Why Business Students Should Care About Ethics
By Emad Rahim, DM, PMP, University Dean of Business and Management
In the early 2000s, the scandals at Enron, Arthur Anderson and WorldCom caused leading enterprises and places of higher learning to have more prominent discussions about business ethics. The late-2008 global economic meltdown added more names to the list of once reputable companies that have now become infamous: Washington Mutual and Lehman Brothers.
These companies are examples of how lapsed ethics and greed can create major failures. In the book “Ahead of the Curve: Two Years at Harvard Business School,” author Philip Delves Broughton recounts being an MBA student at Harvard Business School just after Enron’s fall. With many of their graduates directly involved, Harvard was extremely embarrassed by the scandal, Broughton relates. Jeffrey K. Skilling, Enron’s former CEO, was once praised by the school as a model alumnus.
Soon after Enron’s reproach, the school started including business ethics in their curriculum. Nitin Nohria, dean of Harvard Business School, mentions in the Wall Street Journal that after Enron’s fall theirs was the first business school to require a corporate accountability course. Because of the significant ethics issue, the majority of business schools now support ethics studies in their curricula.
Yet, we’ve discovered many business administration and management students don’t see value in taking business ethics courses. Some feel it takes away from bigger priorities like learning business principles, practices, methods and techniques that prepare them for future professional opportunities. They argue that they already know right from wrong. The more cynical students might wonder, “Isn’t the idea of business ethics a contradiction in terms?”
There’s no question. Ethics in business is certainly a challenge, as it is in any other area of life. I like the way Roger Martin, dean of the Rotman School of Management in Toronto, puts it in this Financial Times article, “…the underlying premise of our courses must be that our world would be a very miserable place if we didn't have important socially constructed laws, regulations and norms that constrain and guide our behaviour.” The American business market cannot exist as we know it if owners and managers don't subscribe to codes of ethics that promote the trust and loyalty so key to business practice.
There are two reasons why a foundation in business ethics is valuable to students entering the workplace:
Understanding the important relationship of ethics makes you a better leader.
When you’re at work and caught up in an endless surge of deadlines, performance reviews and company earnings, it’s easy to lose sight of what makes companies successful: teamwork and personal connection. We’re in a time when many company leaders are more prone to abandon struggling companies and their employees to preserve their own financial stability. New generations of business professionals need ethical thinking to develop better solutions for handling major corporate dilemmas and situations.
Having defined ethics helps you make tough decisions.
Studying ethics within business, both in theory and practice, enables students to learn about real-world challenges business professionals face. Knowing which elements require consideration early on can help you make decisions that preserve honesty and integrity throughout the rest of your professional life.
Your coursework should reinforce doing the right thing. Business ethics act as guideposts for how you do your job, manage people and make decisions so that you always make good business sense. Take a few notes from some of the once-were corporate giants. Their ethical lapses did more harm than garden-variety business mistakes.
Emad Rahim, DM, PMP is a PMI Certified Project Management Professional® and the University Dean of Business and Management at Colorado Technical University. Watch him speak about overcoming adversity or connect with him on Twitter @CTUBusiness.
Stay in the know. Subscribe to CTU’s blog and receive fresh updates directly to your inbox.
Image credit: Flickr/Tom Hayme