Adding Ethics to the Classroom

"Is this a good class?" a student asked me nearly 25 years ago on the first day of my Social Issues in Business course. “This is the only class in the MBA program that my employer won’t reimburse. He thinks it’s nonsense. I have to pay for it myself, so I want to be sure I’m getting my money’s worth.” Given my inexperience, my assurance that the class was excellent was based more on hope than evidence. Fortunately, by the end of the session, she agreed.

A few years later, no one was still asking if ethics and corporate social responsibility were really important. That’s because, starting in the 1990s, a series of events had caught the attention of business students, faculty, and deans. Nike was vilified for relying on sweatshop labor. Enron, Worldcom, and other corporate giants were brought low by scandalous ethical lapses. Climate change made sustainability a prime concern for businesses. And smartphones hit the market, making it ridiculously easy for activists to share information about companies’ ethical and environmental transgressions.

As ethical considerations became key issues in the business classroom, business schools tried to determine the best way to teach the topic. In 2004, Susan Phillips of George Washington University led an AACSB Task Force that called for business schools to increase their focus on ethics education, while leaving it up to schools to determine how to do it. Exactly how to best integrate ethics into the curriculum still remains a point of debate today.

Most business schools cover ethics in some form, but administrators still debate the best way to integrate the topic into the curriculum.

A Quick Overview

There are four main approaches to teaching ethics: devising a standalone class, infusing ethics into all core courses, combining the two approaches, and promoting extracurricular activities whose effects seep into programs. Each tactic has some advantages and some drawbacks, but all of them can generate positive results if a school gives them enough weight.

Along with many ethics scholars, I favor creating a standalone class. In an in-depth course, students do more than develop an awareness of the moral issues that might confront them; they also learn analytical skills such as how to build decision-making matrices, how to recognize the psychological biases that impact their choices, how to craft clear statements about ethical issues, how to discover additional facts and determine potential solutions, and how to weigh the importance of various factors and constituents. It takes time for students to develop those kinds of reasoning skills, and time is only available in a standalone course.

A standalone class also allows schools to assess learning outcomes more easily. Teachers might want to gauge if students have learned the decision-making process or mastered the frameworks for making normative judgments. Ethics classes allow for a wide range of learning goals to be assessed.

However, critics point to one big disadvantage of a standalone class. It risks hermetically sealing off ethics considerations from other aspects of business. Critics believe students learn this lesson: “When in an ethics class, think ethically. After it is done, continue normal practice.”

An alternative approach is to cover ethics in all classes. The clear advantage is that ethics is not compartmentalized, but remains an essential component of a student’s business studies. The drawback is that some faculty won’t feel like they have the expertise or the time to cover ethics in their functional courses. Others simply aren’t comfortable teaching the topic. Thus, when schools try to infuse ethics throughout the curriculum, sometimes it isn’t taught with reliable depth or consistency. It is also more difficult to assess learning goals when ethics concepts are distributed throughout the curriculum.

What often works best is a hybrid approach in which a dedicated ethics class is supplemented by related material that can be taught in discipline-specific courses. Students have the time to develop critical decision-making skills while also learning that every aspect of business has an ethical dimension.

Finally, schools can promote ethical awareness among students by supporting extracurricular efforts such as Net Impact, a student-led organization dedicated to addressing the world’s greatest problems. I often have marveled at the passion, creativity, and diligence of students in these organizations and the spillover effect these efforts have on the student body as a whole.

Getting Specific

Many tools and materials are available for schools that want to create a dedicated ethics class or a hybrid program. For instance, there are excellent books available on the topic, including those by Thomas Donaldson and Patricia Werhane; Norman Bowie and Tom Beauchamp; John Boatright; Manuel Velasquez; Archie Carroll; Edward Freeman; Andrew Wicks; Kirsten Martin; Joseph DesJardins; Laura Hartman; Linda Treviño; Mary Gentile; and O.C. Ferrell. My own book, The Vision of the Firm, integrates both legal and psychological understandings of ethics along with traditional philosophical materials.

Case studies are another popular way to teach ethics. One case study I like revolves around the mortgage meltdown of 2007-2008 and teaches two valuable lessons: Banks displayed ethical lapses when they used financial incentives to exploit vulnerable populations, and policymakers created moral hazards when they rescued large financial institutions because they were “too big to fail.” Students can reflect on how these situations came about and how they could have been resolved differently. Students also can get fresh perspectives on ethics issues when professors bring in guest speakers—alums, ethics professors, and other experts—to share their insights.

