Should a B-school Education Include an Education in Ethics?

By Chris Barton, Co-Editor

Should a B-school education include an education in ethics?

In the mid 2000s, the egregious actions of people like Dennis Kozlowski of Tyco and the leadership at Enron had people asking just this question. Many blamed the curriculum of MBA programs for at best allowing, and at worst encouraging the unethical actions that jumped from headlines. Much ink was spilled over how a “greed is good” mentality, the idea that humans only ever act in self-interested ways, and an implicit sense of moral relativism saturated all of the nation’s top MBA programs. Were we teaching people to behave badly?

B-schools, having been put on the defensive, began integrating ethics into their curriculum – or at least trying too. The integration proved difficult. Amitai Etzioni, a sociologist who guest-taught at Harvard Business School, wrote a revealing op-ed in which he painted a picture of the turmoil that erupted when HBS tried to integrate ethics curriculum:

“Reactions ranged from distrust to outright hostility. One economist argued that “we are here to teach science!” Another faculty member wanted to know, “Whose ethics, what values, are we going to teach?” And a third pointed out that the students were adults who got their ethics education at home and at church. By meeting’s end, the project had been sent back to the drawing board… A member of the marketing department mused that if [ethics were integrated into the curriculum], his department would have to close because much of what it was teaching constituted a form of dissembling… A finance professor was also concerned about its effects on his curriculum… [which included] how you could make a profit by breaking implicit contracts.”

Why such hostility? Sumantra Ghoshal, an impressive management scholar who (among other things) taught at both INSEAD and the London Business School, offers a compelling explanation. According to Ghoshal, Business as an academic discipline suffers from ‘physics envy:’ in order to make their discipline as true-seeming, respectable, and marketable as possible, scholars try to reduce the complexities of business down to simple, universally applicable ‘laws’ that they can teach and publish, like the laws of physics. In their search for reductionist, causal explanations of business and management, scholars privilege the aspects of humanity that seem predictable and quantifiable over those that don’t; “people act in self-interested ways” is much more useful for making laws than “sometimes people act in ways that are determined by the sum of their lived experiences.”

But while physics – and idealized business – yield to causal explanations, it makes no sense to speak of ethics as being ‘caused’ by anything, and you cannot ‘discover’ ethics via the scientific method. Under the causal and reductionist logic of business, ethics simply makes no sense – it’s nonsense. Hence the economist’s scandalized exclamation in Etzioni’s anecdote: “we are here to teach science!” To him, ethics must have seemed a strange, unintelligible anomaly incompatible with the reductionist methods and logic of business.

Thanks to its foreign logic and hostility from professors and students alike, ethics curriculum has become embattled at B-schools. When integrated into the existing curriculum, it confounds and often contradicts the content being taught. And when taught as a separate class (or set of classes) it becomes ghettoized, a course that everyone suffers through and then promptly forgets. Recognizing both the necessity and the impossibility of effective ethics education, the AACSB encourages their member schools to “renew and revitalize their commitment to ethical responsibility” but “does not prescribe a particular curriculum or course.” To our credit, Thunderbird once had a series of ethics courses, taught by endowed professors; but they were unpopular and considered inessential. The professors left along with our previous President, as they knew they would be first on the chopping block once ASU moved in.

But is the education even all that necessary? As a frustrated faculty member in Etzioni’s parable pointed out, “students [are] adults who got their ethics education at home and at church.” If ethics can’t effectively be taught at business schools, doesn’t that imply that the curriculum is devoid of any ethical influence? How can B- schools be teaching ‘bad’ ethics if ethics can’t be taught there at all? If this were the case, students could learn their ethics at home and at church, and business programs could be left alone to teach the skills of management and the facts of business.

The claim that B-school education is devoid of ethical instruction stems, once again, from ‘physics envy’ and the conception that management, unlike ethics, is “scientific.” Although physicists might reasonably assume that a photon is unencumbered by ethical considerations, the same cannot be said of a human. Unlike the natural sciences, Social Sciences – including both management and economics – must contend with the complex, fickle realities of human nature. And the principles of conduct that govern our actions – AKA our ethics – underpin everything we do, even if we do not explicitly evoke them. Inasmuch as management and economics are the study of humans, they are the study of people acting under the influence of ethics; as inconvenient as that is for a discipline that desperately wants to be reductionist.

