Bottom Line or Business Ethics – Which is more Important? Judith Samuelson’s article discusses – Chuck Gallagher Business Ethics Speaker comments…

July 21, 2012

There have been a flurry of articles lately about what and how business schools teach business ethics.  The most recent, an article written by Judith Samuelson on the HUFF Post Business section states the following:  “Research conducted by the Aspen Institute suggests that ethics IS taught in business schools, and, increasingly, with an eye to making it stick by embedding it in orientation programs, “learning journeys,” core course work and hands-on experience.”

It is in the first part of her article that I take exception.  As a business ethics speaker and author I see first hand what seems to be the norm for business ethics offerings in b-schools and it’s pathetic – at least that’s my opinion.  Samuelson goes on to say, “Business ethics goes by many names and the vast majority of schools in the Institute’s ranking of business schools require ethics or something that goes by the name of “social responsibility,” “social enterprise,” “social impact” or “leadership and values.””

REALLY?  Social responsibility?  Social enterprise?  Leadership and values?  Come on…you can call it what you want, but if you don’t teach beyond the theory of what is socially acceptable or how leadership intersects moral norms, you effectively have little more than just fluff!  Theoretical fluff…I would call it and that has little impact in the real world when faced with split second decisions that have an impact far beyond the moment.

One clue comes from the inside. Luigi Zingales, a titan of the academy of finance who teaches at the University of Chicago, argues that business education across the disciplines needs to move from a stance of “values neutrality” to one where students are exposed to the moral decisions that permeate the core of business. Zingales suggests we deliver “ethics” in accounting and finance rather than a course labeled Ethics, which is bound to turn off motivated students looking to get ahead.

Interesting paragraph by Samuelson.  Intriguing that Zingales wants to hide ethics in some other course because it turns off motivated students who want to get ahead.  I have an alternate suggestion…  Educate students with the course – “How to avoid an orange jumpsuit and handcuffs” – in other words make ethics real and alive.  What do the professors know about the real world of federal prison, how one turns to the dark side and what happens when that happens.  Pardon the bluntness, but perhaps students should be scared sh*tless and know the real world implications of their (sometimes misguided) desire to get ahead.

Samuelson shares: To the contrary — research also suggests that the big take away from b-school is the same one that permeates board rooms. Ethics are important, but earnings-per-share is the guiding principle. Remember the ethics handbook distributed to each employee at Enron? The more compelling and well compensated message went something like this: We exist to make money. “Profits,” aka “shareholder value,” is the most important metric. We all benefit when the stock price goes up — and employees who make it happen will receive the most. Damn the torpedoes; full speed ahead. EPS is the main meal. “Ethics” is desert.

Samuelson’s article approaches the education of business ethics in a focuses thought provoking way.  Nice article.  I, on the other hand, would love to share a good dose of reality into the minds of the students helping them connect the dots between choices and consequences.  Perhaps a semester of real world example where the students choose among a set of choices giving them an opportunity to see which one’s result in career destruction and arrest would have far more impact.  Maybe we should call it:  Career Destruction and Prison – the Ethics Course YOU Won’t Forget!

What do you think Judith?

Photo by Clay Bennett – see claybennett.com


Business Ethics as a Core Course in Business Schools? What a novel idea…or do you prefer an Orange Jumpsuit and Handcuffs?

July 18, 2012

What a novel idea is right…  It seems that what is OBVIOUS sometimes is missed by the masses.  Honesty, integrity, and ethics are – or should be – the core foundation for which we operate in life.  Yet, as Luigi Zingales points out in his article: “Business School should count ethics as a core course” it appears that all to often those who are at the top of the business food chain seem to forget the core of business fundamentals.

Zingales, in his article, states: “Recent scandals at Barclays, JPMorgan Chase, Goldman Sachs and other banks might give the impression that the financial sector has some serious morality problems. Unfortunately, it’s worse than that: We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame.”

The problem – at one level – is academics seem to be more concerned with theory than practical application.  Again, Zingales shares the following:

Most business schools do offer ethics classes. Yet these classes are generally divided into two categories. Some simply illustrate ethical dilemmas without taking a position on how people are expected to act. It is as if students were presented with the pros and cons of racial segregation, leaving them to decide which side they wanted to take.

