Do business schools fosters a corporate climate of greed?
 

NO
Linda Cunningham:
Corporations, not schools, are the source of corruption

Although business schools may not be doing all they can to foster ethical behavior in future executives, they cannot be said to foster a climate of greed. In the wake of corporate scandals that may have harmed our economy more than the 9/11 attacks, many point the finger at business schools for not beefing up their ethics offerings. Maybe business schools understand the origins of ethical behavior better than we think. As professor David Messick from the Kellogg School of Management said in a recent article in Crain's Chicago Business: "If [students] don't have a sound moral compass, nothing I teach in a 10-week course is going to embed one there."

Some business schools that do not have a required ethics course may, in fact, be doing something far more valuable: embedding the discussion of ethics into every course in the MBA program. Ethics are not like garnish on an entre. In business, as in life, ethical thinking has to be fully integrated with learning and with personal experience.

No matter how much a business school may do, corporate culture is much more significant in determining ethical behavior. If the culture is corrupt, if it demeans or punishes those who try to apply ethics to workplace decisions, many will be seduced or intimidated into behaving in ways they wouldn't ordinarily consider. They begin living in two worlds--driven by corporate values at work and by personal values at home.

If business schools aren't to blame for corporate greed, who is? Many point to the peculiarly American version of capitalism where everything is driven by short-term profitability. Even Aaron Feuerstein, the exemplary CEO of Malden Mills, a privately owned company, recognizes the enormous pressures on American CEOs for ever-increasing profits. When Feuerstein continued to pay employees whose jobs were lost temporarily because of a factory fire, NBC's Tom Brokaw said to him: "Other CEOs must hate you" (because of his generosity to workers). Feuerstein replied, "No, they admire me!" Feuerstein knows that although CEOs of publicly held companies often wish to be more honest, compassionate or just, the huge pressures toward profitability at all costs keep them from following their best instincts.

Business schools needn't shift into overdrive because of recent corporate scandals, unless they have been totally ignoring ethics in their curriculum. Business ethics is best integrated into everyday discussions of management, finance, marketing and so on. If some schools are currently weak in accomplishing this integration, two new forces will compel them to think again: pressure from prospective students who want these skills and recruiters who want assurance that business schools are committed to turning out MBAs who can provide moral leadership.

YES
John Deckop:
'Greed is good' is prevailing ethic

Most business school professors and deans believe that business schools should foster a climate of corporate greed. The cliche "greed is good" may be out of fashion at the moment due to recent events, but the intellectual arguments supporting it are generally assumed and unchallenged in business schools. The result is that business school students receive little training on when to discipline greed to prevent harm to society, their corporations and even themselves in the long run.

The greed-is-good creed goes back 200-plus years to Adam Smith, who argued that the pursuit of financial self-interest results in the maximization of society's wealth. As Milton Friedman so famously maintained, "The social responsibility of business is to increase its profit."

Business schools and their students reflect these beliefs. Almost all business courses begin with the premise that profit maximization is the objective. The content is devoted merely to the means of getting there. Business students cannot help but focus on the good of the shareholders to the exclusion of other stakeholders. A challenge in class to this objective would likely be met with a stare of incomprehension, as analytical models and techniques to obtain other ends generally don't exist in our texts.

Many business programs contain some ethics coursework. Some schools require a course in business ethics (often a partial semester module), and textbooks may contain a chapter on ethics (which the professor may or may not get to). These are better than nothing. They can cause students to think at least momentarily about their role in business, and the role of business in society. But taken as a whole, the business school experience tells students that their goal should be to make as much money as possible, which means making their corporations as much money as possible. Money is how the score is kept in business. It is not surprising that many business people (not just CEOs and CFOs) are tempted to cause harm to win the game.

Business schools should teach students when and how to temper greed. Admittedly, the greed-is-good proposition provides a parsimonious conceptual foundation for business decision-making. The alternative can be messy. As we are seeing today, however, unrestrained greed has created its own mess because it does not serve the best interests of society. University professors, as teachers and researchers, need to lead the way in developing models and techniques that reflect the needs of multiple stakeholders in business. These, in turn, need to be a central component of the business school curriculum, not an isolated course or chapter.