As you can tell from the title of this blog – we are fans of an ethic based curriculum before and after schooling. Today we will focus on the specific applications of ethics training in business schools.
If you are looking to get an undergraduate or an MBA degree – hopefully you will take a few ethics classes but my friend Jeff Miller from bizethics.org reports that ethics requirements have been dropping and are the credits that were required previously are no longer required nowadays.
Although the article was written in 2003 – here we are in 2010, seven years later still reeling from the lack or ethics (and common sense) as exotic financial instruments were derived, packaged and sold en masse that would eventually result in the real estate bubble that burst and brought down the economies of the world with it.
I think the article is as relevant today as it was when Jeff wrote it, and I am providing a link to the entire PDF document here: Curriculum Vital: Ethics Courses in Business Schools
Tags: business schools, ethics courses, mba, undergraduate
When the news about Google giving an ultimatum to China came out, I was quite shocked. Was this is a genuine change of heart from the search engine giant or did it have something to do with its competitor Baidu?
I’ve thought about this and I genuinely think that Google decided that they would no longer sacrifice globally accepted values in order to gain a foothold in China. That has to be applauded. However there’s too much of a gray area to accurately pinpoint what exactly was the motive – or was it a combination of motives?
One thing is clear, Google wouldn’t throw in the towel so quickly. With its search engine technology and being a global brand, it has no reason not to wait it out. Even if expectations were not being met, Google could easily hold on. It would have no problem convincing employees, shareholders, and everybody else because of the huge size of the Chinese market.
That leads us to the second point. Take a look at the figures of Chinese internet users and the swiftly rising middle class. For confirmation you can read Martin Jacques’ book “When China Rules the World” if you are in doubt. Why would Google do such a thing – unless something went really awry – it seems Google is really trying to make a stand.
The following is an excerpt from Professor Julian Friedland’s article, recently published in the Chronicle of Higher Education. It discusses the challenges of teaching business ethics as an academic discipline:
Students who succeed in my classes learn to apply canonical ethical theory to contemporary business dilemmas, wrestling with their values and reconsidering the proper role of business in society. That is not easily done. It can be daunting for business students to re-evaluate their own views about, and relationship to, the corporate world they are about to enter as potential leaders. But once they get a taste for it, their intellectual curiosity blossoms. A few years ago, I added to my syllabus a section on consumer ethics, forcing students to confront issues of personal choice and responsibility. If consumers spent more responsibly, there would be fewer market failures; the same goes for investors. So how self-interested should we be? To grapple with such questions is to do applied ethics.
It remains to be seen if many business professors will achieve tenure by doing ethics properly speaking. Most of what now gets published in top business journals under the rubric of “ethics” is limited to empirical studies of the success of various policies presumed as ethical (”the effects of management consistency on employee loyalty and efficiency,” perhaps). Although valuable, such research does precious little to hone the mission of business itself.
While the public clamors for the return of managerial leadership in ethics and social responsibility, surprisingly little research on the subject exists, and what does get published doesn’t appear in the top journals. The reasons are varied, but perhaps more than anything it’s that those journals are exclusively empirical: Take The Academy of Management Review, the only top journal devoted to management theory. Its mission statement says it publishes only “testable knowledge-based claims.” Unfortunately, that excludes most of what counts as ethics, which is primarily a conceptual, a priori discipline akin to law and philosophy. We wouldn’t require, for example, that theses on the nature of justice or logic be empirically testable, although we still consider them “knowledge based.”
The major business journals have a responsibility to open the ivory-tower gates to a priori arguments on the ethical nature and mission of business. After all, the top business schools, which are a model for the rest, are naturally interested in hiring academics who publish in the top journals. One solution is for at least one or two of the top journals to rewrite their mission statements to expressly include articles applying ethical theory to business. They could start by creating special ethics sections in the same way that some have already created critical-essay sections. Another solution is for academics to do more reading and referencing of existing business-ethics journals. Through more references in the wider literature, those journals can rise to the top. Until such changes occur, business ethics will largely remain a second-class area of research, primarily concerned with teaching.
Tags: business professors, Higher Education, managerial leadership
You might have headphones or compact-disc recordings from Koss – a company based in Wisconsin. They just found out that their VP of Finance, allegedly spent a huge amount (current estimates say $20 million+) from the company account on shopping: furs, clothing, jewelry, home decor and more.
The estimated amount of $20 million is about 100 times, Sujata Sachdeva’s 2008 compensation which was around $200K.
Just unraveling this thing will be a huge mess. It will be a beast to tangle not to mention that if this went on for some years (news reports are estimating it was 4 years in the making) then other small primarily family owned companies that are thinly traded like Koss might have similar issues that have yet to surface.
