees alike. Leaders in many of these companies were downright unethical,
and several CEOs treated their firms as a gold mine, to collect the gold and leave the
employees and stockholders with little or nothing.

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