Op-Ed
The Business of Ethics
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Two days ago, former Enron CEO Jeffrey Skilling was sentenced to 24 years in prison for his involvement in one of the largest corporate scandals of the decade. Skilling was convicted of federal felony charges including conspiracy, insider trading and securities fraud.
A few weeks ago, Yale student Aleksey Vayner made national headlines for his over-the-top 11-page cover letter and video resume in which the I-Banking applicant made a number of false claims. Vayner credited himself with running a charitable organization, serving as the CEO of an investment firm and writing a book on the Holocaust. Research by bloggers has shown that all of these claims are fabricated.
And, earlier this month, Hewlett-Packard’s former chairwoman, Patricia Dunn, was charged with four felony counts for data-mining. In her effort to discover the source of continuous company information leaks, Dunn spied on the home-phone records of fellow board members. Dunn found the director; the lawsuit found Dunn.
So, what do these current events tell us about the state of America’s corporate values? Unfortunately, nothing good. It seems as though a trade-off exists between business ethics and business profits — meaning that one comes at the expense of the other. Of course, there are those of us out there who know that this is simply not the case. In fact, there are plenty of socially responsible corporations and business practices that have their fair share of financial success, such as Ben & Jerry’s or DuPont. Still, we cannot hide from the reality of increasing corporate malfeasance in recent times.
In his Business and Professional Speaking course, Professor Brian Earle recently discussed a survey taken by the Ethics Officers Association which revealed that an alarming 48 percent of employees have engaged in unethical or illegal activity within the past year. The annual cost of these unethical or illegal actions? $400 billion! Perhaps what is even more disconcerting about white collar crime, however, is that it occurs at every level.
Like Aleksey Vayner (well alright, maybe not quite like Aleksey Vayner), many job applicants fabricate their past experiences and credentials. According to a study released by Avert Inc., a company that performs background checks, 44 percent of job applicants have falsified information about their work experience or education on their resumes. Therefore, it is not surprising that screening and selection services, such as those offered by Avert, are increasingly used by corporations. (Now might be the right time to change that bullet on your resume from “Spearheaded the development of new financial contract database” to “Participated in the development …” … just a thought.)
But what should be done about the apparent lack of ethical standards in corporate America? In the wake of recent corporate scandals, some business schools have found that the answer rests with education. More and more universities are instituting courses on ethics and social responsibility. For example, FSU’s College of Business has created a “Business Ethics and Moral Leadership Course” in order to increase students’ awareness of the importance of ethical decision-making. Bentley College is recognized for its Center for Business Ethics, which is similar to UC Berkley’s Center for Responsible Business in its Haas School of Business. Additionally, Northwestern’s Kellogg School of Business, ranked as the 4th best business school in the U.S. by U.S. News and World Report, inserted an ethics segment into the basic organizational leadership course that all students are required to take. And Cornell’s undergraduate business program currently offers a 2-credit course on Business Choices and Consequence. Yes, business programs all around the country are adding required courses on ethics to their curriculum.
One of my best friends attends the Stern School of Business at New York University. She recently informed me that NYU also added a required course on business ethics to their undergraduate program, in which she is currently enrolled. The course, Professional Responsibility and Leadership, “is designed to help students consider the purpose and function of business in society and the ways in which a business profession is incorporated into a successful human life.” However, rather than being considered a serious component of the business curriculum, the course seems to offer more comic relief than anything else.
Every so often, particularly when I need a good laugh, my Stern friend will call me with a new story from her Ethics class. This is my personal favorite: “Well, today we were learning about Ghandi’s teachings — you know, honesty, peace, leading a simple lifestyle — and one of the brainiacs in my class says to the teacher, ‘When you get older and amass wealth, it’s not about being rich; it’s about knowing your grandkids will go to college or that your kids will have Ferraris too.” Keep in mind that when this student offered his precious token of insight, he was being completely serious.
So, why bother teaching ethics if students are already set in their ways? While we may not know the extent to which these courses may benefit the businessworld in the future, there is no harm in raising awareness. The effort made by schools such as Stern, Haas and Kellogg to educate students on business ethics is admirable. It may be impossible to change the values of students, but it certainly is possible (and important) to make students aware of proper business practices. Providing students with cases of possible leadership situations and ways to handle business in a responsible manner is crucial to developing the honest CEOs of tomorrow.
Perhaps Cornell should jump on the bandwagon and make Business Ethics a required course in the Applied Economics and Management curriculum. After all, with a wide course offering ranging from Entreprenuership to Econometrics to Estate Planning, AEM could surely squeeze in a class on Ethics.
But why should we limit the study of ethics just to business students? What about students studying government, communication or engineering? Or how about our Pre-Med and Pre-Law majors, whose future careers will require them to deal effectively with ethical dilemmas?
I am not sure whether it is Cornell’s business to impart an understanding of socially responsible practices in society, but I do think that the importance of ethics could be better stressed. While students should be able to distinguish between right and wrong by now, a little refresher never hurt anyone.
Naomi Goldin is a senior in the College of Agriculture and Life Sciences. She can be contacted at ngg6@cornell.edu. Kit and Kaboodle appears alternate Wednesdays.
Every school is adding some
Every school is adding some type of ethics class to put on a show and pretend it will impart its students with values. These classes are mostly useless. Classes can only go so far in teaching or changing student's values or decision making. Nor does the case study method really do anything but make people evaluate previous unethical behavior and go, Wow, that was a really dumb thing for them to do and I'd never go that far.
What is truly missing are experiences that could develop a sense of empathy within the future business, law, and political leaders. One method that could be effective is to have a class where students might study a case, but then they come face to face with the results.
Have them meet with a family who lost their life savings from Enron and saw their dreams wiped out.
Have them meet with people who suffered from depression, or alcohol or drug abuse, or fell victim to physical abuse as a result of the pressures and devestating emotional effects that mass layoffs can cause.
Have the students visit a town where cancer rates and other diseases are persistent because of improper chemical disposal methods that try to save money.
Have someone visit from Bhopal (or we're Cornell, let's fly them over) so they can hear about the children who died in their mother's arms in the night when Union Carbide used untested and unproven technology in the plant, leading to the deaths of thousands of people.
In short, they must see and hear from those whose stories will stick with them and find a permanent place in their minds, so that later on, hopefully they will think through their actions and remember the possible consequences of unethical behavior.