And all of us who research, study, and teach management are ourselves ethical beings as well, and we act based on what we believe to be right. What’s more, we are all capable of influencing, and being influenced by, our peers, teachers and mentors. Peer pressure, norms of behavior, explicit directives, and implied value systems all influence our ethical reasoning in ways ranging from subtle to obvious. Although it might not be an explicit part of the curriculum, ethics nonetheless exists as an implicit subtext of any education, a foundation of norms and values upon which the curriculum is laid. And we cannot teach the curriculum without also teaching its foundation.

The transfer of ethics happens in subtle ways, often masked within content presumed to be value free. Take, for example, greed. Now, most people would agree that greed is unethical; it’s even one of Christianity’s seven cardinal sins. It’s a vice, to be overcome; an unscientific concept with roots and applications in philosophy and theology. Self-interest, on the other hand, is considered the lynchpin of economics; a core principle in the scientific study of human behavior. Despite the massive difference in when and where these words are used, they are very closely related in meaning; any difference between self-interest and greed is one of degree, not of type.

So then is it possible to teach economics, and the doctrine of self-interest, without concurrently teaching a lesson on the ethics of greed? Research says no; that in fact an education in economics causes people to view greed more positively, as more morally acceptable, as well as causing them to act in more selfish ways. Whether it is intended or not, economics curriculum has a demonstrable effect on its student’s ethics.

And this is not a problem specific to economics. Social sciences, in general, go beyond simply describing how people act to prescribing their actions. Theories about how and why people act the way they do often become self-fulfilling, through a process called the ‘double hermeneutic.’ The idea is that social scientists observe and interpret people’s actions, while at the same time people attempt to understand their world and guide their actions using social science. The result is that a theory – whether right or wrong to begin with – acquires descriptive accuracy as people learn to conform to its doctrines.

Management theories are particularly vulnerable to this double hermeneutic, as management is explicitly about influencing others and coordinating people’s actions. Ghoshal gives the example of ‘transaction cost economics:’ based on assumed self-interest, the theory proposes that management’s goal is to prevent people from behaving in opportunistic ways that harm the company as a whole. Managers cannot simply ‘trust’ employees to behave in ways that are good for the group, and so they must monitor and control, reward and punish, and manage through fiat. What’s the result? People who feel they are not trusted act in untrustworthy ways. “Instead of controlling and reducing opportunistic behavior, [this management approach] is likely to create and enhance such behaviors.”

It’s in this way that ethics seeps into the curriculum at B-schools. Not through explicit instruction or discussion, but implicitly, as a set of shared assumptions, biases, norms, values and ideologies that underpin the whole program yet are never discussed outright. The scholars who were offended by the proposition of ethics in Etzioni’s parable, are, it seems, in denial about the fact that they are social scientists whose work is subject to the double hermeneutic. What’s more, they seem to have forgotten that they, their objects of study, and their students, are all humans, and as such bring to every situation a degree of ethical decision making. Ethics guides the actions of the people they study, ethics guides the material they teach and the way they teach it, and ethics guides the decisions that those students will make both now and in the future.

To say that ethics has no place in business is as absurd as saying that logic has no role in literature, or that compassion has no role in policy. It may not be the preferred object of study, but denying its existence outright makes a mockery of the discipline. To ask “Should a B-school education include an education in ethics?” is to miss the point entirely. B-schools are already steeped in ethics education – it’s in the theories we teach, in the way that we teach them, in the discussions we have about them, in every case study and every lesson.

The question we should be asking is this: which ethics are we teaching? Are we teaching students to behave in ways that benefit society, or are we teaching them to take advantage of other people and their positions? Are we encouraging actions like those Dennis Kozlowski and the Enron execs took, or are we discouraging them? Do we teach compassion, or callousness? Bravery, or cowardice? Empathy? Manipulation? Greed?

We should be vigilant for ethical instruction sneaking into our classes. Keep an eye out for what is assumed, what is promoted, and what positions are not discussed. And then ask: do I agree with what is being taught?