Lancaster, Judith --- "In Favour Of An Integrated Approach To The Teaching Of Ethics To Business Law Students" [2001] UTSLawRw 13; (2001) 3 University of Technology Sydney Law Review 174

In Favour Of An Integrated Approach To The Teaching Of Ethics To Business Law Students

Judith Lancaster

Faculty of Law, UTS

CONCERN ABOUT corporate Australia’s behaviour has risen to new heights since the recent collapse of the corporate giant, HIH Insurance, the telecommunications player One.Tel, and the stalwart of domestic airlines, Ansett. Revelations about directors rewarding themselves with extravagant lifestyles, extraordinary salary and bonus packages[1] and large purchases of political influence[2] have outraged a public sector racked by redundancies, disempowered by seriously weakened industrial laws and divided by a rapidly widening gap between rich and poor.

The sizeable social and economic impact of these spectacular collapses fuels what many believe to be an increasing sense of moral deterioration within our commercial sector and arouses awareness of the fact that successful business operation relies on much more than mere profit maximisation. It also signals that the behaviour of corporate individuals is shaped in the classroom and that the educators of our future business leaders must assume some of the responsibility for instilling the integrity factor and fostering critical debate about the social costs of business cultures that reward conspicuous displays of greed, excess and unfettered self interest. Responsible universities have an obligation to develop something more in students than profit making acumen. According to former Harvard President Derek Bok, a responsible university has a basic obligation to society

which it violates by refus[ing] to take ethical dilemmas seriously. And a university that fails to engage its members in a debate on these issues and to communicate with care the reason for its policies gives an impression of moral indifference that is profoundly dispiriting to large numbers of students and professors who share a concern for social issues and a desire to have their institutions behave responsibly. [3]

In other words, the university must assume a significant share of responsibility for the way the corporate sector operates and its leaders behave. This is particularly important in capitalist societies where the dual goals of profit maximisation and wealth accumulation sit somewhat ambiguously with the moral imperative that imposes a duty to act ethically. As Pearson has pointed out:

...Companies are set up and evolve in a way that deliberately pushes at the boundaries of what is widely regarded as acceptable. This is endemic to the capitalist system. The spirit of capitalism stressed the importance, to the economy in general and social welfare in particular, of the duty of entrepreneurs to maximise their profit.[4]

The tension between these two oppositional principles along with the tendency for ethical imperatives to restrict the operation of profit-maximising strategies makes for an uneasy relationship between the imperatives of capital and the moral high ground.

The commonly held perception that profit making is the bottom line for business has rendered issues other than profit irrelevant. It has also generated an understanding that values and ethics are ‘pie in the sky’ concepts that are impractical in the ‘real world’ and that moral considerations are associated with emotions, which in turn, render commerce inefficient. The ‘greed is good’ message of the 1980s and the recriminations that followed with the moral rectitude of the 1990s suggest a destiny held captive to the cyclical swings of the oppositional imperatives that are at the heart of market-based societies. But it is the drive to minimise the undesirable effects of the capitalist economy that makes it necessary for students, as our future business leaders, to develop an understanding, through their education, of the moral obligations that attach to business professionals. Adam Smith would have strongly supported the idea of training business students to appreciate the implications of their decisions as evidenced by his words:

We can never survey our own sentiments and motives, we can never form any judgement concerning them; unless we remove ourselves, as it were, from our own natural station, and endeavour to view them as at a certain distance from us. But we can do this in no other way than by endeavouring to view them with the eyes of other people, or as other people are likely to view them.[5]

When an ethics component was introduced into the Business Law subject at UTS[6] at the beginning of 2001 it could not have been more timely. One of the primary aims of integrating ethics into the procedurally oriented business law subject was to socialise students into a culture where moral considerations are seen as central to the ‘nuts and bolts’ issues of commerce.[7] Despite the frequently raised objection to the idea that education serves as a socialising medium, the decision to actively seek to socialise students through the teaching of ethics was based on a belief that those who object to educational socialisation fail to acknowledge the reality that socialisation will naturally occur as part of the educational process. Therefore, the question is not whether education should or should not socialise but rather it should be about the values our educational institutions should or should not endorse.

