Over the past decade business schools have rushed to respond to accreditation agency and ranking demands that programs include ethics. How this got started no one seems to know but once started the idea was has been an uninhibited snowball careening downhill growing in size with each tumble. Please do not mistake my concern over teaching ethics over ethical behavior as I tend not to accept that the first necessarily leads to the second. I also question if business instructors are the ones best trained for the job of accepting the teaching ethics handoff from the parents of a student with 18 years of development. Far too few business ethics class revolve around a foundation that includes discussions of Plato, Socrates or even more current contributions of French or German philosophers. This somehow strikes me similar to an accountant teaching the meaning of beauty. If one expects change in that young student consider, for a moment the math of 40/52000. This about represents 40 hours of ethics class divided by the student’s 18 years (or around 52,000 aware hours) of life experience or a .00035 impact. Granted there are some small experiences, such as life effecting accidents, loss of very significant person, witnessing (or part of) of a horrible terrorist attack that are so powerful that they can actually change the future of fifty-two thousand life hours. One might wonder if a theoretical case driven ethics class would qualify as life changing.
One school that prides itself on its ethics classes is Temple University. Within the business department two courses are offered, an undergraduate (3101) and a graduate (5088). There is also on the books, an MS in Corporate compliance and ethics degree but, interestingly, not being currently offered. The objective of undergraduate business, society and ethics is “To increase your awareness of the mutual ethical responsibilities existing between the contemporary business organization and its internal and external stakeholders.” An odd aspect of the graduate class is (from the catalog) that “This course may be repeated for additional credit.” Maybe if you want to be ethical you take it once and if you want to be really ethical you take it twice? I do not mean to dwell on Temple as the business department is not that different from the others around the U.S. What does make one striking difference is the business school got caught not living up to their undergraduate course object. In July (2018) Temple University fired its business dean, Moshe Porat, for falsifying, over a number of years, data that was presented to U.S. News and World Report for MBA rankings. One might ask, “If business schools are lying what can we realistically expect from students?”
Unethical business behavior is certainly not a new topic. Consider, for example, laws such as Securities Exchange Act of 1934 addressing accounting transparency or the Foreign Corrupt Practices Act of 1977 concerning bribery of foreign officials which essentially made unethical behavior illegal. There did, however, seem to be a more public awareness highlighted in 1991 when Michael Milken, a Warton MBA, was found guilty of massive fraud. His endeavors, however later paled in comparison to Madoff’s (political science bachelor’s, Hofstra University) ponzi scheme defrauding 65 billion from almost 5000 clients. These were individuals with degrees not the schools themselves. But are the actions of academic institutions now all that different from the businesses we teach about? Have we created a situation where there is a difference between “what we teach and what we do” at universities.
Take for example the prestigious Edmond J. Safra Center for Ethics at Harvard which states its mission is, “to advance teaching and research on ethical issues in public life. …. we not only produce ground-breaking research but also endeavor to spread it, engage in public discourse, and translate our academic outputs to various constituents on campus and beyond.” Aside from producing ground-breaking research Harvard has produced a series of rather unethical students and administration. As example, in 2006 academic researchers were found guilty of stealing samples of their work on antibodies designed to prevent organs from being rejected by transplant patients and attempting to sell them to a Japanese company. Prior to that two Harvard College students, responsible for running charity events to benefit children with cancer (Jimmy fund), stole $132,000 of the money collected. Then there were Gomes and Pomey who absconded with $91,000 stolen from the funds of Hasty Pudding Theatrical. Last year Harvard Law administrators, DeMarco and Saylors, were arrested for stealing $110,000 in scholarship funds (of all things) for students with disabilities. Most recall clearly when Harvard basically looked the other way when the editor of the prestigious Harvard Business Review, Suzanne Spring was extolling high praise on Jack Welch’s management style at GE while having an affair with him.
This returns us to Temple University and the rankings data scandal. Moshe Porat hurt Temple in the same manner unethical behavior has hurt companies, organizations and government image throughout the years. Are Temple students any worse off competitively by the situation? Most likely not, but the university’s next recruiting year might be. Perhaps now is the time to recognize that universities while striving to make money, like any business, have taken on many of the same virtues and flaws of the businesses we have so long taught about. Perhaps the longer term lesson Temple provides is that the moral high ground academics have enjoyed has been truly shaken. As such, business school faculty and administrators, most of whom have taken few life risks, might now be sincerely more humble when expounding from the classroom pulpit about business principles.
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