Koss would certainly appear to be an exception with such a huge amount but it says something about financial controls at other firms. Perhaps a hundred baby Enrons in the making.
Its not fair to say that business ethics training would have averted such a financial disaster – but along with tighter controls – such embezzlement might have been corrected earlier and at lower cost.
With such a high unemployment rate you don’t want companies laying honest employees off and shutting its doors because of the actions of one executive. But that’s what one executive can do if given the reins in such an unchecked way as we seem to have in this case.
Tags: Embezzlement
In today’s Financial Times – there is an analysis on page 7, titled “Of greed and creed” – and talks about that more bankers are questioning the ethics of their work.
Among the most questionable actions were the toxic investments that were passed on to investors and millions and millions were made by “packaging” and “bundling” these transactions. The steps before and after such shams led to the eventual collapse of the world economy which has yet to recover.
Now on the cusp of 2010 – so many workers find themselves without a job and without any prospects for a job. The US with its real unemployment rate (including the people who have given up looking and those who have taken part-time/freelance opportunities to pay atleast some of the bills) is at 17%+
An interesting point made in the FT article was that “banking has always attracted moral controversy” this is because the basis of modern-day finance is lending at interest – where the lender really doesn’t have any interest in whether you prosper or not, they will get their money as was evident when so many homeowners could not pay their mortgages and the taxpayers came to the rescue. Its about time to develop a more ethical banking system – one based on profit sharing (read: shared interests).
A silver lining from all this is a quote that is highlighted in the article: “Most people want to do a good job. There is an increased desire to look at the ethics of what they do.”
This is very important and can be the foundation stone from which we build better banks, better corporations and better institutions. For that to happen we need to be fair with all – have a system that is based on merit and intertwines the interests of all rather than stacking the cards all on one side.
Tags: ethical banking, greed, toxic investments
Ethics and Integrity in the workplace need not start in college, in the MBA graduate program or on the job. By giving a future workforce a headstart it will be easier to re-inforce business ethics training later in life with courses and programs.
Parents and Primary care educators can begin with “Lemonade Stand Lessons” – give kids scenarios like, if you had a lemonade stand, and you could only get bad, possibly diseased lemons on a particular day – would you continue to sell lemonade or suffer a day’s loss by closing down the stand and waiting until better quality lemons are available? Just an example – and I’m sure we can expand on it tenfold with better scenarios suited to each age or class group.
I believe such thinking would have a two-fold benefit: the primary one which is making kids better suited for future responsibilities whether they are managing or being managed. The second benefit is that it would encourage innovation and foster entrepreneurship which is a great need if the US plans on staying competitive going forward from 2010.
A recent study by a professor at Kansas State University shows a striking gap between what business students rate as crucial to executives and the behavior they themselves exhibit.
For example among the must-have traits – honesty was rated in the top 5 – however in a separate study conducted by the same professor, the vast majority (88%+) of the students stated they had cheated while at school.
The professor points out that the effect of such cheating continues into the professional careers of these students where they are more like to engage in unethical and morally questionable practices – and the result of this has been and will continue to be the financial disaster that is currently facing us in the form of a great recession.
Time for more character training and ethical courses at our schools and universities – and more publications to clearly distinguish between right and wrong with fairness to all.
This week Goldman Sach’s announced it was launching a $500 million dollar initiative to help small businesses as an apology for its part in the financial crisis.
As many smart people have pointed out – its not exactly that large an amount as many of those are loans that will carry interest, much of the money will be given to non-profits thereby providing big tax write-offs and whatever other tricks they might have up their sleeve.
This is a classical example in teaching an unethical way of conducting a business. Over at Marketplace, Cody Willard gave 5 reasons why Goldman Sachs is still a much disliked company – chief among them their role in the AIG mess.
The most concerning among them from our blog’s point of view: business ethics – is that they were selling toxic derivatives to investors for billions of dollars then turning around and betting against their own products. Somebody didn’t sign up for business ethics training in that department – or more likely they flunked that class.
When you think of business ethics – the first thing that comes to mind is that will following ethical workplace practice affect the bottom line? If you are an employee then the question would be, will this impact my career? Will my sales performance be hit?
Since this is my first post on the topic – I want to just focus on one word: Trust. In the workplace of the future – with everybody competing for more business, and fierce challenges in the face of recessions and depressions – trust will win out over the rest.
If there is trust in you as an individual and if there is trust in your organization you will have credibility that will positively influence your bottom line.
You want to make “gaining the trust of your market, of your competitors” a top priority. You want to play fair – to ensure a level playing field where winners are chosen on merit instead of internal politics, bribes, kickbacks, favors, you name it.
We’ll evaluate case studies, discuss the challenges, and how we can be better trained to perform ethically and morally in our workplaces.