Relevance of ethics in business education

Pdf File 301.10 KByte, 28 Pages

Relevance of Ethics in Business Education

by

Suveera Gill University Business School, Panjab University, India

Lately, business schools have been the subject of significant criticism for failing to sensitize the students to ethical obligations of stewardship and responsible use of power. This study examines the perceptions of business school students to ethics education. A survey was used to elicit responses of students at the University Business School, Panjab University to various business scenarios on five ethical dimensions. The survey findings indicate the need for the compulsory inclusion of ethics in business education. Additionally, the presence of organizational codes of ethics has a positive impact on ethical perceptions and the behaviour of executive students. Statistical analyses on demographic factors indicate that female students have higher ethical orientation than males. The older in contrast to younger business students have given more emphasis to wider ethical issues. Higher ethical values have also been found amongst non-executives and students opting for human resource specialization. A review of the top fifty business schools across the globe reveals that there has been a discernible change in the focus and curriculum of the schools, resulting in a rediscovery of the relevance of ethics in education. The implications of these findings on business education are discussed in an attempt to reconcile the curriculum with the notion of an altruistic higher education.

I. Introduction

Interest in ethics education and the ethical attitudes of business students who are likely to be future managers is on the increase (Borkowski and Ugras, 1992; Jennings, 2004). In part, this is probably due to unethical business practices ? governance issues, from management malfeasance to failure in internal control systems; environmental issues, from greenhouse gas emissions to dumping of toxic wastes; and social issues, from occupational health hazards to human rights violations ? that started coming to light in the late 1990s and the first decade of the 21st century. Business schools have been accused of doing a poor job of educating and preparing their students (Bishop, 1992; Collins and Wartick, 1995; Park, 1998; McPhail, 2001; Ackoff, 2002; Hinings and Greenwood, 2002; Mintzberg and Gosling, 2002; Pfeffer and Fong, 2002; Doria, et al., 2003; and Trank and Rynes, 2003) and a poor job of producing research relevant to the practice of management (Starkey and Madan, 2001; and Davenport, et al., 2003). They, like all other institutions of higher learning, have, for a long time, overemphasized excellence over ethics, both personally and organizationally (O'Hear, 1988; Barnett, 1990; Gioia and Corley, 2002; and Pfeffer and Fong, 2004). More specifically, the level of moral awareness and ethical perceptions of business school students has been called into question (Schneider, 2002).

1

The present study explores whether and how business school students perceive that education could influence ethical behaviour. A comparative analysis has been made of the efforts and direction taken by the top fifty business schools across the globe to promote the issue of ethics. The paper concludes by making a case for systemic corrections in management programs so as to make the students aware of the importance of ethics, one of the cornerstones on which sustainable business models are developed.

II. Philosophy of ethics: ethical theories

Ethics may be defined as an "inquiry into the nature and grounds of morality where the term morality is taken to mean moral judgments, standards and rules of conduct" (Hunt and Vitell, 1988). It deals with what is morally right and wrong. The ethics of business includes not only the moral values and duties of the profession itself, but also the existing values and expectations of the larger society. All decisions are made and defended on the grounds of underlying moral philosophy. Moral philosophies present guidelines for resolving conflicts and for optimizing the mutual benefit of people living in groups (Ferrell and Fraedrich, 1991). Ethical theories in moral philosophy may be categorized as either deontological or teleological theories. Deontological theories, like utilitarianism, Kantian rights and justice, deal mainly with the inherent righteousness of behaviour. Teleological theories, like virtue and common-good, stress the amount of good or bad embodied in the consequence of the behaviours (Velasquez, et al., 2002). The five kinds of ethical theories do not seem to be reducible to each other, yet all seem to be necessary parts of individuals' ethical behaviour (Boatright, 2003). Both deontological and teleological theories are used when evaluating whether or not the decision or act is ethical.

III. Literature review

In international literature, increasing attention has been given to ethical development and decision making of students in general, and business school students in particular. Given the quantity of individual and cross-sector empirical research undertaken, the same can be categorized into two distinct pursuits: (i) studies that address the direct linkages in ethical decision-making models (awareness, individual factors and intent), and (ii) studies of the moderating factors of ethical decision making in the organization and moral intensity. However, we provide a highly summarized review of a few, but probably some of the most relevant and important ones from the perspective of the present study.

