My Experience With Teaching Ethics Session As Part Of Core Marketing Course

This past week I had a chance to teach an ethics session as part of a larger, core marketing course that I am teaching at Irvine University. I write this post to share my experiences on what worked and what didn't.

Now as context, about four years ago in 2005 I wrote a post on covering ethics as part of business school curricula, and to make a long story short, back then I didn't have a very comfortable opinion on how effective that type of training would be and whether students would want to pay for such training. I have since that timeframe (and based on comments from folks) augmented my opinion a little bit in that while I feel that ethics is something that should not be exclusive to business schools, it is something that leaders need to work with, and as such, is a fundamental topic for business schools to address.

That said, I am not quite comfortable with how I addressed ethics in this past week's session. Setting my effectiveness and student perceptions aside for the moment, here's the basic path that I took:

  • Though I'm no business historian, I characterized the history of the revitalization of ethics in the business schools as falling into two mini-eras in recent history– One of these mini-eras started on the order of five to ten years ago and was driven by a lot of the corporate scandals, executive fiascoes (e.g., Enron), and need for better financial reporting (e.g., Sarbanes-Oxley). In this first mini-era, business schools introduced ethics into their curricula with some of them incorporating ethics into leadership courses with others taking ethics and spreading a little bit of those ideas into all courses. Waving my hands a lot, I cited Michael Lewis' piece, "The End" (Of Wall Street), the role of credit default swaps, and failure of ethics (among other things) being at the heart of the cause of the economic downturn. So I concluded that business schools can still do more. Mini-era two is taking place with MBA graduates taking part in the student-led MBA Oath, which has been going viral.
  • I indicated that leaders need to be concerned with ethics – basically what I said above in that it is not the sole responsibility of business school students, but that we can further the practice of ethics.
  • I promoted two key frameworks for analyzing ethical concerns– Both of these frameworks are from Chapter 4 of the McGraw-Hill Irwin textbook, "Marketing", 9th Edition, by Kerin et. al. One framework was the standard, 2×2 consulting-like matrix that broke ideas into 4 quadrants with (Ethical-Not Ethical on one axis and Legal-Not Legal on the other). We spent time discussing certain scenarios and whether they fell into one quadrant or the other. I argued that the legal axis was, in principle, more straightforward than the ethics axis, where the degree of overlap and misfit between individual, company, general business, and international ethical principles are more fuzzy and can require reconciliation whether by management, ethics officer or other. I cited Transparency International as a data point and source for international practices and norms for ethical conduct. The second ethical framework that we covered conceptually balanced profit maximization and shareholder value against items like environmental, societal, and other factors. Here I feel that the best management practices for balancing things are not so well-developed, but I struggle a bit with how this area should be advanced.
  • I talked about ethical codes of conducts (as documents that need to be affirmed by employees in many companies) and associated online training programs – although I did not have example references or documents to point to off-the-cuff.

With respect to the big picture, I was able to cite a number of cases where companies (e.g., Body Shop, POM, BP) have made ethical and social concerns an essential part of their business and/or marketing strategy, but I think my ability to cite, crisp quantitative information could have been better. What are the costs of being ethical? What are the costs of not being ethical? Where does being ethical add to the bottom-line in terms of revenues, sales commissions, shareholder value, reduced churn, etc.? The answers I provided to these questions were either a bit long-winded or not available at the tip of my tongue.

In any case, if folks have thoughts on ethics, teaching ethics, receiving ethics training, etc., please feel free to share your stories. I am interested in what works and doesn't work for folks.

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Blog Interview On Consulting For Chicago Booth Corporate Strategy and Management Group

I did a blog interview for the Chicago Booth Corporate Strategy and Management Group (student-run organization for part-time and evening program). The interview (link here) covers areas such as typical week in the life of an independent consultant, common problems currently facing clients, and the most helpful MBA training I received at Chicago.

Aside from the fund raising item I mentioned in the interview section on current client issues, I also shared the following (which characterizes one current client philosophy on approaching prospective consulting projects):

… The other theme I have been seeing more of is in the operational process improvement area. The themes here, however, have not been so much around improving profits as they have been about weathering the economic storm and making improvements that increase either customer satisfaction or quality of services and products. Clients, on the balance, are more conservative right now. Whereas the smart executives and managers may have been going for broke before and taking bigger chances, they now see making continuous improvements as a must-do (not necessarily demonstrating immediate margin or revenue improvement until after the storm lifts). As additional light, some executives are missing their revenue numbers in the current (bad) market climate, but they are making their net profit numbers. These companies are using the stable net profits as their bulletproof vest with their Boards while using consultants in very targeted ways or in controlled “entrepreneurial experiments” to help build for the future.

As an independent consultant, I increasingly need to use my network to read the market (as opposed to having information flow to me from "The Firm". Don't know whether others are seeing similar things or not. Please feel free to share your thoughts.

A Damning Exhibit Concerning MBAs and Business Schools

Nail in the coffin. Perhaps not, but I'd have to agree it's a bad case. The New York Times portrays a tough canvas of MBAs and their responsibilty in the economic crises in the article entitled, "Is It Time to Retrain Business Schools?". The article starts off:

JOHN Thain has one. So do Richard Fuld, Stanley O’Neal and Vikram Pandit. For that matter, so does John Paulson, the hedge fund kingpin.

Yes, all five have fat bank accounts, even now, and all have made their share of headlines. But these current and former giants of finance also are all card-carrying M.B.A.’s.

 Couple of interesting points which I had not seen before and probably should be thought out further:

  • The notion of professionalization and stewardship
  • The emphasis on shareholder value as an underpinning to finance, entrepreneurship, etc. instruction

But I also have some off-the-cuff thoughts (* indicates based on the Organizational Behavior 4th Edition text [2008] by Dr. Steven McShane and Dr. Mary Ann Von Glinow):

  • Which investors or Boards reward something other than shareholder value? Are these groups in a minority?
  • Although socially responsible companies have been brought to light over the past decade or so, do they get widely-known, superior returns? Do youth and business people value them? Do kids (or adults) worship Bill Gates as part of Microsoft or as part of the Gates Foundation more? Where is the balance?
  • In most surveys, when asked about the most important characteristic employees look for in a leader, most say honesty and ethics (*). What does that say about our ability to hire qualified managers and executives then?
  • 95% of the Fortune 500 companies in the US have codes of ethics (*). Enron also had a well-developed code (*).
  • Is it that business school students are neither trained in risk management nor tragedy of the commons systems structures? Or is it that personal performance plans and reward structures do not align? Other?

If the problems stem from business-, company-, or world-cultures, then how will we get educated and make amends?