Olkan Guler
Ethics Education in Business Schools: A Review
Ethics Education in Business Schools: A Literature Review
ABSTRACT. Ethical standards of businesspersons have long been a societal concern. Given the
enormity of today’s ethical problems, interest in ethics education is at all time high (Shenkir, 2004).
This paper investigates (a) the methods of teaching business ethics in business schools, (b) the role of
business schools in teaching business ethics, and (c) contents of ethics courses in business schools.
KEY WORDS: Business schools, business ethics.
Introduction
Business schools have a responsibility to provide practitioners with training in the basics of ethics
which would ideally lead to an informed workplace and act as a catalyst to stimulate socially and
ethically grounded corporate activities and programmes (Cornelius, Wallace & Tassabehji, 2007;
Pfeffer & Fong, 2004).
Ethical standards of businesspersons have long been a societal concern. Both consumers and
politicians have expressed outrage at scandalous episodes of fraud and cheating that surface from time
to time (Wynd & Mager, 1989). General public is demanding higher ethics of businesspeople
(Kidwell, 2001). Organizations and society at large recognize that ethically and socially responsible
behaviour plays a crucial role in good business practices. This realisation has led employers to expect
and demand that business schools facilitate the training of students in ethics and social responsibility.
Because corporations and consumers are increasingly reassessing the central role of corporate social
responsibility, business education can no longer keep this issue on the periphery (Nicholson &
DeMoss, 2009).
Research indicates that ethics education has migrated steadily from focus on issues-based, stand-alone
ethics courses to a more integrated focus on individual and corporate ethics that includes coverage of
topics such as corporate social responsibility and sustainability (Christensen, Peirce, Hartman,
Hoffman & Carrier, 2007).
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Ethics Education in Business Schools: A Review
This article does not aim to give a comprehensive or final answer to this complicated or pressing
challenge. Each business school must explore the questions on its own, tailoring the curriculum to its
own character, resources, and mission (Jackson, 2006). In doing so, specific attention should be paid
to the prevalent economic and business climate.
Definitions
Cardeiro (2003) defines ethics as a value system by which individuals evaluate and judge the
behaviours of themselves and others. Behaviour is evaluated against some previously established set
of standards. The traditional sources of ethical standards are religious, philosophical or
cultural/societal value systems (Cardeiro, 2003). Furthermore ethics is also described as “a process by
which individuals, social groups, and societies evaluate their actions from a perspective of moral
principles and values. This evaluation may be on the basis of traditional convictions, of ideals sought,
of goals desired, or moral laws to be obeyed, of an improved quality of relations among humans and
with the environment” (Hurley, 1972 in Cardeiro, 2003). Other definitions emphasize the context
within which business is conducted when defining ethics. For instance Christensen et al. (2007) define
ethics as ‘a form of applied ethics that examines ethical rules and principles within a commercial
context; the various moral or ethical problems that can arise in a business setting; and any special
duties or obligations that apply to persons who are engaged in commerce’.
The common foundation among these definitions is the acceptance of standards and morality which
should be clearly drawn, clarified, documented and agreed upon by all in a corporation and all of that
should be acceptable to society at large. Business schools must design their ethics courses to serve to
this end.
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Ethics Education in Business Schools: A Review
Role of Business Schools
Business schools have asserted the benefits of economic and materialistic thinking in their classes for
so long that few even question these assertions (Giacalone & Thompson, 2006). A recent survey also
shows that there is a perceived deficiency in the degree of integration of ethics and social
responsibility into various specific disciplines (Nicholson & DeMoss, 2009).
In light of the recent corporate scandals, this critical question is put to business schools: Are business
schools complicit in the corporate crimes committed by their graduates? (Swanson & Fisher, 2008). A
recent research showed that there is resistance from some administrators, faculty, and students to
ethics in the classroom (Alsop, 2006). A fundamental problem is faced in teaching business ethics and
social responsibility unrelated to pedagogy or course content. Rather, the problem is with the basic
worldview underlying our management education – a worldview that undermines and countermands
the basic tenets of ethics and social responsibility (Giacalone & Thompson, 2006).
