What’s so tough about business ethics?
March 11th, 2007 | Author: Jack Brittain | PermalinkI presented to a community group Friday evening on technology/innovation and economic development, and during the Q&A someone asked a question that used to come up frequently but has fallen off the radar in the past couple of years: What are business schools doing about the terrible state of business ethics in America? During the Enron/WorldCom years, this question came up every time I addressed an group, and I suppose it is making a comeback now because of the options back dating scandals that are in the news.
While public interest seems to change with the latest news, I see a lot that gives me confidence in the future of American business in today’s students. First, they care. The students who are in business school today have a much greater sense of social responsibility than any group I have seen in my 30 years in higher education. There is a recognition of the public leadership role of business leaders, and our students are interested in programs that prepare them for community service. Our Board Fellows Program, which places students in internships with local non-profits, was created by students interested in getting more community experience and has 25 students placed this year. Our non-profit consulting group serves 5-8 non-profits in our community every year by providing business consulting designed to make these organizations more effective in the delivery of services, and we are currently working on a social ventures fund that will help develop sustainable non-profit organizations in our community through the provision of one-time investment capital. And the service learning programs at all the universities in the area are experiencing record student participation.
Second, I think we know a lot more about preparing students for the ethical challenges they are going to face in the course of their careers. Early ethics courses focused on the “rules,” but knowing the rules did not really prepare individuals for the conformity pressures and incremental “legal” activities that often lead to unethical practices in the real world of business.
Seventeen years ago, the David Eccles School of Business took on the challenge of preparing students for business leadership by starting their training with a course that challenges each student to translate personal values into a credo of business conduct that will define their business career. I did a short piece for an alumni magazine that details this approach, and I think it remains timely. Take a look.
Business news was seldom carried on the front page in the past. This has changed dramatically in recent years with one corporate scandal after another. The amounts involved are staggering, and the resulting impact on stock markets and pension accounts has made most Americans innocent bystanders.
The impact of these crimes on how business is conducted is wide ranging. Recent federal laws demand a much greater level of business accountability in financial reporting, and appropriately so. The change in attitudes towards business was captured in a recent movie mini review in Entertainment Weekly: “The Perfect Score. A movie about high school students trying to steal SAT answers. So they can go to business school and learn how to steal millions.” (pg 16, February 6, 2004)
As a business educator, it is bewildering to see business education included among the presumed rotten apples. Still, we do not want to dodge questions about ethics and business education, they are valid and challenge our assumptions about the effectiveness of what we are doing to prepare our graduates for business careers.
“Ethics” in Business Schools
My experience teaching in a number of business schools has convinced me most are getting business ethics wrong. I think the elite business schools might be even worse at teaching this subject than others. One recruiter recently characterized a visit to a prestigious Ivy League business school as a “walk in the Land of the Velociraptors.” It was not a compliment. Students can walk out of an ethics class and not see a connection their next class, even when the organizational behavior case is about corporate fraud.
The core problem is business schools tend to teach business ethics as a set of rules, typically the law. Students too often conclude it is okay to walk the boundary of the law as long as the do no stumble into illegal behavior. This is the opposite of what we want our students to learn, because the boundary of ethical behavior is typically crossed well before one gets to the boundary of illegal behavior.
There has to be a better way.
David Eccles School of Business faculty started struggling with the problem of teaching business ethics about fourteen years ago. As we better understood the failure of traditional approaches to preparing people for ethical leadership, we started to understand two issues we needed to address:
- In cases of illegal behavior, individuals cross the boundary of unethical behavior long before they start engaging in illegal acts. The difficulty is ethical dilemmas are subtle shades of gray, and the boundaries are hard to see. What our students seemed to need was a much better grounding of their business behavior in personal values and “gut instincts.” This approach is not about externally defined rules, it is about understanding core personal values and how they relate to business decisions.
- The second feature of ethical business dilemmas is they occur in complex social systems with concentrated authority, distributed responsibility, and diffuse accountability. In many instances of illegal activity, hundreds of people are involved, yet no one raises an alarm. It is in understanding the complexities of “being ethical” when one lacks authority that we found personal attributes like courage, skills like effective dissent, and the importance of career preparation matter, leading to the quip, “Six months salary in the bank is the key to integrity.” There is no textbook on courage. We do not have easy answers when it comes to teaching our students how to act with integrity, but we are asking the right questions.
The David Eccles School did something extraordinary twelve years ago, replacing introductory business with Foundations of Business Thought, a course examining personal values and business practice. David Eccles School students begin their business studies with questions about the community responsibilities of business, the moral obligations of leadership, and market economy values. More than 2,000 students a year take the class, and just 60% are business majors.
The Foundations of Business Thought course now enrolls over 2,500 students a year and 50% are pursuing majors other than business. We were ten years ahead of everyone else on this, and we will be here with the same focus year after year because we know this is the right kind of education for every student who will eventually work in large organizations with a concentration of economic, social, and political power. And as I said in the beginning, I am confident because today’s students care.
Later.
I enjoyed your article. I was terminated from my job as a HR Asst. I am over 40 and as you know in a protected group. However, my employer terminated me. When I applied for unemployment, the employer noted that I was terminated for breaching confidentiality and insubordination. I was unhappy in my current position because the rules were different for everyone and I was concerned that my job would be eliminated. They were implementing a new program that involved my job. So, I applied for another position and I had to pass a required (70 wpm) typing test. With two attempts I failed with 69 wpm. I was told by the HR rep. not to say anything about my typing test and to let my manager speak to the CEO. I told her that I couldn’t lie and that you never got anywhere by telling lies. She didn’t respond to my answer. I must say that she did not ask me to lie. But, as I learned while working in the dept. it was “who you were” and I wanted to do what was right. The HR Rep offered to give me the test again and I said “No” because that would not be fair. I wanted to follow the same rules that was given to other employees. I was asked by the Asst. Admin. how I did on the test and I told him that I had failed. Also, my co-worker e-mailed me and inquired how I did and I informed her. Then, she decided to apply for the position. I did not tell her that she was ineligible. The employer had a policy that if you do not apply during the posting period you would be ineligible. There was a exception—you could be promoted if it was the same job family in your dept. I informed my manager that I had spoken to the employee and she expressed that she wanted to apply for the position. My manager said at that time that the employee was ineligible. One day later, my manager informed me that the employee had applied and was coming in to take the typing test. She informed me that she would have told the Asst. Admin. she did great on the test. She suggested that in the future that I not divulge the information. The co-worker came in and had taken the typing test and failed. So, I saw it as we were both ineligible because we didn’t meet the requirements. I was interviewed for the open position approx. 6 days later and the co-worker was interviewed on the seventh day. I was notified by e-mail three days following the interview informing me that the co-worker was chosen for the position. I was called in the office 13 days later and questioned about me not being happy in the dept. and I said it was true. It was at this time that my manager stated that she could no longer trust me and that she instructed me not to divulge my typing score. I needed to think about what I had done. I was called in the office 8 days later and was told that it was in my best interest to resign. I refused to resign and then was terminated. I applied for unemployment. At my unemployment hearing, their lawyer represented the argument that I worked in the HR dept. and my typing score was a confidential record and I breached confidentiality. If I couldn’t be trusted with my own records, then how could I be trusted with others. We have become a society of “know who” rather than “know how”. Who would believe that I was terminated because I told the results of my own typing score? I know that employment at will protects many organizations.