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Can Business Schools Teach Ethics Effectively?

What should the Goals Be of Teaching Ethics to Business School Students?

Years ago my ethics professor asked our class: Can Business Schools Teach Ethics? More than half of the class said ‘no’. The rest of us said ‘yes’ but we had no idea how to teach ethics effectively. Many of us were uncomfortable with the notion that we would be preaching to our students and telling them what is right and what is wrong. Most of us believed you are born with a good sense of right and wrong and nothing can change the way you will act when faced with an ethical dilemma.

I added that teaching ethics to those with a propensity to lie, steal and cheat makes no difference while teaching it to students who are pre-disposed to ‘doing the right thing’ isn’t necessary because it’s like preaching to choir. It’s the middle ground of students we should target; those whose ethical values aren’t set in stone yet and can be influenced by ethics education. I believed this back then and I am more convinced about it now having taught ethics at the university level for more than 20 years.

However, to be effective the goal of teaching ethics should not be tell students what’s right and what’s wrong but, instead, it should be to sensitize students to some of the dilemmas they might experience in business and to give them the tools to handle the challenges.

Business school students are taught from their very first class in a MBA program that maximization of shareholder value is the primary goal that should drive business decision making. In his landmark opinion piece that was published in the NY Times Magazine in 1970, Milton Friedman said: "The Social Responsibility of Business is to Increase its Profits". Many still agree with Friedman some 44 years later. If this is true then whether business schools can teach ethics effectively is problematic.

Ethics in business requires that CEOs, at least sometimes, place the interest of others ahead of their own self-interests, which for all too many is to maximize their pay packages. The CEO-to-worker compensation ratio today is about 300:1 while back in 1965 it was 20:1. Some of the biggest names of the frauds of the early 2000s stole their way to fortunes and received MBAs from our most prestigious business schools. For example, Jeffrey Skilling (Enron) graduated from Harvard. Raj Rajaratnam (Galleon Group hedge fund) from the Wharton School. Each was driven by greed and the pursuit of short-term profits -- and ethics gets in the way. The short-term goal of maximizing profits crowds out the long-term goal of establishing an ethical culture in an organization, which requires an ongoing commitment to ethical behavior.

For years now the debate among university professors has been whether ethics is best taught in a separate course or integrated throughout the curriculum. According to standards set by AACSB – International, either approach is acceptable. From years of experience I have come to believe integration is the best approach – at least in theory. In this way students are taught that being ethical is part of every discipline, every decision they make in business, and everything they do.

Wouldn’t it be nice if students took this to heart and acted accordingly; but it’s not that simple for two reasons. First and foremost some of them are unreachable. Second, while integration sounds good it also means that every professor has (or can learn) the tools needed to teach ethics to business students. That’s why the stand-alone course may be best. Not every professor cares about gaining the tools and you can’t fake teaching ethics. I believe the answer to ethics education is to do both. A separate course taught by a ‘true believer’ can pick up the slack of the integration approach and reinforce learning.

Some will argue that today’s students are unreachable because they expect instant rewards for their efforts and ethics gets in the way. Others say that young people have been corrupted by social media (Facebook, Twitter et al), television (many reality TV shows), and wrongdoings by our leaders that set a bad example especially since all too many get away with unethical/illegal behavior. For example, Bank of America recently agreed to a settlement with the government of $16.65 billion for their role in the mortgage meltdown while no BOA executives were sent to jail for their role in the fraud.

So, can business schools teach ethics? I believe we can but it takes committed professors supported by university administrators. The problem here is we’re dealing with the allocation of scarce resources to bolster ethics education and it becomes an even greater challenge when separate courses are taught. I believe we can teach ethics but it is more of a challenge today than ever before to get students to care because of the general decline of ethics in society. Wherever we look there’s another scandal.

Finally, even if teachers can teach ethics it still may do no good unless we also ‘walk the talk’ of ethics. Professors serve as role models for our students so our behavior in and out of class must reinforce our ethics instruction. Even more important is the observation that if we don’t teach ethics in our classes we’re sending a signal that it’s not important to us so why should students care?

Blog posted by Steven Mintz, aka Ethics Sage, on September 2, 2014. Dr. Mintz is a professor in the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at:

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