MBA Programs Are Failing in Ethics

Business schools do a poor job of teaching students business ethics. Pro or con?

Read the debate by guest columnists Michael Beer and Mary Gentile and watch the video with Bloomberg Businessweek.com reporter Joel Stonington

Pro: Business Schools Need a Higher Ambition

When Edwin Gay became the founding dean of the Harvard Business School in 1908, he proclaimed an ambitious vision for HBS and the business leaders it sought to educate. According to Gay, the purpose of business was to do both “well and good.”

A century later, Gay’s vision still hasn’t been realized. For the most part, business management has yet to become a profession driven by more than the pursuit of quarterly earnings gains for investors. It takes only a quick scan of the business headlines to see rich fodder for ethical debates: Do CEOs who fail to turn around failing companies really deserve to walk away with golden parachutes? Shouldn’t CEOs cut their own pay and benefits before laying off employees? It’s no wonder people are quick to question whether business schools are to blame.

For starters, B-schools must do a much better job of integrating the multiple disciplines of management into a coherent approach to developing future leaders. While some schools are requiring more courses in ethics, teamwork, and leadership values, that’s not enough. As long as we offer courses strictly as stand-alone affairs, with ethics over here and finance over there, we will continue to groom leaders inclined to perpetuate a siloed view of the world. We need to connect the dots between leadership and personal integrity and everything else we teach, with an eye toward building organizations that have a “higher ambition”—pursuing economic as well as social value in ways that benefit not only investors but employees, customers, suppliers, and society at large.

My colleagues and I are encouraged that some B-schools have sought help from higher-ambition leaders themselves — people like Ken Freeman, former CEO of Quest Diagnostics, now dean of Boston University’s School of Management, and Bill George, former CEO of Medtronic, now teaching leadership development at HBS.

Now, 100 years after Edwin Gay declared that business must do both “well and good,” it is time to incorporate higher-ambition principles into the B-school curriculum.

Con: Teach the Practice, Not the Concept

Too often we try to teach business ethics through intellectual analysis, as if it’s only an academic subject. Or we teach ethics as if it’s a wake-up call to an assumed audience of blissfully self-centered future managers.

Although there can be truth and undoubted value in both of these approaches, perhaps our focus should go beyond trying to “teach ethics”-to teaching how to practice ethical behavior. Based on this simple observation, it would be fruitful to shift the debate from “What is the right thing to do?” to “How can I make the right thing happen?”

Business faculty all over the world are addressing the questions of values-driven leadership. They are inviting students (the future leaders and executives of global business) to engage in an explicitly acknowledged “thought experiment.” Rather than limiting the discussion of ethics to thorny dilemmas where intelligent people can reasonably disagree, triggering what one professor called “ethics fatigue,” these educators invite their students to approach ethics from a new direction: “What if you thought you knew what was right in a particular situation? How would you get it done? What would you say, to whom, in what sequence, with what evidence, and how would you counter their resistance or fears?”



This approach, called “Giving Voice to Values,” begins from the assumption that there will always be those who push and even break society’s laws and ethical norms. But there will also be those who would rather observe them, if they believed they had the skills, the competency, and the literal practice in how to do so. Rather than “teaching ethics,” this approach teaches managers how to be ethical, enabling them to believe they have a choice.



The rapid adoption of this new approach is a promising sign that business schools have finally found a way to reconcile their core strength of preparing future leaders for action, with their new mission to instruct those same leaders how to be responsible, and, yes, ethical.



Opinions and conclusions expressed in the Debate Room do not necessarily reflect the views of Bloomberg Businessweek, Businessweek.com, or Bloomberg LP.

Reader Comments

Maxwell Pinto

Yes, it's very important to teach leaders and future leaders how to be ethical, and how to practice ethics, but please note the following:

Ethics is concerned with “doing the right thing” in terms of morals, fairness, respect, caring, sharing, no false promises, no lying, cheating, stealing, or unreasonable demands on employees and others, etc. In addition, business ethics calls for corporate social responsibility (CSR) and addressing social problems such as poverty, crime, environmental protection, equal rights, public health, and improving education. We need a practical approach rather than a philosophical one, with “leadership by example.”

