B-Schools Still Seeking Ways to Stress Ethics

Ronald J. Alsop
April 12, 2005
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A modern morality play opened recently on Broadway — not in the theater district, but way uptown at Columbia University. Before an audience of Columbia M.B.A. students, actors performed “Scenes from the Slippery Slope,” in which an investment banker is pressured to falsify expense accounts to conceal his boss’s extramarital affair. At pivotal points in the mini-drama, actors called on students to advise the ethically challenged young man.

The presentation was part of Columbia’s latest effort to infuse ethics into the M.B.A. program in an engaging way, a process that’s proving to be a slippery slope itself for business schools. Three years after coming under attack for their M.B.A. graduates’ involvement in the many corporate scandals, schools are still grappling with how to teach ethics more effectively.

“Ethics isn’t getting a whole lot more substantive attention at many schools,” says Craig Smith, associate dean at London Business School, which requires both full-time and executive M.B.A. students to study ethics. “It’s often just an elective offering at best, arguably preaching to the converted.”

Even as corporate executives are being held to ever-higher standards of conduct, M.B.A. students and professors bristle at ethics requirements. Some faculty members resent being forced to squeeze ethics lessons into an already jam-packed syllabus, while students grumble that ethics classes tend to be preachy and philosophical. At Carnegie Mellon University, some students even object to a required ethics course because they contend it doesn’t matter to corporate recruiters and won’t help them land jobs.

Pricewaterhouse to pay $225 mln in Tyco settlement

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PricewaterhouseCoopers LLP said on Friday it will pay $225 million to settle a class-action case brought by investors in Tyco International Ltd. following the accounting scandal at the diversified manufacturer.

The settlement with the auditing firm, combined with a recent settlement with Tyco that was previously announced, brings the total settlement to more than $3.2 billion, according to a statement from law firm Grant & Eisenhofer and two other law firms representing the plaintiffs.

Tyco last month agreed to pay $2.975 billion into a fund for plaintiffs in 32 class-action lawsuits that resulted from an accounting scandal that sent former Chief Executive Dennis Kozlowski to prison.
Kozlowski and former Tyco finance Chief Financial Officer Mark Swartz were found guilty in June 2005 of looting $600 million from the conglomerate. The case became one of the best-known cases of the excesses of corporate America when it became clear that Kozlowski had used company funds to pay for luxury items including a $6,000 shower curtain and a $15,000 umbrella stand.

Mission: Social Responsibility

Business Week Magazine
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A U.N. initiative to promote business ethics is readying a set of principles. It could change the way B-schools operate.

In July, 2000, the U.N. launched the U.N. Global Compact, an initiative to encourage responsible business practices worldwide. The program developed principles for responsible investment and now has more than 3,800 participants, including more than 2,900 businesses in 100 countries.


Members developing the principles envision that business schools will reassert their commitment to teaching business ethics and address issues of human rights, labor, environment, and corruption.

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Are Business Schools Silent Partners in Corporate Crime?

Diane L. Swanson Kansas State University, USA
William C. Frederick University of Pittsburgh, USA

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An unexplored question is the link between corporate misdeeds and the nation’s business schools. Although policy-makers in Washington have now changed the rules for stock options and 401K plans, they have not yet investigated business schools as possibly unwitting accomplices to corporate crimes. This oversight seems odd, since the executive managers of the scandal-ridden firms and their partners in crime, some holding MBA degrees, may reflect an approach to business education that elevates narrow self-interest above broader values of community and corporate citizenship. This ideology was never very far from the minds of the executive carpetbaggers who stole from their own companies, wiped out employee pensions and made distrust of business a national byword. In the aftermath of this wholesale robbery, members of the Association for the Advancement of Collegiate Schools of Business (AACSB) in the USA have maintained an inexplicable silence. Behind their wall of quietude, these deans of colleges of business who set the standards for business school curricula worldwide are proposing wobbly new accreditation guidelines that will do little to head off a new generation of MBAs who are at risk of Enron-like behaviour.

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Moral Leadership and Business Ethics

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“Conventional wisdom has it that two of the most glaring
examples of academic oxymorons are the terms “business
ethics” and “moral leadership.” Neither term carries credibility
in popular culture and when conjoined constitutes a
“null-set” rather than just a simple contradiction in terms.
The reason for this is definitional, but only in part. More significant
is that we have so few models of businesses and
leaders operating on ethical principles. Simply put, the
cliché persists because of the dearth of evidence to the
contrary. At best, both these terms remain in the lexicon as
wished-for ideals rather than actual states of being.”

Is Wal-Mart Good for America?

“100 million Americans shop every week at Wal-Mart to get ‘every day low prices.’ Some economists say Wal-Mart helps hold down the cost of living and boosts U.S. productivity. But critics charge that Wal-Mart is destroying good American jobs by pushing production of consumer goods to China. FRONTLINE Correspondent Hedrick Smith travels across the U.S. and to China to investigate Wal-Mart’s impact on American’s economic future.”