Does it make sense to teach business ethics?

Will it make students moral?

This article was published in Legatus Magazine in 2010, on the occasion of the launch of our first graduate business program. Legatus is an association of Catholic CEOs, with approximately 3,500 members.

I’ve had a nagging suspicion for some time now that teaching business ethics in a university is not delivering on what’s expected of it. The big question is this: Does teaching business ethics make business more ethical?

At the Catholic University of America (CUA), just like at every other university with a business program, we teach the obligatory business ethics course; the accrediting agencies insist on it, after all. But I think there’s a problem with this approach. Some time ago, two of my students were in their business strategy class with one of my colleagues, a professor of management. During this class, they delivered a presentation about Wal-Mart’s strategic challenges.

At the end of the presentation, my colleague challenged them with the following: “I happen to know that you’ve been discussing ethical issues about Wal-Mart in Dr. Abela’s class. Why didn’t you bring up those issues in your presentation today?”

Without missing a beat, the students’ response was: “Well, that was an ethics class; this is a strategy class.”

There you have it. A separate business ethics course teaches students that ethics is separable from the rest of business — that you can “do” ethics separately from doing finance, marketing or HR. It teaches them what my former professor — Ed Freeman of the University of Virginia’s Darden Business School — calls the “separation thesis,” the (false) idea that business issues and ethics issues can be clearly separated.

This thesis is false because there’s no such thing as an amoral, ethically neutral finance theory or management theory. They can masquerade as such, but every theory of business contains within it some fundamental assumptions about what the theory is for, what counts as a good outcome, and what role human beings play in that theory. And depending on the content of those assumptions, the theory will be moral or immoral, but never amoral — never free of morality. So it’s false to think that we can teach business as a purely technical subject and then add ethics to make it moral. The “ethicality” of business is already determined from the core assumptions of the business theory we teach.

Thus we often face the problem that in our business ethics course, we teach students to respect human dignity, but then in marketing they’re taught to sell as much stuff as possible regardless of the good of the consumer; in finance, to maximize profits above all else; in economics, that human beings are nothing more than utility maximizers who find their happiness by consuming more and more stuff. Not explicitly, perhaps. But implicitly, that’s the message they get from these courses.

If, after you graduate, real life presents any tension between the lessons you learned in your business ethics course and the lessons from your finance (or marketing or management) course, guess which is more likely to win? “I’ve got to do my job,” graduates think, “and my job is finance, therefore I do what my finance class taught me.”

The difficulty here is that when business runs this way, according to supposedly amoral theory, we invariably end up with the greed-induced global malaise we’re facing now. Why? Because “amoral” business leads to immoral business: Without a strong notion of the good built into our concept of business, without a strong ethical foundation within the theory, business theory cannot provide sufficient protection from temptation.

The irony is that good business leaders know what many professors don’t: that a true theory of business is in fact ethical at the core. Most Legates [members of Legatus] I’ve spoken with know that a successful, long-lasting business is one that cares about its people — its customers, employees and the communities it operates in.

So how do we educate future business leaders? Instead of teaching business ethics as a separate course, let’s build it into each and every business course, and show that it belongs right inside business theory itself. (That, by the way, is the purpose of the Catechism for Business — not to serve as a business ethics textbook).

This is what we are trying to do at Catholic University with our Master of Science in Business (MSB) program. It’s a one-year business program designed for liberal arts students who want to pursue a business career. It takes the critical thinking and communication skills they’ve developed and adds the language and tools of business. Each course — be it in marketing, finance or management — is solidly founded on the Catholic social teaching principles of solidarity, subsidiarity and human dignity. And there is no course in business ethics.

Applications to this program are reviewed on an ongoing basis, so if you know any liberal arts college seniors with an interest in business, send them our way!