In a recent op-ed piece, I decried the state of ethics in today’s business community. The Volkswagen emissions fraud, the Peanut Corporation of American contamination cover-up, and Turing Pharmaceuticals’ 5,000% price increase for a particular drug all happened virtually simultaneously and threw me into a bit of a funk. Every day on Wall Street, it seems, an investment bank, hedge fund, or some other financial actor settled charges of wrongdoing by paying a few million dollars in shareholder money. This is depressing, as is the suggestion in a recent Poets & Quants column by Ethan Baron that perhaps MBAs, with their inadequate ethics education, may be responsible for these business fiascos. All this makes clear that those of us who are concerned with improving ethics education have our work cut out for us.
Still, it is well to remember that the news is not entirely bleak. Despite the incredible violence in the world (33,000 annual gun deaths in America, rape as a weapon in conflicts in Africa, nearly prehistoric methods of warfare practiced by ISIS), Steven Pinker has argued persuasively (though not conclusively) that general levels of violence in the world have been in steady decline for centuries.
The “Black Lives Matter” movement reminds us of how much progress we still need to make in the area of race relations. Certainly there is much unconscious racism still around and many perhaps secretly harbor conscious racist ideas. But unlike when I was a child, where support for segregation based on the supposed inferiority of African Americans was widely espoused in public debates in America, the number of people today who publicly state such cretinous beliefs is vanishingly small. These views are no longer acceptable in polite society.
And, to get to my real point, the same may soon be said for the views that getting rich as an end in itself is an acceptable goal for a business school graduate and that making money for shareholders is the only responsibility of a firm.
When I taught business ethics in business school in the late 1990s, it was sometimes discouraging stuff. It was common for my students, who read in the newspapers of the seemingly daily minting of new dotcom millionaires, to announce in class that their only real goal in life was to become rich and retire by the age of 30 and they didn’t really care what it took to do that, so long as they didn’t go to jail.
Today, such amoral pronouncements are not socially acceptable. While some students may secretly harbor such desires, only a few would say them aloud in polite company because they will be outliers. Many more of my students are motivated to make the world a better place than to get rich for the sake of getting rich. They are more concerned with doing meaningful work that solves real problems and helps real people than in just being paid a high salary. To the extent that they hope to prosper financially, it is not so that they can buy a yacht, but so they can turn their mental and financial resources to improving education in America like Mark Zuckerberg, improving lives in Africa like Bill Gates, and the like.
Why this change? My pet theory is that elite universities began paying attention to whether high school students applying for admission had done any volunteering. This caused high school students to begin volunteering and even forming 501(c)(3)s for the selfish purpose of improving their chances of attending a good college. But along the way, these young students learned the satisfactions that come from helping others. And the volunteering that began as a way of padding a high school resume turned into a way of life. With these changes in students’ outlook, it is certainly more enjoyable and hopeful to teach ethics today than it was in the late 1990s.
My anecdotal examples have been reinforced by studies that were noted recently by Peter Singer, who hopes, as I do, that today’s students, with their more enlightened views of why we work, will advance in corporate America over the coming years and bring a sea change in the ethical cultures they inhabit.
Their ability to do so will be enhanced by the fact that views regarding the role of firms are evolving just as are the views of the role of individuals within those firms. Not long ago, Milton Friedman’s view that profit maximization for shareholders was the only legitimate goal of a corporation was widely accepted. Friedmna’s view is still popular in some circles, but it is on the wane. Singer noted that McDonald’s had recently announced that it would soon phase out the use of eggs from caged hens because it is the right thing to do. Americans are a decade or so behind their European counterparts in accepting the notion of corporate social responsibility, but it is increasingly the view inside and outside American business firms that they owe a responsibility to society at large to do more than just make money for shareholders.
Ethics education finds little purchase in a world populated solely by proudly selfish individuals working for firms following Friedman’s dictum. But in a world of well-intentioned students going to work for firms that recognize their corporate social responsibility, the impact of improved ethics education can be leveraged to make a real difference. An important lesson for today’s students is that notwithstanding their good intentions, social and organizational pressures, cognitive heuristics and biases (such as the self-serving bias), and even seemingly innocuous situational factors can make it hard for them to live up to their own standards. That is the lesson of behavioral ethics that is the subject of most of our Ethics Unwrapped videos. But their more enlightened world view is a good start and a hopeful sign for the future.
Ethan Baron, “Are MBAs to Blame for VW and Other Business Ethics Fiascos?,” Poets & Quants, Oct. 22, 2105.
Steven Pinker, The Better Angels of Our Nature: Why Violence Has Declined (2011).
Robert Prentice, “Bad Examples overflowing in the corporate world,» Star-Telegram, Sept. 24, 2015
Peter Singer, “After VW: Ethical Business and the Question of Honesty,” The Globe and Mail, Oct. 13, 2015.