Ethics education and ethical perceptions

The role of business ethics instruction on students' ethical attitudes is not clear cut (Arlow, 1991; Boyd, 1981?82; Borkowski and Ugras, 1992; Stevens, 1984; and Mayer, 1988). Some studies have found that ethics instruction sensitizes business students to ethical issues (Bok, 1976; Shannon and Berl, 1997; and Byerly, et al., 2002), and affects behaviour at the margin (Salmans, 1987; and Green and Weber, 1997). Other empirical research has provided evidence that ethical education can correlate to development in the moral perspectives of students (Rest, 1988), thereby supporting the fundamental assumptions behind Kohlberg's (1984) three-level moral development model. Additionally, a meta-analysis of fifty-five studies by Schlaefli, et al. (1985) has shown that ethics education has a positive impact on students' ethics. Contrasting studies suggest that students' ethical attitudes are influenced more by exposure to the large socio-cultural norms than by education in specific disciplines, which may have implications for business ethics instruction (Arlow, 1991). Given these mixed results, researchers continue to recommend that ethics be integrated into the spectrum of business courses (Borkowski and Ugras, 1992), and the need for mandatory student exposure to training in general ethics (Mayer, 1988).

2

Gender and ethical perceptions

The relationship between gender and ethical perceptions has received quite a bit of attention. Gilligan (1982) and Lyons (1983) maintained that females address ethical issues through care or responsibility oriented framework, while males employ a justice, or rights-oriented approach, as posited by Kohlberg (1981, 1984). The moral development of females occurs in a different context and through different stages than that of males, leaving open the question of differences in ethical behaviour and attitudes due to gender (Yankelovich, 1972). Kracher, et al. (2002) found that gender is related to moral development of business professionals and graduate business students in United States and India. Beltramini, et al. (1984) and Thoma (1986) found that female students are more concerned with ethical issues than their male counterparts. A number of studies concur with significant differences between ethical behaviour of males and females.1 There are studies that yield results to the contrary2 and a few studies have also put forth mixed results.3 Ford and Richardson (1994), as well as Loe, et al. (2000), reviewed studies analyzing ethical behaviour on a gender basis, and found mixed and inconclusive results. The forty seven studies included by Borkowski, et al. (1998), invoking meta-analysis, yielded similar results.

Age and ethical perceptions

Researchers have investigated the impact of age on ethical reasoning and ethical decision making. Age was considered by Kohlberg (1981; 1984) to positively affect moral development. Kracher, et al. (2002) found that older business professionals have lower cognitive moral development than younger graduate business students in the United States and India. However, researchers have found mixed support for the relationship between age and ethical decision making, indicating that people's values may become stronger with maturity (Cole and Smith, 1996).4 Some studies have shown a positive relationship between age and ethical decision making5 and there are studies demonstrating no relationship between age and ethical decision making.6 Ford and Richardson (1994), as well as Loe, et al. (2000), reviewed studies

1.

See, for example, Miesing and Preble (1985); Betz and O'Connell (1987); Giacalone, et al. (1988); Jones

and Gautschi (1988); Betz, et al. (1989); Wayne (1989); St. Pierre, et al. (1990); Tyson (1990); Burton, et

al. (1991); McCabe, et al. (1991, 1994); Peterson, et al. (1991); Poorsoltan, et al. (1991); Walker (1991);

Gaedeke, et al. (1992); Whipple and Swords (1992); Cole and Smith (1996); Luthar, et al. (1997);

Kracher, et al. (2002); Adkins and Radke (2004); Cagle and Baucus (2005); Lopez, et al. (2005); and

Luthar and Karri (2005).

2.

See, for example, Rest (1986); Mc Nichols and Zimmerer (1985); Laczniak and Inderrieden (1987);

Stevens and Stevens (1987); Fritzsche (1988); Glenn (1988); Beggs (1989); Derry (1989); Zinkham

(1989); Tsalikis and Ortiz-Buonafina (1990); Paradice (1990); Paradice and Dejoie (1991); Davis and

Welton (1991); McCabe, et al. (1991); Borkowski, et al. (1992); Tyson (1992); White and Dooley (1993);

Sikula and Costa (1994); and Lee (1997). .

3.

See, for example, Harris (1989); Lane and Schaupp (1989); Shepard and Hartenian (1990); Arlow (1991);

Stanga and Turpen (1991); Giacomino (1992); and Ruegger and King (1992).

4.

See, for example, Laczniak and Inderrieden (1987); Wayne (1989); Jarreau (1990); Arlow (1991); Davis

and Welton (1991); McCabe, et al. (1994); Borkowski, et al. (1992); and White and Dooley (1993).

