Why Educational Institutions must teach Business Ethics

Ask any of my management students, and they will tell you that I begin my Business Ethics lectures with Prof. Viru Sahastrabuddhe’s epic quote “This is not a philosophy class”.

Now it is important that I put this disclaimer here. 

One, I understand philosophy, as much as a three-year old understands quantum mechanics, and two, I strongly opine, business ethics is an oxymoron.

Where there is business, there is no room for ethics. Classic Friedman, right?

Indian media houses seem to be smacking their lips now, as Mr. Nirav Modi and Mr. Vikram Kothari have given them at least a month’s content to share. More interestingly, I don’t seem to run out of examples on financial frauds in my business ethics classes. Between you and me, I’m contemplating on deleting my slides on outdated scams such as the Saradha or the Rose Valley case; I’ve got two more oven-fresh scams!

Coming to business. This plethora of frauds and scandals across the globe has indeed got me thinking: How relevant is the need for us to teach content-specific business ethics in educational institutions? I shall put forward a few fundamental reasons, why academic institutions should all incorporate this subject in their curriculum.

No offence to teachers and gurus of philosophy, but business ethics should not be taken up by professors of philosophy and religion. Business ethics does not remotely aim to develop students into becoming Swami Vivekananda or Mahatma Gandhi. Neither does it make students ethical overnight. The reason is very simple: moral development. In fact, there is a very interesting theory by Lawrence Kohlberg called the Moral Development Theory, where he mentions the story of a man called Heinz and the dilemma that he faces in stealing a rare drug in order to save his cancer-ridden wife. Kohlberg’s theory gives us the answer to the question ‘why business ethics classes are unable to bring about a change in the minds of students, at least by the end of the semester? He argued that morality and character development starts from the early childhood years of an individual and can be influenced by various socio-cultural norms, rules, laws and interactions with societal members. Businesses are often tempted to make short-term gains by discounting ethical considerations. From this perspective, ethics are pivotal in determining the success or failure of an organisation, given that they influence a company’s image and help to define a business model that will thrive even in adversity. Hence, business ethics, if at all, is a mere extension of strategic management.

Business ethics education also helps correct the behavioural patterns of neutralization. Although neutralization is associated largely with criminal psychology, there are direct implications for students of business ethics. Many a times, individuals describe their behaviour contrarily to that of an observer. They define words in their own way, in a desperate attempt to rationalize their behaviour. For instance, consider the above example where Heinz steals the drug to save his ailing wife, and passes it off by saying “I really had no choice”. Now assume Heinz having a feud with his neighbour, who as it turns out, is a doctor. To the doctor, Heinz could have at least consulted him once before resorting to stealing the drug. Or maybe, you play professional knife-throwing on random people on the streets and wash off your hands by saying “No one’s hurt anyway, so why the fuss?” The onlooker will have had his heart in his mouth all the while. In essence, what this permits them to do is to admit that they did commit the activity, without admitting that it was actually wrong. The expectation is that business graduates acquire the skills of doing the right thing, especially when the going gets tough.

Note that I have used the word ‘educational institution’, which encompasses schools, colleges, universities, technical schools, vocational institutes as well as business schools. Yes, ethics should be taught from the grassroots level in academic settings. It is of course, unreasonable for school students to fathom and cognize complex ethical theories developed by John Stuart Mills and Thomas Hobbes. But, primary levels in the higher education hierarchy could deliberate on role models and negative impacts of scams rattling our business landscape. This knowledge shall go a long way, when students relate these facts and happenings to various theories like teleology or deontology. Further, at the b-school level, strategic cases may be developed to look at not mere best practices but sustainable solutions to overcoming business malpractices. Ethics awareness, to say the least, would go a long way in the pursuit of improved workplace ethics, especially when reducing unethical behaviour.