Ethics in business? Get real

Ethical standards may at last be rising in the business world, but helping MBA students understand their significance can still be a challenge. As Professor Paul Palmer explains, it means remaining firmly rooted in reality.

In 2007, I gave a lecture to MBA students on irresponsible bank lending. I’d been researching the idea of creating an ethical code for selling financial products, and thought it was important to share my findings with tomorrow’s business leaders. With hindsight, most people today would say that was a timely topic for discussion – but back then, it provoked a barrage of criticism from my audience. Ironically, they accused me of not living in the real world.

Of course, that was before the financial crisis began to unfold, so I didn’t mind the criticism too much. But even now, after we’ve seen so much proof of the trouble a lack of ethics can get us into, I still find myself having to justify why ethical decision-making is important. Talk about strategy or finance, and students are generally enthusiastic. But when it comes to discussing responsibility or sustainability, I have to provoke interest by stressing how vital these issues are to today’s businesses.

Perhaps it’s because ethics sounds like a branch of philosophy – people expect it to be dry and academic. In fact, ethics is more about real-life, everyday judgements than any other part of an MBA programme, so I’m very happy to ‘keep it real’.

How do we do this? Well, business scandals continue to happen with unprecedented frequency, so examples are easy to come by. These can make lively role-play sessions, covering everything from bribery and blackmail to sexual and racial harassment. And we don’t look at these from a politically correct perspective – it’s about hard business decisions, where serious problems can be traced back to fundamental failures of judgement.

Increasingly, our guest speakers are keen to cover ethical topics, giving us yet more real-world examples. And we’ve recently made more of our City connections through a special project where students compete to work with eight leading city firms and organisations. Each successful participant gains direct, hands-on experience of a corporate responsibility issue, carrying out research on a topic of genuine value to the partner and completing a consultancy report.

This focus on the real world comes as a surprise to many students. Some are also surprised to find out how difficult this module is - Ethics is a tough, serious subject.

But my role is more than running this part of the course. As the Dean’s introduction to this eNewsletter says, with my team, I’m running a cross-school review of the ethical business content of all Cass courses – undergrad, postgrad and MBAs. We’ve now completed a pilot, and been encouraged by everyone’s willingness to reassess their areas from an ethical standpoint. As the project rolls out over the coming months, we hope to see its influence spread throughout the school – with possible new course designs and materials.

Most importantly, as ethics is so grounded in the real world, I hope the review will result in yet more practical elements in our teaching. As a business school, we know how to ‘get real’, and this project will make that focus even sharper.