Few business schools require rigorous ethics training. A call for reform.
By Diane L. Swanson and Dann G. Fisher
a sharp decline in the public’s trust in business, the public might assume that all business schools are now educating their students in corporate responsibility and ethics. But that is not the case. In fact, business schools that require CR/ethics coursework are in a distinct minority. The most recent statistic available is that only one-third of accredited business schools offer an ethics-related course, and presumably fewer require one. This statistic was confirmed for Bloomberg Press in 2004 by the Association to Advance Collegiate Schools of Business (AACSB), the agency that accredits business schools internationally, and no evidence points to change since then.
The scarcity of CR/ethics coursework was not always the case. The number of CR/ethics courses grew greatly from the mid-1970s to the mid-1980s with more than half of the business schools polled requiring an undergraduate and graduate course in ethics by the mid-1980s. This trend was reversed in the 1990s. The proximate cause can be traced to AACSB’s change in accrediting policy in 1991 to mission-driven standards based on subject integration. Specifically, the new standard moved away from language that clearly pointed business schools toward requiring an ethics course to a policy of integration that allows ethics topics to be added to other courses without a stand-alone ethics course. AACSB could have reversed the decline in CR/ethics courses when reformulating its accrediting standards in 2003 but did not. (Note: Business ethics, when taught, is delivered in a business and society context that emphasizes corporate responsibility; therefore, we use the terms ethics and corporate responsibility interchangeably, or we simply refer to CR/ethics courses.)
Recently, we asked an AACSB official if the one-third statistic is still accurate. In reply, he wrote that the agency “has not conducted any specific surveys of ethics education strategies.” This reply is disheartening. As academics and business practitioners know, information deemed important gets measured and tracked. Absent further data, there is no reason to believe that the one-third statistic confirmed by the accrediting agency in 2004 has changed for the better. Essentially, the message to schools vying to get or keep AACSB accreditation is that the standard for CR/ethics coursework is left to each school. Many schools have not risen to the occasion. In fact, some schools axed CR/ethics courses, even as the news of Enron, Arthur Andersen, and other business scandals was still unfolding.
A bright spot in this picture is that some schools have been seeking to brand their MBA programs as socially responsible by competing in the Aspen Institute’s ranking of MBA programs based on ethics, environmental, and social issue coverage. Overall, however, business schools are not self-regulating in this important area. Their accrediting agency, made up of member deans who accredit each other’s degree programs, perpetuates weak standards for CR/ethics education.
A Call to Improve
In September 2002, in the wake of notorious corporate scandals, William Frederick (University of Pittsburgh) and Duane Windsor (Rice University) joined one of us (Swanson) to lead a grassroots campaign that lobbied AACSB to strengthen business ethics education by mandating that business schools require at least one freestanding CR/ethics course as a condition of graduation. Despite support for this campaign from three conference boards and hundreds of business professors and practitioners, the agency chose in 2003 not to require even one stand-alone CR/ethics course in its reformulated standards. Instead, AACSB advised that business schools could continue to meet accreditation standards by integrating ethics across the curriculum, an approach that usually adds up to very little coherent coverage.
Although AACSB rejected the campaign’s call for a stand-alone CR/ethics course, a survey in 2008 found that an overwhelming majority of CEOs, deans, and faculty polled agreed or strongly agreed that an ethics course should be required for all undergraduate and MBA students. Therefore, it appears that a plurality of AACSB’s closest stakeholders deem the agency’s ethics education policy as misguided and inadequate.
The AACSB, and a significant number of professors, continue to rebuff attempts to require an ethics course in the curriculum. For instance, when the National Association of State Boards of Accountancy (NASBA) seemed poised in the wake of accounting scandals to require an ethics course as a qualification to sit for the CPA exam, AACSB and the American Accounting Association chastised this regulatory body for attempting such direct involvement in curricular issues. Ultimately, NASBA backed down under this criticism.