Helping students become more socially responsible and ethically sensitive is a substantive part of our
business schools as they prepare a new generation of business practitioners for the future (Giacalone
& Thompson, 2006). There have been suggestions that business schools should focus on teaching
students that there is a meaningful reciprocity between financial success and implementing global
ethical and moral values (Hoffman, 1984; Alsop, 2006). The bottom-line instructional focus will need
to give way to more holistic view of business leadership. If business schools are to produce ethically
centred students while students are taught about the leader’s role in financial success they must teach
students that the successful leader first must actively and passionately advance the interests of people.
In establishing for students how this new success is defined, it will be essential to introduce new role
models whose ethical and financial success makes them exemplary (Giacalone & Thompson, 2006).
Literature review also reveals that ethics subject taught at business schools is notoriously ineffective.
The following section looks at the reasons behind this. The general recommendation to improve the
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Ethics Education in Business Schools: A Review
situation is that business schools need to revise their education models and their approach to teaching
ethics subject.
Why are Ethics Courses Ineffective?
There is a considerable volume of research on ethics education but few of those found support for the
effectiveness of it (Luthar & Karri, 2005; Shenkir, 2004).
Researchers who claim that ethics education is not effective argue that there is no significant
difference between those who had taken a business ethics course and those who had not taken a
business ethics course when it came to their ethical attitudes. Furthermore, according to these
researchers, there was no transfer of knowledge from schools context to business context as a result
what was taught in classroom was not practiced in business environment (Jewe, 2008; Halbesleben,
Wheeler & Buckley, 2005; Swanson, 2005; Lane, Schaupp & Parsons, 1998; Trevino, 1992; Wynd &
Mager, 1989).
Some researchers indicate the difficulty of matching the ever changing ethical standards of individuals
with the ethical standards delivered programmatic classroom training as the main reason for it
(Halbesleben et al., 2005; Swanson, 2005). Another reason for the ineffectiveness of the business
ethics courses is that the behaviour which business students learn or perceive is required to succeed in
business schools may run counter to the ethical sanctions of society and the business community
(Lane et al. 1998).
Furthermore there is also an argument on the contradictory nature of business decisions with personal
decisions, such as decisions related to well being of shareholders, employees, customers and social &
environmental responsibility (Verschoor, 2003). Verschoor claims that MBAs are concerned about
possible conflicts in their careers and unsure that their business education is preparing them
adequately.
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Ethics Education in Business Schools: A Review
Wynd and Mager (1989) offer the following three possible explanations for the lack of effectiveness
in business ethics education:
a. The functional academic areas may have intellectually conditioned students that are not
responsive to ethics course content,
b. The possibility that family, previous education and culture are greater influences of ethical
development and
c. That a person’s basic values are set early in life and are difficult to change (Churchill, 1982).
Nicholson and DeMoss (2009) investigated the degree to which course content on ethics and social
responsibility are being incorporated at the program or major level found that the content level in
programs or majors is not adequate to meet the needs of business graduates. In addition, research
findings indicated that social responsibility was rated lower than ethics by all department
coordinators. The authors suggest that this finding is especially disturbing since social responsibility
has become an important part of the corporate agenda in recent years. Society now demands
responsible behaviour from corporations and links related behaviours to a corporation’s identity
(Cornelius, Wallace & Tassabehji, 2007; Nicholson & DeMoss, 2009).
Research shows that the main reason for ethics education not being effective is the lack of connection
between what is being taught in classroom and what is expected of students when practicing business
(Bennis & O’Toole, 2006). In the research conducted by Lane et al. (1998) it is proposed that instead
of encouraging and reinforcing ethical behaviour, the business program may present students with
choices that stress ‘winning is everything”. They suggest that this leads to the behaviour which
business students learn or perceive is required to succeed in business schools that runs counter to the
ethical sanctions of society and the business society. Sometimes businesspersons would even have to
make business decisions that conflict with their personal values (Verschoor, 2003).
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Ethics Education in Business Schools: A Review
Although the business ethics courses found ineffective, Jewe (2008) claims that the real value of such
courses may lie in the potential for increasing an individual’s awareness of ethical issues and
understanding of ethical decision making process both of which are often included in business ethics
curriculum.
Refer to the Appendix 1 for a table presentation of reasons of ethics courses being ineffective.
General Guidelines
Ethics is the central managerial virtue (Wilhelm, 2002). Given the enormity of today’s ethical
problems, interest in ethics education is at all time high (Shenkir, 2004).
