Striving for Ethical MBAs
In the wake of corporate scandals, various high-profile business schools are trying hard to ensure that tomorrow’s business leaders receive a solid education in ethics. Yet critics argue that, in general, universities still aren’t doing enough in the field of ethics and that the basic ideas underlying some MBA courses may actually be hindering ethical development.
USA TODAY reports on an audit of the top U.S. business schools. The audit shows that just 23% mandate that students take at least one course in ethics and 30% require them to take a course in which ethics is combined with the teaching of another business subject. Nearly half (46%) offer only electives in business ethics, meaning that these schools don’t require their MBA students to study ethics at all, according to the audit, conducted by Prof. Diane Swanson of Kansas State University, Tammy MacLean of Suffolk University, and Barrie Litzky of Pennsylvania State University.
And those are just the best schools. The Association to Advance Collegiate Schools of Business (AACSB), an accrediting agency for business schools, reports that just a third of all business schools even offer ethics as a separate course. This may be part of a long-term trend. “Over time,” reports The Journal of Education for Business, “ethics courses have been disappearing slowly from many B-school programs as MBA programs have been redesigned.... Some business ethics teachers have suggested that this marginalization of business ethics in favor of other ‘hard’ business topics is one of the reasons for the deterioration of ethical conduct in business.”
Business schools accredited by the AACSB are required to provide some sort of ethics education, but schools have considerable leeway in how to meet those obligations. Some academics contend that, in light of recent corporate malfeasance, MBA programs should require their students to take at least one ethics class. Others say ethics needs to be integrated into all MBA courses so students understand how ethics relates to everything from marketing to finance.
Among the top schools that have revamped their curricula is Northwestern University’s Kellogg School of Management. Its incoming MBA class now starts with a 10-day course that contains a lot of material on ethics and social responsibility. Writing about Kellogg, The Economist reported last September, “This year’s MBA students will find courses on ‘leadership’ and ‘ethics’ to the fore. A class on ‘leadership in times of crisis,’ once optional, is now mandatory. And there is a new core course on ‘business in its social environment.’”
Harvard Business School has also made changes, requiring first- year students to take a new ethics course called Leadership and Corporate Accountability. “We're trying to prepare students for the responsibilities of business leadership,” Lynn Sharp Paine, a Harvard business professor who co-led the team that designed the new ethics course, told Knight Ridder/Tribune Business News. “What we’re trying to do is not propose a set of right answers, but give people a framework for working through the issues.”
But some believe that the problems with MBA education go deeper than coursework, stemming from the conceptual underpinnings of business schools. The Economist, summarizing the ideas of Harvard University professor Rakesh Khurana, reports, “Some of the theories taught in business schools are antithetical to a sense of professionalism. For example, if managers are ‘agents,’ shareholders are ‘principals,’ and organizations simply nexuses of contracts, the implication is that a manager has an obligation to fulfill a contract, as does a consultant or an investment banker, but owes no loyalty to a larger body, which is one of the characteristics of a professional.”
Without a sense of larger loyalties, some argue, MBA graduates learn lessons that might hinder ethical decision-making. For example, students may come away with the impression that they should optimize shareholder value at all costs, even at the expense of customer needs or product quality.
Such a focus on the bottom line and corporate performance pervades today’s management thinking, suggest the findings of a recent study. It examined all the empirical research published by the Academy of Management from 1958 to 2000. “While management scholarship shows a steadily increasing fascination with performance, interest in human welfare peaked in the late 1970s,” write the authors. This research focus is bound to reflect and influence what is taught in today’s universities.
In the final analysis, then, business schools may need to do more than add new ethics courses; they may need to reexamine some of the underlying assumptions of professional management education.
For an article on how business schools “still get a bad report card for ethics,” go to the following Kansas State University page:
http://www.mediarelations.ksu.edu/WEB/News/NewsReleases/business112403.html
For findings of an Aspen Institute survey of MBA students, see
http://www.aspeninstitute.org/index.asp?bid=3610
For a critical view of some of those survey findings, go to
http://finance.pro2net.com/x38423.xml
To get a copy of the Aspen Institute’s “Beyond Pinstripes 2003: Preparing MBAs for Social and Environmental Stewardship,” go to
www.beyondgreypinstripes.org
For an article on how more MBA students are interested in the role and responsibility of business in the larger society, see
http://www.kellogg.northwestern.edu/news/hits/040412apo.htm
For more on the Kellogg School of Management’s ethics focus, see
http://www.kellogg.northwestern.edu/news/hits/030312oc.htm
To see the article “Business Schools Add Ethics in Wake of Corporate Scandals,” go to
http://www.kellogg.northwestern.edu/news/hits/020816ap.htm
For links to ethics case studies and tools, go to the AACSB’s
http://www.aacsb.edu/resource_centers/ethicsedu/tools-cases.asp
For information on Net Impact, a “network of business leaders committed to using the power of business to positively impact social and environmental concerns throughout the world,” go to
www.net-impact.org/
Below are articles cited in this TrendWatcher:
“Bush Rebuffed by Business Schools.” USA Today. ProQuest. March 2004, p. 6.
