A magnificent gift, it raised eyebrows and prompted envy around the world: a $20 million pledge by former Securities & Exchange Commission Chairman John Shad to Harvard business school to advance the cause of ethics. Along with $10 million from fellow alums, the March, 1987, pledge generated as much controversy as interest.
Some rival deans argued that the subject couldn't be taught in the classroom. Several of Harvard's own professors thought it a nondiscipline, and administrators came to view the pledge as a mixed blessing.
LOST SLEEP. For Thomas R. Piper, a senior associate dean chosen to lead the initiative, the episode has even brought on sleepless nights. "I sometimes woke up at two or three in the morning and said: 'Boy, I wish we didn't get that gift.' We got the gift at a time when we didn't know what in the world to do about ethics. People were expecting an answer, and we didn't have it."
Five years and more than $5 million later, Harvard is still debating the question--and is still taking it on the chin. "What they are offering is a politically correct, cram-down program," says Mark Pastin, director of the Lincoln Center for Ethics in Tempe, Ariz. Adds consultant Barbara Ley Toffler, a former Harvard ethics teacher: "They haven't done anything new or innovative."
It doesn't help that the most visible reminder of Shad's gift is the B-school's huge $18 million physical-fitness center named for him. Although none of Shad's pledge went toward the building, it is larger than most B-schools and just across the street from the greater university's athletic complex.
What has changed is the school's commitment. Harvard has recruited a core of four ethics teachers, added courses, and beefed up its research on the topic. Before 1988, it was possible to get a Harvard MBA without any explicit instruction in ethics. Today, the focus begins even before students show up for class (table). The admissions department requires all applicants to write an essay on an ethical dilemma.
Those who gain admission now find that their first class is in a nine-session nongraded "module" dubbed Decision Making & Ethical Values and taught by some of Harvard's most seasoned professors. The school expects to add yet another module in the second year in 1993. It's also a new world for professors who teach traditional business courses. Encouraged by the school, they're integrating ethics into both their classes and research. In the past three years, Harvard has produced 35 case studies in ethics, 15 of which have been written by professors in such fields as accounting and marketing.
Thus far, the student reaction is mixed. "I can't say that I've seen anything significant," says one first-year student about Harvard's attempt to integrate ethics into other courses. "More environmental issues have been introduced into the core courses than ethics." Even those who applaud adding the new module to the curriculum doubt that it can alter the values of students. "You can't impart ethics on a student with nine classes," says Christian Johnson, a first-year student at Harvard. "But it was valuable to compare our own sense of ethics with others'." Some 150 students are now taking an elective called Moral Dilemmas of Management, up from 100 last year and only 50 two years ago. Nearly 30% of the 806 members of Harvard's class of 1992 have enrolled in one of three key ethics electives.
NO SAINTS. Yet some critics believe ethics should be treated like any other mainstream subject, with a full-semester, graded course--an approach taken by the University of Virginia's business school. Harvard scoffs at the criticism. "We're not converting sinners," says Piper, "but we're taking young people who have a sense of integrity and trying to get them to connect ethics with business decisions." As for Shad, who has anted up $5 million and set up a trust fund to cover the remaining $15 million of his pledge, he says he's "very impressed. It's not just a PR program."
The B-school is considering adding a fourth elective in ethics, doing more research on how the issue affects international competition, launching an ethics program for executives, and sponsoring collaborative efforts with other business schools. As long as ethics remains such a hot topic, Piper is likely to endure a few more sleepless nights over it.
ETHICS ALONG THE CHARLES As part of its ethics program, Harvard business school: -- Asks applicants to write an essay on how they managed and resolved an ethical dilemma -- Requires all MBAs to take a nongraded, nine-session course on ethics -- Works with faculty to integrate ethics into the core courses in such subjects as accounting, marketing, and operations -- Encourages mainstream faculty to do case studies on ethical questions -- Offers three ethics electives DATA: BW