10.1177/1052562905280834JOURNAL OF MANAGEMENT EDUCATION / February 2006Alsop / COMMENTARY

BUSINESS ETHICS EDUCATION INBUSINESS SCHOOLS: A COMMENTARY

Ronald J. AlsopWall Street Journal

Will the ethics focus at business schools fade along with the corporatescandals?

That question was put to me when I spoke about corporate reputation lastyear at the Simon Graduate School of Business Administration at the Univer-sity of Rochester. The MBA student who asked the question seemed skepticalabout how dedicated b-schools really are to teaching about ethics and othersubjects related to corporate reputation.

I agreed with her that some of the b-school reaction to the scandals didseem to be knee-jerk and could prove to be only temporary. Clearly, there waspressure on the schools to do something fast, with MBA graduates of HarvardBusiness School and Northwestern University’s Kellogg School of Manage-ment enmeshed in the Enron scandal and President George W. Bush, a Har-vard MBA himself, calling for schools to become “principled teachers ofright and wrong.”

Not only had schools neglected ethics lessons, but critics also believedthey had encouraged students to go to practically any lengths to increase cor-porate profits and short-term shareholder return. In a public opinion surveyof how companies can repair their tainted reputations, there was clearly anMBA backlash: “Fire all of the MBAs under 35,” one respondent said,whereas another commented, “Listen to common sense and not some off-the-wall MBA.”

For now, of course, it’s too soon to tell how lasting and effective the eth-ics courses will be. But I remain optimistic that many schools will continueto develop new and better ways to incorporate ethics, as well as social res-

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ponsibility, corporate governance, and legal compliance issues, into thecurriculum.

For one thing, I believe that these issues will remain very much front andcenter for years to come in the corporate world. The most recent Harris Inter-active survey of the public’s view of corporate reputation found that nearly71% of people still consider it not good or terrible.

Clearly, universities have a critical role to play in preparing leaders to cre-ate an ethical and socially responsible climate in the world’s business enter-prises. But teaching about ethics isn’t as simple as it looks to outsiders. In myresearch over the past few years, I have discovered that for a variety of rea-sons, there is resistance from some administrators, faculty, and students toethics in the classroom. They resent taking time away from the hard skills toponder ethical dilemmas. Some faculty members bristle at being forced tosqueeze ethics lessons into an already jam-packed syllabus, whereas studentsgrumble that ethics classes tend to be preachy and philosophical.

There’s also that frequent debate about whether business-school studentsare too old to benefit from an ethics class. That strikes me as simplistic think-ing that merely evades the issue. Of course, most 27-year-olds are unlikely tochange their moral compass very much. But they can certainly learn about thekinds of ethical challenges they are sure to face in their business careers andstrategies for coping with them in a responsible manner. As Paul Glasserman,senior vice dean at Columbia Business School, told me, “The problem withethics is that it’s such a loaded word. What we want to give students are strate-gies for protecting their integrity in the workplace. We aren’t trying to teachthem right from wrong.”

Some schools, including Columbia, are still struggling with how to makeethics an effective part of the curriculum. Some say an elective is goodenough, others favor a required course, whereas a third group believes ethicsshould be infused throughout all of the basic courses. Perhaps given the sorrystate of corporate America’s reputation, schools should do all three.

What sounds best is the integration approach. It’s also the most challeng-ing. I recently wrote a column about Columbia’s novel but flawed attempt atan integrated model. Columbia devised a separate course in which studentstook a final exam and received a grade, but many of the class sessions weretaught within other required core courses, such as finance, operations, andeconomics.

“When a professor said it was time for the ethics module, it felt veryforced and students didn’t participate very much,” one Columbia MBA stu-dent told me. “A lot of students were also upset about being graded on acurve. If you received a low grade, you felt you would be viewed as a bad per-

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son.” (Aware of such concerns, Columbia ended up switching to a pass/failgrading system.)

Columbia’s revamped program—The Individual, Business and Society:Tradeoffs, Choices, and Accountability—is no longer a separate course withits own final and grade. But the program still requires professors in the basiccourses to weave in ethics content, such as fair pricing policies in marketingand the boundaries of earnings management in accounting. “We still believein putting ethics in the context of our core courses,” says Dr. Glasserman.“When I teach managerial statistics, for example, I deal with the misleadingways information can be represented.” The revised ethics program also fea-tures many activities outside the classroom, such as guest lecturers and paneldiscussions.

There was even a modern morality play of sorts performed for Columbia’sMBA students. Actors presented “Scenes from the Slippery Slope,” in whichan investment banker is pressured to falsify expense accounts to conceal hisboss’s extramarital affair. At pivotal points in the minidrama, students werecalled on to advise the ethically challenged young man.

But because of the complexities in blending ethics into courses through-out the MBA program, some schools have opted for new required stand-alone courses. One of the most successful I’ve seen so far is Harvard’s Lead-ership and Corporate Accountability, which places ethics within a largerframework and appears to be off to a good start. Using the school’s trademarkcase-study format, the course includes sections on personal values and lead-ership, governance issues, and the legal, ethical, and economic responsibili-ties of companies to their stakeholders. “The course works well,” a HarvardMBA student said in an interview with me, “because instead of a lot of philo-sophical musings, it focuses on how to apply ethics lessons in the real world.”Among the cases: Enron’s collapse, WorldCom’s recovery strategy, and theTylenol poisonings.

Lynn Paine, the lead professor for the class, believes a stand-alone courseis essential because “ethics discussion too easily gets crowded out” of othermanagement courses. “The integration model sounds good,” she says, “butmany faculty members have no training in ethics and the law and don’t knowhow to incorporate them well.” The Wharton School at the University ofPennsylvania recently launched a doctoral program in ethics and legal stud-ies, but it will take time to produce a significant crop of new ethics scholars.

Although I applaud business schools such as Harvard and Columbia thatare creating new ethics programs, schools need to go a step beyond case stud-ies of ethical problems. They should emphasize that as future managers, stu-dents must learn to create a culture where ethics are part of daily decision

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making, not just a code hanging on the walls. Too often, ethics codes are merewindow dressing. Even disgraced Enron had developed an extensive ethicscode and set of values, which seem like a bad joke now that the company’sculture of fraud and deception has been exposed.

Business schools could start with a close examination of the culture atJohnson & Johnson (J&J). Its famous credo values statement has become avibrant part of day-to-day business operations throughout the world—frommundane decisions about installing sprinklers in corporate facilities to majorcrises involving the safety of its drugs. Employees treat the credo with all thereverence they would give to a religious creed. Because the pharmaceuticaland consumer-products company lives its ethics code, it enjoys a sterling rep-utation. For 7 consecutive years, J&J has placed first in Harris Interactive’sannual ranking of global companies with the best corporate reputations.

As more companies try to emulate J&J’s example, they will be looking forbusiness-school graduates with a strong grounding in ethics. Unfortunately,some MBA students have the misconception that corporate recruiters don’tcare whether they learn about business ethics. Quite the contrary. In fact, 74%of recruiters who participated in the 2005 Wall Street Journal/Harris Interac-tive business-school survey rated personal integrity and knowledge aboutcorporate ethics as very important, whereas 24% said they are somewhatimportant. As one survey respondent put it: “We check job candidates’ refer-ences and background much more thoroughly now. Integrity is thecornerstone of our recruiting process.”

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