“Business: Back to School; Face Value.” The Economist. ProQuest. September 6, 2003, p. 72.
Crane, Frederick G. “The Teaching of Business Ethics: An Imperative at Business Schools.” Journal of Education for Business. ProQuest. January-February 2004.
Sachdev, Ameet. “Corporate Scandals Cause U.S. Business Schools to Take Harder Look at Ethics.” Knight Ridder/Tribune Business News. ProQuest. February 14, 2003, p. 1.
“Survey: Creating Leaders.” The Economist. ProQuest. October 25, 2003, p. 7.
University of Michigan Business School. “Research Reflects Changing Views About the Purpose of Businesses.” Internet [http://www.bus.umich.edu/FacultyResearch/Research/Research _Reflects_Changing_Views_020404.html]. October 3, 2003.
Walsh, James P., Klaus Weber and Joshua D. Margolis. “Social Issues and Management: Our Lost Cause Found.” Journal of Management, WilsonWeb. Vol. 29, Issue 6, pp. 859-881.
Weisman, Robert. “Harvard Business School Introduces Mandatory Ethics Course.” Knight Ridder/Tribune Business News. ProQuest. December 30, 2003.
Below are other articles read for this TrendWatcher:
“But Can You Teach It?” The Economist, Internet [http://www.economist.com/business/globalexecutive/education/ displaystory.cfm?story_id=2685892]. May 20, 2004.
Irvine, Martha. “Not All for Money.” MyrtleBeachOnline.com, Internet [http://www.myrtlebeachonline.com]. April 13, 2004.
Nissimov, Ron. “Educators Use Business Scandals as Teaching Tools.” Knight Ridder/Tribune Business News. ProQuest. February 13, 2003, p. 1.
Roy, Ashok K and Linda C. Roy. “The Importance of Teaching Ethics.” Business and Economic Review, January-March 2004, p. 22.
Schmalensee, Richard L. “The ‘Thou Shalt’ School of Business.” Wall Street Journal, December 30, 2003, p. B4.
Utne, Leif. “The Green MBA.” Utne. ProQuest. May-June 2004, p. 28.
Verschoor, Curtis C. “Is Ethics Education of Future Business Leaders Adequate?” Strategic Finance. ProQuest. August 2003, p. 20.
USA TODAY reports on an audit of the top U.S. business schools. The audit shows that just 23% mandate that students take at least one course in ethics and 30% require them to take a course in which ethics is combined with the teaching of another business subject. Nearly half (46%) offer only electives in business ethics, meaning that these schools don’t require their MBA students to study ethics at all, according to the audit, conducted by Prof. Diane Swanson of Kansas State University, Tammy MacLean of Suffolk University, and Barrie Litzky of Pennsylvania State University.
And those are just the best schools. The Association to Advance Collegiate Schools of Business (AACSB), an accrediting agency for business schools, reports that just a third of all business schools even offer ethics as a separate course. This may be part of a long-term trend. “Over time,” reports The Journal of Education for Business, “ethics courses have been disappearing slowly from many B-school programs as MBA programs have been redesigned.... Some business ethics teachers have suggested that this marginalization of business ethics in favor of other ‘hard’ business topics is one of the reasons for the deterioration of ethical conduct in business.”
Business schools accredited by the AACSB are required to provide some sort of ethics education, but schools have considerable leeway in how to meet those obligations. Some academics contend that, in light of recent corporate malfeasance, MBA programs should require their students to take at least one ethics class. Others say ethics needs to be integrated into all MBA courses so students understand how ethics relates to everything from marketing to finance.
Among the top schools that have revamped their curricula is Northwestern University’s Kellogg School of Management. Its incoming MBA class now starts with a 10-day course that contains a lot of material on ethics and social responsibility. Writing about Kellogg, The Economist reported last September, “This year’s MBA students will find courses on ‘leadership’ and ‘ethics’ to the fore. A class on ‘leadership in times of crisis,’ once optional, is now mandatory. And there is a new core course on ‘business in its social environment.’”
Harvard Business School has also made changes, requiring first- year students to take a new ethics course called Leadership and Corporate Accountability. “We're trying to prepare students for the responsibilities of business leadership,” Lynn Sharp Paine, a Harvard business professor who co-led the team that designed the new ethics course, told Knight Ridder/Tribune Business News. “What we’re trying to do is not propose a set of right answers, but give people a framework for working through the issues.”