In addition to using these familiar methods of teaching ethics, schools might consider three more unusual approaches:

Simulations. I have found that when students confront realistic and difficult situations through simulations, they become much more interested in ethical issues overall. One simulation I use has been developed by the Kelley School of Business at Indiana University in collaboration with Simcoach Games, based in Pittsburgh, Pennsylvania. The simulation places undergraduates in up to 15 ethical dilemmas that could occur during their senior years at college or during their summer internships.

For example, in one scenario the protagonist has a very smart friend who has helped the protagonist in many situations, including finding a place to live in New York for the summer. The friend’s summer internship didn’t work out, so he asks for a recommendation for a job opening at the protagonist’s company—but he isn’t really qualified. Should the protagonist recommend him on the basis of friendship, loyalty, and a hope that the friend’s intelligence will allow him to succeed? Should the protagonist refuse because the friend’s failure in the position could harm the protagonist’s own reputation? Should the protagonist promise to recommend the friend, then quietly do nothing? Should the protagonist formally recommend the friend, but informally describe his strengths and weaknesses to the hiring partners? As students wrestle with these questions, they realize that ethics issues could confront them many times in their careers and that they need a model of how to think them through.

Ethics videos. These can be recorded by an ethics professor on staff or an outside expert. When I was at George Washington University, I helped create materials for each department to use in ongoing ethics conversations. Faculty would provide me with cases that they already used and that they thought might have ethical dimensions. After studying each case, I would record a ten to15-minute video commentary that either could be posted to the course’s website or more fully integrated into classroom discussion. This alleviated the burden on professors to become experts in the topic and allowed them to use the material as time permitted.

The range of topics varied widely. A human resources professor desired commentary on the Enron case. One accounting professor wanted an ethical assessment of the issues that accountants face as a result of Sarbanes-Oxley; another provided a case in which an accountant conducted an audit and discovered that a friend was guilty of embezzlement. A finance professor asked me to explain why financial statements help business leaders make sound decisions and how important it is that they be based on accurate reports. A statistics professor was interested in the psychological biases people might have when they gather and use data and how those biases might lead to ethical lapses. A professor of international business proposed a case involving a workforce with strong cultural conflicts.

The videos provided students with a constant reminder of the importance of ethics, but they had another benefit. Once students understood these commentaries were coming, they began to look for the videos, and they thought about ethical issues even before the classes reached the relevant assignment. Feedback from the professors was very positive, and some asked if they could appear in new videos with me to discuss the issues.

A downside of these videos is that, at least in my experience, they’re very specific to a professor and a class; as faculty rotate in and out of required courses, new professors might use different cases. Schools can overcome that disadvantage by asking the dean’s office to commit ongoing resources to the creation of new videos.

Classroom vignettes. To provide professors with go-to examples they can use in the classroom, I wrote the 2015 book 100 Vignettes on Ethics: Shades of Black, White, and Grey. The book includes vignettes written across ten business areas (pharmaceutical, financial, tech, transportation, legal, healthcare, energy, government, sports/entertainment, and NGO sectors) and ten functional disciplines (accounting, marketing, strategy, operations, statistics, technology, communications, HR, public policy, and finance).

Therefore, an accounting professor could use ten cases from widely varied fields to illustrate ethical considerations in that discipline. Among the vignettes are ones that cover client confidentiality and fraud; off-shore financial practices; questionable financial statements associated with a theater company; and excerpts from famous cases such as Enron, HealthSouth, Ford Pinto, and Freddie Mac. At the end of each vignette, three questions form the basis of classroom discussion.

Ethics professors can work with their colleagues to create similar mini-cases in areas of interest to their schools—particularly if they’re developing customized programs. For example, the Kelley School has contracted to provide programming to the NFL Players Association, and part of the programming is an ethics course that focuses on personal reputation and responsibility. It includes vignettes based on a wide range of issues with ethical implications: stadium subsidies; the Donald Sterling situation; the Washington Redskins name controversy; the losses experienced by several contractors associated with Tiger Woods’ implosion; the concerns about spiritually based leadership, as exemplified by former Colts coach Tony Dungy; and data analytics as employed by entertainment giants such as Disney. Schools could devise vignettes that are most aligned with their missions and their constituents.

Outside the Classroom

Students will take away an even stronger message about the importance of ethics if schools support extracurricular programs. For instance, some schools host case competitions that include components of ethics, sustainability, or corporate social responsibility. Other schools create research centers devoted to ethics, CSR, environmental and social sustainability, corporate governance, or corporate citizenship.