In response to the claim by AACSB that ethics material can be integrated across the curriculum absent a foundational course, Ray Hilgert, emeritus professor of management and industrial relations at Washington University’s Olin School of Business, says: “If you believe it’s integrated in all the courses, then I’m willing to offer you the Brooklyn Bridge.”
Dangers of the Status Quo
Professor Hilgert has put his finger on the crux of the problem. AACSB’s doctrine of integration, based on curriculum flexibility, allows each business school to set its own ethics requirements. As a result, schools are effectively absolved from requiring any CR/ethics courses. Deans and department heads can claim that this material is handled across the curriculum, meaning that professors from disciplines such as marketing, finance, operations management, accounting, and strategic management who are not necessarily trained in ethics can claim to teach a bit of it in their courses. In reality, however, these professors typically find it burdensome to try to learn this material and integrate it knowledgeably into their courses, especially given their understandable desire to teach their own areas of expertise first and foremost.
The bottom line is that distributing ethics topics across courses can be superficial and incoherent, if not anchored to a foundational CR/ethics course. In the process, the signal to students is that ethics is not as important as technical coursework. This message perpetuates the fallacy of amoral business, as indicated in the oft-cited cynical query: Isn’t business ethics an oxymoron? The upshot is that most students graduate from business schools without knowing that CR/ethics has a long tradition in academia and practice, having been recognized as a division of the Academy of Management decades ago. Obviously, these students will not know the research that has accrued in this area. Nor will they know innovations in practice.
The paucity of ethics coverage resulting from the integration approach risks graduating students who are not prepared to recognize ethical dilemmas in practice, much less understand, suggest, or implement possible solutions. There is also the problem of trying to discuss ethics in various classes when students have not been exposed to the theoretical building blocks in a stand-alone ethics course that would enhance knowledge, comprehension, and application of the subject. This failure to provide building blocks is also problematic for continuing education. For example, a majority of states in the U.S. now require ethics coursework in continuing education as a condition for CPA license renewal. This puts the cart before the horse, since continuing education cannot presume the existence of prior foundational ethics knowledge garnered in business schools.
The perennial problem of assessment also looms. Practically speaking, the listing of some ethics topics on various syllabi does not constitute any particular assessment standard. In most schools, this ad hoc approach will fail to yield sound coverage of CR/ethics, setting the stage for inadequate business education for decades to come. For when ethics is scattered across the curriculum, assessing learning outcomes becomes difficult, if not impossible. Leaders of the aforementioned grassroots campaign have concluded that two assessment errors are inevitable under the status quo:
• Ethics coverage will be assessed as being sufficient even when it is woefully inadequate or even missing in action.
• Ethics content can be distorted, diluted, or trivialized but still pass inspection.
The lack of CR/ethics coursework portends that most business students will graduate without understanding the public and private initiatives that are changing the landscape against which the business curriculum will inevitably be judged. Their failure to comprehend sweeping reforms in corporate governance, financial market regulations, rules for prosecuting corporate fraud, and voluntary codes of responsible conduct almost guarantees that business schools will be on the defensive indefinitely against critics who claim that business education is willfully amoral. It also means that most business graduates will not be prepared for jobs in corporate responsibility, risk management, and ethics compliance. For instance, there can be no assurance that they have been exposed to key elements of public policy, including those mandated by the Foreign Corrupt Practices Act of 1977, the Organizational Sentencing Guidelines of 1991 (stiffened in 2004), and the Sarbanes-Oxley Act of 2002.
Obstacles to Improvement
One of the main obstacles to revitalizing CR/ethics education is that many, if not most, business schools face a zero-sum curriculum. Because AACSB has freed business schools from requiring any ethics courses, additional resources for such courses are not readily forthcoming. Most deans do not have an incentive to champion ethics coursework, and they are unlikely to feel any pressure from their faculty to do so. Any call for increased coverage might prompt departments to debate what areas to omit from the curriculum so that ethics can be added. In many cases, an ethics course is doomed before the debate even begins. Positive results from this scenario are unlikely, since it politicizes ethics coursework, prompting other faculty to protect their turf in a curriculum that lacks space and resources for additional courses.
