Harvard Business School is among the few M.B.A. programs that require students to take ethics as part of their core curriculum. The program is delivered through a nine-session course that aims to give the next generation of corporate executives a sense of the gravity of their roles as managers. There are a handful of electives that students can take as well. "What we teach is that you can't reduce your job to a set of financial obligations," says Joseph Badaracco, the John Shad Professor of Business Ethics at Harvard Business School. "It's a big, complicated set of responsibilities."
So what went wrong with Jeffrey Skilling? The former Enron Corp. president and CEO was once a shining example of the management ingenuity coming out of Harvard. Now, he can be listed among its most notorious alumni. "When you see someone who had such extraordinary talent and was a smart and articulate guy building up what was a terrific company, and you find out the company was screwed up massively, its importance [to an ethics discussion] is clear," says Badaracco. His conclusion: Business schools aren't doing enough. "It's only nine sessions in a 700- to 800-session program," he says. "So, clearly, [ethics] has only a limited influence relative to other courses the students take."
Badaracco is not the only one doing some soul-searching. Nationwide, academics and business schools are raising questions about the role of business ethics in a business school curricula, and about whether the current scandals reflect a fundamental shortcoming of M.B.A. programs. Certainly, the stories of improprieties at companies like Enron, Arthur Andersen LLP and Xerox Corp. give folks like Badaracco vivid real-life examples of fallen stars with which to teach students how to be good corporate citizens. But they also make educators wonder whether they should be providing students with a better moral compass to allow them to navigate their way through choppy corporate waters without taking illegal shortcuts to good earnings and success.
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The Enron Wake
On business school campuses throughout the U.S., classrooms are buzzing with discussions about the various scandals that have rocked corporate America. While students and faculty have been impressed by the scope of the scandals, they are not surprised by some of the activity. "There were so many pieces of our capital markets that were involved with Enron that people are asking why did it happen, were there systemic failures, is this a new kind of thing or another rendition on the same old failures in business," says Rick Antle, an accounting professor at Yale University's School of Management. Still, Badaracco says it's important to keep some perspective. While he acknowledges that Enron was "a big rock dropped into the pond," there is an ample supply of scandals from which students generate discussions.
Institutions are quick to note that not all those making headlines went to business school. For instance, David Duncan, the Andersen partner who pleaded guilty to his role in the shredding of Enron documents, has only an undergraduate accounting degree from Texas A&M University. And Henry Blodget and Jack Grubman, two Wall Street analysts who have come to symbolize the too-close-for-comfort relationship between corporations and investment banks, weren't M.B.A. graduates either. Blodget has a bachelor's degree in history from Yale University, while Grubman has a master's in probability theory from Columbia University. But enough execs were graduates, and business schools are clearly feeling the pressure.
At many business schools, faculty and administrators are holding discussions about the best ways to reach students with ethics training. Several of the top schools, including Stanford University's Graduate School of Business, the University of Pennsylvania's Wharton School and Yale, have concluded that ethics needs to be woven into the fabric of all courses so that students can see in casework the kind of choices that harried executives face. Other schools, like Columbia Business School and Massachusetts Institute of Technology's Sloan School of Management, take slightly different approaches to the same general idea by offering specific ethics classes as electives while also including concepts of ethics in core curricula. "Students regard one-off courses as just that–something that doesn't fit in with the bulk of their lives," says David M. Kreps, an economics professor at Stanford. "You don't want to marginalize the subject. You want to have it woven into the fabric of all their studies about functions of management and the process of management."
Much of what students do in ethics classes is discussion-based, and professors say their courses force participants to be introspective. "I don't think we are in the business of preaching ethics," says Raymond D. Horton, a professor at Columbia Business School. "This is not about memorizing the Ten Commandments of ethical business behavior." Instead, Horton's classes focus on giving students the ability to make tough decisions and recognize when they might have crossed an ethical line. "Horton's rule for deciding how to behave in situations when the law is not clear is, do you want your family to read about what you did in the newspaper?" he says. "If you are proud, then do it. But if you are uneasy, you probably shouldn't do it."
Taking Duty to a Higher Level
At MIT, students watch films and discuss religion as ways to explore the types of ethical decisions they might face in the corporate world. "I am less interested in talking about issues of compliance than thinking about the big picture," says Leigh Hafrey, who teaches the ethics course there. At Yale, Antle tries to impress upon his classes the importance of remembering that accounting's sole function is to inform the investing public of a company's financial state. "The students have to sense that their duties run to a higher order than simply taking advantage of a reporting system to make some numbers look good."
At many of these schools, calls for taking ethics courses to the next level are growing louder. Columbia's Horton, for example, says a cadre of faculty and administrators wants to make ethics courses required for all business students to ensure everyone is exposed. And Hafrey at MIT says his school is considering making an ethics course a requirement for first-year M.B.A. students.
In the end, education alone can't ensure good corporate behavior. Yale's Antle notes that most business people aren't trying to be criminals when they start their careers. "People get into this by getting on that slippery slope, and then it snowballs," he says. "The key is that you have to be aware when you start to slide. Mature common sense can go a long way, but that's hard to [maintain] when you're working 18-hour days."
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