The Importance of Teaching Ethics at Business Schools

Business ethics is vital for success in the modern world, and so is a fundamental requirement for any business school program. Without ethics and trust, there is no foundation to build a successful career. Accordingly, business schools have a duty to instill such values in their students.

Businesspeople haven’t exactly garnered a great reputation when it comes to moral conscience. Headlines about pharmaceutical price gouging, car companies cheating on emissions testing, fraudulent accounts being hoisted upon clients, the financial crisis, and too many other scandals to name, reveal the extent of the challenge faced.

Teaching ethics

What responsibility do business schools have in all this? They are training future c-suite executives and managers; ethics is an important part of this – for its own sake, for the sake of the bottom line (triple or otherwise), and to stay well clear of scandals. Schools are also in a strong position to research and share their findings related to ethical decision making – or lack thereof.

Of the aforementioned scandalous events, Edward L Queen of the New Republic wrote in September 2015 that greater scrutiny is required: “These events – and others – make clear that there is a need to look at the broader cultural realities that drive unethical decisions in business, particularly the perception that the only way of determining value and worth is money.”

The challenge for business schools is that graduate students – the ones who go on to lead organizations – are older and typically have a full-fledged set of values by the time they enter a classroom. Teaching ethics to them seems daunting at best and impossible at worst.

Evaluating values

This it has not stopped business schools, to their credit, from trying. Recently, the University of Arizona’s Eller College of Management held its annual Collegiate Ethics Case Competition, which has students confronting the kinds of ethical dilemmas real businesses face.

Last year, the case was based on the debate between Apple and the FBI about unlocking phones in the aftermath of the San Bernardino terrorism case. “I believe that the more that you can raise awareness about the importance of good decision making, the more you can simulate the realities of what will occur in the business sector for these students,” said Paul Melendez, founder of the Center for Leadership Ethics at Eller and organizer of the event.

Generational shift

The good news is that students’ mindsets are evolving. Once upon a time, they did not stress a desire for an education in this area. But millennials want to have serious conversations about ethics, particularly corporate social responsibility (CSR). Business schools are responding with what some have coined ‘responsible management education’ (RME). 

The United Nations’ Principles for Responsible Management Education (PRME) initiative supported the Macquarie Graduate School of Management in Australia in conducting a survey of 1,699 respondents. The resulting ‘The State of CSR and RME in Business Schools and the Attitudes of Their Students’ found that, “Students exhibited positive CSR attitudes, with a heightened focus on acting ethically and a diminished focus on financial considerations.”

Half the respondents said they would give up more than 20% of their starting salary to work for a company that cares about its employees. PRME also found one in five respondents would sacrifice 40%, or more, of their future salary to work for a company with a sense of corporate social responsibility (CSR).

Methods for bringing ethics to the classroom

As students’ principles shift so do the schools’ responses. In recent years, top business schools have made an effort to infuse ethics into the curriculum through workshops, panel discussions, and courses. In 2004, a task force run by accrediting body AACSB determined that business schools had to improve ethics education, but it left schools with the freedom to decide how. Discover some ways business schools are teaching ethical leadership:

•  Case studies - Business schools have long used case studies to illustrate the challenges businesses regularly face. These real-life stories spark classroom discussions about what leaders did right and what they did wrong. Case studies are a good way to demonstrate the sort of ethical dilemmas business executives may face in their future career.

• Guest speakers - Business schools provide frameworks and theories to help students learn how to make decisions about investments, hiring, and marketing. But it is significantly harder to bring reality into the classroom. Along with case studies, one way to address this is to host guest speakers from industry. They can talk about their own experiences with ethics.

• Simulations - Simulations allow students the chance to apply what they have learned without any risk. Technology is utilized to replicate situations similar to those experienced in business reality. Replicating ethical dilemmas in a simulation allows students to evaluate their values and decide where they are willing to compromise. Often, these simulations ask students to work in teams, reflecting one of the biggest challenges faced when encountering ethical quandaries in real life.

• Integration - One criticism business schools have faced is that ethics are taught in a vacuum. Educators now believe that a pedagogical approach which sees ethics weaved into all courses is a more effective approach. Slowly, business ethics is becoming better integrated in MBA curricula.

• Self-assessment and reflection - An MBA is a time away from the pressures of the workplace, when individuals can reflect on their personal goals and develop a strategy for their upcoming career. It is, therefore, a critical period for the embedding of ethical principles that can act as a compass to navigate the challenges of the future.

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