Why teach ethics in Business Schools?

Andreas Follesdal

Ph.D. Harvard 1991, Fulbright Scholar 1983-84

In Norwegian Fulbright Alumni Newsletter

Ten years ago John S.R. Shad, Chairman of the Securities and Exchange Commission, promised Harvard Business School 15 million dollars towards improving their ethics courses. The reason, said Shad, was that too many graduates of the finest business and law schools ended up in prison. Recent turmoil in the Norwegian financial sector has caused similar demands for more ethics in the curriculum of Norwegian schools of business and administration.

Prevention of such illegalities is surely important, but ethics courses must also have other aims. Indeed, it would be a mistake to believe that ethics courses will prevent all unethical behavior. Actually, more worrisome practices may be uncovered as a result of increased scrutiny brought about by such courses.

Instead, a central goal of teaching business ethics must be to prepare the students for taking responsibility at their future places of work. Dilemmas and conflicts will arise in unpredictable ways, so the students must be prepared to reflect critically on their values and ideals. Moreover, as leaders in private sector they will have to take responsibility for defending the social function of business and administration. To equip them for this task, the schools must teach corporate responsibility.

During a recent conversation at Harvard Business School, professors Lynn Sharp Paine and Thomas R. Piper confirmed that business ethics was now firmly embedded in the school's curriculum. Ethics is taught in an early set of lectures to new students, as well as in elective courses during their second year.

One important reason for the endorsement of business ethics in Harvard's management education is that globalization of business requires awareness of different cultures and responsible handling of the value conflicts that arise. In addition, many alumni insist on the importance of preparing students for the challenges to personal integrity by modern business life. A well-rounded manager must be prepared to handle ethical dilemmas.

A book on the Harvard experiences, Can Ethics be Taught? (Harvard Business School 1993) suggests three lessons for Norwegian efforts at integrating ethics into the curriculum.

1) Business ethics perspectives must not only be taught in a separate course, but must also be integrated into the various other courses. Professors of strategy, marketing, finance and other central subjects must identify ethical dilemmas and possible solutions as an integral part of their teaching. Only in this way can we expect students to develop a profound understanding of how ethical issues arise and how they are best handled by other professionals in the field.

2) The ethics curriculum must be developed jointly by professors with competence in ethical theory, with other faculty members, and with representatives of business and public administration. Changing regulations and business environment would make it futile to prepare students only for the present business world. Rather, they must be trained to reflect systematically about conflicting values in order to be well prepared for the challenges and dilemmas ahead.

3) The faculty must feel qualified and confident in addressing ethical aspects in their course s. Thus the schools must offer faculty development programs in business ethics. In the United States the consulting firm Arthur Anderson & Co, SC has taken on the responsibility of developing such programs and faculty networks. Similar contributions are sorely needed in Norway.

As future leaders students of business and management will into dialogue with owners, public officials as well as co-workers. They will need a proper understanding of the respective roles and responsibilities of private and public sector, of management and employees. The students must learn how to handle the unavoidable tensions and conflicts with integrity. Moreover, they must be prepared to contribute to public debate about the value of the private sector. One of the most important challenges to the schools of business and management in Norway must be to enable their students to exercise these powers responsibly.

andreas.follesdal AT arena.uio.no September 1997