Can business ethics courses change the corporate landscape?

Just over 100 years ago, the Master of Business Administration (MBA) was recognised as a formal degree. A century on and this prestigious qualification has continued to adapt to the times, as new business contexts call for new business skillsets.

The need to adapt has been particularly pronounced since the Great Recession threw the notion of business ethics (read more on the subject of business ethics) into the spotlight once again. During this global financial crisis it became apparent that, for business education to remain sustainable, we would need more than core business modules like finance, accounting, marketing and strategic management. Rather, issues concerning society at large needed to be taken into account. As a result, business schools have come to realize that their curricula have to pay more than lip service to topics like ethics and corporate social responsibility.

Demand for business ethics in the classroom

Rankings exercises have also been introduced to give candidates an insight into responsible and ethical business schools. Until 2011, the Aspen Institute created an annual ranking, ‘Beyond Grey Pinstripes’, offering an alternative business school ranking based on how well a business school has integrated aspects of ethics, corporate social responsibility (CSR) and environmental awareness into its curriculum. It was decided that the ranking was no longer necessary in a world where the vast majority of business schools – though not yet perfect – had reached a solid understanding of the importance of these topics.

QS TopMBA.com also produces a specialization ranking focussing on CSR. At present, Harvard Business School leads this ranking, followed by Stanford and INSEAD (Singapore). 

The beginning of corporate social responsibility

Business ethics as a discipline began to emerge in the 1970; a decade later, offshoots such as corporate social responsibility (CSR), became integral to business degree modules. In light of recurring business scandals, such as the savings and loan crisis in the 1980s, the Enron scandal of 2002 and, more recently, the financial crisis of 2007/08, there has been an increasing emphasis on how to do business ethically.

Delphine Wharmby, communications director at HEC Paris, says for years now, the school has developed an integrated approach to teaching sustainability and corporate social responsibility, with the goal of raising social awareness. “Initiatives like introducing courses covering sustainable business practices, a wide range of relevant electives, on-campus conferences, and the integration of mission and action projects reflect HEC Paris’ ongoing commitment to forecasting and meeting the changing needs of global business,” Wharmby says. “The objective is not necessarily for all participants to work in social business, but for them to acquire an awareness of the importance of these issues in their field of work, and to develop inquisitive skills about the role of business in society.”

ESMT‘s EMBA program also offers a track dedicated to ‘managing business integrity’, in which students explore the topics of compliance, ethics, and fraud much more deeply. Martha Ihlbrock, head of communications at ESMT European School of Management and Technology in Berlin,says: “The courses address topical issues of modern managerial practice in the field of governance and compliance and links these to leadership and ethics. Within this track, the course ‘business ethics’ is a reflection that business ethics and corporate social responsibility are major leadership topics, which need to be present in every manager’s skillset.”

Chris Saunders, director of the full-time MBA at Lancaster University Management School (LUMS) says business schools, and perhaps MBAs in particular, can sometimes make the way business operates seem very competitive. “The reality is that most businesses gain more from collaboration and a fine-grained understanding of their stakeholder’s wants and needs, than they do from exclusively pursuing a competitive agenda.

“Having a strong ethics/CSR/sustainability component on an MBA program is essential for getting this message across to future senior managers,” Saunders says.

Changing the ethical mould

Business school candidates who have built up significant business experience, as is the case for most Executive MBA students, have usually developed a sense of business ethics during their careers to date, based on their own encounters with ethical dilemmas in business. It might therefore be difficult to adjust to a different set of ethical values.

LUMS’ Saunders says the school doesn’t expect to change the moral perspectives of its students on the business ethics course, but rather give them an opportunity to express them. “We fully understand that the experienced managers on our program will already have an established set of morals and ethics, but they may never have taken the time to articulate these,” he says. “What we aim to do is introduce the difficult ethical issues senior managers regularly face, and make the students aware of the complexity involved in stakeholder management.

At Surrey Business School, the challenges of teaching ethics to EMBA candidates arise from getting them to understand the importance of ethics in their decision-making. Bill Payne, MBA president of Surrey Business School, says: “We stress the idea that as managers, often senior managers, their decisions will have implications and effects that go beyond the workplace and so they need to understand that. It adds additional layers of complexity to decision making, which some see as just slowing down the process but, in the main, EMBA students are happy to engage with the discussions and reflections.” 

The value of business ethics

Student demand for business school programs that offer an ethical dimension is high. Many of the newly accredited business schools across the globe, such as Ecuador’s ESPAE and the School of Business and Economics at the University of Canterbury in New Zealand, place a core emphasis on corporate social responsibility, sustainability or other ethical dimensions. 

LUMS’ Saunders believes the benefit to students of incorporating business ethics into the MBA program comes mostly on their return to the business world. “Knowing what they stand for, what they will and will not do, understanding that ethical, social and sustainability issues are complex and need careful attention, and will help graduates to have an idea of how they can make a difference.” 

Whether we will be able to look back in 20 years and say that ethics and CSR courses for MBA and EMBA students had a profound impact on the business landscape is, of course, impossible to predict.

Nevertheless, the growing awareness of ethics as an integral part of business practice is most certainly a step in the right direction and one that reflects a growing global demand for businesses to adhere to such principles.

ENDS