There are two main debates identified in the business of ethics education: These are (a) the content of
the ethics course and (b) the method of delivery in the classroom (Buff & Yonkers, 2005). In terms of
methodology of teaching business ethics, Buff and Yonkers identified the following approaches to
teaching ethics:
a. Ethics teaching in the philosophical context; i.e. values, morals and religious principles.
According to this method, ethics should be embedded throughout the curriculum with a focus
on individual behaviour and societal norms such as justice, social responsibility, integrity and
honesty.
b. Targeted ethics teaching within a profession; i.e., code of conduct, professional ethics and
values, and a specific way of conducting business. The focus of this method is to teach what
is considered wrong or right within a business profession.
Although there are some suggestions (Swanson, 2004; Pfeffer & Fong, 2004) that a stand-alone ethics
course in business curriculum is vital; Buff and Yonkers (2005) claim that one course alone will not
be sufficient to develop a sense of professional ethics in an undergraduate business student. To
remedy this situation it is suggested that ethics subject should be integrated across the curriculum and
the topic of social responsibility should be integrated into all teaching disciplines (Buff & Yonkers,
2005; Verschoor, 2003; Maclagan, 2003; Sims, 2000).
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Ethics Education in Business Schools: A Review
Business ethics instruction as well as moral theories should be an integral part of management
education without which there would be no framework for moral deliberation, and no way of even
interpreting or uncovering morally relevant facts (Hoffman, 1984). Business schools should focus on
to sensitizing students to ethical dilemmas, so they will be better prepared to make ethical decisions at
work (Swanson 2004; Nitterhouse, 2003; David, Anderson, McTier & Lawrimore, 1990).
To increase the effectiveness of business ethics courses it is suggested that ethics training and
education should be specifically targeted at a social setting of interest (Halbesleben et al., 2008).
Furthermore training that is intended to address specific ethical behaviour in business should be
designed to specifically address that context; as a result training intended to address ethical behaviour
in education should be designed accordingly (Halbesleben et al., 2008). In this way it is aspired that
students will be able to relate the issues to the wider context within which the decision needs to be
made and justified accordingly.
As pointed out above, investigation into findings by researchers reveals that there is widespread
support for delivering the business ethics topic in more than one single course. Furthermore business
ethics topics should be integrated into various other courses at different levels in addition to a stand
alone course on business ethics only. The following section focuses on how this could be integrated to
the curriculum.
Curriculum Design and Teaching Strategies
There has been research on the current approaches to ethics education and ethics curriculum and some
shortcomings have been identified. For instance it is argued that business schools have lacked
offerings in the humanities (Bennis & O’Toole, 2005; Litz, 2003). Some others assert that large gaps
in the curriculum of many business schools are very often demonstrate the neglect of historical and
the ethical dimensions in understanding business and management (Dhiman, 2008; Warren &
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Tweedale, 2002). According to them there are two academic disciplines exist to fill these gaps:
business history and business ethics. Warren and Tweedale (2002) believe that management educators
have much to learn from the institutional failures, frauds and unintended consequences of past
corporate and individual decisions. Business history research that is focused upon this ethical agenda
can richly detail and illustrate how and why these mistakes were made and help business students to
reflect upon the structures and processes that are necessary to make progress in business ethics
(Warren & Tweedale, 2002).
There are various approaches to how to teach business ethics. Park (1998) proposes a two-level
framework for business ethics education; (a) basic foundation, and (b) practical components. (Refer to
Appendix 2 for Park’s more detailed framework for business ethics education). Park explains the
purpose of practical components as follows:
a. To help moral subjects to conduct ethical leadership,
b. To actualise integrity between individuals and organisation, and
c. To fulfil the social responsibility of business firms.
Park maintains that any model of business ethics education needs to take into consideration why
particular ethical problems are at issue and, based on systematic understanding of causes, a responsive
and comprehensive curriculum should be designed.
Furthermore Park (1998) suggests that an integrative curriculum across the general management
education should be designed to develop an integrative curriculum strategy. (Refer to Appendix 3 for
Park’s detailed integrated ethics teaching strategies). Integrative curriculum approach to ethics
education is also supported by Sims (2000). (Refer to Appendix 4 for Sims’ detailed model). Sims
maintains that in order for this approach to succeed, the faculty support must be provided.