Others hide behind the concept of corporate social responsibility, suggesting that social obligations rest on firms, not on individuals. I say “hide” because a firm is nothing but an organized group of individuals. So before we talk about corporate social responsibility, we need to talk about individual social responsibility. If we do not recognize the latter, we cannot talk about the former.

I agree!  Ethics theory – while valuable – doesn’t go far enough to teach those who will face practical application what to do and when to do it when faced with pressure and temptation.  Theories are wonderful, but how many of us think about theory when faced with real life challenges in real time.

As a business ethics speaker, I was set up as the keynote speaker at a university in Canada.  My background was hidden from the faculty as the Dean of the Business School…wanted my presentation to impact both the student attendees as well as the faculty guests.  To that end, as we prepared to share dinner together before the presentation, one of the professors asked me a simple question – “What theory of ethics do you follow?”

That question caught me a bit off guard as my mind raced to formulate an appropriate answer.  Then it hit me…  The answer just flowed from my mouth – “The theory that keeps you out of federal prison!”

“Oh” responded the professor, and quickly he found company somewhere else.  Discomfort created by my response is just what needs to take place when teaching ethics.  We, all too often, make ethics some luke warm course to fill a curriculum and fail to teach the real world application of what happens when ethics fail.  Zingales says:

The way to teach these ethics is not to set up a separate class in which a typically low-ranking professor preaches to students who would rather be somewhere else. This approach, common at business schools, serves only to perpetuate the idea that ethics are only for those students who aren’t smart enough to avoid getting caught.

Rather, ethics should become an integral part of the so-called core classes – such as accounting, corporate finance, macroeconomics and microeconomics – that tend to be taught by the most respected professors. These teachers should make their students aware of the reputational (and often legal) costs of violating ethical norms in real business settings, as well as the broader social downsides of acting solely in one’s individual best interest.

So here’s the deal…if your business school isn’t committed to teaching practical ethics then you can’t expect graduates to apply ethics in practical day-to-day applications.  What is practical ethics – perhaps it’s ethics applied in such a manner that it keeps you out of an orange jumpsuit and handcuffs.

Your comments are welcome


Featured New Book, “Accounting Ethics… and the Near Collapse of the World’s Financial System,” – a Business Ethics book that is worth a read!

August 17, 2011

This new book manifests the importance of accounting ethics by looking at the role that some ethical failures played in recent scandals, particularly AIG’s role in bringing the world’s financial system to the brink of collapse. After establishing the vital importance of ethical accounting, the book goes on to give a thorough analysis of what ethical behavior means for accountants and shows them what can be done to embody that ideal.

Quote startPakaluk and Cheffers… have tackled every major ethics issue currently facing the accounting profession.Quote end

Sutton, Mass. (PRWEB) August 17, 2011

The fruit of a collaboration between a Harvard PhD and ethics specialist (Pakaluk) and a Harvard MBA and forensic accountant (Cheffers), “Accounting Ethics” is an entirely new treatment of the subject that reads like a detective story while imparting a deep understanding of professional ethics for accountants.

The book’s treatment of the role of accounting ethics failures in the financial crisis connects the dots between AIG’s first massive accounting ethics failures, dating back over 20 years, and AIG’s more recent accounting irregularities that—as Ben Bernanke and Timothy Geithner have stated—nearly brought the world’s financial system to its knees.

Pakaluk and Cheffers also examine accounting ethics issues associated with Enron, Worldcom, Lehman Brothers and more, paying particular attention to clashes between rules and principles, conflicting interests and the challenges facing corporate accountants, Big Four auditors (Ernst & Young, KPMG, PWC and Deloitte), the FASB, AICPA, and related regulatory bodies.

While not a “gotcha” book designed to point fingers, Pakaluk and Cheffers, in their third book on accounting ethics, have tackled every major ethics issue currently facing the accounting profession, including well established traditions such as independence, codifications of conduct, professional foundations and whether or not accounting ethics can be taught. The authors support their insistence on the importance of accounting ethics using historical, philosophical, and sociological research.

