Trying to Mix Ethics and Big Bucks

Post-doctoral ethics fellow Joanne B. Cuilla was searching for a book by Professor Carl F. Taeusch--an ethics specialist who taught at Harvard Business School in the 1930's--when she found a valuable collection of works on ethics hidden away in the second basement of Baker Library. Cuilla examined the dusty collection closely, and discovered that many of them had not been checked out since the 1950's.

Realizing the books were valuable, Cuilla said she was surprised the books had been left to gather dust in a dark corner of Baker. "It wasn't like they were outdated or anything," she said, adding that they still could have been useful tools for ethicists to examine.

For 30 years, the collection had lain dormant, a silent testament to the lack of interest in ethics business scholars had displayed. But this year, the Business School began considering ethics in professional education much more seriously.

As insider trading scandals rocked Wall Street, Business School Dean John H. MacArthur announced that Harvard would set up a $30 million ethics endowment, two-thirds of which came from Securities and Exchange Commission (SEC) Chairman John S.R. Shad. Rather than solving the B-School's ethical dilemmas, the money only caused more difficulties as the School sought ways to spend it.

Harvard has yet to pinpoint exactly how the money should be spent. The Business School currently offers one optional course in ethics, "Ethical Aspects of Corporate Policy," which last year attracted only 60 out of the 800 second-year students eligible to take the course.

The professor who taught this course, Kenneth E. Goodpaster, was denied tenure this year, and will leave the Business School in the fall. Senior Associate Dean of the Business School Thomas R. Piper said that the course would be offered next year, but would not say whether an ethics expert will be hired to teach it.

At the time that he announced the new endowment, MacArthur said that the Business School would definitely not introduce a required ethics course, but would integrate ethics into many different classes.

"It is clear that ethical issues have to be considered as they arise in the profession of business--constantly, and unexpectedly," MacArthur said to reporters at the time. "They have to be imbedded in the very fabric of what we teach and research at Harvard Business School." MacArthur has repeatedly refused to speak to The Crimson.

SEC Commissioner Edward M. Fleischman '54 said that Shad gave money to Harvard for a program that would approach ethics from a variety of angles. "The chairman is no visionary, and he's no fool. His attitude is multi-dimensional, and part of his attitude is that you have to teach ethics along with the rest," Fleischman said. "Part of the job is to give an official imprimateur to the role of ethics, showing what the problems are."

The Business School will set up several committees to look at directions for the new program, which will be implemented during the next 10 years, said Joseph L. Bower, an assistant Business School dean. Recently the B-School faculty initiated a comprehensive self-review of their MBA program, but did not focus on ethics exclusively.

"It is not just a matter of whether there's an ethics module or not an ethics module. One must study the entire experience," Piper said.

Piper, who is playing an instrumental role in the B-School's planned review, said he has spent the past six months communicating with ethics centers about their programs, in an effort to find models for Harvard to follow. However, few schools have chosen to integrate ethics into their classes although they require students to take a course on ethics.

"What hasn't been answered is, why at most schools of higher learning, it is such a challenge to distribute [ethics] across the curriculum. I think it is critical that we research to see why it is and what can be done," Piper said.

But many outside scholars doubt Harvard is the school to lead the way.

"I think that would take a faculty whose members were already firmly committed to business ethics, and Harvard's faculty has a reputation for being antagonistic to applied fields like business ethics," said Manuel Velasquez, chairman of the Society for Business Ethics and the director of the Center for Applied Ethics at Santa Clara University.

Others cite the University's lack of tenured ethic experts as a sign of Harvard's lack of commitment. "[Their denial of tenure] surely seems to leave us with some serious questions as toward the seriousness and competency of the Harvard Business School in establishing such a program," said W. Michael Hoffman, director of the Center for Business Ethics at Bentley College.

Kennedy School Professor Dennis Thompson, who will lead Harvard's new ethics program, initiated by President Bok this fall, said that hiring outside experts to teach ethics is not always the perfect solution. "Ethics has to take root among the faculty members themselves. It cannot be grafted on. But that does not mean people from the outside can't help," Thompson said.

While Thompson said he would like to see the Business School hire theologians and philosophers to teach ethics courses in the MBA program, Harvard is committed to its case study method of teaching business, which would require an ethicist to have a strong foundation in business as well.

Students say they hear little about ethics in the classroom. Though a Business School student and a graduate were implicated in the Ivan Boesky insider trading scandal, students said they never discussed the events in class.

"[The trading scandal] is a pretty immediate thing right here," said second-year student Scott N. Bruskin. "But there is sort of a lid on it. It hasn't come up in the classroom environment." Bruskin said that his professor for a Management Policy and Practice class ignored students' requests to talk about the Boesky case rather than hold the scheduled case-study discussion.

The Boesky case is not the only ethical topic ignored in class. Arthur G. Epker III, another second-year student, said that out of 19 courses he had taken in the past several semesters, he could think of only one case in which the class discussed ethical questions.

"The faculty have resisted [the teaching of ethics] and that's because they either don't understand it or because they think it's a soft discipline," said Reverend Robert K. Massie, a doctoral student at the Business School.

Others say that the teaching of ethics is not at all feasible. "I think it's the most ridiculous thing I've ever heard," said David J. Vogel, professor of business and public policy at the University of California at Berkeley. "I think it's sort of a parody--the notion of throwing money at problems went out with the sixties. I think that schools are setting themselves up to be made fools of."

The Business School has already decided to spend part of the money on a University-wide program to bring four ethics fellows from different disciplines to research and speak on ethical issues. One of the four fellows for next year, Massie said the Business School would take its time spending the $30 million. "They're building for the long run. They're not interested in making a big splash," He said.