The summary of Where Will They Lead? 2003 MBA Student Attitudes About Business and Society may be found at www.aspenbsp.org.

 

Before delving into the report, I assume as a minimum the ethical principles of truth telling, not stealing, and treating others as you would want them to treat you. In the last column I discussed several myths about ethics and concluded that:

One of the fundamental findings, and also one of the most incredible, is that students feel unprepared to "manage values conflicts." It begs the questions of how much ethics training they had before -- and how much they chose to retain. Frankly, students should know a lot about ethics and "managing values conflicts" before they ever enter an MBA program, for they should have received such training from their parents, their extended family members, their teachers, and whoever headed whatever clubs and associations they joined, as well as managers at firms where they worked. To place the entire burden on MBA programs is ludicrous.

 

The question itself ("To what extent is your business education preparing you to manage values conflicts?") is a bit ambiguous. Does it refer to difficulties in implementing ethical decisions, which I agree sometimes can be very tough, or does it refer to conflicts between your ethical principles when the boss wants you to bend or break the rules? If the latter, I don't understand the responses by graduates. My mother and my father taught me not to lie, cheat, steal, or be unfair. If that's what the boss wants, I tell the boss no, and if he or she does not comprehend my stand, I see my attorney. I did not have to go to graduate school to learn that.

 

Another interesting question is "How important are the following factors in contributing to the recent corporate scandals in the U. S.?" Almost half of the respondents claimed that "the priorities communicated during business school" played a role in these scandals. That's a bit puzzling to me because I would like to know what priorities they are talking about. Unfortunately, the Aspen Institute failed to define its terms.

 

I have read many papers and heard lots of speeches in which the author asserts that the maximization of shareholder wealth is a principle that leads to unethical behavior, so I'll surmise that issue is at the core of these "priorities." While it can lead to unethical behavior, it doesn't have to. Besides, not working to maximize shareholder wealth is a form of thievery since the stockholders have contributed their capital in hopes of receiving dividends and capital gains. These proponents typically err because they confuse the implementation of that ethical principle with those managers who employ that proposition as a rhetorical device to bolster their own actions. In fact, an objective observer of the corporate scandals of the past years would have to conclude that investors got robbed when top executives pretended that they were the owners instead of the managers. It was the larceny by corporate managers that led to the corporate scandals, not the managers working to maximize the wealth of shareholders.

 

As an aside, the survey is flawed on this question because it does not elicit any response for factors that contributed heavily to the spate of scandals. These factors include the lack of enforcement by the Securities and Exchange Commission and the Justice Department, the existence of stock options, the failure by Congress to fund the SEC so that the SEC could do its job, the failure by the Financial Accounting Standards Board to issue good accounting standards concerning special purpose entities, among other topics, and political campaign contributions that encouraged members of Congress to thwart the efforts of the SEC and the FASB to improve financial reporting. It is hard to interpret the results when the survey omits some of the most important dynamics behind the corporate scandals.

 

For a solution, the Aspen Institute asks several questions about social responsibility or imbeds social responsibility into the factors to consider under a specific question. However, the author of the survey ought to understand that ethics and social responsibilities are not synonymous. Overlapping, yes, but not equivalent.

 

For example, the institute queries, "Which of the following MBA courses do you think should address issues to the social responsibilities of companies?" and then lists virtually all first-year courses of a typical MBA program. When I teach financial accounting in the MBA program, I certainly include issues about telling the truth to debt and equity investors in financial reports, but is that what they mean by social responsibility? I wouldn't know how to answer the question. In addition, the survey contains the obvious flaw that the author is encouraging all respondents to enumerate all courses, presumably to draw certain conclusions.

 

Finally, I am bothered that the survey asks nothing about the corporations that hired or will hire MBAs. In many ways, corporate America has more power in teaching ethics to their new employees and more responsibility than graduate schools could ever aspire to. Even if MBA programs did a stellar job in teaching ethics to their students, business enterprises could emasculate the labor by not creating a corporate culture that teaches and enforces ethical principles.

 

I think MBA programs can and should teach the application of ethical principles to the business world. Because of its flaws, the survey does not help us to understand where or how to achieve this in our MBA programs. Even so, some of the responses by graduates demonstrate a naiveté about ethics in the corporate world. What bothers me most is that for some of these students maybe, just maybe, none of their family, friends, or associates cared about ethics until now. If so, society may have future upheavals when these individuals face temptations behind their corporate desks, regardless of what MBA programs have accomplished in ethics training.

 

J. EDWARD KETZ is the MBA Faculty Director at the Smeal College of Business at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk (Wiley, July 2003), which explores the causes of recent accounting scandals.