This book’s attractive presentation of deep philosophical thought– that will enlighten even the most experienced accountant—using a fast moving who-dun-it style, will keep practicing professionals and students alike glued to the pages.

“If you never could have imagined a textbook in accounting that through large sections reads like a detective novel, well, one has been created, courtesy of the once unimaginable professional and ethical breakdowns in a slew of major companies: Enron, AIG, and others. … The clear expositions and well-argued principles set forth in this suspenseful book give intellectual grounding to a profession that utterly relies on courageous honesty and integrity, as exemplified in this book’s opening pages. That is what accounting brings to the market, and without it the practice is empty of value.”

—Michael Novak, Ambassador, Templeton Prize winner and author of The Spirit of Democratic Capitalism

“If you are familiar with Understanding Accounting Ethics, either the second edition or the original, also written by Pakaluk and Cheffers, you will immediately see the same passion for ethics evident in their latest book. Smart accountants will make it an essential part of their personal ‘business bookshelf,’ while the smartest accountants will actually take it off the shelf and read its chapters periodically.”

—Jonathan Hamilton, Accounting News Report

About the Authors:

Michael Pakaluk, Ph.D., is a professor of philosophy and currently is the Chairman of the philosophy department at Ave Maria University in Naples, Florida. He has written extensively on ancient ethics and morality. Dr. Pakaluk’s expertise in accounting ethics, in conjunction with his position as Senior Research Analyst and Public Policy Consultant with the Ives Group, Inc., led to an invitation to present a seminar on accounting professionalism and IFRS convergence for the Financial Accounting Standards Board (FASB) in 2009.

Mark Cheffers, C.P.A., A.B.V., is the Founder and CEO of Ives Group, Inc., an independent research provider focused on developing web based due diligence and market intelligence tools. Its subscribers include many of the most prestigious professional service firms, educational institutions and regulatory bodies in the world. A former PWC auditor, forensic accountant and ligation consultant, Cheffers has delivered numerous seminars and written extensively on accounting malpractice, ethics, and financial reporting matters.

Product Information:

Accounting Ethics…And the Near Collapse of the World’s Financial System
By: Michael Pakaluk and Mark Cheffers
ISBN: 9780976528036, 424 pages, $75.00

Order Through the Allen David Press Website:

On Amazon:

Or contact sales representative, Mr. Thomas Hardy:
Tom(dot)Hardy(at)AllenDavidPress(dot)com


All things Business Ethics – Bidhan “Bobby” Parmar wins Best Dissertation Award 2011! Congratulations!

August 11, 2011

University of Virginia Darden School of Business Professor Bidhan “Bobby” Parmar has been selected as the winner of the Society for Business Ethics Best Dissertation Award 2011. His dissertation is entitled, “The Role of Ethics, Sensemaking and Discourse in Enacting Authority Relationships.”

Bobby ParmarAccording to the Society’s website, the purpose of the award is to recognize the dissertation that most clearly demonstrates the potential to contribute to substantial advances in business ethics research and practice.

Parmar’s dissertation, unlike traditional work in business ethics, examines ambiguity, language and social relationships as critical aspects of moral decision-making in organizations. His work demonstrates how an individual’s organizational role can shape his or her perception of and subsequent handling of ethical issues. Because organizations have a division of labor to produce goods and services, it can be very difficult to place responsibility for ethics failures. One key practical implication is to improve the kind of ethics training that managers and leaders receive. Instead of relying only on improving individual decision frameworks, Parmar’s work suggests that companies need to treat ethics failures like other system failures and create mechanisms to prevent those failures – by making clear how internal and external stakeholders will attribute responsibility for ethics failures.

Parmar will receive a plaque and a cash prize at the Society’s awards luncheon on 13 August in San Antonio, Texas, during the organization’s annual meeting.

Parmar is an Assistant Professor in Business Administration, having recently finished his MBA/PhD at Darden. His research interests focus on how managers make decisions and collaborate in uncertain and ambiguous environments to create value for stakeholders. His recent research examines the impact of authority on moral decision making in organizations. Parmar’s work has been published in Organization Science and the Journal of Business Ethics.