To make matters worse, protection for ethics courses is unlikely, since AACSB’s policy of integration contributes directly to reducing or eliminating the number of ethics faculty. Always small in numbers, ethics professors face a stacked political deck when curriculum is voted on and courses are reduced or eliminated by faculty fiat. Although some schools, including Duquesne University and Kansas State University, have ethics courses in their undergraduate and MBA curricula in the face of these pressures, these gains can be easily lost when professors retire or move to other universities and are not replaced. By default, most business schools find it much easier to list some ethics topics on a few syllabi, although there is no way of knowing if this practice adds up to valid coverage.
Given this state of affairs, those who would provide leadership in this area need to be well armed with the intellectual acumen to combat the facile, often reflexive arguments against CR/ethics courses. Among these arguments, claims that ethics cannot be taught keep resurfacing, despite convincing evidence that social and behavioral skills can be learned and improved upon through exposure to educational programs that blend theoretical principles and practice. Putting ethics on the defensive with the recurring mantra that it cannot be taught is absurd. We know of no other course held to such burden of proof. An accounting professor puts the situation in perspective by asking: “And do we say that financial, auditing, and accounting courses are utter failures when over 500 companies had to restate their financial reports in 2005? Therefore do we stop teaching these courses?” Another professor, formerly a business school dean, observes: “To say ethics education has no influence is equivalent to saying that education has no influence. If we give up on ethics education, we might as well give up on all education. Is that what the cynics advocate?”
At any rate, champions of CR/ethics courses have never claimed that one course will resolve all ethical dilemmas. Obviously, students will find themselves in workplace situations where organizational culture, policies, peer pressure, leadership, laws, stakeholder pressures, and other factors influence the nature of ethical dilemmas and possible responses. Given the complexity of these influences, it is modest to propose that at least one course in the curriculum address ethics by itself and arm students with the ability to recognize ethical dilemmas and possible solutions, just as marketing, leadership, and other behaviorally based courses impart specific language and knowledge to students. Detractors do not place a similar burden of proof on these courses. For instance, no one demands evidence that all business students who take leadership courses become good leaders. Arguably, universities would need to be shut down if all courses were held to such an impossible standard.
A Straightforward Solution
In 2002, the grassroots campaign leadership proposed a straightforward solution to the dilemma of inadequate ethics education, with a three-pronged standard that was endorsed by the movement’s backers.
A required, freestanding foundational CR/ethics course is necessary.Efforts to integrate ethics across the curriculum should be a goal.
Other initiatives, such as hosting guest speakers, offering service learning projects, and establishing endowed chairs in ethics, are highly desirable.
This formula retains sufficient discretion for individual schools, since it does not dictate the design or placement of individual courses in the curriculum. Nor does it dictate course titles, which can vary. The litmus test for a course dedicated to ethics is simply that the focus is on delivering ethics in the context of corporate responsibility.
Textbooks for this type of course abound, replete with case studies. Moreover, Ph.D. programs specializing in ethics and corporate responsibility have existed for decades. That there is a supply of trained CR/ethics educators is evidenced by the existence of various academic associations, conferences, and journals dedicated to this enterprise. If the accrediting agency is serious about advancing business ethics education, then its standards should effectively ensure that this supply of formally trained ethics faculty is maintained in the face of faculty attrition caused by the habitual axing of ethics courses tacitly encouraged by present accreditation policy. To not anticipate and deal with this issue is to ignore realities on the ground.
Potentially everyone gains by keeping the material on CR/ethics intact as a required foundational course. By design, this approach encourages cross-fertilization of ideas within other business courses, rendering integration across coursework meaningful for raising ethical awareness in students. Moreover, it can serve as a countermeasure to narrowly amoral business education in three ways. First, a stand-alone course sends the proper signal to students: ethics matters. It is a clear invitation for students to embrace the need to earn the public’s trust in business. Second, a stand-alone ethics course provides students with the conceptual building blocks that will allow advanced learning to occur throughout the curriculum and beyond.
