Business School: The Ethical Dimension

The arrival of the MBA Classes of 2004 on campuses across the country has been accompanied by much commentary in the popular press on the rising emphasis on business ethics in the curricula of leading business schools.

Increased Attention on B-Schools

In the aftermath of recent corporate scandals, attention has been focused on the role business schools play in shaping the ethical mindset of future corporate leaders. Indeed, many members of Enron’s, WorldCom’s and Tyco’s senior management held MBAs from leading business schools.

In the glare of increased public scrutiny, business schools have been quick to point out how they are adapting their admissions criteria and programs to the new environment. For example, Wharton has disclosed that it hired a background-checking firm to verify the authenticity of applications of a random sample of 10 per cent of Class of 2004 accepted applicants.

According to BusinessWeek, the Class of 2004 at the University of Michigan Business School received a pre-school assignment to write a case study on the most challenging ethical dilemma each person had ever encountered. On arrival, 99 per cent of the class submitted something.

BusinessWeek itself is considering giving ethical instruction a greater weighting in its annual survey of MBA programs.

There has been increased speculation on whether holders of the MBA degree should have to sit a licensing exam on graduation, equivalent to passing the bar after a law degree. Whilst this would be a dramatic move, the debate is still very much a theoretical one.

How is HBS reacting?

In a recent article, The New York Times outlined that the HBS admissions process had been modified to include increased verification of applicants’ transcripts, and increased emphasis on integrity, honesty, and respect for others in letters of recommendation. The School is now interviewing all admitted students, according to Brit Dewey, Managing Director, Admissions and Financial Aid.

What about the prominence of business ethics and law in the HBS curriculum? In Foundations, RC students study Leadership, Values and Decision Making (LVDM). It’s likely that the case mix of many core courses will be adjusted this year to draw on lessons from recent corporate scandals.

However, to many outsiders, it may come as a surprise that the current HBS core curriculum does not have a required module on business law and business ethics (there are, of course, elective courses in these areas in second year.) Others may argue that there is a point of view that “you can’t teach ethics, you learn it at your mother’s knee.”

When confronted with this observation in an interview with CNBC last week, Prof. Thomas Donaldson of the Wharton School of Business, who has taught business ethics for the past 25 years, replied “my mother taught me ethics, but she didn’t tell me about highly leveraged derivative transactions … one of the things you can do is expose students to the predictable challenges that they’re going to encounter when they get out [into] the business world.”