Archive for the ‘education’ Category
Ethics & Economics, Part 1
This is the first of an occasional series on the relationship between ethics and economics.
Although I’m not an economist, I do find economics both important and interesting. It is far from its reputation as “the dismal science.” Its reputation as dismal likely comes from the fact that the stuff it studies is often dismal, for it studies things like scarcity and competition, things that are most often experienced as negatives. But those things are unavoidable facts of the human condition. In this regard, economics is no more ‘dismal’ than physics. It’s a bummer that I cannot fly unaided or teleport or be in two places at one time, but those facts don’t make the study of physics particularly dismal.
So we shouldn’t avoid economics. And understanding at least a bit of economics is crucial to a deep understanding of many issues in business ethics. You can’t effectively critique the market, or the institutions that populate it, without understanding at least a bit of the theory behind how they’re supposed to work. That’s why I often start my own Business Ethics course by having students read a bit of Adam Smith’s Wealth of Nations, as well as commentaries on Smith by Nobel Prize-winning economists Ronald Coase and Amartya Sen. A bit of economic literacy goes a long way.
The definition of “Economics” that I typically use in my own teaching is this one, cobbled together from various sources, is this:
Economics is the social science that deals with the production and distribution and consumption of goods and services and their management.
In particular, I usually add, economics tends to involve the study the ways in which behaviour within systems of production, distribution, and consumption is driven by incentives. The other things that I take to be typical of the work of economists, if not part of the definition of the discipline:
- Economists tend to be particularly interested in the way people respond to incentives of various kinds;
- Economists care a lot about actual data. They care in particular about the actual consequences of various policy decisions, rather than just the intentions behind them.
- While economics is nominally a descriptive discipline, its descriptive theories (about, e.g., the conditions under which markets operate efficiently) tend pretty quickly to generate policy prescriptions (for what governments can & should do to foster such efficient operation).
Here is another definition of economics, which Thomas Sowell, in his textbook Basic Economics, attributes to the late British economist Lionel Robbins:
“Economics is the study of the use of scarce resources which have alternative uses.”
I like that definition quite a lot, since it highlights the intersection with ethics: justice, one of the central topics within ethics, is primarily about the fair distribution of scarce resources.
I’ll end there for now. But watch here for other entries in this series, on how ethics and economics overlap and/or conflict.
In the interest of promoting economic literacy, here are a few books about economics that I recommend. All of them are aimed at non-economist audiences.
- Economics Without Illusions: Debunking the Myths of Modern Capitalism, by Joseph Heath
- The Undercover Economist, Tim Harford
- The Rational Optimist, by Matt Ridley
- Predictably Irrational: The Hidden Forces That Shape Our Decisions, by Dan Ariely
Ethics on Business Magazine Websites
I’ll start by highlighting the obvious conflict of interest, here: my blog is carried on the website of Canadian Business magazine. In this blog entry, I effectively congratulate CB for highlighting ethics. So this is not an unbiased blog entry, but hopefully the facts I present here speak for themselves and stand on their own.
Ethics in business is clearly a hot topic these days, whether discussed using the word “ethics” itself or one of the mushier terms like “CSR” or “sustainability” or “corporate citizenship.” Even those who are cynical about the topic cannot deny that it is an important topic.
But here’s an interesting fact. At time of writing, only two major business magazines (Canadian Business and Fast Company) feature ethics and/or CSR on the front page of their websites. The Economist, Forbes, Fortune, and Business Week do not.
Here’s slightly more detail:
- Canadian Business has both Ethics and CSR listed on the front page.
- Fast Company has a link called Ethonomics on its front page (right at the top), which leads to a section featuring a pretty steady stream of social responsibility blog postings.
- Forbes has a CSR blog but it is very hard to find if you start from the site’s main page. You need to click on “Leadership” (not at all obvious) and then you’ll see the link in the lower-right of the Leadership page.
- The Economist has nothing ethics- or CSR-related on its main page, though to its credit The Economist does tackle relevant topics pretty frequently. (For an older example, see The Good Company.)
- Fortune likewise has nothing on their main page (though if you click on the “Leadership” link, you get taken — oddly — to their Management page, which currently features a piece on philanthropy.)
