c Business Ethics in management education

Business Ethics in management education



Today as we stand at the threshold of becoming a future manager it is absolutely essential that we ponder and reflect over business ethics. The question we increasingly need to ask ourselves is “What is Business Ethics and how is it important?”


Ethics is a set of values and principles that we strongly believe and follow. It is learning what is right or wrong, and then doing the right thing. The concept of business ethics has come to mean various things to various people, but generally it's coming to know what it right or wrong in the workplace and doing what's right -- this is in regard to effects of products/services and in relationships with stakeholders. After a host of scams such as Enron, Worldcom etc, business ethics has assumed a lot of importance. Since everyone - be it an investor, customer or public view an organization with suspicion it is very important that the organization portrays an ethical image.


The broad areas of business ethics are:-

1. Managerial Mischief – it includes illegal, unethical, or questionable practices of individual managers or organizations, as well as the causes of such behaviors and remedies to eradicate them.

2. Moral Mazes - it includes the numerous ethical problems that managers must deal with on a daily basis, such as potential conflicts of interest, wrongful use of resources, mismanagement of contracts and agreements, etc



Business ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s. An increasing number of people asserted that because businesses were making a profit from using our country's resources, these businesses owed it to our country to work to improve society. Many researchers, business schools and managers have recognized this broader constituency, and in their planning and operations have replaced the word "stockholder" with "stakeholder," meaning to include employees, customers, suppliers and the wider community.


Today 90% of business schools teach business ethics. Ethics in the workplace can be managed through use of codes of ethics, codes of conduct, roles of ethicists and ethics committees, policies and procedures, procedures to resolve ethical dilemmas, ethics training, etc.



Now to answer the latter part of the question – How is business ethics important?

The importance of business has largely been undermined over the years. It provides numerous benefits such as:-


1. Attention to business ethics has substantially improved society

2. Ethics programs help maintain a moral course in turbulent times

3. Ethics programs cultivate strong teamwork and productivity as they align employee behaviors with those top priority ethical values preferred by leaders of the organization.

4. Ethics programs support employee growth and meaning. Attention to ethics in the workplace helps employees face reality, both good and bad -- in the organization and themselves. Employees feel full confidence they can admit and deal with whatever comes their way.



Lawson (2004), found that while most students engage in behaviours like classroom cheating and plagiarism, a large number of them, nevertheless, consider themselves to be more ethical than most corporate professionals. Also disturbing is the fact that they consider that unethical behaviour is a must for success in professional life. This belief is a cause for concern and indicates a need for students to sharpen their ethical decision-making skills in complex real-world type settings.


This section aims to investigate whether a relationship exists between students’ attitude toward ethical behavior in an academic setting and their attitude toward such behavior in the business world. This analysis can be useful in helping to determine the extent to which students’ beliefs regarding ethics in the business world are a reflection of their general ethical beliefs and values. In addition, it can help identify the required focus of schools’ ethics programs. A finding that students’ beliefs regarding ethics in the business world are unrelated to their beliefs regarding such behavior in an academic setting might indicate a lack of knowledge regarding acceptable behavior in the business world, with the implication that ethics programs should focus on providing such information. On the other hand, the finding of a positive relationship between these beliefs would indicate a greater need to emphasize general ethical theory.


In another survey (Glenn, 1988, pp. 178–179) hen asked whether they agreed with the statement, “A person can be both financially successful and uncompromisingly honest.” Of the cheaters, 67% agreed with the statement; of the non-cheaters, 76% agreed. The difference in the responses of the two groups was statistically significant.


What are the underlying variables?

Lawson’s study started with certain hypothesis and the following inferences emanated from it:

·        Gender – Several studies in the past have shown statistically conclusive proofs that females tend to me more concerned about ethical issues than their male counterparts. Of course, recent surveys seem to contradict these findings

·        Age and Education Level – Students tend to become more mature with age. This greater ethical maturity may be caused by a variety of possible factors, including the effect of the business curriculum, the greater age of upper level students, or more extensive work experience.

