Business Ethics and MBA - Prof Amit Jain
Not just What and Why but How is also important
When we talk about business ethics in B Schools curriculum, almost all students and co-faculty are of the opinion that it is a good course to have but has no practical relevance. Their apprehension is based on the following two big assumptions. One that ethical issues occur only when a big incidence like Enron happens and thus not a part of daily business life and second that in case there is any such issues, people do not speak as they do not want to do so either due to greed or fear.
This article will try to counter these two assumptions. It will provide some dilemmas which a business manager can face as part of his/her professional life. Then it will provide a brief on the curriculum on Business Ethics which is based on cases where people at all level of management have voiced their values and have been trying to approach the business ethics career from the same perspective.
What is business Ethics and what are the various dilemmas
Business ethics is a part of applied ethics which looks at how a business entity and people in that entity works on a day-today basis on the moral values. A moral value is something which is loosely defined as it depends on the culture, the religion and other societal factors. So how does one define what is morally right or not. Well even though moral values may differ from person to person and place to place but there are certain values which are almost universally acceptable like Honesty, truth, loyalty, mercy etc. So when a right vs. wrong dilemma occurs, they know what is right and what is not and can decide on their action. But will the dilemmas always occur in this form, At least not in the business world. Rushworth Kidder is his great book How Good People Make Tough Choices provides a good list of four such dilemmas which can be common for any business experience. They are
- Truth versus loyalty
- Individual versus community
- Short-term versus long-term
- Justice versus mercy
Some examples could be
- You, as part of a confidential meeting come to know the list of people who would be laid off by your organisation. In the list is the name of your colleague whom you are very friendly with. He just checks with you if his/her name is there in the list. What will you say to him/her Telling him that his/her name is there would lead to holding the truth and give him an opportunity to search for a new job but not telling will lead to your value of loyalty to your organisation and avoiding any chaos which the organisation may have due to the grapevine generated
- You are into the mining business and have identified an area in the forest where you have good mineral reserve. Mining there would lead to deforestation and thus the tribe who are dependent on the natural resources may get impacted. But in case the mining is not done , the minerals in short supply and thus high prices leading to high cost to consumers
- You are working in a finance company and just reviewed a finance model which is being used for pricing a product which is a hot sale. One of the assumptions in the model seems to be wrong. If you tell about the error now then the product may lose its sales pitch and hit the company’s top line. It may also lead to some layoff in the organisation. If the error is not told that company may have a fantastic growth in the short term but the error may hit them in the long run or rather in case regulator audit may find the error
- You are heading the HR department and have to decide on two cases. Two employees have taken more leaves than permitted by company rules. As per company policy, both should be removed from company services but you and other employees know that while one has taken the leave because of the family problems he faced and thus had a genuine need, the other took the leaves for his leisure. Justice demands that both should be fired and a message is send to the whole organisation that we take the policies seriously. On the other hand mercy demands that only the second person should be fired and send the message to the whole organisation that we understand the human needs of employees and are flexible on genuine human needs.
Such and may more dilemmas will occur in your business life no matter whether you are in finance, marketing, HR or operations. Dilemmas are also not industry specific but players in all industry face such dilemmas.
How to get out of the dilemma
What to do if dilemmas of such nature occur? Rushworth Kidder in his book has also tried to answer such questions with the help of three principles which are
- Utilitarianism- Do whatever produces the greatest good for the greatest number
- Rule-based thinking- Act only on that maxim through which you can at the same time will that it should become a universal law by famous German philosopher Immanuel Kant
- Care-based thinking- Do to others what you would like them to do to you
As Kidder himself says that no one rule is best and application of these depend on individual and also on circumstances
The Last Mile
But the last mile in business ethics is the ‘How’. Study of Business Ethics does not stop by identifying the dilemma faced or by identifying the principle for solving the dilemma but by having a plan to act on your values in a way which does not hamper your career and then executing the plan. Mary. C. Gentile a former professor at Harvard Business School and currently working with Babson College has come up with a curriculum to help in this last mile. The curriculum called ‘Giving Voice to Values’ incubated by Aspen Institute and now funded by Babson College provides management students instances where they can face ethical issues and how they can voice their concern in the most effective manner.
The curriculum asks the participants to identify the purpose of their business life, the method of their communication and then use heuristics and biases of oneself and others towards developing the action plan. Some of the heuristic and biases which can be looked at are
- Obedience to Authority
- Social Proof
- False Consensus Effect
- Overoptimism
- Self-Serving Bias
- Framing
- Cognitive Dissonance
Disclaimer- The views are based on the author’s perception of books like How Good People Make Tough Choices, The Ethical Executive etc and his teaching the curriculum Giving Voice to Values at some B-schools in India. The author sincerely apologies in case anybody finds any copyright infringement. The same is not intentional and he would be thankful t people who could bring such infringement to the notice of the author
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