- Business Week likewise does nothing to feature CSR or ethics.
So, what do you think? Why are business magazines, and in particular their websites, so slow on the uptake? Is it lack of interest, lack of access to good content, or both, or something else?
Should We Teach Students About the “Social Impact” of Business?
Filed under: corporate citizenship, CSR, definitions, education, ethics, management, MBA, stakeholders |
Comments (3) As regular readers know, I’ve blogged a lot about the vocabulary we use to talk about ‘doing the right thing’ in business. Here’s another example of a term that some people seem to want to use to capture that entire topic: “Social Impact.”
See for example this piece, by NYU’s Paul Light, in the Washington Post: It’s time to require students to do good.
I’ll start by pointing out that the headline is inaccurate, though that’s likely not Light’s fault. (It’s more likely the fault of the newspaper’s headline writer. Hard to say.) At any rate, Light’s article isn’t about making students “do good;” it’s about teaching them courses about doing good. And that’s a very different thing.
Light points out that many business schools now offer courses on what he refers to broadly as the “social impact” of business. “Social impact,” he says, can variously be defined in terms of “social responsibility, innovation, engaged citizenship or plain old public service.” (Note that Light is in trouble here, already, implicitly assuming all of those terms are good things. For counter-examples, see my recent blog entry on unethical innovation.)
Anyway, Light says business schools are increasingly realizing that they need to teach students something about the social impact of business (and presumably, more specifically, about how to maximize positive social impact and minimize negative social impact.)
For what it’s worth, I should point out that many business ethics classes — presumably among the courses that Light sees as part of the trend — absolutely would not focus primarily on social impact. And that’s a good thing, because social impact is just one of the many ethical issues that arise in business. Courses on business ethics can cover a large range of issues, many of them not directly related to social impact:
- product safety (which is mostly a concern to customers, who very often make up only a tiny segment of “society”)
- employee health and safety
- truth in advertising
- the environment (which, depending on your philosophical views, may have ethical importance independent of society’s reliance on it).
Each of those topics has relatively little to do with social impact, and indeed there can be important tensions between, for example, what is good for employees and what is good for society.
But maybe Light doesn’t want courses in business ethics more generally; maybe he really does think it most important to focus on social impact, thereby ignoring the issues (like those noted above) that got the field of business ethics off the ground in the first place. Such a focus by business schools would be incredibly unfortunate, because it would leave business students radically unprepared to face the ethical challenges that they really will have to face on a daily basis in their professional lives. And even if courses on “social impact” do tackle a broader range of issues (including the ones listed above) the title of the course is going to mislead students into thinking that social impact really is the key issue after all.
Finally, I’m confused by the fact that Light views “social impact” as a skill:
Making social impact part of every student’s curriculum would send the signal that social impact is an essential skill….
What are we to make of this? Is social impact really a “skill”? Personally, I’m not sure how to make sense of that turn of phrase. I suppose we can read Light somewhat more charitably as meaning that an appreciation of the social impact of business, and an understanding of the key issues and how to respond to them, are essential parts of a sound business education. And surely he’s right. But we ought at least be clear on the fact that what we’re struggling with — and what we need students to struggle with — is the complexity of the role and impact of business in society. Calling it a skill misleadingly implies that we know what to do about it all, and now we just need to do it. If only life were so simple.
MBA Ethics Education Roundup
Back in November I did a 4-part series on ethics education for MBA students. I thought it might be a good idea to collect all of them, plus a couple other relevant blog entries, on a single blog entry. So here they are:
- MBA Ethics Education: Designing the Designers (…whether we are thinking about training MBAs to make particular decisions, or training them to build the contexts in which particular decisions are to be made, business schools are in the business of designing designers….)
- MBA Ethics Education: Avoiding Excuses (…Sometimes, doing the right thing simply requires that we avoid the temptation to do the wrong thing. Positive role models are definitely a good thing, but we also need to understand why things sometimes go wrong…)
- MBA Ethics Education: All Decisions are Ethics Decisions (…there really is no clear distinction between “ethical” decisions in business and straightforward business decisions…)
- MBA Ethics Education: Speaking Up (…too often, bad things happen because good people don’t speak up….)