·        Academic Performance - Cheating is less prevalent among students with high grades (Zastrow, 1970), However almost all students admitted to cheating at some point to life.

·        Relative Significance of the Result – Cheating was less visible in midterm examinations than plagiarism in term papers.



The Relationship – Does it exist?

The results of Lawson’s study (2004) indicated that there is a very strong relationship between students’ propensity to engage in unethical behavior in an academic setting and their attitude toward such behavior in the business world. Students who cheat on exams or who plagiarize papers were more likely to be accepting of the need for unethical behavior in the workplace than those who did not engage in academic dishonesty. Specifically, the “cheaters” are more likely to believe it is acceptable to lie to a potential employer on an employment application and to believe it is acceptable to use insider information when buying and selling stocks. In addition, they were more likely to believe that they would have to compromise their ethical standards in order to advance their careers, and were less likely to believe that people in the business world generally act in an ethical manner or that good ethics is good business. From these results it is clear that students’ propensity to cheat in school and their beliefs regarding ethical behavior in the business world are very much related.

In a similar manner, a strong relationship was observed between the degree to which peer cheating upsets students and their attitude toward dishonesty in the business world. Students who are more upset about peer dishonesty are more likely to believe that insider trading is unethical, more likely to agree that people in the business world act in an ethical manner and more likely to agree that good ethics is good business. With regard to their personal behavior, they are less likely to lie to a potential employer on an employment application and less likely to believe that they will have to compromise their ethical standards in order to get ahead in their careers.


Possible Explanations

1.      One possible explanation for why some students engage in unethical behaviour while others do not is that students have a diverse set of ethical beliefs. Ethics is personal. In the case of academic dishonesty, some students might not believe that plagiarizing a paper is unethical and engage in such behavior, while at the same time believe that it is unethical to cheat on a test and not do so. Another student with the opposite beliefs and actions would believe himself to be acting ethically as well. Yet each student would perceive the other to be acting unethically.


2.      White and Dooley (1993) note that “ethicality and practicality are often at odds with each other” (p. 649) and that in this type of situation “students’ responses indicated they believed practicality was more important than ethicality” (p. 643).

3.      Tsalikis and Fritzsche (1989, p. 695) noted, “a related challenge to ethical decision making is that sometimes good and evil seem to be joint products.


The Suggested Course

The belief of students that unethical behavior is the norm in the business world is a cause for concern. To a certain extent this belief appears to arise from naivete on the part of students. In training these future managers, it is important that they be exposed to the complexities of real-world decision-making. This exposure would have dual benefits. First, it would help students realize that the decisions made by people in business are generally at least as ethical as the ones they themselves would reach. Second, it would enable students to sharpen their ethical decision-making skills. With this type of training, students would be prepared with both the ethical skills and the knowledge they need when entering the business world.



It is now important to consider the perception of students of our Institute towards the Business ethics course being taught in the institute. These are some of the facts which really throw some light upon the excitement of students towards the Business ethics course:


-         Only 40 of out of a batch size of 220 students in PGP19 have enrolled into the Business Ethics course

-         Considering, the Top-20 students in the Institute only two of them have this course as an elective. This is especially surprising since most of them are specializing in Finance which requires a through understanding of ethics.


When we asked one of the toppers as to why he did not take this course as an elective, his response was – “This course is very hypothetical in nature where the approach taught in handling ethical dilemmas is utopian in nature and far away from reality and practicality”


When we asked one of the students who had taken the course, her response was “This course is a welcome change from the mental rigor which we go through in other courses and does not require regular studying.”


Thus it can be seen that Business ethics course is not being seen in a very positive light among the students.





Golden Rule – The Philosophy

The Golden Rule is endorsed in one form or another by most cultures and major religions and is still espoused by philosophers, business ethicists and popular business authors.  Based on the principle “Do as you are done by”. This requires imagining ourselves in someone else’s “shoes” and asking how, were we in the other person’s place, we would wish or want to be treated. GR is thus a form of thought experiment.


How is it used in teaching Business Ethics?

