No revised lesson plan at b-schools...
Ethics after Enron
By Sarah A. Klein
Crain's Chicago Business
February 11, 2002
It's fodder for a case study in any business ethics course: self-dealing, questionable bookkeeping, conflicts of interest and a corporate culture that exalted profit and pay above all other values.
While the Enron-Andersen scandal has forced accountants, corporate directors, politicians, regulators and Wall Street analysts to rethink the way they do things, the controversy apparently hasn't touched off a similar wave of soul-searching regarding ethics instruction at the area's top business schools.
None cites any plans to beef up its business ethics course offerings, despite the lapses at the center of the Enron Corp. mess.
Northwestern University's Kellogg School of Management — which graduated former Enron Chief Financial Officer Andrew Fastow in 1987 — has not felt compelled to review its curriculum based on recent events, says David A. Besanko, associate dean for academic affairs.
"Our discussion on ethics is ongoing," he says. "We haven't accelerated it."
Though Kellogg offers an ethics course, it is not required. "These kids are smart people," says Kellogg ethics Professor David Messick. "The average age is 28 to 30. Their character is largely formed by the time they get here. If they don't have a sound moral compass, nothing I teach in a 10-week course is going to embed one there."
At the University of Chicago Graduate School of Business, administrators maintain that moral reasoning is already infused into every course.
"Ethics are not a side issue," says Deputy Dean Ann McGill. The school offers a stand-alone business ethics course, taught by a Nobel laureate, but here, too, it's not required for graduation. And there's been no talk of changing that.
Meanwhile, the University of Illinois at Urbana-Champaign — whose accounting program, recognized as one of the nation's best, has been Andersen's prime recruiting ground — considers its method of weaving ethics into business classes adequate, despite the Enron revelations, says Frederick L. Neumann, special assistant to the dean.
But business ethics advocates say the questions raised by the collapse of the Houston-based energy giant and by the Chicago-based accounting firm's role in it are too big to ignore. They hope it will prompt undergraduate and graduate business schools alike to consider bolstering ethics in their curriculums.
"There is no better time to convince business schools that this is a priority," says W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College in Waltham, Mass. "When a fish gets washed up on the beach, no one comes to look. But when it's a whale, everyone pays attention."
Ironically, some of the best training materials in the field of business ethics were developed by Andersen.
In the 1980s, the firm invested $5 million in a program to teach business educators about ethics, with the expectation that those who attended the seminars at the firm's St. Charles facility would return to campus and "spread the gospel," says Paul L. Schumann, a professor of management at Minnesota State University, who attended Andersen's program.
"Because of Andersen, we started seeing more and more business schools paying attention to business ethics," he says. Many business professors around the country still teach with Andersen's ethics-oriented videotapes.
Andersen discontinued the program years ago, several former attendees say. An Andersen spokeswoman said she had never heard of the program and could not provide information about it.
Andersen's onetime emphasis on ethics instruction was unique in the corporate world. If more companies asked campus recruits about their ethics training, business schools would be more inclined to bolster that part of the curriculum, says Nancy McGaw, associate director of the Aspen Institute's Initiative for Social Innovation through Business in New York.
"If a business sends a clear message that it won't hire students (without ethics training), it will free up business schools to offer it," she says.
While advocates say that ethics education has lapsed at many U.S. business schools, they note that religious-based schools have kept up the drumbeat.
In Chicago, both DePaul University and Loyola University have mandatory ethics courses. DePaul has an annual competition that rewards students for ethical analysis of business problems, and Loyola has a certificate program for students training to become corporate ethics officers.
The curriculum is not intended to convert students to sainthood, but to teach them to assess their own values before they are required to do so in a pressured, sometimes confrontational, job setting, instructors say.
DePaul senior Dennis Stoia, a member of the school's accounting club, says the Enron debacle has dominated conversations in many of his classes. He says the ethics instruction he's received has forced him to think about the consequences — and necessity — of playing whistle-blower as an auditor. "You are representing public dependability," he says.
But working ethical considerations into general business classes — as many universities profess to do — isn't always easy.
"That ethics is integrated is a great fallacy," says Laura P. Hartman, a professor of business ethics at DePaul's College of Commerce and president of the Chicago-based Society for Business Ethics.
Out of discomfort or unfamiliarity with the subject, or for simple lack of time, many business professors avoid bringing up ethics, she contends. "Faculty around the country are a little intimidated about being able to answer the questions" students pose, Ms. Hartman says.
Indeed, even ethics specialists aren't always able to anticipate every problem.
Ms. Hartman says she got a call from a former student — now an Andersen employee — who said her class had prepared him for situations where there's a bad apple in a good company. But, she recalls him saying, "You didn't prepare me for being one of the few good apples in a bad company."
©2002 by Crain Communications Inc. |