And see also these earlier blog entries by me:
CSR Advice for Students
I was recently interviewed for a student-oriented CSR project called “Citizen Act.”
Here’s the (public) Facebook page featuring the interview: Interview of Chris MacDonald, a Business Ethics Specialist
(Citizen Act is a “training game which trains students in the responsible banking practices of tomorrow.” It’s sponsored by Société Générale, a European financial services company.)
The interview is partly about my own career path, but also touches on my critique of CSR, as well as some stuff about the key obstacles for ethics/CSR, and my advice to students interested in this area. Here’s a snippet:
According to you, what are the main obstacles in the development of Business Ethics? Are there any cultural limitations? Any lack of resources or will?
I think the main obstacle is the complexity of organizations. Large, complex organizations exist for good reasons: they have the potential to be enormously productive and highly efficient. But they pose a challenge, both for internal control (by managers trying to implement a code of ethics, for example) and for external control (by regulators and ‘civil society.’)
The final bit is about my advice for students:
Would you have a message to deliver to students who are taking part in CITIZEN ACT?
My message would be to stay passionate, but to remember that being passionate about a topic like this is only the beginning. You need above all to use your brain, because our passions may run in different directions. Beyond that, avoid being either gullible or cynical about business. The world of commerce is enormously important for human well-being. Markets and the businesses that populate them do an enormous amount of good — our challenge is to figure out the best ways to conduct business so that it can stay competitive with the fewest possible negative side-effects.
MBA Ethics Education: Speaking Up
This is the fourth (and final?) installment in a series of postings on ethics education for MBA students.
The fourth element of MBA ethics education that I want to talk about is the willingness and ability to speak up.
Often one of the biggest barriers to doing the right thing lies in not knowing what to do or say in a hierarchical or group context. Think first of hierarchies. Pretty much all organizations are hierarchical in nature, with each individual answerable to, and performing tasks assigned by, someone in the layer above. In such contexts, when your performance evaluations (and maybe your very job) relies on your boss’s perceptions of you, it can be pretty tough to “speak truth to power,” as the saying goes, even when your conscience says you should. Next think of groups. Business involves a lot of teamwork — a lot of MBA education revolves around that fact — and on teams there can be pressure to conform, to go with the flow, to be a ‘team player.’ But more often than not, if something unethical is about to be done, and least one person on the team realizes that it’s wrong. The question in such cases is whether that one person will have what it takes to speak up. Part of MBA ethics education should be aimed at giving people what it takes to do so.
At a first approximation, I’d say that speaking up when you see something unethical (or maybe just something thoughtless, with potentially bad consequences) requires three things.
First, you need the understanding — the ethical sensitivity, if you will — to notice that something is wrong.
Second, you need to be motivated — you need to care, and you need the courage to act in the face of the pressures of hierarchy and teamwork. You need some understanding of just what your obligations really are. (Among other things, this requires a refusal to indulge in self-serving excuses.)
Third, you need the skills to actually formulate and voice an objection. You need to know things like how to express ethical doubts in a non-threatening way. You need to know how to seek out allies who might share your ethical qualms. And you need a vocabulary in which to express your concerns. In these regards, I highly recommend a book from which I’ve learned a lot, namely Mary Gentile’s recent book, Giving Voice to Values: How to Speak Your Mind When You Know What’s Right. It is a truly wise piece of writing, and “wise” is not a word I use very much.
None of this is intended to exaggerate the complexity of the simple act of raising one’s voice. But all the available evidence suggests that at least sometimes (and likely too often) it actually is difficult, in organizational settings, to speak up when we get the sense that something isn’t right. And (as discussed in a previous blog entry) it’s just not plausible to think that the people who fail to speak up are all somehow morally defective. Too often, bad things happen because good people don’t speak up. We need to make sure that MBA students (and, surely, others too) graduate with the skills to do so.
MBA Ethics Education: All Decisions are Ethics Decisions
This is the third in a series of blog entries on ethics education for MBA students (the first two are here and here).
