Teaching Ethics

THE TERM "business ethics" is often considered an oxymoron. But across the river at Harvard Business School there are growing calls for inserting a mandatory course on that very subject into the curriculum for all MBA candidates.

The reason? The involvement of B-Schoolers--several alumni and one student who subsequently was "asked to withdraw"--in the insider trading scandals that have rocked Wall Street in recent months. Mandatory ethics instruction, its advocates say, would help prevent graduates entering the business world with a "profits-at-any-cost" mentality.

Hardly. At best, such instruction would merely allow the University to disclaim responsibility for future alumni malfeasance. But Harvard is not to blame for the actions of its alumni. While instituting an ethics course may relieve the B-School's sense of guilt, it would not make Harvard MBA's any more "ethical."

HARVARD BUSINESS School provides vocational training. It isn't supposed to shape the moral character of its students, who come to Cambridge to acquire specific skills and knowledge. It's only inevitable that a few alumni will do things of which the school won't be proud, so there is little reason for the soul-searching going on right now. Harvard graduates tend to do well after they leave because they were already talented achievers when they got here. The University claims too much credit for their later success; it isn't morally responsible when they go astray.

Businessmen and Wall Street wizards who choose not to go in for illegal tactics aren't--and won't be--swayed by one course they were forced to endure back in school. Ethical sensibilities are the product of an extended formation and MBA students already in their middle to late 20s have for the most part made their fundamental decisions about their responsibilities to society.

More generally, business interests and ethical concerns regularly conflict in the real world that B-school students eventually will face. In a competitive business environment knowing something that the other guy doesn't know is the way to turn big profits. Secrecy and deception, whether legal or illegal, are part of the game. The line between the kings of financial shenanigans that are legal and those that aren't is arbitrary. Many graduates of another professional school, the one located just behind Littauer, will spend their careers thinking up ways for investors to bend the law.

While in some instances the profit motive may be held in check by a strong sense of ethical responsibility, good business and good ethics rarely work in harmony; the conflict almost always remains. Did Union Carbide readily pay out millions to the families of the Bhopal disaster, despite its clear responsibility for what happened? Does the certain knowledge that cigarette smoking is unhealthy prevent tobacco companies from putting forth all sorts of spurious arguments to the contrary?

Given the political and economic freedoms that we enjoy, the ethics of American business can improve only when individuals decide to let ethical considerations take their proper place in the policy process. Executives will have to allow such considerations their place, even if it affects the bottom line, and they'll have to exert pressure on their peers to do the same. Until that happens, the questions confronting Harvard MBA's in their future careers will continue to be: what can we get away with? or, how can we limit the damage?

In today's environment, B-School students are at Harvard to figure out how to maximize profits; social justice isn't on the agenda of American business. One course won't make any difference.