He teaches courses in Darden’s MBA programs, including First Year “Ethics,” “Leading Organizations” and a second year elective called “Collaboration.” Parmar is a fellow of the Business Roundtable Institute for Corporate Ethics, an organization housed at Darden, which brings together leaders from business and academia to fulfill its mission of embedding ethics into the everyday business decision-making and practice of organizations. He is also a fellow of Darden’s ethics research center, the Olsson Center for Applied Ethics at Darden. Prior to teaching at Darden, Parmar taught at the University of Virginia’s McIntire School of Commerce.


Colorado State University and the University of Northern Colorado Present Symposium on Business Ethics Aug. 11-12

July 27, 2011

News Release re: Ethics Education

FORT COLLINS – Colorado State University and the University of Northern Colorado will present the Daniels Fund Ethics Initiative Leadership Symposium on Business Ethics Aug. 11-12.

In a business era punctuated by new and serious ethical challenges, this two-day interactive symposium is geared toward providing relevant tools and practice for navigating ethical dilemmas that professionals may encounter. All sessions will take place at the Bohemian Auditorium inside Rockwell Hall West on the CSU campus.

A variety of noteworthy speakers and presenters have been selected to lead the symposium in the following areas:

• Corporate Governance and Business Ethics Case Study – Led by Eric M. Pillmore, senior advisor for corporate compliance, Deloitte Center for Corporate Compliance and the former vice president of corporate compliance, Tyco International, this interactive session will engage participants in a case study of Tyco International and offer recommendations on how to restore an ethical culture to a company.

• Social Responsibility and Business Ethics – Bryan Simpson, media relations director for New Belgium Brewing Co., will lead a discussion of the company’s efforts toward maintaining sustainability and social responsibility in their business operations. Thomas Dean, professor of entrepreneurship and sustainable enterprise and the Daniels Ethics Professor at Colorado State University, will facilitate an interactive exercise where participants will balance profit maximization and sustainable business choices.

• Applying Ethical Decision Making at Work – Using business-based ethical dilemmas, Linda Ferrell and O.C. Ferrell, both professors of marketing and Bill Daniels Professors of Ethics at the University of New Mexico, will guide participants toward making workable recommendations based on unique organizational roles and perspectives. The two also will provide a framework for definitions, examples and overall understanding of organizational ethical decision making.

• Ethical Decision Making Simulation – Barney Rosenberg, a veteran of three decades of leadership in business ethics and corporate compliance, will lead this session that asks participants to use the knowledge gained in the symposium as a mock board of directors is forced to navigate a complex business environment in the corporate fast lane. Rosenberg, vice president of ethics and business conduct for The Meggitt Group, is a former general counsel for Mattel Corporation and a former deputy general counsel for Pitney Bowes.

This Leadership Symposium on Business Ethics is made possible through the support and leadership of the Daniels Fund, reflecting the interest in ethical business practices of Bill Daniels, its namesake. The Daniels Fund Ethics Initiative sponsors business ethics studies and research at seven U.S. universities, including Colorado State University and the University of Northern Colorado.

Individual cost to attend the symposium is $450, which includes breakfast, luncheon and evening networking event meals. To register for the conference or to learn more, visit http://transition.biz.colostate.edu/RSVP/2011LeadershipSymposium.aspx


Ethics and the Truth! Is What Used to be Trump University a Scam?

June 30, 2011

An interesting article was posted on CNN recently that discussed dramatic increases in Higher Education.  Two things seemed a bit strange to me: (1) the Federal Government was investigating the tuition increases at the same time they were cutting funding to Higher Education; and (2) featured in the middle of the article was an “out of place” video report on what used to be called “Trump University”.

The video and it’s content caught my eye.  Here’s the video for you to review.  Then let’s talk…

OBSERVATIONS:

What would motivate anyone to sink $35,000 into a three day school and pay for it by maxing out credit cards?  Funny, but a scammer knows the human emotions that motivate people to make uncommon choices that typically lead to disaster.  In this case, the motivation – “the desire to be rich!”  Reality check…the rich get that way through hard work and understanding how to take advantage of a situation.  Trump is a master of that art.  If you think you’ll be rich from taking a three day course – you’re delusional.