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Ethics Education in Business Schools: A Review
One of the widely used approaches to teach ethics is the case study method. Burton, Dunn & Goldsby
(2006) provide a checklist of questions for ethics students using case study method (Refer to
Appendix 5 for a list of questions answered in a case study). Burton et al. stated that students’
objective should be to find an alternative action in a case situation. Each question aimed at a particular
moral consideration such as principles, or duties, benefits, fairness, relationships, freedom, character,
or sustainability.
Determining all the precise details of how business schools should go about cultivating students to
become morally educated business persons would be a major undertaking. In today’s business
environment, business ethics course contents should be designed to educate morally educated
businesspersons who will meet the following four special demands imposed by current business
climate (Jackson, 2006):
a. Embrace a new paradigm in which businesses must follow social mandates and financial
imperatives,
b. Satisfy, yet not be dominated by, an increasingly legalistic, compliance-focused approach to
ethics triggered by major business scandals, in other words, being compliant but venturing
beyond compliance,
c. Integrate ethics into all areas of business; and
d. Mediate the conflicting forces of tolerance versus intolerance occasioned by globalisation.
Castro (1989) provides a list of guidelines that one must pay attention to when teaching a course on
business ethics. His approach is guided by the question of “What can be taught in a classroom that
will help people to reach ethically viable decisions?” Castro’s (1989) list is as follows:
a. The ability to imagine all of the stakeholders in a particular decision
b. An understanding of the cultural, organizational, perhaps class-based filters through which
they will perceive their stakes – both at the moment the decision is made and thereafter;
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Ethics Education in Business Schools: A Review
c. An ability to estimate the costs of alienating various groups of stakeholders from the
organization to which the decision-maker is primarily responsible – again both at the point the
decision is made and thereafter;
d. An understanding of the train of historical obligations and mutual interdependence of which a
particular decision may be a part;
e. Sensitivity to the potential impact of a particular decision on the relationships between
members of the decision-making entity, and
f.
An understanding of the potential impact of a particular decision on the self-regard (and
moral power) of both the decision-maker and members of the decision making entity.
Castro’s approach encapsulates a wide range of considerations in situations where ethical lines might
be breached by anyone involved in making any decision at any level in an organisation. A hands-on
manager, decision maker as well as an ethics lecturer could use Castro’s list as a guideline for their
forthcoming actions and teachings.
Wynd and Mager (1989) recommend that the goal of a course in business and society should not be to
change the way students perceive how they should act in certain situations involving ethical and social
responsibility dimensions at the current point in time. Rather a more appropriate goal may be to make
students aware of the ethical and social dimensions of business decision making, such that the
dimensions may become components in the decision making process.
Research shows that ineffective decision making in ethical situations occurs because of
misperceptions regarding others’ ethical standards (Park 1998; Halbesleben et al., 2005). To remedy
this situation they claim that ethics training and education should be specifically targeted at a social
setting of interest. The training that is intended to address specific ethical behaviour in business
should be designed to specifically address that context (Jennings. 2004; Rossouw, 2002). This claim is
complemented by the findings of Bennis & O’Toole (2006) who maintain that business education
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Ethics Education in Business Schools: A Review
needs reforming and this means more than just adding courses in the humanities. They argue that the
entire curriculum must be infused with the multidisciplinary, practical, and ethical questions and
analyses reflecting the complex challenges business leaders face.
Limitations and Future Research
This paper is based on literature review on the topic of business ethics and teaching of business ethics
only. The main limitation of this paper stems from the fact that it is not based on research and
therefore it does not deliver research outcomes conducted in business schools in New Zealand.
Furthermore the paper does not look into the realities of ethics education in New Zealand. The future
research could look into the practice of ethics education in business schools in New Zealand. In light
of the recent corporate failures and corporate governance disasters there are lessons to be learned.
Business schools should take a fresh look at their ethics course contents and the curriculum and
should consider redefining their roles in attempting to correct the wrong doings of the past.
Conclusion
As the debacles at Enron, WorldCom, Arthur Andersen, Tyco, to mention just a few, demonstrate,
teaching future managers that ethical behaviour and decision-making is central to our financial and
economic system and even our survival as a society is paramount (Luthar & Karri, 2005). Cordeiro
(2003) points out that “While teaching ethics and code of ethical conducts are important, the most
important factor is the ethical behaviour of leaders. Ethical leadership is fundamental since ethical
behaviour is an individual – not a corporate – matter. In practice, ethics is not something that a
manager “does”; it is something that the manager “is”… The only solution to this decline in business
ethics is increased ethical leadership from the top”.
