With turmoil in the financial market and controversy surrounding exorbitant bonuses for top-level executives, analysts and educators are beginning to question the ethical practices in business and, especially, the training of ethics in business schools across the country.
According a March 15 article in The New York Times, business schools have been criticized as being "too scientific, too detached from real-world issues."
The article also claims students receive "only a limited understanding of ethical and social considerations essential to business leadership."
Daniel Herron, professor of finance in the Farmer School of Business (FSB), agreed current educational trends in business schools need to be changed.
"Traditional business decision-making theory claims that all we should be concerned about is making money for our investors while obeying the law, everything else doesn't matter," Herron said. "We need to start teaching business students who are going to be making decisions that their business is a member of society and, just like individuals have obligations to all the different groups in society, so does business."
Herron helped to create the Business 101 course at Miami University, a required introductory level course for all business majors. Herron said the class was created to provide a framework for ethical decision-making that students may then apply in more advanced courses.
Todd Bailey, professor of finance in the Farmer School of Business, teaches two classes addressing these issues called "Legal Environment of Business" and "Ethics, Law, and Business."
He said the courses in Miami's FSB are exceptional because they emphasize the process of making ethical decisions rather than predetermining which decision is more ethical than another.
"There isn't a formula to this and if there was, we would have figured it out," Bailey said. "We teach students to develop the skill-set for engaging in the process of becoming ethical decision makers. You're not going to be the only person making decisions in your community."
Herron said the secret to ethical business practices is to stress decision-making techniques.
"The ethics is not in the solution, it's in the process," Herron said. "So the process of everyone weighing options and applying the financial, legal and ethical perspectives leads you to the ethical decision. What some business schools have not been teaching is that process."
Michael Curme, associate dean of FSB, said the college has been grappling with the process of teaching ethical business practices and decisions for several years.
"Ethical decision-making is present, but it's less likely to be addressed," Curme says. "We continue to have this conversation that the school needs to be more deliberate about (addressing ethics). It's an awareness issue and it doesn't happen over night."
Senior Ryan Dezso, a finance major, said he is confident the ethics courses at Miami are adequately preparing him for the workplace.
"Miami's ethics courses have been improving, even in the last four years I've been here," Dezso said. "I think that might be because so many issues have come up over time, especially in the last year. Even since Enron and now with the current crisis, we can practically learn from the things that are going on around us."
In reference to feeling prepared to make significant ethical decisions in the real world, Dezso said ethics are important outside of the classroom as well.
"A good amount of business ethics is based on your own personal value system and morals," Dezso said. "How to handle business situations and how to handle other things that go on while you're working-if you combine those two, we're pretty prepared to go out in the real world."
Curme said the role of the individual is crucial in making ethical decisions.
"Following an ethical framework is still theoretical and all we can do is demonstrate an understanding of the ethical framework while students are here," Curme said. "But how they act when they get out of here … that decision comes down to so many other things that are in the fabric of someone's being and are not going to be affected by what we teach and deliver in the business school."