Finally, a stand-alone ethics course provides the opportunity for valid assessment of ethics in the curriculum. Students completing an ethics course successfully have plainly demonstrated a certain grasp of knowledge. This method of assessment is simple and time-honored: students either pass the course or they do not. In this way, the two assessment errors identified above can be avoided. That is, ethics will not be assessed as sufficient when it is woefully inadequate or even missing from the curriculum. Nor will it pass inspection when its content gets distorted, diluted, or trivialized by uninformed inclusion haphazardly in other courses.
No Direction Home
The AACSB has framed its resistance to sound CR/ethics education with a false dichotomy. That is, the question posed by defenders of the status quo is: Isn’t it better to integrate ethics into the curriculum rather than require one ethics course? This question prompts onlookers to engage in an ill-conceived, artificial debate that seems designed to block progress. Let’s be clear:no dichotomy exists. Coherent business ethics education means including topics in the curriculum that are anchored to and informed by a required CR/ethics course. Requiring all students to take at least one such course is the very least that business schools can do to fulfill the university’s mission of exposing students to socially useful knowledge. Such policy would let students know where business schools stand, while preparing them to be able to recognize and deal with ethical issues in practice.
If no clear standard for CR/ethics in business degree programs exists, then it is equivalent to operating without a map in this area, meaning that any road will take us to an undefined destination. Surely business schools can do better. If not, their failure to improve CR/ethics education can easily be perceived by a skeptical public as aiding and abetting recurring business scandals. Put more affirmatively, business schools need to do their part by sending graduates into the workforce armed with knowledge about the ethical issues they will surely encounter. The goal is to train business students to be part of the solution, rather than be perceived as part of the problem.
Another Window of Opportunity
Although the grassroots campaign for better ethics education did not get the desired response from AACSB, we suspect that this accrediting agency would be sensitive to ideas from CR practitioners. The opportunity to provide input is at hand.
The AACSB’s Blue Ribbon Committee on Accreditation Quality is currently reviewing accreditation standards with the goal of making recommendations for revisions in April 2013. We are told that this committee will consider business ethics, corporate responsibility, and sustainable development as key issues to be considered in the context of revised standards for the business curriculum. According to the AACSB website, the following address can be used for suggestions or inquiries: http://www.aacsb.edu/brc/contact.asp. Needless to say, much is at stake in this next round of determining accreditation standards, especially since firms wanting to hire socially responsible managers cannot assume that business school graduates have had any particular training in this important area.
Diane L. Swanson is a professor of management at Kansas State University where she holds the Edgerley Family Chair in Business Administration and serves as the founding chair of the Business Ethics Education Initiative. Dann G. Fisher is an associate professor of accounting at Kansas State University where he holds the Deloitte & Touche Faculty Fellowship.
Textbooks specializing in CR/ethics include:
Business & Society: Ethics and Stakeholder Management, by Archie B. Carroll and Ann K. Buchholtz. South-Western Cengage Learning (2011).
Business and Society: Stakeholders, Ethics, Public Policy, by Anne T. Lawrence and James Weber. McGraw-Hill (2010).
Business & Society: A Strategic Business Approach to Social Responsibility, by Debbie M. Thorne, O.C. Ferrell, and Linda Ferrell. Cengage Learning (2010).
Business PhD programs strong in the CR/ethics area include:
Benedictine University, Program in Values-Driven Leadership
Nottingham University, Business School
Penn State, Smeal College of Business
Rutgers, Business School
University of Pennsylvania, Wharton School of Business
University of Virginia, Darden School of Business
Georgetown University McDonough School of Business
Academic Associations/Conferences specializing in CR/ethics include:
International Association for Business and Society
Organizations and The Natural Environment Division of the Academy of Management
Social Issues in Management Division of the Academy of Management
Society for Business Ethics
Academic journals specializing in CR/ethics include:
Business Ethics Quarterly
Business & Society
Corporate Reputation Review
Journal of Academic and Business Ethics
Journal of Business Ethics
Journal of Business Ethics Education
Journal of Corporate Citizenship