One of the key challenges involved in teaching MBA students about ethics is to figure out just what the scope of the topic is. Just which issues are “ethical issues?”
As management guru Peter Drucker once pointed out, “there are no finance decisions, tax decisions, or marketing decisions; only business decisions.”* In other words, decisions that seem to be about a particular aspect of a business cannot (or at least should not) be made as if they have nothing to do with other aspects of the business. And decisions taken by people who are primarily responsible for one area (e.g., marketing) cannot be made as if they have no implications for the work of people in other areas — or as if those decisions could not benefit from input from those other areas. Likewise, the leaders of a company cannot plausibly delegate such decisions and thereby wash their hands of them. Delegation may be necessary, but it can never be complete. A tax decision or a product design decision is not “merely” a tax decision or a product design decision — it is a decision that can affect the fate of the company as a whole.
In a similar vein, it’s worth pointing out that there really is no clear distinction between “ethical” decisions in business and straightforward business decisions. Every decision made within or by a business affects someone. HR decisions have a clear ethical component, as do decisions about things like purchasing (recycled paper or no?) and waste disposal. A decision to allocate resources — money, time, authority — to one person or project is inevitably going to advantage some over others. Even design decisions privilege one view about what is beautiful or useful over others, and what kinds of tradeoffs to make between, for example, price and utility and simplicity. Those are ethical matters. Essentially if any individual or group is helped or harmed, if rights or privileges are at stake, then it is an ethical decision. As a result, it is hard to think of any decision made in business that has no ethical element to it. For this reason, it is wrong to think of “ethical” decisions as some quirky species of decisions. All business decisions are ethical decisions. Of course, it is true that some decisions will present themselves as “ethical” decisions because the stakes are so high, or because the values involved conflict so significantly. So it makes a kind of intuitive sense to call those kinds of decisions “ethical decisions.” But we shouldn’t be misled, by that shorthand way of speaking, into thinking that other decisions don’t have an ethical component.
The dilemma this poses for business education is this: should business students (MBA students in particular) be required to take a separate course in ethics, or should ethics somehow be made part of each of the courses that an MBA student takes? Both approaches have their downsides. On one hand, designating (and requiring) a course on ethics establishes the topic as a serious topic, one to be taught to MBA students alongside Finance and Marketing and Strategy and so on. But if you put ethics into a separate course, you risk ghettoizing the topic, and implicitly encourage professors in other disciplines to say things like, “Don’t worry about the ethics, here — you’ll learn that in your ethics course.” But there are risks inherent in the alternative strategy, too. If you try to weave a bit of ethics into every course, then ethics ends up being taught by profs who may not have any particular expertise in, or passion for, the topic. Indeed, ethics may get pushed to the end of the syllabus, and may have a tendency to fall off the agenda altogether when other topics take longer than expected.
Ideally, an MBA program should probably have both — a dedicated ethics class as well as a concern for ethics woven throughout the curriculum. Ultimately, an integrative approach is required. That means designing a curriculum that finds ways to weave ethics into classes on Accounting and Organizational Behaviour, but that likewise takes Accounting and OB seriously in the way it teaches ethics.
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*Drucker is quoted in Roger L. Martin’s 2007 book, The Opposable Mind: How Successful Leaders Win Through Integrative Thinking, (p. 79). Martin is Dean of the Rotman School of Management.
MBA Ethics Education: Avoiding Excuses
Filed under: accountability, education, ethics, excuses, management, MBA |
Comments (9) 
This is the second in a series of blog postings on ethics education for MBA students.
We all want MBA students to leave school with a good chance of being able to do the right thing when the going gets tough. Sometimes, doing the right thing simply requires that we avoid the temptation to do the wrong thing. Positive role models are definitely a good thing, but we also need to understand why things sometimes go wrong.
We can gain insight into that by looking at why it is that people do bad things in the first place. The best short treatment of that topic that I know of, as it applies to Business Ethics, is a paper by my pal Joseph Heath.* Business seems to be, in Heath’s words, a “criminogenic” setting (i.e., a setting that seems to generate criminal behaviour, along with other forms of wrongdoing). If we want to improve ethical conduct in business, we need to understand what characteristics of the world of business are responsible for that pattern.
