Do Business Schools Incubate Criminals? This is the headline of an op-ed by Luigi Zingales, a professor at the University of Chicago Booth School of Business, published today at Bloomberg.com. Zingales' argument (summarized below) invites some rumination on the expectations of social norms -- how much power do they wield over individual behavior? When and how are these norms established and changed?
Citing the latest round of corporate scandals at JPMorgan, Barclays, and Goldman Sachs, Zingales says the problem is more than too-big-to-fail-firms behaving badly. "We are dealing with a drop in ethical standards throughout the business world and our graduate schools are partly to blame," he writes. Zingales says current ethics courses in MBA programs are too often presented in morally-agnostic frames. After all, he notes, the market is meant to function via the invisible hand of cumulative, rational self-interests, not via rigid moral commandments.
"Some [MBA ethics instructors] simply illustrate ethical dilemmas without taking a position on how people are expected to act," he writes. "Others hide behind the concept of corporate or social responsibility, suggesting that social obligations rest on firms, not on individuals."
Zingales' solution is to re-infuse business-school ethics with some old-fashioned bright lines of right and wrong and to give every course an ethics component, rather than teaching it separately. I would love to hear from people with more (any) business-school experience on this one. I remember similar opinion pieces popping up in the wake of Enron and WorldCom, etc, and then again in the wake of Bernie Madoff and Raj Rajaratnam, not to mention the fraud exposed in the mortgage industry post-bust. So, another call to revamp the teaching of business ethics seems warranted, but will it be effectual?
Is this really a worsening trend, or just a continuing one with more interconnectivity and higher stakes? Research shows that people often adjust their own moral standards based on their perceptions of how much these standards are valued and maintained by others. Can business school ethics courses, no matter how they're taught, make headway against certain corporate cultures or the anything-goes attitudes that often prevail in boom times? Shouldn't a person's moral compass be fairly well set before he or she enrolls in business school?
Citing the latest round of corporate scandals at JPMorgan, Barclays, and Goldman Sachs, Zingales says the problem is more than too-big-to-fail-firms behaving badly. "We are dealing with a drop in ethical standards throughout the business world and our graduate schools are partly to blame," he writes. Zingales says current ethics courses in MBA programs are too often presented in morally-agnostic frames. After all, he notes, the market is meant to function via the invisible hand of cumulative, rational self-interests, not via rigid moral commandments.
"Some [MBA ethics instructors] simply illustrate ethical dilemmas without taking a position on how people are expected to act," he writes. "Others hide behind the concept of corporate or social responsibility, suggesting that social obligations rest on firms, not on individuals."
Zingales' solution is to re-infuse business-school ethics with some old-fashioned bright lines of right and wrong and to give every course an ethics component, rather than teaching it separately. I would love to hear from people with more (any) business-school experience on this one. I remember similar opinion pieces popping up in the wake of Enron and WorldCom, etc, and then again in the wake of Bernie Madoff and Raj Rajaratnam, not to mention the fraud exposed in the mortgage industry post-bust. So, another call to revamp the teaching of business ethics seems warranted, but will it be effectual?
Is this really a worsening trend, or just a continuing one with more interconnectivity and higher stakes? Research shows that people often adjust their own moral standards based on their perceptions of how much these standards are valued and maintained by others. Can business school ethics courses, no matter how they're taught, make headway against certain corporate cultures or the anything-goes attitudes that often prevail in boom times? Shouldn't a person's moral compass be fairly well set before he or she enrolls in business school?
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