Back to Index

Enron - Andersen Philippine style

Raúl Escalante answers the posting on "Enron-Andersen Philippine style": "Since I am Mexican, an economist and an MBA to boot, I suppose I should jump into the gap. I can't deny I had a visceral reaction to the posting, but, to be fair, should recognize I had similar misgivings about management students a few years ago.

There are a few points I think I should address:

On MBAs in general. There is a widespread misconception of MBAs as greedy, money-grabbing, unscrupulous business people. To be honest, I did meet a couple of people who matched that description rather accurately during my two years at Stanford, and I think that one of those was actually a fellow MBA student. However, most MBA students are people concerned with learning how to do "things" better, more effectively or more efficiently. As an active participant in the GSB's Public Management Program, I interacted with the most generous and committed group of people I have ever met. Generally speaking they were socially oriented entrepreneurs, non-profit managers concerned with increasing their impact, and the like. Aside from that self-selected group, practically all fellow students were genuinely interested in what we were up to and generous in their support of our activities. Most major business schools (including Stanford's GSB), run programs whereby summer-internship salaries for students who decide to work in non-profit ventures are funded by donations by their classmates; I benefited from one such program and spent my summer consulting for the United Way of San Francisco and for the American Red Cross of the Bay Area. Although a high salary directly upon exiting is part of the allure of the MBA degree, I can safely claim it isn't the strongest incentive by far (believe me, as an academic I would double my salary immediately if I returned to work in the Federal Government). Career switching, tapping into a social network, and the MBA experience itself are far more common motives.

On Mexican and Latin American MBAs. Most of my Latin American classmates at the GSB came from very well established families and had little need of an MBA to improve their lot in life. Until recently, it was very rare for relatively affluent young Mexicans to emigrate; they usually earned their degrees and returned. In the past few years, there has been a trend for young professionals to seek better quality of life abroad than what they have in Mexico City. In my experience, few of these emigrés have MBA degrees.

I have given a lot of thought to this and firmly believe that my country needs far more MBAs than it has. Studying a business degree will not make a person more unscrupulous than he already is. On the contrary, by exposing that person to at least basic ethics courses, and more importantly, to an environment in which ethical values are openly appreciated, there is a good chance that her behavior will improve, all other things held equal. Mexico needs more managers who are aware of the benefits of profit-sharing, treating staff well, using non-discriminatory practices, etc. All of these lessons are constantly repeated during the two year program. We also need managers who know how to make things work.

We need to widen the universe Mexican MBA applicants come from, especially to encourage public school graduates, nonprofit managers, women and our own minorities to attend business school.

Among the Mexican MBAs or MBA students you may want to consider are Regina Bracho who worked in microfinance (sustainable lending and savings services for people in extreme poverty) for two years and now manages General Electric's social investment fund in Mexico; or Agustín Landa who managed a house for "niños de la calle" (street children) for fifteen years (and started a gourmet cheese factory whose profits currently pay for 80% of the expenses of the home). I know both well.

On the Porfiriato and Salinas. As you surely know, despite its gross inequalities, the Porfiriato was probably the period of greatest economic growth in Mexican History. It was also the period in which public schooling started in this country. Although there is no way to substantiate this, I am sure that, had the Revolution not taken place, the plight of agricultural and industrial workers would be much better than it is today. Similarly, Salinas' rule laid the groundwork for a much more efficient economy, despite the well known excesses conducted by his family and cronies. Disillusionment has set in, but the policies which were indispensable seem to have locked in (thankfully). Even the PRD talks in terms of balanced (or close to balanced) budgets now.

My comment: As I have said many times, I regard the Mexican Revolution as a tragedy, which undid most of the good work of the despised regime of Porfirio Díaz. I agree with Raúl, but the danger is that people will jump to conclusions and assume that the Enron-Andersen case is typical. It should also be recognized that Mexicans expected miracles of US-trained economists. I think we had better leave miracles to the Virgen de Guadalupe.

There is much work to do to improve income and wealth distribution in Mexico, and my bet is that US trained MBAs are good people to bet on to make the necessary changes.

Ronald Hilton - 2/20/02