Business ethics need to move beyond what’s illegal | Felix Salmon

Journal of Business EthicsBusiness school professor Luigi Zingales, with the full agreement of fellow business-school professor Justin Wolfers, has an important op-ed under a provocative headline: “Do Business Schools Incubate Criminals?”

Zingales’s point is a good one: that the way business-school students study ethics is much like the way that entomologists study ants. Quite aside from the fact that ethics courses are generally taught by relatively junior professors, they also tend to shy away from actually telling students to be ethical:

Most business schools do offer ethics classes. Yet these classes are generally divided into two categories. Some simply illustrate ethical dilemmas without taking a position on how people are expected to act. It is as if students were presented with the pros and cons of racial segregation, leaving them to decide which side they wanted to take.

Others hide behind the concept of corporate social responsibility, suggesting that social obligations rest on firms, not on individuals…

My colleague Gary Becker pioneered the economic study of crime. Employing a basic utilitarian approach, he compared the benefits of a crime with the expected cost of punishment that is, the cost of punishment times the probability of receiving that punishment. While very insightful, Becker’s model, which had no intention of telling people how they should behave, had some unintended consequences. A former student of Becker’s told me that he found many of his classmates to be remarkably amoral, a fact he took as a sign that they interpreted Becker’s descriptive model of crime as prescriptive. They perceived any failure to commit a high-benefit crime with a low expected cost as a failure to act rationally, almost a proof of stupidity.

At business school, there are lots of classes where students try to maximize profits; that’s nearly always considered to be the way to win in business. It’s easy to see, then, how Becker’s framing of unethical behavior as something with costs and benefits essentially strips the ethics away, leaving only a simple decision of whether the actor wants to take the risk of punishment.

via Business ethics need to move beyond what’s illegal | Felix Salmon.

Strange Random Ethics Quote:

“The word “good” has many meanings. For example, if a man were to shoot his grandmother at a range of five hundred yards, I should call him a good shot, but not necessarily a good man.”
G.K. Chesterton

 

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Posted on July 20, 2012, in Article and tagged , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. Business schools do a lousy job of teaching practical ethics that go beyond theory and prevent unethical and illegal practices. Maybe we should spend more time focusing on how to prevent criminal activity and when that is curtailed…then focus on the theory and other ethical options.

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