Business decisions often concern complicated situations that are neither totally ethical nor totally unethical. Therefore, it is often difficult to “do the right thing,” contrary to what many case studies will have you believe!

Is it the seller’s duty to disclose all material facts regarding the product/ service in question, or is it the buyer’s responsibility to find out the pros and cons of what he or she is getting into? Should the seller answer each question exactly as it was asked, and ignore some pertinent information? Or should he or she merely address the spirit of the question? Is the buyer responsible for due diligence? This is a gray area.

Maxwell Pinto, Business Consultant and Author.
http://www.smashwords.com/profile/view/MaxPinto
http://www.lulu.com/product/ebook/leadership-and-ethics-major-ingredients-of-the-business-recipe/18646122

Robert Laughing

Let me see....I can "learn" ethics in college, and when give the choice to pocket $10 million to $100 million ( ala Naber's Oil ex-CEO). I will remember my university ethics class, and tell them who are offering, "Aaaa, no thank you, as I never earned that payoff."

Get real, people. No one has that kind of ethics.....especially, we now know, Penn State University. Imagine that red-headed young, aspiring, junior, deputy-assistant coach, attacking one of the imperial court, and expecting the king, queen, royal princes, to back him up or, more likely, dispose of his future in a trash heap, for being "not a team player."

Lawrence A. Beer

In academic courses the object is not to teach ethics, as most know in their heart what is right and wrong, but to remind people what they already feel and put such understandings into a practical structure to confront moral improprieties. The example of the recent Penn State scandal tells us that the first obsever of the incident knew what he saw was wrong; the problem was what to do about it. The application of an ethical decision is harder then the moral judgment.

In my book, A Strategic and Tactical Approach to Global Business Ethics, guidelines for handling ethical issues are provided. Such is the direction that educational institutions need to teach the future leaders of the global business world. The tools to handle ethical matters need to trump the religous and philosophical references that construct each one's personal stance. While we all recognize ethical injustice most do have a plan in place, be it reactionary or proactive, to do anything about it.

Michael Lenwell

The problem with any of these concepts is you can't really teach morals and values into someone. Yes, you can tell them the laws that are in place to protect businesses and individuals, but in the end, it comes down to not just knowing the differance between right and wrong but having the courage to chose between right and wrong.

czander

If deans and celebrity business professors want future managers to be ethical, the way to do it is simple. Do not teach your students how to manage from the top down. Teach them to understand the corporation from the bottom up. Have them read Studs Terkel instead of Michael Porter. Teach them to understand the lives of working people, not Jack Welch. Teach them the history of the industrial revolution and have them read Dickens. Teach them about the huge change in the human condition this industrial-corporate-global revolution has brought us, both positive and negative. Have students think about the nature of work and how CEOs can contribute to making a better life for their employees, their families, and communities. Teach them the value of the once dominant employee-employer compact. Do this and you do not have to teach a course in ethics, values, or how to be fiscally responsible, and you will not need to have them sign a “let’s all be ethical” oath. And, one final thing, please, keep out of B-schools: celebrity CEOs, motivational gurus, and shameless consultants. And please do not give tenure to any professor who so arrogantly writes a "how to do it" book.

burno

There are greedy business ethics in Wall Street, only doing money business to make money, not adding productivity whatsoever to society or to industries. Only speculate, spread rumors, and make big bugs. This vicious cycle creates pain for great majority of us, only those 1% that enjoy the profit and destroy the rest.

Gaurav

Business ethics are taking centerstage these days; gone are the days where only traditional theory was practised in any corporation, where the shareholders were considered as dominant stakeholders, and all the business pratices were done considering their share of interest. Today we adhere to a network model of stakeholders, where the companies cannot even determine the exact set of stakeholders they have at a given point in time. There is increased liability on businesses today, therefore even business ethics as a course are even taken seriously in many b-schools.

