How to Teach Business Ethics

Current models are doomed to fail, but approaches that are willing to challenge corporate values and students' moral blinders might work, writes Terry L. Price.

June 4, 2007

The dreaded question: “So, what are you teaching this semester?” When I reply that I teach a business ethics course, more often than not my questioner laughs and asks whether that isn’t an oxymoron. And then laughs some more.

So it is hardly surprising that the recent cheating scandal at Duke University’s business school has fueled cynicism about the teaching of business ethics. Business schools across the country responded to corporate wrongdoing over the last decade by emphasizing ethics within their curriculums. In the daytime M.B.A. at Duke, students are required to take “Leadership, Ethics and Organizations” as part of an initial three-week summer term. Yet close to 10 percent of first-year students in Duke’s M.B.A. program were suspected of cheating on a take-home examination. The collective laughter would have been greater only if the accused students were in one of Duke’s ethics courses.

Still we should be careful not to infer too much from the Duke cheating scandal. A successful ethics component within a business program does not guarantee that its participants will never behave immorally. Not even churches or prisons boast that kind of effectiveness. So why should we expect it of an ethics class? What we expect is that when students complete the ethics component, they will approach moral problems with greater thoughtfulness and intellectual sophistication, as well as be more likely to resolve these problems in the right way. The goal is improvement, not perfection.

The behavior of the Duke M.B.A. students nevertheless gives us reason to pause. How much thoughtfulness and intellectual sophistication are necessary to know that cheating is wrong? Surely these young professionals did not need an ethics class to garner this important piece of moral knowledge. But if the students were aware of the wrongness of cheating all along, what kind of knowledge were they missing? What, exactly, could they have been taught in business ethics?

There is something more for business students to learn in ethics classes, and throughout their business programs. Ethics is not just about the what of morality; it is also about the whom of morality.

In ethics, the general requirements -- the what of morality -- are often quite straightforward. Indeed we would be hard pressed to find anyone in our society, let alone a university-level student, who was unaware of the general prohibition on cheating. However, the application of these requirements to individuals -- the whom of morality -- can be significantly murkier. I dare say it would not be difficult at all to find students who genuinely believe that their circumstances justify them in violating the prohibition on cheating.

Doing the right thing in the Duke case therefore required two things. First, the M.B.A. students needed to know that cheating is generally morally wrong. Second, they needed to know that it was wrong for them to cheat in their particular circumstances.

Why do people sometimes believe that moral requirements do not apply to them in the situations they face? The most compelling answer appeals to consequences. People predict that breaking the rules will have high payoffs. And where are the opposing costs? After all, rule-breaking really doesn’t seem to hurt anyone else, especially in environments in which others similarly break the rules. Of course the rules of morality generally ought to be followed. But only as long as the costs aren’t too high.

The consequentialist logic of business education may encourage this kind of thinking. There is no mistaking the fact that profit maximization is the chief value within many business curriculums. As a result, brief surveys of business law, discussions of company codes of conduct, or even introductions to ethical theory -- the what of morality -- are very likely to buckle under the comparative weight given to considerations of profit, goal achievement, cost-benefit analysis, and shareholder satisfaction.

Does this mean that business ethics really is an oxymoron? Not if business schools are willing to take the whom of morality seriously and educate students throughout the curriculum about the application of ethical requirements to all business actors. Among other things, this kind of education would draw on traditional academic disciplines such as philosophy, psychology, and politics to help students understand their place in the world and the role of business in society.

Ultimately, business ethics requires that we rethink the business curriculum. Business is not a closed system with its own set of values, motivations, and rules. The curriculum should reflect this fact. First, students must be able to think deeply and critically about conflicts between wealth and other values. Second, students should know more about ordinary human psychology, especially the tendency to overestimate our own importance and the importance our goals. Third, students need a greater awareness of the interdependence of business and the rest of civil society. Unfortunately, students cannot get this kind of education from a curriculum that focuses only on the business “fundamentals.”

So it is not enough for business students to hear yet again that certain behaviors are generally prohibited by morality. They must also come to see that these prohibitions apply to them even when morality conflicts with self-interest, the bottom line, and the interests of investors.

When business schools start taking ethics seriously, maybe people will stop laughing.


Terry L. Price is visiting associate professor of philosophy and a fellow at the Parr Center for Ethics at the University of North Carolina at Chapel Hill. He is associate professor at the University of Richmond’s Jepson School of Leadership Studies and author of Understanding Ethical Failures of Leadership (Cambridge University Press).


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