The managers of future are receiving education in the present. It is a matter of immense importance
that students understand and appreciate the connection between acting ethically and business
outcomes such as profits, sales growth, etc. Strong exposure to examining and understanding ethical
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Ethics Education in Business Schools: A Review
issues in business is called for to ensure that future managers understand the importance of ethical
conduct and its long-term impact on performance of their organizations as well as society at large
(Luthar & Karri, 2005). In addition to this role of business schools in tertiary institutions, trade
associations, business community and the news media will play a stronger role in fulfilling this
mandate in the future (Wilhelm, 2002).
New Zealand public and investors suffered as a result of reckless and unethical corporate decisions
made by corporate leaders here in NZ as well as overseas. Most of those corporate leaders have been
educated in tertiary institutions. It is a matter of urgency that the issue of business ethics education is
revised.
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APPENDIX 1: REASONS WHY ETHICS COURSES ARE INEFFECTIVE
Source
Reasons Why Ethics Courses are Ineffective
Nicholson
&
DeMoss, Inadequate coverage of relevant topics by ethics courses
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2009
Lack of connection between what is being taught in classroom and what
Bennis & O’Toole, 2006
is expected of students when practicing business
Teaching staff lack real life business experience
Halbesleben et al., 2005; Continuously changing ethical standards of individuals
Swanson, 2005
Verschoor, 2003
The contradictory nature of business decisions and personal decisions
Influence of prior learning, such as family, culture, prior education
Wynd & Mager, 1989
Negative academic approach to ethics subject as a result students are not
positively responsive to ethics course content
Lane et al., 1998
Ethical values taught at business schools (i.e., ‘winning is everything’)
are not in line with ethical sanctions of society
Churchill, 1982
Ethical values are set early in life and this is difficult to change later at
tertiary level
APPENDIX 2: PARK’S FRAMEWORK FOR BUSINESS ETHICS EDUCATION
Levels of ethics education
Components of levels of ethics education
Level 1:
Basic foundation for ethics education
Level 2:
Practical components of ethics education

Ethical reasoning

Moral sentiments

Ethical praxis

Intensify moral imagination

Develop ethical wisdom & courage

Enhance meta-strategic competences
(Based on Park, 1998)
APPENDIX 3: PARK’S BUSINESS ETHICS EDUCATION STRATEGIES AND BENEFITS OF
THESE STRATEGIES
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Business ethics education strategy
Benefits of business ethics education strategy
Collaborative learning
Develops students’ basic social skills
Strengthens students’ social interaction within small
groups
Case study method
Helps analyse ethical dilemmas and discover alternative
solutions
Outsourcing external guest lecturers
Invited managers share with students ethical issues they
face and how to solve them
Role playing
Students acquaint themselves well in ethical dilemma
situations
Debate strategy
Helps students to join discussions through asserting
various positions on ethical issues so that they can make
responsible decisions
Survey strategy
External survey can be done on corporate ethical codes
and, based on this, the internal survey can deploy survey
feedback and self-evaluation.
Group projects
Enables students to discern the differences between top
managers’ and employees’ position on the unethical
conduct of organizational members
(Adapted from Park, 1998)
APPENDIX 4: SIMS’ BUSINESS ETHICS EDUCATION CURRICULUM MODEL
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Ethics across the curriculum policy designated courses and assignment
Principles of management
Written case
Organisation management
Student presentation and ethical dilemmas
Introduction to business
Class discussion of current events
Business research methods
Class lecture; homework; class discussion
Personnel administration
Students debates
Marketing management
Class discussion of current events
Business policy and strategy
Written case analysis
Managerial accounting
Class discussion of professional ethics; students problems
Auditing
Class discussion of professional ethics; students problems
(Source: Sims, 2000)
APPENDIX 5: QUESTIONS USED WITH A CASE STUDY
Questions Used in a Business Ethics Course Using Case Study Method
Does the contemplated action…
conform to moral principles?
create more good than harm?
lead to fair outcomes?
promote caring relationships?
advance personal liberty?
contribute to sustainability?
stimulate personal ideals?
(Source: Burton et al., 2006)
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