Institutionalizing Ethical Training

Wharton's Thomas Donaldson on what's needed to make ethics a permanent part of B-school curriculums

With ethics and the restoration of the public trust in Corporate America still a prime concern of executives, politicians, and others, the Conference Board's Blue Ribbon Commission on Public Trust & Private Enterprise recently came out with recommendations for fixes in accounting, ethics, and corporate governance.

BusinessWeek Management Education Editor Jennifer Merritt spoke with Thomas Donaldson, a professor of legal studies who specializes in corporate ethics at University of Pennsylvania's Wharton School to discuss recommendations for keeping ethics at the forefront of business education. Donaldson has appeared before Congress to talk about ethical issues, including testimony regarding the Sarbanes-Oxley legislation. He's also a trustee on the Carnegie Council on Ethics & International Affairs. Following are edited excepts of the conversation:

Q: There has been a lot of talk about what business schools should do to keep ethics from going the way of some fads. What doesn't work?


One thing that people think seems like the right thing, but really doesn't work is blanket integration, trying to incorporate ethics into every discussion as a side-item. But that [method] has been used by some schools as a cover for not actually having any faculty members who focus on ethics.

Q: What is important to making ethics a permanent and meaningful part of business-school education?


The research element is extremely important. If you look at a business school's stakeholders -- students, recruiters, faculty -- the hardest nut to crack has been the faculty. The most pressure to teach and study ethics has come from students and corporate executives.

Q: Why is the faculty tough to crack?


The reward system inside each discipline is tied in some way, at all schools, to publication of research. [Only a few journals are stronger in ethics than in other subjects, and ethics isn't as tangible a subject as, say marketing or decision science, making it harder to assess the depth of research in ethics. Additionally, few professors actually concentrate on ethics as a discipline.] When tenure promotions are made, committees need to pay attention to efforts to create research in this area. And [schools must] support research in ethics financially.

Q: What if that doesn't happen?


If not, ethics will hang along on the thread of scandals. Unless there's additional rigor in the research of ethics, it will only be important while scandals are in the news. When there's additional research and rigor in the research, that's when an area gains respect from colleagues in other disciplines. And only then can the discipline become institutionalized.

Q: What is Wharton doing to get up-and-coming scholars interested in ethics?


I'm working with a colleague on a PhD track in ethics. We're close to getting it done. For the last 20 years, it has been catch as catch can when it comes to hiring an ethics professor. Most, like myself, studied something completely different and came to ethics by chance and made the switch.

Q: A lot of the research that gets disseminated in B-school curriculums comes in the form of case studies. That means digging in deep at a company to get to the heart of an issue. Will that be harder to do if a company knows your focus is ethics?


There's a natural barrier. Companies aren't eager to [bring] researchers in to do work that could expose problems.

Q: But not every ethics case would be about scandal or problems, right?


Right. We need more cases on positive ethical outcomes. The attention to failure has...put the emphasis on legality and compliance. And so we've missed opportunities to focus on more positive or creative cultures that show good ethics.

Q: Beyond research, is there a role that corporations play in keeping ethics alive in B-schools?


Business-school deans and faculty listen to their customers. And corporations are a customer of a business school. If corporations continue to insist, as they have been, that we pay attention to ethics, business schools will comply.

I always tell my students that the first big ethical decision they'll make after B-school is where to go to work. You need to understand the policies and the ethics of a company before you accept a job. Corporate recruiters need to be open, to tell students about their approach to ethics. If they aren't, that's telling too. But being specific could really be a competitive advantage for a recruiter.

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