Thomas Piper believes that teachers have a tendency to ‘steer clear of the word socialisation’, for it is, he claims, quoting the words of Harold Leavitt, ‘an emotional booby trap, conjuring up both negative images of mindless obedience and positive visions of collaborative professionalism’.[8] Piper notes that this tendency to steer clear arises out of a reluctance amongst educators to admit that teaching entails passing on a significant proportion of attitudes and beliefs that are commonly accepted within the social construct of a particular society. He also notes that a degree of sidestepping takes place in an effort to avoid at all costs the possibility that the teaching of ethics be equated with developing a consensus on the primary values that provide the foundations of our social framework. However, in Business Law and Ethics the pursuit of consensus about fundamental values is encouraged and engagement in that pursuit is facilitated through the reading materials. These materials expose students to a diverse range of moral beliefs and viewpoints, which they can apply to solving hypothetical dilemmas that arise out of the procedurally oriented legal content.

Steven Wheelwright, head of the Technology and Management course at Harvard Business School shares the view that ethics must be taught in an integrated fashion. The reason for this is to discourage disjointed decision making where issues are compartmentalised and dealt with one at a time, as well as to avoid the possibility that the subject be seen as an abstract intellectual exercise with no real relevance to professional education.[9] Another important aim is to dispel the common belief that moral behaviour has been learned through the disciplinary experiences of school and family life and there is nothing more to add to that. This requires students to develop an understanding of the way that commercial sector failure, which arises out of impropriety, prompts the government regulation. As Daniel Vogel points out, ‘new scandals often lead to the establishment of a new statute, regulation or regulatory agency’. ¹⁰

One of the first things students are encouraged to appreciate is that government controls impose a significant cost. Robin and Reidenbach point to two significant repercussions of increased regulation in response to unethical behaviour. Firstly, there is the expansion of legal departments— ‘[t]he increased legislation means that executives must now consult more lawyers more frequently to determine whether proposed actions and programs are legal or have the potential for leading the company into a legal problem’—as executives are forced to seek guidance on how to exercise corporate responsibilities and ‘how...to navigate the murky waters of corporate liability’.[11] Secondly, the definitional boundary of what is considered acceptable business practice recedes, opening the way for ‘dog eat dog’ attitudes to flourish and in doing so, increasing the degree of difficulty experienced by those who must compete. Once students understand the cause and effect link between commercial sector failure and government regulation the task of demonstrating the ‘good ethics is good business’ principle is made easier. As well, the benefits to be gained from engaging in socially responsive and responsible behaviour has become evident because it can be demonstrated that propriety in business serves to minimise the risks associated with commercial activity held captive to the pursuit of profit as the bottom line. For example, the recent launch of ethical investment funds by major Australian fund managers signifies not just an awareness of the fact that modern investors are as concerned about social costs and benefits as they are about healthy returns but a commitment to doing something about it.[12]

Edited reading materials containing a carefully selected mix of theoretical extracts and current journal and newspaper articles have been designed to expose the students to a variety of arguments that challenge beliefs and extend the boundaries of learned behaviour beyond childhood and pre-adult experiences. Thus students are encouraged to develop an understanding that ethical principles do not come in packages—one set for business and another for one’s private activities—as well as to appreciate the nature of the complexities that render the learnings of childhood insufficient for corporate decision making. As part of the preparation to deal with the problems commonly encountered by business leaders, the readings have been selected with a view to providing a broad range of topics covering some of the more pressing contemporary issues such as the cost of environmental vandalism and urban decay; the nature of the values generated by competitiveness and the social impact of the behaviours it rewards; the positive and negative features of globalisation; balancing work and family commitments; industrial regulation of a diverse work force, and responsible management of scarce resources. These topics are addressed within the context of their importance in relation to what has been identified by the co-coordinator of the ethics component and the author of this paper as ten responsibilities of corporate and commercial professionals:

