"Why Business Schools Fail to Teach Ethics"

I've been attending some interesting breakfast and lunch events at the Carnegie Council for Ethics and International Affairs and have read some issues of their online magazine Policy Innovations. Now I have found their blog site, Fairer Globalization. A recent post on this site is "Why Business Schools Fail to Teach Ethics." It includes several paragraphs from a New York Times op-ed by Robert Shiller (author of Irrational Exuberance) in 2005 titled "How Wall Street Learns to Look the Other Way," which puts the responsibility at the feet of business schools for failing to provide enough ethics training.

The op-ed is indeed worth resurrecting, because it critiques not just business schools but a moral philosophy that students sometimes pick up that takes utilitarianism away from an altruistic search for the greatest good of the greatest number and towards a Machiavellian egoism that borders on a rejection of any social obligations at all. Here's the excerpt from what Shiller said:

"[A]s with any situation in which we are puzzled by how a group of people can think in a seemingly odd way, it helps to look back to how they were educated. Education molds not just individuals but also common assumptions and conventional wisdom. And when it comes to the business world, our universities - and especially their graduate business schools - are powerful shapers of the culture.

"That said, the view of the world that one gets in a modern business curriculum can lead to an ethical disconnect. The courses often encourage a view of human nature that does not inspire high-mindedness. Consider financial theory, the cornerstone of modern business education. The mathematical theory that has developed over the decades has proved extremely valuable in general. But when it comes to individuals, the theory runs into some problems. In effect, it portrays people as nothing more than 'maximizers' of their own 'expected utility.' This means that people are expected to be totally selfish, constantly calculating their own advantage, with no thought of others. If the premise is that everyone would steal the silverware if he knew he could get away with it, and if we spend the entire semester developing the implications of this assumption, then it is hard to know where to begin to talk about ethics.

"Ultimately, the problem at the university level is a tendency toward overspecialization. Each professor gains expertise in a certain kind of research skill; that is how subject matter is defined. The specialty of financial theory has largely come to be defined by skills manipulating a narrow class of mathematical models of purely selfish behavior. Business ethics is just another academic specialty, and can seem as remote as microbiology to those studying financial theory."

Using Tech to Grow Givers: DonorsChoose.org

If you watched the Colbert Report last week, you learned something about DonorsChoose.org. It has also received attention from Oprah, the Today Show, Dateline, the New York Times, Time magazine, Newsweek and Doonesbury comics. The organization has received the Nonprofit Innovation Award from the Stanford Business School and Amazon.com, a Global Technology Laureate from the TECH Museum of Innovation and Microsoft, the 2006 Social Capitalist Award and selection by Ashoka as a model project.

The idea behind DonorsChoose.org is a two-way exchange, to foster innovation in public schools and at the same time encourage individual philanthropy for that cause. School teachers submit ideas for experiences and materials that their students need to learn, using a form. The proposals are then put online and anyone can search among them by areas of interest, learn about needs, and choose to fund a project with a gift card to a teacher or family member. Donors get a package of photographs and student thank-you notes, a teacher impact letter, and an expenditure report showing how their gift was spent.

A former student in the CSR course at NYU Stern School that I teach (with Prof. Bruce Buchanan), Kari Hayden, is now Director of Corporate Partnerships at DonorsChoose.org. She will be working on direct corporate philanthropy and cause marketing programs through an innovative approach highlighted by the Wall Street Journal. To learn more, look at Blogger Challenge, or email Kari at kari@donorschoose.org.

SAI Conference on November 5

Social Accountability International (SAI) will have its 10th anniversary conference on Monday, November 5 at the Harvard Club of New York City. It's not just sentiment that will bring me there. It's a tremendous opportunity to hear stories from around the world from people with a variety of perspectives who share the common goal of improving the quality of their workplaces and the environment.

My special regional interest is in Turkey, which will be well represented. Workplaces and managers will also be represented on the program from countries like China, India, Pakistan; Germany, the Netherlands and Switzerland; Argentina, Nicaragua and Peru. At least two major international labor unions (UNI and UFCW) will be there, and speakers from the World Bank, IFC, Harvard, ETI and ISEAL.

For more about the conference, click here.

Word for the Day: "He Meant Well"

NYU's Stern School of Business requires a course in professional responsibility and offers an elective on CSR and other topics. Its Markets, Ethics and Law (MEL) program is responsible for teaching and research on professional responsibility and CSR. The MEL faculty has recently been focusing on utilitarianism as a guide for moral conduct, and the text has been John Stuart Mill's Utilitarianism.

Mill has a dispositive retort to those who defend perpetrators of acts with bad consequences on the basis of their having had good motives. This is the quote of the day:

"It is often affirmed that utilitarianism renders men cold and unsympathising; that it chills their moral feelings towards individuals; that it makes them regard only the dry and hard consideration of the consequences of actions, not taking into their moral estimate the qualities from which those actions emanate. If the assertion means that they do not allow their judgment respecting the rightness or wrongness of an action to be influenced by their opinion of the qualities of the person who does it, this is a complaint not against utilitarianism, but against having any standard of morality at all; for certainly no known ethical standard decides an action to be good or bad because it is done by a good or a bad man, still less because done by an amiable, a brave, or a benevolent man, or the contrary. These considerations are relevant, not to the estimation of actions, but of persons; and there is nothing in the utilitarian theory inconsistent with the fact that there are other things which interest us in persons besides the rightness and wrongness of their actions." (Utilitarianism, Book 2 [full text])

In other words, good people can do bad things and bad people can do good things. But note that Mill distinguishes between motives and intentions. See more on Utilitarianism Today at the CSRNYC.com web site.

New Blog

This blog is being started to cover issues relating to corporate social responsibility. It supports the web site http://www.csrnyc.com/.