5.

See, for example, Rest (1986); Miesing and Preble (1985); Thoma (1985); Glenn (1988); Beggs (1989);

Jeffrey (1993); Gaedeke, et al. (1992); Hiltebeitel and Jones (1992); Ruegger and King (1992); and Luthar

and Karri (2005).

6.

See, for example, Jones and Gautschi (1988); Lane and Schaupp (1989); Paradice (1990); Burton, et al.

(1991); McCabe, et al. (1991); Paradice and Dejoie (1991); Peterson, et al. (1991); Poorsoltan, et al.

(1991); Stanga and Turpen (1991); Giacomino (1992); Jones (1992); Tyson (1992); Cole (1993); O'Clock

and Okleshen (1993); and Stevens, et al. (1993).

3

analyzing ethical behaviour on an age basis, and found mixed and contradictory results. The thirty five studies included by Borkowski, et al. (1998), invoking meta-analysis, yielded similar results.

Academic class and ethical perceptions

In the published literature pertaining to ethics, less research work has been done comparing differences between executive and non-executive students. Cole and Smith (1996) compared business students and business practitioners and found the former having more negative views of business ethics. Arlow and Ulrich (1980); Stevens (1984); and Warneryd and Westlund (1993) found executives more ethical than students. Kracher, et al. (2002) found that business students with no work experience were more positively affected by business ethics courses in the United States and India. A number of recent studies suggest that the ethical decision making of executives is affected by organizational expectations and support (Trevino, 1986; Weber, 1990; Toffler, 1991; Fraedrich, et al., 1994; Stevens, 1994; Jones and Hiltebeitel, 1995; Trevino and Nelson, 1995 and Adams, et al., 2001). Loe, et al. (2000) reviewed seventeen studies addressing the role of codes of ethics in influencing organizational decision making and found that codes assist in raising the general level of awareness of executives to ethical issues.

Specialization and ethical perceptions

There are very few studies that compare ethical behaviour across various specializations. Arlow and Ulrich (1980) tested business students at the beginning and end of the semester in a business and society course and found a decrease in ethical values among accounting students in contrast to management and marketing students. The results of a study by Cherrington and Cherrington (1979), as well as Fulmer and Cargile (1983), indicated that there are differences between accounting students and other business students in the way the ethical issues are perceived, with the former tending towards a more ethical viewpoint.

Summary

Although the evidence is sometimes mixed, there are indicators from the literature that differences in the ethical attitudes and perceptions of business school students may be explained by individual and organizational factors. A number of published pieces of research confirm ever increasing attention to the relevance of business ethics in education. Most of the empirical research in India has focused on ethics and professional values in the business and industry sector. Increasingly, the importance of governance at management schools (Gill, 2006) and value based curriculum have been emphasized (AICTE, 1995; Chakraborty, 1995; Singh and Raju, 1996; Prasad, 2005 and Gill, 2005). No previously published research in India, however, has examined the attitudes and perceptions of business school students to ethics education. Additionally, internationally there has been no published research on an analysis of the efforts made and direction taken by top business schools across the globe to promote the issue of ethics. The present study fills these research gaps.

IV. Objectives and scope

The present study has been carried out with the following four objectives:

1. To find whether the teaching of ethics would facilitate developing solutions for moral and ethical issues facing business and society.

2. To make factual data available on ethical attitudes and perceptions of business school students.

3. To make comparative analysis of the efforts made and direction taken by the top fifty business schools across the globe to promote the issue of ethics.

4

4. To make a case for systemic corrections so as to meet the challenges involving ethics in higher education.

A detailed and exhaustive sets of questionnaires were developed to carry on an in depth exploratory and empirical research of ethical perceptions of students pursuing their Masters in Business Administration (MBA) at the University Business School, Panjab University, India. Established in 1968, the UBS is one of the foremost centres of management education in India. Over the years, it has been consistently ranked amongst the top fifteen business schools in India. The data was collected in December, 2005.

To make an assessment of the relative importance that higher educational institutions attach to business ethics, a study of the top fifty business schools across three regions, i.e. the Americas (18), Europe and Africa (18), as well as the Asia-Pacific (14), was carried out. The Financial Times (FT) average ranking for three years (2003-2005) were used to identify the top business schools. Since the FT ranking excludes a number of good business schools in the Asia-Pacific region, reference has also been made to the ratings given by Asia Inc. (2005).

