… UD was entering a blue line train at Foggy Bottom, and a woman with lots of luggage sat down next to her. The woman apologized for taking up so much room with the luggage, and UD commiserated. “No fun dragging lots of stuff from one car to another.”
The woman explained that she commuted twice a week to a lectureship at GW University’s school of business. “I teach a class in business ethics.”
Readers of the UD category Beware the B-School Boys know that UD has what to say about that.
In her shy, tongue-tied way, UD took advantage of the three minutes they had before they went their separate ways at Metro Center to tell this woman all about her area of specialization.
The woman was a good sport, and she came right back with a defense of the enterprise, and UD came back from the defense, etc., etc.
I swear it was all very amiable, with the woman (they exchanged names on the platform, but if you think UD remembers swiftly exchanged names on noisy platforms, you don’t know UD) insisting that “in the long run” unethical behavior destroys shareholder value, and UD insisting that short-term profit seems to suit a lot of people perfectly well, thank you, and that for instance insider trading – both unethical and illegal – seems absolutely rampant — you might say even structural to the economy — and even after the feds finally drag in Steven Cohen it will continue to be a practice many business people defend and engage in…
UD‘s hastily attempted point (swaying train, unsteady luggage, crush of commuters) was that business schools are hopelessly up against a humongous cognitive dissonance between moral scrupulousness and the nature of competitive financial markets. She was not saying, she yet more hastily hastened, that free marketeering was the work of the devil. She merely pointed out that mild to extreme cheating was endemic to the project, and the business school that fails to take this into serious account runs the risk of having its ethics component be a laughingstock.
You see, the rhetoric of university business ethics courses always looks like this. This Globe and Mail article begins, as most on the subject do, with the rampant reality:
Over the past decade, a succession of high-profile corporate crimes has spurred business schools, globally, to infuse business ethics and leadership into course content.
Not just the last decade, of course; corporate misbehavior and crime has been massive for decades. And business schools have been offering tons of ethics courses through all of those decades. But, you know, check out this category, Beware the B-School Boys. Just read the latest entry in it, about the dean of Columbia University’s business school.
Anyway, the Globe and Mail story goes on to announce that this new guy is really going to turn things around at Ryerson University…
Yet the language he offers his interviewer is dead jargon city. Leadership is a process, not a position… Let’s talk codes of conduct…
Faithful UD readers know what she proposes. Toss the courses. Initiate a lecture series featuring business cheats who got caught. These guys are often articulate, charismatic… Incentivize them by taking a bit of time off of their sentences for each speech.
January 21st, 2013 at 3:23PM
“a humongous cognitive dissonance between moral scrupulousness and the nature of competitive financial markets…mild to extreme cheating was endemic to the project”
UD, would you argue that lack of moral scrupulousness is more endemic to a free-market economy than to other types of economic organization? Feudalism, for example? Government-directed corporatism (in Mussolini’s sense), aka economic fascism? Classical socialism?
Will the director of State Steel Mill #34 be any less likely to take shortcuts with worker safety in order to meet his production targets (and keep his privileged position) than the general manager of a capitalist steel mill worrying about meeting his P&L target?
Is a high-level Federal bureaucrat any less likely to inappropriately use insider information to help his career than a Wall Street fund manager to use insider information to help HIS career?
Is a university researcher with a possible Nobel Prize at stake…or maybe just an opportunity for fame within his profession…any less likely to make up data than a corporate researcher hoping to become VP of R&D?
I think the evidence is that power and glory are temptations at least equal in their force to the temptation of money.
January 21st, 2013 at 4:05PM
david: Excellent question. I’d say cutting corners and more serious cheating/illegality is endemic to humankind. Yes. But of course the damage done to all of us – and to society – by high-level, large-scale, multinational business illegality is far, far greater than your other examples.
January 21st, 2013 at 5:57PM
The advantage to be gained by short-term, legally actionable behavior is friggin’ enormous. I don’t mean the honest mistake, the occasional fudged number, the sometime misrepresentation of a product, sales puffery, or other sharp practice. I do mean working a racket, often by systematically lying to other players who are in a position too weak, too vulnerable to counter your rig.
I was so distressed about the endemic corruption in business (I was a salesman), I finally got out, even though I had a genuine knack for it.
January 23rd, 2013 at 7:37AM
FWIW-back in the 1990s I thought of entering a new line of work. The technical knowledge I expected to acquire quickly, but I was repeatedly warned, “You’ll have trouble finding a straight shop. You’ll be slow-paid and no-paid and just plain beaten down, no matter what you bring to the table.” I declined the opportunity.
Think about that the next time you hear the standard-issue bleating from our chambers of commerce about not being able to find good workers.
david foster, I agree with you. I’ll add that there’s a sort of “meritocratic expectation” (my term) in markets that makes corruption within them especially painful.