The best way to encourage students on this path would be to ask students to think of actions that they consider morally right and wrong (perhaps without specifically focusing their attention on business contexts). Responses like “that is what our society says” should be gently resisted, on the grounds that they do not account for why certain kinds of actions are favored over others.

Later the exercise is repeated with business situations like deceptive product representation, the subjection of employees to unsafe or dangerous working conditions (particularly without their consent), discrimination, padding expense reports and other self-interested lies, monopolistic practices that exclude competitors from the market, and so forth.


Limitations of Golden Rule

The Golden Rule has been subjected to many criticisms also.


For example, GR forbids helping blind people across the street (since most people who help others in this way do not themselves wish to be helped across the street).  While such a sentiment partly derives from a failure to appropriately identify with the victim’s situation, the larger problem in these cases is that unwelcome conclusions seemingly result if GR is applied based on the agent’s own immoral or corrupt desires.


Hence many commentators have urged that GR should be applied using not the preferences of the agent herself, but rather those of the person affected by the action. In effect, this turns GR into what is sometimes referred to as the “Platinum Rule”: “Do unto others as they would have you do unto them.” Now according to the above principle, GR now prohibits businesses from raising prices, even when their costs go up, on the grounds that customers would prefer that they not do so, and that GR prevents employers from firing unproductive employees who wish not to lose their jobs.


Lastly, GR also fails in deciding between ethics and utilitarianism - which is more imp? Imagine that a manager must decide whether to remove a female foreperson from a male construction crew. While she is eminently qualified and capable, the men on the crew resent taking orders from a woman and as a consequence production lags. In such cases, it will simply be impossible to find solutions that agree with what everyone wants.




Conversational Method of Teaching Business Ethics

Using conversational learning in business ethics teaching efforts will allow students to become self-reflective, to learn the value of dialogue and good moral conversation, to learn about others’ ethical experiences and attitudes, and to apply the knowledge gained to organizational life. The process seems to foster a trusting environment, one in which students engage in active participation and take personal risks in the classroom. However, it requires that the students and teachers to be equally proactive, pre-do experiential exercises and come to the class with an open-mind.


Role of the Student

·        Listening to others with the intention of learning with them.

·        Reflecting intentionally to gain more understanding of the complexities of organizational life.

·        Being open-minded and accepting that there are multiple legitimate and viable perspectives and possibilities in any situation.

·        Understanding that there is no right answer or right approach in an ethical situation

·        Being proactive in anticipating potential ethical or moral dilemmas and finding different ways to learn from different perspectives about how one might address such dilemmas.


Role of the Teacher

As a teacher, conversational methods of teaching business ethics has the following requisites-

·        Knowing one’s strengths and shortcomings, being honest with oneself, continuously striving to increase our ethical (and other) self-awareness and seeking and listening to feedback from responsible peers and colleagues

·        Building an atmosphere of trust and psychological safety and a norm of collective responsibility in the classroom.

·        Generating empathy in the students and making them learn from each other’s experiences

·        Reflecting and building on differences in perspectives of different students.

·        Emphasizing relationships and social interactions and proactively managing the dynamics of ethical and moral situations, challenges, opportunities and dilemmas.


Classroom activities and teaching methods

Ask students to think of a situation in which they experienced an ethical dilemma and give them about five minutes to jot down some notes about their experience and their feelings. Then ask students to pair with someone they do not know. Their task is to introduce themselves to their partner and to describe their ethical dilemma situation and feelings about that situation. When they have told their stories, convene as a large group and each person introduces their partner and describes their partner’s ethical dilemma experience. This is followed by the person being introduced responding to questions about their experience that group members ask. Often, the partners are changed in course of a session to enable the students to gain from varied experiences.



In the long run meaningful dialogue promotes deeper commitment to the goal, purpose or mission of teaching business ethics. However, it is important to recognize that the introduction to talking and learning about values, beliefs, morals and other ethically related issues often generates in students powerful emotional responses ranging from self doubt and shame to frustration and confusion. These emotional responses, if not addressed, can result in student resistance, limited risk taking, failure to listen to others and mistrust in the classroom all of which can stifle student learning in business ethics teaching efforts.