Paul F Onyango MBA

I know what I'm talking about, that's a biased leftist article: How do you leftists cause a company mess then expect a middle or right CEO to turn things round when you've already defrauded the corporation. We MBAs are not there to be hirelings of crooks that's not our profession even if you pass off as husband and wife! I graduated JSU MS Business School the toughest HBCU MBA.

PREETAM

Teaching ethics in B-schools is a trend now. Students get to know what business ethics is all about. Professors simplify the subject with various case studies and examples.The next future leaders are ready to step into the corporate world. They have the concept of ethics in mind but it is hard for them to practice it in the real world. Many students take ethics as unrelated things to management studies. This may be due to the lack of awareness of ethical conduct in corporations or the professor's style of delivering the concepts. As the management student is going to be a stakeholder of some corporation he/she should be well aware of the Corporate social responsibility. So it's the B-school's responsibility to make the student well prepared to became a good corporate citizen as well as a profitable stakeholder.

Himanshu Guntewar

I am really confused and curious if one can really teach ethics. As ethics stands for theory or system of moral values and as they say it's embedded in us since childhood. In another context, or as I may say, in real sense thinking about ethics and acting ethical is easy for developed countries but other countries cannot negotiate and afford it. So, we can say that that many situational factors (economical, cultural etc) and Individual Factors (age, sex, nationality, society role) play an important role in ethical decision making. It's evident that, as long as any of these factors play a role in the decision making, unbiased ethical decision is not possible.

Kenneth Goodpaster

Michael Beer's observation that management education, analogous to legal and medical education, has “for the most part” not delivered on its historical promise to prepare business executives as professionals is a limited generalization, but does have some merit, and is documented with insight and historical scholarship by Harvard Business School Professor Rakesh Khurana in his book From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession.

In a forthcoming book from Cambridge University Press, Corporate Responsibility: The American Experience, I have worked with a team of scholars to offer a portrait of more than two centuries of business thought and practice in the U.S.   The second of those two centuries has witnessed the emergence of B-schools in universities. 

To level a charge of unfulfilled promises against business education during this time is not unwarranted, even if it must be carefully qualified in view of the fact that many schools do explicitly or implicitly embrace what Beer calls “higher-ambition principles.” (I’m relieved to say that one such place is the school I work for, the Opus College of Business at the University of St. Thomas, where business students are imbued with the idea that profit is not the goal of business. Rather, it is the deserved reward for a business that offers products and services that fully meet customers’ needs, provides a safe and respectful work environment at a fair and equitable wage, and respects and protects the physical and societal environments in which it operates.) 

Beer also notes that “people are quick to question whether business schools are to blame” for the regular appearance of scandals, most dramatically during the last decade. But in addition to the qualification indicated above (“most, but not all business schools”), there is another qualification worth making. It’s that moral formation is a lifelong process, not a two or three-year process in business schools, or law or medical schools for that matter. 

So if we are soul-searching as a society about ethical integrity, the formative variables go beyond professional school degree programs (never mind fallen human nature).
 
Mary Gentile’s counterpoint in the debate urges us to “shift the debate from ‘What is the right thing to do?’ to ‘How can I make the right thing happen?’” Gentile suggests we need to approach ethics from a “new direction” by hypothesizing that the hard work of discernment can be set aside and that what remains is simply “how would you get it done?”
 
This is risky advice and sets up what is surely a false dichotomy. Teaching ethics (in a dedicated ethics course, a marketing course or a finance course) certainly involves paying attention to implementation, not simply moral direction. But the use of the case method has always been mindful of this distinction – the need to join knowledge (theory) to action (practice).  

Gentile’s book, Giving Voice to Values, focuses attention on action plans in connection with matters ethical. Let’s just keep in mind that while it is true that concepts without action may be sterile, it is just as true that action without concepts is blind.

Kenneth Goodpaster
David and Barbara Koch Endowed Chair in Business Ethics
University of St. Thomas Opus College of Business

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