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Pacific Coast Business Times Op ed - September 9, 2011

Does Teaching Ethics to Business School Students Improve Ethical Decision-Making?

Aspen Institute Study Provides Encouraging Data on B Schools Ethics Programs

Post-financial meltdown, business schools are trying to make their graduates more responsible. But does taking one class on ethics work, or does a new ethical model need to permeate the curriculum?

Many industry watchers saw business schools as contributing factors in the financial crisis, arguing that they failed to challenge orthodoxies and mostly taught the technical material but not the “soft skills” such as leadership and ethics. But what about now? Have b-schools changed?

Yes, and no, according to a survey by the well-regarded Aspen Institute of how schools are teaching social, environmental, and ethical topics. On the one hand, MBA programs are teaching more social, environmental, and ethical content than ever. Four-fifths now require students to take a business and society course, compared to just 34% in 2001, when the Aspen Institute first conducted its Beyond Grey Pinstripes survey.

“The financial crisis caused schools to be more introspective about what they are teaching,” says Judy Samuelson, Aspen’s director of business and society. “They were criticized for being part of the problem, and not part of the solution. And that has created an environment where faculty can innovate and make change.”

On the other hand, schools have yet to significantly reform “core” subjects like finance and accounting. “We put weight on how courses think about these issues in the real business lens, not just as philanthropy, CSR, or social enterprise. We still have a ways to go in the traditional teaching of accountancy and finance, where it’s often about metrics that aren’t future-oriented, and that don’t embrace full cost-accounting.”

The report ranks 149 schools in 22 countries, with only a few major institutions not participating (Harvard Business School and Chicago-Booth, notably). Stanford’s Graduate School of Business comes out on top, followed by the Canadian York University’s Schulich school, IE University in Spain, and Mendoza College at Notre Dame. Yale, Northwestern and Cornell also feature in the top 10.

Whether schools are embracing changes often comes down to individual faculty, and attitudes amid certain disciplines, says Samuelson. “These institutions are not like corporations where CEOs drive the firm. Academics have standing in their field, because of how they are viewed. All of that contributes to what gets taught.”

Samuelson says b-schools continue to “lag rather than lead” business practice. But she does think schools have become more responsive to what students are asking for. “The reason we are seeing change is that the 'millennials' are demanding it. These students want business to be seen in the context of the big issues of our day.”

One reason to focus on b-schools is that they are “hugely influential” in defining attitudes, Samuelson says. About a quarter of graduate degrees, and 20% of undergraduate ones, are business-related. And their impact extends beyond what is taught in the classroom.

From my experience many instructors are reluctant to teach ethics. Some feel uncomfortable doing so. Others are concerned about becoming too preachy. Still others do not believe ethics can be taught. Let me refute each argument against teaching ethics to business school students.

First, business school graduates will become tomorrow’s business leaders and we must ensure they are committed to being and bringing a strong ethic into the workplace. The degree of comfort level in teaching ethics is a product of one’s knowledge in this area, which can be gained through self-learning, and an awareness of the importance of the task. The latter is where business school deans have an important role to play.

Ethics need not be taught in a preachy manner. What I do is expose students to different ethical theories and explain how they can be used in business to make better decisions. I tell my students there is no one best method; each has a role to play in ethical decision-making. For example, utilitarianism emphasis harms and benefits of actions and tends to be quite often used in business decisions where costs and benefits are evaluated. Lastly, we’ll never know if teaching ethics has made a difference. As American journalist, historian, academic and novelist Henry Brooks Adams once said, “A teacher affects eternity; he can never tell where his influence stops.”

Blog posted by Steven Mintz, aka Ethics Sage, on October 14, 2011