But some believe that the problems with MBA education go deeper than coursework, stemming from the conceptual underpinnings of business schools. The Economist, summarizing the ideas of Harvard University professor Rakesh Khurana, reports, “Some of the theories taught in business schools are antithetical to a sense of professionalism. For example, if managers are ‘agents,’ shareholders are ‘principals,’ and organizations simply nexuses of contracts, the implication is that a manager has an obligation to fulfill a contract, as does a consultant or an investment banker, but owes no loyalty to a larger body, which is one of the characteristics of a professional.”
Without a sense of larger loyalties, some argue, MBA graduates learn lessons that might hinder ethical decision-making. For example, students may come away with the impression that they should optimize shareholder value at all costs, even at the expense of customer needs or product quality.
Such a focus on the bottom line and corporate performance pervades today’s management thinking, suggest the findings of a recent study. It examined all the empirical research published by the Academy of Management from 1958 to 2000. “While management scholarship shows a steadily increasing fascination with performance, interest in human welfare peaked in the late 1970s,” write the authors. This research focus is bound to reflect and influence what is taught in today’s universities.
In the final analysis, then, business schools may need to do more than add new ethics courses; they may need to reexamine some of the underlying assumptions of professional management education.
For an article on how business schools “still get a bad report card for ethics,” go to the following Kansas State University page:
http://www.mediarelations.ksu.edu/WEB/News/NewsReleases/business112403.html
For findings of an Aspen Institute survey of MBA students, see
http://www.aspeninstitute.org/index.asp?bid=3610
For a critical view of some of those survey findings, go to
http://finance.pro2net.com/x38423.xml
To get a copy of the Aspen Institute’s “Beyond Pinstripes 2003: Preparing MBAs for Social and Environmental Stewardship,” go to
www.beyondgreypinstripes.org
For an article on how more MBA students are interested in the role and responsibility of business in the larger society, see
http://www.kellogg.northwestern.edu/news/hits/040412apo.htm
For more on the Kellogg School of Management’s ethics focus, see
http://www.kellogg.northwestern.edu/news/hits/030312oc.htm
To see the article “Business Schools Add Ethics in Wake of Corporate Scandals,” go to
http://www.kellogg.northwestern.edu/news/hits/020816ap.htm
For links to ethics case studies and tools, go to the AACSB’s
http://www.aacsb.edu/resource_centers/ethicsedu/tools-cases.asp
For information on Net Impact, a “network of business leaders committed to using the power of business to positively impact social and environmental concerns throughout the world,” go to
www.net-impact.org/
Below are articles cited in this TrendWatcher:
“Bush Rebuffed by Business Schools.” USA Today. ProQuest. March 2004, p. 6.
“Business: Back to School; Face Value.” The Economist. ProQuest. September 6, 2003, p. 72.
Crane, Frederick G. “The Teaching of Business Ethics: An Imperative at Business Schools.” Journal of Education for Business. ProQuest. January-February 2004.
Sachdev, Ameet. “Corporate Scandals Cause U.S. Business Schools to Take Harder Look at Ethics.” Knight Ridder/Tribune Business News. ProQuest. February 14, 2003, p. 1.
“Survey: Creating Leaders.” The Economist. ProQuest. October 25, 2003, p. 7.
University of Michigan Business School. “Research Reflects Changing Views About the Purpose of Businesses.” Internet [http://www.bus.umich.edu/FacultyResearch/Research/Research _Reflects_Changing_Views_020404.html]. October 3, 2003.
Walsh, James P., Klaus Weber and Joshua D. Margolis. “Social Issues and Management: Our Lost Cause Found.” Journal of Management, WilsonWeb. Vol. 29, Issue 6, pp. 859-881.
Weisman, Robert. “Harvard Business School Introduces Mandatory Ethics Course.” Knight Ridder/Tribune Business News. ProQuest. December 30, 2003.
Below are other articles read for this TrendWatcher:
“But Can You Teach It?” The Economist, Internet [http://www.economist.com/business/globalexecutive/education/ displaystory.cfm?story_id=2685892]. May 20, 2004.
Irvine, Martha. “Not All for Money.” MyrtleBeachOnline.com, Internet [http://www.myrtlebeachonline.com]. April 13, 2004.
Nissimov, Ron. “Educators Use Business Scandals as Teaching Tools.” Knight Ridder/Tribune Business News. ProQuest. February 13, 2003, p. 1.
Roy, Ashok K and Linda C. Roy. “The Importance of Teaching Ethics.” Business and Economic Review, January-March 2004, p. 22.
Schmalensee, Richard L. “The ‘Thou Shalt’ School of Business.” Wall Street Journal, December 30, 2003, p. B4.
Utne, Leif. “The Green MBA.” Utne. ProQuest. May-June 2004, p. 28.
Verschoor, Curtis C. “Is Ethics Education of Future Business Leaders Adequate?” Strategic Finance. ProQuest. August 2003, p. 20.