May 21st, 2013 | 
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By MELISSA KORN
Business-school professors are making a morality play.
Four years after the scandals of the financial crisis prompted deans and faculty to re-examine how they teach ethics, some academics say they still haven’t gotten it right. Melissa Korn reports on Markets Hub. Photo: Getty Images.
Four years after the scandals of the financial crisis prompted deans and faculty to re-examine how they teach ethics, some academics say they still haven’t gotten it right.
Hoping to prevent another Bernard L. Madoff-like scandal or insider-trading debacle, a group of schools, led by University of Colorado’s Leeds School of Business in Boulder, is trying to generate support for more ethics teaching in business programs.
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Richard Mia
“Business schools have been giving students some education in ethics for at least the past 25 or 30 years, and we still have these problems,” such as irresponsibly risky bets or manipulation of the London interbank offered rate, says John Delaney, dean of University of Pittsburgh’s College of Business Administration and Katz Graduate School of Business.
He joined faculty and administrators from Massachusetts’ Babson College, Michigan State University and other schools in Colorado last summer in what he says is an effort to move schools from talk to action. The Colorado consortium is holding conference calls and is exploring another meeting later this year as it exchanges ideas on program design, course content and how to build support among other faculty members.
But some efforts are at risk of stalling at the discussion stage, since teaching business ethics faces roadblocks from faculty and recruiters alike. Some professors see ethics as separate from their own subjects, such as accounting or marketing, and companies have their own training programs for new hires.
A strong ethics education can help counteract a narrowing worldview that often accompanies a student’s progression through business school, supporters in academia say. Surveys conducted by the Aspen Institute, a think tank, show that about 60% of new M.B.A. students view maximizing shareholder value as the primary responsibility of a company; that number rises to 69% by the time they reach the program’s midpoint.
Though maximizing shareholder returns isn’t a bad goal in itself, focusing on that at the expense of customer satisfaction, employee well-being or environmental considerations can be dangerous.
Without tying ethics to a business curriculum, “we are graduating students who are very myopic in their decision-making,” says Diane Swanson, founding chair of the Business Ethics Education Initiative at Kansas State University.
Stand-alone ethics courses are a start, but they “compartmentalize” the issue for students, as if ethical questions aren’t applicable to all business disciplines, says David Ikenberry, dean of University of Colorado’s Leeds School.
Some schools are experimenting with a more integrated approach. This fall, Boston University’s School of Management is introducing a required ethics course for freshman business students, and is also tasking instructors in other business classes to incorporate ethics into their lessons. It may also overhaul a senior seminar to reinforce ethics topics.
“We need to hit the students hard when they first get here, remind them of these principles throughout their core classes, and hit them once again before they leave,” says Kabrina Chang, an assistant professor at Boston University’s business school, who is coordinating the new freshman class.
Students likely know right from wrong, so rather than, say, discussing whether a student would turn in a roommate caught stealing, Ms. Chang says she’ll lead a debate on how or if a student might maintain a relationship with the thief.
Students may find the roommate-thief scenario more relevant than a re-examination of recent Ponzi schemes, but many remain skeptical of how such discussions apply to real life.
As one M.B.A. wrote last year on College Confidential, an online message board, “It’s not like Johnny is going to be at the cusp of committing fraud and then think back to his b-school days and think, “gee, Professor Goody Two Shoes wouldn’t approve.”
What’s more, schools can’t calculate the moral well-being of their graduates the same way they can quantify financial success or technical acumen. One of the few rankings availableâthe Aspen Institute’s “Beyond Grey Pinstripes” reportâwas suspended last year, in part because researchers could not determine the net benefit of ethics courses. Without demonstrable returns, there’s little incentive for deans to add classes and instructors.
Employers, who have in the past pushed schools to add more hands-on training and global coursework, could successfully agitate for more ethics instruction. But many companies say completing an ethics course won’t make or break a hiring decisionâespecially since firms tend to offer their own training for new hires.
“I’m not so sure that an ‘A’ in an ethics class is really a valid way of judging” an individual’s moral compass, says Jill Smart, chief human resources officer at Accenture,
which hires thousands of students each year.
Even if recruiters do indicate expectations of more ethics curriculum, some say schools still won’t change without clear marching orders from the Association to Advance Collegiate Schools of Business, the industry’s main accrediting group. Schools must demonstrate that they both expose students to ethics and measure learning outcomes, says Joseph DiAngelo, the AACSB’s chairman. But the group doesn’t prescribe which concepts must be addressed, nor does it track the number of classes offered at member schools.
As the financial crisis fades from memory and the economy recovers, instructors worry that the moment has passed.
“That’s the danger of ethics education in business schools. We only think about it when there’s a crisis,” says Katz’s Mr. Delaney. Citing the previous rounds of introspection sparked by Michael Milken’s downfall in the 1980s, Enron and other accounting scandals a decade ago, he says, “If we don’t find a way to instill [ethics] in people, we’re going to repeat it over and over again.”
Write to Melissa Korn at melissa.korn@wsj.com
A version of this article appeared February 7, 2013, on page B4 in the U.S. edition of The Wall Street Journal, with the headline: Does an ‘A’ in Ethics Have Any Value?.
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