An overwhelming number of students desire to be ethical; they just need to learn the tools to translate their ethical intuitions into decision-making models.

Still others incorporate CSR into the orientation programs designed for incoming students. For instance, when I taught at the University of Michigan, incoming students volunteered with local nonprofits in Ann Arbor and Detroit as part of their orientation. Over time, that program has grown to include participation by part-time and full-time MBA students. It now is housed in the Sanger Leadership Center, which operates a year-round program that allows students to engage with the city of Detroit. Such programs not only can reinforce ethical values of students, but also can demonstrate how regional business benefits when the whole community is healthy.

Other schools create unique programs to raise student awareness of ethics. For instance, in fall 2014, the Kelley School adopted the Kelley Moment Coin program to recognize undergraduates, faculty, staff, and others who demonstrate integrity, accountability, perseverance, appreciation, and engagement. Faculty and staff who want to award a coin to a student must submit a story about the moment they saw that student demonstrate Kelley values. The recipient gets a chance to review the story before it is shared on the Kelley Moment Coin website, where it appears alongside other brief stories of ethical conduct.

A student who receives a coin is eligible to “pay it forward” by nominating professors, staff members, or fellow students to receive their own coins. Thus, the Kelley Moment Coin program works on a variety of levels to recognize and incentivize actions that promote ethics and professionalism throughout the undergraduate program.

Making Progress

No collection of courses and extracurricular activities will guarantee that a school will turn out responsible graduates. I often have said that if Hitler walked into my class, he wouldn’t walk out as Ghandi. Spiritual transformation is not the goal of an ethics class. However, in my experience, an overwhelming number of students desire to be ethical; they just need to learn the tools to translate their ethical intuitions into decision-making models applicable to business.

I think business schools as a whole are making more progress in giving students those tools. After teaching for nearly three decades, I’m heartened to see that topics like ethics, corporate social responsibility, sustainability, governance, and citizenship are now considered essential parts of business school curricula. In addition, I have consistently noted that students understand the importance of these subjects more readily and more deeply than faculty because of their keen awareness of the power of social media and how it can be used to spread information.

Even so, it’s up to administrators to help faculty determine the best way to introduce these topics into the curriculum—to make it easy for faculty to utilize all resources—and to provide relevant content that will help students navigate the 21st-century workplace.

Sidebar

How to Talk About Ethics

As important as the topic of ethics is to the business curriculum, I’ve rarely seen a groundswell movement from faculty to devote more class time or resources to ethics or corporate social responsibility. In my experience, the impetus for change is more likely to come from entrepreneurial faculty, committed deans, enthusiastic students, or interested stakeholders such as accrediting bodies, alumni, and recruiters. Over the years, I have learned to broach the topic with different groups in a variety of ways.

With students: My style is to “lead from behind” by letting students work through some issues for themselves before I teach them from my perspective. I help them think about how ethical business can slow climate change, dampen the fires of terrorism, address the issues of poverty, create a positive work environment, and prevent a career from going up in flames. I also employ exercises that allow them to wrestle with the notion of who they are and how they might make a difference in the world.

While an ethics class might include a lot of “musts” and “oughts” and “shoulds,” I’ve found that students are more inspired by “coulds” and “what-ifs.” I’ve also found that a class is most successful when I give students the opportunity to share what inspires them, which business leaders they would like to hear from, and how they would like to put ideas into practice.

With administrators: Ethics and CSR issues are not always prioritized at an institution, but deans and other administrators are much more interested in ethics programs when students, alumni, recruiters, and donors make a push for them. For that reason, I usually try to find other stakeholders who are enthusiastic about the prospect of advocating for additions to the curriculum.

With faculty: The school’s institutional history and the influence of faculty leaders, past and present, are vital to building enthusiasm among faculty about teaching ethics. For instance, the University of Pennsylvania’s Wharton School had a strong ethics program in large part because of the involvement of the late Tom Dunfee, who was not only a first-rate scholar but who also possessed incomparable personal skills. He cultivated relationships and opened many doors for the topic of CSR. When I’m talking to a school about launching a CSR program, I usually try to identify the champions who will help others embrace it.

The goal is to build critical mass among the constituents who favor making ethics an important topic of conversation. Once that mass is there, the whole school will become much more receptive to the idea of launching or expanding an ethics program.