• to appreciate the breadth of the corporate role, i.e. that it extends well beyond profit maximisation;
• to engage in debate about values and application of judgment;
• to see business and management education as a moral endeavour rather than just the transfer of skills and knowledge;
• to deal satisfactorily with increasingly pressing global pressures without compromising local established cultural values;
• to develop the capacity to recognise and articulate the ethical dimension of managerial decisions and to develop an appreciation for the legitimate place ethical discourse has in business;
• to understand that the separation of commercial activities from community concerns is a divide that is not in the best long term interest of a business;
• to explore the systemic causes and consequences of unethical behaviour;
• to identify opportunities to contribute to the broader community;
• to identify the indicators of poor leadership;
• to understand how absence of vision, insufficiency or inconsistency of values, inability to distinguish between power and authority and a preoccupation with self interest lead to disabling outcomes such as workplace morale deficits, loss of organisational and individual purpose, decline in production and profits, diminished trust and erosion of legitimacy.

The response from the students to the idea that ethics has an important place in the business curriculum and to the requirement that they must engage in open and reflective discussion of moral issues has been positive. The resistance that one expects when sacred beliefs and values are challenged has been surprisingly minimal. This is partly due to the fact that the need to provide for dealing with student resistance to the entire exercise teaching and being taught ethics was acknowledged in the developmental stages of the subject content. Ruth Macklin’s work on pluralism and indoctrination was seen as very valuable in this regard. She suggests that resistance arises out of a tension produced by conflicting obligations imposed on ethics teachers in societies where pluralism is highly valued. Firstly, there is the realisation of a need to avoid the possibility of undermining the plurality of values on which our community is based and thereby failing to fulfil the obligation to be tolerant of a variety of moral beliefs. Secondly, the positive obligation to promote the diversity of views and moral convictions housed in a pluralistic culture cannot be fulfilled in circumstances where there is a contrary requirement to impose models of moral convictions and ethical positions.[13]

Those students, who could be described as falling into the resistant category have responded well in workshop discussions of the issues raised in the readings, all of which have been designed to expose them to counter-arguments presented in an non-threatening way throughout the carefully selected and edited reading materials. The real value of this approach is that it does not exert pressure to change from entrenched viewpoints, particularly those arising out of religious influences. Rather, it acknowledges what Lisman describes as ‘providing [students] with an understanding of opposing viewpoints [which] ... might eventually result in their coming around to a more moderate way of looking at issues’.[14] It also focuses on the five general goals recommended by Callahan for teaching ethics—stimulating the moral imagination; recognising ethical issues; eliciting a sense of moral obligation; developing analytical skills;[15] and promoting a tolerance of disagreement and ambiguity—while it minimises the possibility that students will feel pressured to change fundamental beliefs and developed behaviours.

The issue of teaching in a way that avoids exerting pressure to change behaviour has been considered of fundamental importance in the design of the ethics component because it facilitates delivery of the message in a manner consistent with the principles being taught. Such an approach avoids the possibility that the pressure to demonstrate that successful outcomes have been derived from teaching ethics might lead to a situation which Caplan believes ‘can force teachers to adopt goals that are inconsistent with both acceptable moral practices and espoused educational philosophies’.[16] Instead, the aim is to encourage awareness of different approaches to decision making as a means of achieving what Ramsden describes as ‘helping students to become aware of their current conceptions, so that they become conscious of the fact that there are different conceptions of the phenomenon in question’.[17] The issue of change, therefore, is left to the individual students. This view is based on a belief that learning experiences that are confrontational are only effective in non-threatening environments.

Although it is too early at this point in time to demonstrate the benefits of taking an integrated approach to the teaching of business ethics with business law at UTS, the success of this enhanced subject cannot be doubted. Its success is evident in the high level of student engagement in discussion of the moral issues associated with commercial activity and the clear willingness of the students to probe into the more difficult dilemmas that arise for corporate leaders. It is somewhat of an irony that what many believed were three of the nation’s most dependable corporations—HIH, One.Tel and Ansett—should provide, in their demise, an outstanding case for ensuring that ethics and the moral aspects of commercial decision making are an integral part of the business curriculum.

References

Derek Bok, Beyond the Ivory Tower, Harvard University Press, Cambridge, MA, 1982, p126.