V. Research hypotheses

The study tests the following hypotheses:

H1: There is a difference between the ethical perceptions of male vis-?-vis female students. H2: There is a difference between the ethical perceptions of older (age) vis-?-vis younger students. H3: There is a difference between the ethical perceptions of MBA vis-?-vis MBA (Executive) students. H4: There is a difference between the ethical perceptions of students with human resource specialization vis-?-vis others.

VI. Research design

A brief profile of the respondents

The universe for the present study consisted of 194 second-year business school students at the UBS. A total of 162 students constituting 136 MBAs and 26 MBAs (Executive) participated in the survey. An MBA at the UBS includes three full-time programmes, i.e. MBA (General), MBA (Human Resource) and MBA (International Business) of two years (four semesters) duration. Additionally, the MBA (Executive) is a three year (six semesters) course for working professionals conducted in the evening. There is no core or elective paper in ethics at this business school. However, the study of ethics is a key component of certain courses in human resource, general management, accounting, and others. Consequently, only the fourth and sixth semester students, who have had sufficient ethics coverage in their papers, were administered the questionnaire. A brief demographic profile of the respondent students can be seen from Table 1.

5

Table 1. Demographic Profile of the Surveyed Business School Students

Gender Age Qualification Specialization

Admission Category Work Experience Type of Organization

Designation

Functional Area

Annual Income

*: Not Applicable 1 Lakh = 0.1 Million

Males Females Less than 25 years

25-30 years 30 years and above

Humanities

Commerce Science Finance Human Resource Marketing International Business Reserved

Unreserved Less than 5 years 5-10 years 10 years and above Public Sector Undertaking Government Private Non Government Organization Others Top Management Front Line Supervisor Middle Management Non-Management Accounting Engineering Finance General Management Marketing/Sales Below Rs. 2 lakhs Rs. 2-3 lakhs Rs. 3-4 lakhs Rs. 4 lakhs and above

MBA N=136

(%) 92(56.8) 44(27.2) 110(67.9) 26 (16.1) 0 (0.0) 12 (7.4) 45 (27.8) 79 (48.8) 13 (8.0) 34 (21.0) 53 (32.7) 36 (22.2)

50 (30.9)

86 (53.1) * * * * * *

*

* * * * * * * * * * * * * *

MBA (Executive) N=26 (%)

25(15.4) 1(0.6) 2(1.2)

13 (8.02) 11 (6.8) 5 (3.1) 5 (3.1) 16 (9.9) 1 (0.6) 0 (0.0) 24 (14.8) 1 (0.6)

0 (0.0)

26 (16.0) 6 (23.1) 15 (57.7) 5 (19.2) 4 (15.4) 5 (19.2) 17 (65.4)

0 (0.0)

0 (0.0) 1 (3.8) 3 (11.5) 16 (61.5) 6 (23.1) 7 (26.9) 2 (7.7) 3 (11.5) 13 (50.0) 1 (3.8) 9 (34.6) 11 (42.3) 3 (11.5) 3 (11.5)

TOTAL N = 162

(%) 117 (72.2) 45(27.8) 112(69.2) 39(24.1)

11(6.8) 17(10.5) 50(30.9) 95(58.6) 14(8.6) 34(21.0) 77(47.5) 37(22.8) 50(30.9)

112(69.1) 6 (23.1) 15 (57.7) 5 (19.2) 4 (15.4) 5 (19.2) 17 (65.4)

0 (0.0)

0 (0.0) 1 (3.8) 3 (11.5) 16 (61.5) 6 (23.1) 7 (26.9) 2 (7.7) 3 (11.5) 13 (50.0) 1 (3.8) 9 (34.6) 11 (42.3) 3 (11.5) 3 (11.5)

Preparation of the Survey Instrument

A number of previous research studies have been conducted by taking business students' ethical attitudes and perceptions using measures of ethical theories or principles. The principles commonly cited are teleological and deontological moral philosophies (Ferrell and Fraedrich, 1997; and Hartman, 1998). Various scales (instruments) using ethical principles have been prepared and used by criterion-related validity. Harris and Sutton (1995) used it in discovering differences between students and executives' use of deontological and teleological principles that have been consistent with those found by researchers using other measures of ethical principles (Reidenbach and Robin, 1990; Singhapakdi and Vitell, 1991; and Smith, et al., 1999). Richards and Harris (1999) also used the instrument in finding a predicted negative relationship between egoism and ethical judgment. This is consistent with results obtained by Barnett, et al. (1994, 1996, 1998) using the twenty question Ethical Position Questionnaire and those obtained by

6

Download Pdf File