Last fall, Bentley College management professor Tony Buono taught a class on corporate scandals with colleagues pitching in from finance, accounting and even the philosophy department. The four picked through the cases of Enron, WorldCom, Tyco and Shell.
At the end of the semester, the number of students in a simulated trading room who were caught in misconduct or misusing information for insider trading was significantly higher than at the beginning. The students said, “You taught us how to do it,” Buono recalled.
“For those of us who’ve spent our careers teaching this, it’s been a disappointing time,” said Buono, who has taught at the Waltham, Mass., college for 27 years. “Some of the most renowned names in the corporate world are now jokes at cocktail parties. And they were led by graduates of our business programs.
“That made a lot of us sit up and rethink the approach of what we’re doing.”
The scandals at Enron Corp., WorldCom Inc. and other companies led to convictions for top officials, and they have given business professors plenty of classroom examples of executives slipping up. Four years after the scandals exploded, academics are pushing the need to promote moral examples, too.
“Students need to be inspired of the possibilities of not doing harm,” said University of Northern Iowa professor Donna Wood, a founder of the International Association for Business and Society and one of about 200 people who were in Boulder recently for a business ethics education conference at the University of Colorado.
Ethics classes are popular
Efforts to integrate ethics into core courses in financing, accounting and marketing are gaining steam, and ethics courses are as popular as ever, professors said. The scandals have spawned new positions at some companies (think legal and ethics compliance officers). The University of Denver’s Daniels College of Business has a new class this fall called “Ethics and Compliance in a Post-WorldCom World,” formed in part after professors saw the job demand.
University of Denver business professor John Holcomb said stockholder activism and the Sarbanes-Oxley Act targeting corporate fraud have given ethics professors a springboard in persuading colleagues in finance, accounting and other core fields to incorporate ethics into their lessons.
AACSB International-The Association to Advance Collegiate Schools of Business is the accrediting agency for business schools. It requires that ethics be included in the curriculum without requiring a specific course — a stance that has drawn both praise and frustration from ethics professors who see it as either a step in the right direction or not enough.
AACSB typically offers guidelines without mandating specific courses.
“The recent corporate scandals indicate, sometimes ethics issues don’t fit into a nice neat framework,” said Susan Phillips of The George Washington University, who led the AACSB task force on ethics education. “Sometimes ethics issues related to marketing are different from ethics issues related to finance. So the best place to discuss issues related to marketing is in marketing class.”
Even knowing what is right and wrong doesn’t always mean someone will have the courage to do what’s right. Researchers at Southern Utah University spent two semesters studying accounting students who had been exposed to stories of those who acted with moral courage.
Early results — on a student survey including questions such as whether they’d challenge a teacher who was doing something wrong — suggests their resolve to have moral courage increased after such exposure, accounting department chairman David Christensen said.
Fostering social ethics
Buono, the Bentley professor, suspects the students in his class who got caught misbehaving in the mock trading room considered it a game.
“We’re trying to tell the students there is no reset button in real life,” he said.
Several professors said more ethics classes might not have spared fallen leaders of major corporations from prison sentences.
“It’s a big mistake to think if only we taught more business ethics classes, we would have fewer business scandals,” Wood said.
Yet that hasn’t stopped professors from promoting ideas like fostering civic engagement, where students might be required to build a house for Habitat for Humanity or help hurricane victims.
“The key is to open students’ eyes to the possibilities,” said Marc Simons, a junior at the University of Colorado Leeds School of Business. “There are people in business who are thinking of people other than themselves.”