“I thought I’m gonna be a millionaire because Donald Trump is a millionaire.”  A simple expression that exemplifies the power of thought and how one can easily be duped into helping the millionaire stay a millionaire!  Trump knows that success does not come easy, yet the marketing of his course opens the flood gates of money (to him and his organization) from folks who generally know no better.

The coach never met with the subscriber/student.  “If you offer something and you don’t deliver – you are stealing!”  Well…that’s true.  The question is – does the Trump organization recognize the ethical issue with offering something or promising something and then not deliver?

The Better Business Bureau gave Trump University a grade of D-  Ouch.  Wonder if this were The Apprentice if Trump would allow that to take place.  Seems that this is tarnishing his reputation!  Or maybe it supports his reputation as it is not as spotless as he might think.

Investigated for consumer fraud and deceptive business practices – The New York Attorney General is looking into issues related to Trump University.  Likewise Trump got into trouble with the Education Dept in the State of New York and the name – TRUMP UNIVERSITY – has been changed to TRUMP ENTREPRENEUR INITIATIVE…

QUESTIONS:

Have any readers had first hand experience with Trump University or Trump Entrepreneur Initiative?  If so, how would you evaluate your experience?

Do you think that Trump is ethical in his representation of the value of the Trump University experience?

YOUR COMMENTS ARE ALWAYS WELCOME!


Business Ethics Roundup – Week ending January 24, 2010 – Comments by Business Ethics Speaker Chuck Gallagher

January 24, 2010

This is a weekly round up of some of the best business ethics articles, reports and blogs that I’ve seen.  Feel free to click on the links provided, take a look and offer comments here.  The discussion that follows is useful to those who routinely come here for business ethics news and reports.

Business Schools put Ethics high on MBA agendas

This article plays an interesting theme that I am focusing in on as a business ethics speaker and blogger.  What role does the business school take when it comes to business ethics education?  Is business ethics a topic or course description or are ethics larger and part of a comprehensive education that is woven into the fabric of business disciplines taught in both graduate and undergraduate education?  The article is an interesting read.  My question, however, focuses on why just advanced degrees.  It seems to me to assume that business leaders must have advanced degrees in order to become leaders.  I’m not sure I agree with that, but take a look and feel free to offer comments.

Should business ethics be more than a course offered to business students?

Another link to a business ethics university related posting can be seen here.

Caribbean bookings up…

Now one might wonder what tourism bookings information might have to do with a business ethics blog?  Consider Haiti.  Many have criticized cruise ship companies when they continue to offer vacation bookings to Haiti and their neighbor – the Dominican Republic.  Chris MacDonald, a business ethics professor at Saint Mary’s University in Halifax, said travellers to either nation on the island of Hispaniola should not be deterred from their plans — unless logistics make scheduled trips impossible — because these struggling nations need tourism dollars.  Perhaps the luxury and opulence that folks think about when it comes to the cruise industry is, in fact, a positive ethical behavior when it comes to pumping money into the area and providing sustenance for folks who need an economic foundation.

What do you think?

Finders Fee or a Bribe?  A Case Study in Blogger Ethics:

It is incredible what innovations the internet has created.  One is the blog.  It wasn’t that long ago that I didn’t have a clue what a blog was, but less the power it wielded.  Of course, as a business ethics blogger and speaker, I am aware of the simple, yet powerful, use of the pen and open publishing that blogging provides.  This article is cool, in that, it expands the discussion of blogging and ‘financial affiliations’ in the open world of the internet.

Here’s a quote: On Jan. 14, Katherine Rothman, CEO of KMR Communications, sent a mass email to bloggers and other editors who cover beauty, fashion, health and fitness. “I would like to make an offer to you that could be mutually beneficial in the event that this is of interest,” Rothman wrote. Writers, she continued, often find themselves covering “smaller or emerging companies” that lack PR representation. “My offer is this: if you recommend a prospective client to our firm and they sign a contract with us, I would in turn provide you with a generous finder’s fee.”

The discussion is interesting and this is worth a read!

Your comments, of course, are welcome.

CLOSING COMMENTS – Thanks for being a reader of the business ethics blog.  If you run across stories of either business ethics at work (doing well) or business ethics run amuck…feel free to give me a shout.  You can reach me outside of this blog at chuck@chuckgallagher.com