Heath points out that most of the “folk” theories of wrongdoing have long since been dispensed with by the experts who have spent the most time studying the topic, namely criminologists. Those folk theories hold that wrongdoing is caused 1) by defects of character, 2) by greed, or 3) by deviant values. But the available evidence just doesn’t support any of those explanations. That’s not to say that those things never play a role; it’s just to say that none of those 3 provides anything like a general explanation for wrongdoing. Instead, the existing criminological literature points to the fact that wrongdoers exhibit patterns of “neutralization” with regards to their crimes. That is, they describe their behaviour differently than an observer would. They define words differently, in order to attempt to rationalize their behaviour. In essence, what this allows them to do is to admit that they did the thing, without admitting that it was actually wrong.
The following are the “techniques of neutralization” that Heath gleans from the criminological literature:
- Denial of responsibility — e.g., “I had no choice!”;
- Denial of injury — e.g., “No one really got hurt anyway”;
- Denial of the victim — e.g., “They just got what they deserved.”;
- Condemning the condemners — e.g., “Those who accuse me are just out to get me.”;
- Appeal to higher loyalties — e.g., “I have a family to support!”;
- “Everyone else is doing it;”
- Claim to entitlement — e.g., “I built this company, I can do what I want!”
The final section of Heath’s paper deals briefly with business ethics education. He argues that what we know about the genesis of wrongdoing has clear implications for what we teach in business ethics classes. The techniques of neutralization are psychologically attractive, but in most cases they are logically faulty. So we need to teach business students to recognize them, and to recognize why they are faulty. (I’ve got lots to say on how to do that, but I’ll leave it for another time.)
Even more important, perhaps, Heath nods to the role of managers as designers. (See also yesterday’s blog entry, “MBA Ethics Education: Designing the Designers”.) The fact that managers are involved in the design of the work environments they manage implies that they need to be taught how to incorporate an understanding of the significance of techniques of neutralization into their design choices. They need the tools with which to build work environments in which certain kinds of excuses, in other words, are psychologically unattractive and socially unacceptable.
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*See Joseph Heath’s “Business Ethics and Moral Motivation: A Criminological Perspective,” Journal of Business Ethics 83:4, 2008. Here’s the abstract.
MBA Ethics Education: Designing the Designers
As a Visiting Scholar at the Rotman School of Management (more specifically at the Clarkson Centre for Business Ethics and Board Effectiveness), I’ve been thinking a lot lately about how we educate tomorrow’s business leaders. This is the first of a series of blog entries on that topic.
Clearly, what we need to teach future managers (especially MBA students) about ethics depends crucially on what we understand the role of managers to be. And with regard to management ethics, we should carefully distinguish two very different educational needs, rooted in managers’ two very different roles.
One role managers play is that of decision-maker, and so the first issue to consider with regard to managerial ethics concerns the ethical behaviour of managers themselves. In this regard, business schools are in the business of educating decision-makers. Such being the case, it makes sense to teach MBA students about various ethical theories, about what can be learned from various scandals, about social expectations with regard to business, and so on. We want to instill in MBA students that doing the right thing matters, and give them the skills to figure out what that requires of them. (Relatedly: I blogged recently about the MBA Oath and the question of professionalizing management.)
The other role played by managers is that of a designer: managers essentially are tasked with designing organizations (or parts of organizations — teams, branches, functional units, and so on). And so the other key ethical issue with regard to managers is whether they will have the skills to design business units that make it easier, rather than harder, for subordinates to act ethically. MBA students, then, need to be taught about the ethically-salient elements of organizational design. They need to be taught, for example, about the kinds of incentive structures and the kinds of organizational cultures that foster rather than frustrate, good ethical decision-making, so that they can try to design such structures and cultures in the workplace.
