Societies have been increasingly demanding that business schools offer ethics education.[1] Accordingly, one of the eight “General Skill Areas” that AACSB (Association to Advance Collegiate Schools of Business) Standards requires all general management and specialist degree programs to provide is “Ethical understanding and reasoning (able to identify ethical issues and address the issues in a socially responsible manner).”[2] Bloomberg BusinessWeek started including “ethics offering” as a criterion of “B-School ranking” and listing “Top MBA Programs by Specialty: Ethics”[3] and “Top Undergraduate Business Schools for Ethics.”[4]  

The power of analytical reasoning in ethics

I have taught “Ethics and Leadership” (a core MBA course for fulltime, part-time, and online hybrid programs), “Ethical Leadership” (an elective MBA course), “Business, Society, and Ethics” (an undergraduate Business Administration course) and “Special Seminar in Ethics” (a PhD seminar course). Following John Hooker, I take business ethics as a negotiation tool for people to reach a rational consensus on how they should live together in the domain of business and markets.[5] People often have different opinions on ethical issues, so analytical tools are essential as ground rules for finding rational consensus. My courses are designed to introduce students to such analytical tools. The tools primarily consist of four tests integrated in a coherent manner[6]: the generalization (or principled autonomy) test, (individual) autonomy test, (deontic) utility test, and the virtue test (for excellence). To this end, my courses emphasize the ability of capably applying the decision-making frameworks (the four tests) to varied practical cases through articulated, reasoned arguments. Yet, the courses are intended neither to preach the esoteric wisdom of philosophers nor convert sinners into saints. They are rather designed to assist students in learning the very practical skill of recognizing common patterns of ethical success and failure in business settings. I strongly believe that the power of analytical moral reasoning is essential for our students to be successful leaders in their future careers.[7]

Business ethics education beyond strategy

I take business ethics education to be more than strategy. It’s true that ethics can be used as a strategy for reputation management, and companies do so under the name of Corporate Social Responsibility (CSR). However, such a perspective is insufficient. Take Enron, for example, a company that was engaged in a number of philanthropic (beyond-duty) activities while it was also recklessly infringing upon required ethical duties about deception and manipulation. Of course, there are wide overlaps between what is right and what is profitable, which makes ethics a viable strategy.[8] And yet, there are ethical values that cannot be translated into the language of strategy as a specialty tool. If companies regard ethics purely as a strategy, they can fall into the trap so perfectly expressed by Maslow’s “Law of the Hammer,” which says, “If the only thing one has is a hammer, then everything starts to look like a nail.” Like Thomas Donaldson points out, “A company should tell the truth to investors, refuse to discriminate on the basis of race or gender and refrain from dumping cancer-causing chemicals in public waters, even when doing so fails to enhance its competitive posture.”[9] As Ratan Tata, the former chairman of Tata Group, maintains, “making money is not enough.”[10] Tata urges managers rethink about the “purpose of” business. A major component of my courses is to invite future managers to think about the purpose of business, beginning with a simple question, “Law is to justice, as medicine is to health, as business is to ___” and deepening understanding through academic papers about corporate purpose.[11] Throughout the course, students are invited to realize the importance of intrinsic ethical values for defining purpose. In fact, behavioral scientists show that, in the end, intrinsically motivated ethical behaviors pay off strategically as well as ethically.[12]    

[1] See, for instance, Menachem Wecker, “Business schools increasingly require students to study ethics,” U.S. News (September 20, 2011).

[2] Association to Advance Collegiate Schools of Business, Eligibility procedures and accreditation standards for business accreditation (2015), p. 31

[3] Geoff Gloecker, “MBA rankings: Top schools for ethics,” Bloomberg (December 17, 2012).

[4] Geoff Gloeckler, “The best undergraduate B-schools for ethics,” Bloomberg (May 20, 2013).

[5] John Hooker, Business ethics as rational choice (Pearson, 2010).

[6] In academic journals, researchers debate which theory is better among competing ethical theories. John Hooker developed a systemic and rational conception of ethics by which students can learn competing ethical theories in a consistent manner. For instance, utilitarianism is modified as a form of deontology (non-consequentialist, deontic duty-based theory) rather than consequentialism (utility maximization without any side constraints). See John Hooker, Ethical decisions: Doing ethics with our brains (book manuscript).

[7] According to a survey from 195 global business leaders, “high ethical and moral standards” was selected as the most important leadership competency. See Sunnie Giles, “The most important leadership competencies, according to leaders around the world,” Harvard Business Review (March 15, 2016).

[8] See, for instance, Michael E. Porter and Mark R. Kramer, “Creating shared value,” Harvard Business Review (January-February, 2011).

[9] Thomas Donaldson, “Shared values that are lost in translation,” Financial Times (April 23, 2014).

[10] Ratan Tata, “Why making money is not enough,” MIT Sloan Management Review (Summer 2013).

[11] Details of my courses can be found in my submitted syllabi.

[12] See, for instance, Amartya Sen, “Does business ethics make economic sense?” Business Ethics Quarterly, 3 (1993), pp. 45-54; Robert H. Frank, “Can socially responsible firms survive in a competitive environment?” in David Messick and Ann Tenbrunsel (eds.), Codes of conduct: Behavioral research into business ethics (NY: Russell Sage, 1996), pp. 86-103.