Daniel Callahan ‘Goals in Teaching Ethics’ in Daniel Callahan and Sissela Bok (eds), Ethics Teaching in Higher Education, Plenum Press, NY, 1980.

Arthur L. Caplan ‘Evaluation and the Teaching of Ethics’ in Daniel Callahan and Sissela Bok (eds), Ethics Teaching in Higher Education, Plenum Press, NY, 1980, p140.

C.David Lisman The Curricular Integration of Ethics, Praeger, London, 1996, p39.

Gordon Pearson, Integrity in Organizations: An Alternative Business Ethic, McGraw-Hill Book Company, London, 1995, p21.

Thomas R. Piper, Mary C. Gentile & Sharon Daloz Parks, Can Ethics Be Taught? : Perspectives, Challenges and Approaches at Harvard Business School, Harvard Business School, Boston, 1993.

P Ramsden, Learning to Teach in Higher Education, Routledge, London, 1992, p151.

Donald P. Robin & R. Eric Reidenbach Business Ethics: Where Profits Meet Value Systems, Prentice-Hall NJ, 1989, p11.

David Vogel, Could an Ethics Course Have Kept Iran From Going Bad? Wall Street Journal, April 27,1987, p18.

[1]‘Running for Cover’, Sydney Morning Herald, 19—20 May 2001.

[2]‘HIH generous with shareholders’ cash to Liberals’, Sydney Morning Herald, 15 May 2001.

[3]Bok, D., Beyond the Ivory Tower, Harvard University Press, Cambridge, Mass., 1982,

p.126.

[4]Pearson, G., Integrity in Organizations: An Alternative Business Ethic, McGraw-Hill, London, 1995, p.21.

[5]Smith, A., An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Campbell, R.H., Skinner, A.S. and Todd, W.B, Clarendon Press, Oxford, 1976, p.6.

[6]Business Law is a cross-disciplinary subject taught to up to 800 students across three campuses—two in Sydney and one in Malaysia. The ethics component constitutes approximately 8 per cent of the subject made up of two two hour lectures per semester and two one hour tutorial sessions. Total available time per student: 26 hours of lectures and 12 hours of tutorials.

[7]For a discussion of the issue of socialising students through education see Leavitt, H.J., ‘Socializing Our MBAs: Total Immersion? Managed Culture? Brainwashing?,’ Selections (Winter 1991).

[8]Piper, T.R., ‘A Program to Integrate Leadership, Ethics, and Corporate Responsibility into Management Education’ in Piper, T.R., Gentile, M.C. and Daloz Parks, S. (eds), Can Ethics Be Taught? Perspectives Challenges and Approaches, p.Harvard Business School, Harvard Business School, Boston, 1993, p.117, p.p.120.

[9]Ibid, p.144.

[10]Vogel, D., ‘Could an Ethics Course Have Kept Iran From Going Bad?’, Wall Street Journal, 27 April 1987, p.18.

[11]Robin, D.P. and Reidenbach, R.E., Business Ethics: Where Profits Meet Value Systems, Prentice—Hall, New Jersey, 1989, p.11.

[12]‘How to invest with a clear conscience’, The Sunday Telegraph, 18 March 2001, p.97.

[13]Macklin, R., ‘Problems in the Teaching of Ethics: Pluralism and Indoctrination’ in Callahan, D. and Bok, S. (eds), Ethics Teaching in Higher Education, Plenum Press, New York, 1980, pp. 81—101.

[14]C.David Lisman, The Curricular Integration of Ethics, Praeger, London, 1996, p.39.

[15]Daniel Callahan, ‘Goals in Teaching Ethics’ in Daniel Callahan and Sissela Bok (eds), Ethics Teaching in Higher Education, Plenum Press, New York, p.198.

[16]Arthur L. Caplan, ‘Evaluation and the Teaching of Ethics’ in Daniel Callahan and Sissela Bok (eds), Ethics Teaching in Higher Education, Plenum Press, New York, 1980, p.140.

[17]Ramsden, P. Learning to Teach in Higher Education, Routledge, London, 1992, p.151.