But it’s worth noting that even individual ethical decision-making (and not just the design of decision-making contexts) itself involves design. As Caroline Whitbeck points out (in an excellent article* that I recently taught to my Business Ethics class), there is a very strong analogy to be made between ethical decision-making and the kind of design thinking that engineers engage in. Ethical decision-making, like engineering design, involves an attempt to solve a problem, in order to achieve certain objectives, taking into consideration a set of constraints. And it involves attempting to find a good solution, in a situation in which there may be multiple adequate solutions, no clear best solution, but many clearly unacceptable ones. Ethical decision-making, in other words, is precisely not like a multiple-choice exam question. Real ethical questions are very seldom of the form “Should we choose option A or option B?” More often, the question is “what options are feasible?” And, “what would those options look like, in practice?” And, “what series of steps will that option include, and what will happen if we do X and so-and-so does Y in response?” Ethical decision-making is a design process.
So, whether we are thinking about training MBAs to make particular decisions, or training them to build the contexts in which particular decisions are to be made, business schools are in the business of designing designers. The question, then, is not just which ethical principles ought to be used as the building materials of good decisions, but what ethical principles ought to govern the design process itself.
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*Caroline Whitbeck “Ethics as Design: Doing Justice to Moral Problems” (from Hastings Centre Report, Vol. 26, No. 3, 1996).
Ethical to Teach a Bogus Therapy?
Filed under: critical thinking, education, energy, fraud, health |
Comments (22) 
Needless to say, the industry I myself work in — higher education — is in no way immune from sub-par business ethics. (Those of us involved in the teaching end of higher education don’t like to think of it as a business, but at some level that’s what it is, as long as a fee is being charged.) And what else can I call it but bad ethics, when a university offers courses teaching students to manipulate forces that don’t exist in order to generate effects that don’t happen?
Check out this article, from Common Ground magazine: Integrative energy healing
The Integrative Energy Healing (IEH) Certificate Program at Langara College in Vancouver is actively involved in weaving together the science and research of energy-based healing with its practice. For eight years, this program has worked to offer a three-year certificate program in IEH, which offers an in-depth study of the various Eastern and Western scientific theories underlying energy-based healing. It is also an exploration of the human condition and the practice of different types of energy-based treatments….
Here’s Langara’s page about its Integrative Energy Healing. (And for good measure, here’s the page about its Holistic Healing & Skills program.)
Sounds groovy. The problem: they’re teaching something that doesn’t work. “Energy Healing” is part of a cluster of practices that claims to diagnose and treat illness by examining and modifying energy fields that flow around and through the human body. These practices have been pretty well investigated, and they’re simply baseless. The physical starting points of these practices conflict with fundamental physics, and experiments have proven that they just don’t work. One of the main sources supposedly supporting the value of energy medicine, cited in the article above, is Energy Medicine (Oschman, 2000).
Here’s an article reviewing Oschman’s book: Energy Medicine, reprinted from Skeptic Magazine. The review is pretty devastating.
Of course, it’s not hard to find others who have found Energy “Medicine” at least worth looking at. The Common Ground article cites the US National Institutes of Health (NIH) “formally recognizes and encourages the study of energy therapies.” What the article leaves out is that funding has so far turned up zero in the way of useful therapies, and there have recently been significant calls by scientists for the NIH to stop funding this pseudoscience.
So, what is there to say about a university teaching this stuff? Well, to the extent that students believe they’re learning real health science, they’re being ripped off. And since the practices being taught are part of the enormous alternative medicine industry, students are being taught a set of practices intended to be sold to customers: they’re being taught to sell a bogus product. Oh, and in the process, Langara is cheapening the entire notion of higher education.
A final thought, for those of you not yet convinced that it’s problematic for an institution of higher learning to be teaching a highly-questionable practice like “Energy Healing.” What would our reaction be if a parallel university-based programme were started up with the intention not of teaching students to “heal” patients, but to build bridges? What if, instead of using math and physics to build bridges safely, we taught engineers to simply lay their hands on iron beams to “feel” whether they were strong enough?
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Addendum:
Just a bit of clarification: the story above is about Langara College. But I refer to it throughout as “a university.” Technically, colleges & universities are different kinds of institutions in Canada (they’re provincially regulated & mostly provincially funded, so the details vary). But everything I say above applies to higher education institutions of all kinds.
The Business Ethics Blog 