More Operations Research in the News, but not in a Welcome Way

Fabrice Tourre, “the fabulous Fab”, who is at the center of the Goldman Sachs scandal, is a 2001 graduate of Stanford University. That, in itself, is no surprise. Stanford has a top ranked business school that does about as well as the rest of us in graduating ethical MBAs (by that I mean MBAs who do, on the whole, try to act ethically, but some of whom find ethical challenges … challenging), so it is not surprising that a powerful Goldman Sachs person would come from there. But what is surprising is that Fabrice’s Stanford degree is a Masters in Operations Research! Our field is in the news!

Thinking about it, it is not so surprising. Since Fabrice is reported to be 31, a 2001 graduate would have been 22. Most business schools like to see at least a little work experience, so 22 year-olds with an MBA would be quite unusual. A Masters in Operations Research would be more common, I would think.

I can’t tell if the fabulous Fab did anything wrong, let alone illegal, but this does bring up an issue in training. At business schools, we are working hard to think about how to include ethics and other aspects of corporate social responsibility into the curriculum (with varying levels of success). What are operations research programs doing to ensure that their masters graduates are aware of the choices they make? Checking Georgia Tech, Michigan, Stanford Management Science and Engineering (is there still an MSOR from Stanford?), and Cornell (not to pick on them, but to pick a few of the best programs out there), does not lead one to believe that ethics, corporate responsibility or a traditional “engineering professional responsibility” course is part of the masters curriculum.  This is not to suggest that we are putting out a generation of unethical lying optimizers, but perhaps we should rethink the balance of our programs.  I do believe operations research to be outstanding training for a wide variety of careers:  going beyond linear and integer programming into some of the challenges of the real world would be a good direction to go for the sake of the students, and for the rest of us.

11 thoughts on “More Operations Research in the News, but not in a Welcome Way”

  1. I agree with your last sentence. I also think OR grads would in many cases benefit from a course or two on the practice of consulting, including some discussion of ethical issues in consulting (where the truth and what your clients want may not coincide perfectly).

  2. Related to the article, many professions have to take “Ethics” exams, for example in order to obtain a professional engineer certificate (PE) Mechanical Engineers and Civil Engineers have to take a number of exams one of which is engineering ethics. We need the same exam for those who study finance or financial engineering or anything like that can crash the entire universe!

    I was disappointed to see an OR person at the center of the scandal. But even more disappointed when noticed that we only check mediocre OR programs. (Why should we set the bar so low, I mean we should demand even more respected OR programs at MIT and Berkeley to have such ethics trainings) and Stanford’s football teams sucks anyways.

  3. While I support a course in ethics (or at least a course that in part covers ethics) in both MBA and MSOR curricula, let’s keep in mind the axiom that you can lead a horse to water but you can’t make him drink. If someone is ethically challenged, I doubt a course in ethics is going to fix the problem. The value I see in ethics training is (1) to help people identify where and how ethical dilemmas might arise and (2) possibly to help them frame the debate about how to respond to those dilemmas.

    Selling such a course in an MSOR program may be doubly hard, though. First, there’s the usual issue of whose slice of the curricular pie shrinks to make room for it. Second, if the MSOR faculty look over to their business school, and the ranks of MBAs in general, to judge the efficacy of ethics courses, they’re liable to run screaming in the other direction.

  4. I debated whether to talk about this on my blog. I’m glad you brought it up. Ethical concerns should be mentioned in the classroom. I hope all the programs are looking into it.

    I’m also concerned with another story here of the “management vs researcher” divide. Now I know there is plenty of blame to throw around but it does seem like the researchers and modelers are being thrown under the bus. I am in no way saying that Tourre did or didn’t do any wrong doing. But I find it really curious SEC is citing Tourre only from Goldman Sachs. Just something to ponder.

  5. Before we promote the addition of ethics classes, do we have any analysis that shows adding ethics classes actually improves ethics? Also, what other class would you do away with to make room for ethics?

  6. The effectiveness of ethics training has certainly been studied far more that the effectiveness of, say, linear programming training. So, yes, we do have analysis that shows that ethics training improves ethics. Those against ethics training have no trouble convincing themselves that the evidence is flawed or weak. Search “ethics training effectiveness” on google scholar if you would like to read, or pick apart, dozens of papers.

    As for what to remove, I personally think that most masters of OR have too much technical topics (in keeping with a history or current practice of combining MSOR and PhD students in these classes) and far too little on having a successful career in the practical world of operations research. I feel strongly enough about this that I have been falsely accused of wanting to turn MSORs into MBAs which assuredly is not the case. But I do not think that MSOR should consist of a series of “X Programming” courses for a sufficient number of X to fill out a curriculum.

    This is hardly new or radical. Professional societies in engineering have had codes of ethics for a hundred years with educational and testing requirements (as given by wikipedia:

  7. I run a small, internal OR team and have a MBA. While I was getting my degree, I felt that too many of the classes were oversimplifying the math or avoiding it all together.

    I really do like the idea of having a stronger focus on having a successful career in OR. I’ve been collecting a few tips here and there and try to use them to help our internal team cut through the red tape.

    I also try to engage the local universities for senior projects. The reason for part of my complaint is that I’ve seen too many students graduating with varying degrees that still struggle setting up and solving basic problems.

  8. I do agree with some of the comments above. I think taking a “ethics” course or exam will somehow affect a person’s thinking behavior down the road when he/she enters the real business world. However, do we have any analysis that shows adding ethics classes actually improves ethics? The reason I asked this same question is that as a business owner, I have always been challanged by the question between “Ethics” vs “Profit,” or “rational” vs “emotional.” Can acdemic teaching really change the way people behave in the real (business) world?

  9. One problem with the MSOR degree, at least at Georgia Tech, is that we treat it more like a “math/science” degree than a “professional” degree. I have to admit that our training in ethics is stronger at the undergraduate engineering level, where we include ethics primarily in our capstone Senior Design course.

    We are developing a new professional Masters degree focused on Supply Chain Engineering– think OR applied to supply chain and logistics problems. This program will include a capstone design course and a professional practice course that will both involve training in ethics.

  10. This article certainly comes across as if Fabrice did something wrong. I don’t think he was found guilty of any unethical behavior.

    I remember back in my business school some people just had the personalities to be able to do ethical things. They just had the idea that business was bigger than them, and I could definitely see them succumbing to questionable behavior.

    That being said, it’s a tough field to tackle.

  11. Do we have sufficient datapoints (other than “Fab”) to suggest that OR/MS programs are turning out ethically deficient practitioners? I’m not sure that’s the situation.

    Conversely, I do have (personally) convincing empirical evidence that OR/MS programs tend to turn out graduates weak in, understanding where technology fits into business. Or how OR solutions fit into mainline IT. Etc.

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