A substantial number of MBAs from 11 leading North American and European schools claim they would be willing to forgo some financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics, according to research by David Montgomery of Stanford and Catherine Ramus of UC Santa Barbara.

Researchers in the 1970s and 1980s used the advanced market research technique of conjoint analysis to examine the relative importance of such things as financial compensation, the geographical location of the work, the volume and extent of business travel, and opportunities for advancement. But missing from the earlier conjoint studies were attributes that the professors believed might affect MBA job choices in the 21st century.

Montgomery and Ramus’ explored whether a reputation for high ethical standards or caring about employees, environmental sustainability, and community stakeholders makes an organization more attractive to MBA candidates. They also examined whether intellectual challenge of the job is an important selection attribute.

The results surprised the two professors: intellectual challenge topped the list as the most important attribute for MBAs in their job choice decision. The financial package was deemed only 80 percent as important as intellectual challenge. But even more surprising was that reputation for ethics and caring about employees both rose to the top third of the list of 14 attributes, proving to be approximately 77 percent as important as the top criterion of intellectual challenge.

Moreover, more than 97 percent of the 800 MBAs in the sample said they were willing to forgo financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics. On average, MBAs were willing to forgo 14 percent of their expected income.

According to the authors: “There is a strong argument for firms to become more ethically and socially responsible in order to attract MBA candidates. There are important practical implications for both recruitment and retention related to maintaining a reputation for caring about employees and stakeholders; for a commitment to environmental sustainability; and for providing products and services that are considered ethically sound. MBAs want jobs where they can be intellectually challenged, but they prefer positions in organizations that demonstrate a set of socially responsible values in the way they do business.”

Montgomery says the results will challenge some of the conventional wisdom about MBAs.

“The big surprise was that no one thought that corporate ethics was all that important to jobseekers. Conventional wisdom dictated that the major incentives to join a company were financial, financial, and financial. Everyone thinks they know that MBAs are avaricious and greedy. And while no one is claiming that they are perfect, it turns out that MBAs are willing to forgo a significant percent of their income to be more moral across a number of dimensions.”