The status of business ethics education in business school curricula

Research

The Status of Business Ethics Education in Business School Curricula Adolph I. Katz

Introduction

Fairfield University, Fairfield, CT 06430, USA

A survey of member schools of the American Assembly of Collegiate Schools of Business (AACSB) was performed to determine (1) to what extent ethics was part of the education and (2) the relationship among institutional characteristics of AACSB accreditation, National Center for Educational Statistics (NCES) category, control, enrollment, and geographic location on the status of business ethics education in colleges and universities in the U.S.A. This article presents a cross-section in time of current higher education instructional activities in business ethics. Slightly more than one-fifth of the responding colleges with undergraduate business degree programs have a required business ethics course while less than one-sixth of those schools with graduate business degree programs have a required business ethics course. About half of the private colleges offer business ethics courses, while about one-third of the public institutions do. Keywords: Education.

Business

Ethics,

Business

Curriculum,

Business

Adolph I. Katz is Associate

Professor of Information Systems at Fairfield University. He has a Ph.D. from Rutgers University and a M.S. from Harvard University. In addition to his academic tenure at the University of Connecticut, Rutgers University, and Lowell University, he has also worked in industry and government including the position of Director of Planning and Research for the New Jersey Department of Higher Education and Editor, Videotext Project, CBS, Inc. He has published articles in Information and Management, Circulation Research, Biophysical Journal, and the Journal of the AAMZ and has presented papers at meetings of the Decision Sciences Institute, Computer Simulation conferences, International Business Schools Computer Users Group, and the Association for Institutional Research. He is past chairman of the Connecticut Chapter of the Society for Information Management (SIM). His current research interests include the societal impact of information technology, telecommuting, the impact of information technology on the organization, and the I/S curriculum. North-Holland Information & Management 0378-7206/90/$3.50

18 (1990) 123-130

0 1990, Elsevier Science Publishers

According to a 1986 Gallup poll, 63% of the U.S.A. adult population was dissatisfied with the country’s ethical behavior [22]. As ethical scandals proliferate, so do the number of articles ’ in newspapers, magazines, and journals which address the problems of the deleterious impact of business decisions on individuals, communities, society, and the environment and the perceived amoral behavior of corporate organizations and individuals. Diluted baby food products, insider trading, illegal dumping of toxic wastes, and other actions have aroused public indignation [1,3,10,13,17,33, 36,421. The expanding role of computers in all aspects of business, government, and industry has led to growing public concern about such issues as privacy and business crime [21,40]. The general public looks to the universities for leadership, guidance, and education and feels that they are failing [12,18,27,38]. Numerous studies show that the public expectation is that business education will alert individuals to the ethical issues that arise in business and that effort should result in more positive social behavior consistent with a long-term profitable business performance [11,19,29,35]. Some faculty believe that there is a large “body of reflective thought about and analysis of the morality of mankind, its principles, values, theoretical justifications, and paradoxes” [28] worthy of inclusion in the business curriculum [30,31,41]. Surveys, however, show that students do not express much interest in the study of business ethics

’ Magazine and journal articles, addressing ethical issues, increased from 7 in 1983 to 98 in 1987. (1984 (19), 1985 (64). 1986 (74)): Source: Predicast - F’TS PROMT - online index service.)

B.V. (North-Holland)

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[15,44] since it is usually an elective course and doesn’t help one to get a job such as required courses in accounting, finance, information systems, etc. Many questions have been posed on the teaching of ethics in business schools. Is there value in teaching business ethics at the undergraduate or graduate levels? [24,37,39] What should be included in an ethics course? [8,14,16,23,34] Who should teach the course? Huber, for example, advocates Arts and Science and Business school faculty team-teaching in order to develop a wideranging approach to ethical dilemmas, rather than a series of ad hoc answers to a limited set of problems [28]. While discussing and seeking answers to such questions is important, we also need a picture of the current status of business ethics education. What schools do it? How? Who teaches it? Have computers added a new dimension?

“specifically attempt to incorporate formal academic training in ethics, moral values and moral reasoning into business-related courses or curricula.” For the purpose of this study, a broader definition was accepted in order to obtain the most optimistic picture. Business schools may generally offer one or more of three instructional options to undergraduate and graduate business majors: Specific degree-credit courses in the business curriculum whose primary focus is the ethical or moral component of business decisions, ethics modules integrated into business policy courses and/or where appropriate into marketing, finance, accounting, and management courses, and ad hoc seminars and programs on business and computer ethics. Since the 1970’s, several surveys have been made to determine the status of ethics education. The date, target population, and number of respondents for the major surveys since 1970 are listed in

Academic Response

Table 1.

Government and private foundations have made funds available for teaching and developing business ethics curricula. In the 1970s a number of research centers were established at universities to study applied ethics and develop curricula, techniques, and resource materials to promote and encourage instruction. Have these efforts resulted in an increase in ethics education? This question is confounded by the diversity of courses identified as “business ethics.” A broad definition might include “Business and Society” or “Corporate Responsibility”. Huber, however, defines “business ethics courses as courses that

Although the surveys included different groups of schools, the results suggest an increasing interest in “business ethics” in the curriculum. Since these are for different population groups, it is not possible to compare results from the studies. They did not report who was teaching the business ethics courses or the relationships between business ethics” programs and factors such as AACSB accreditation, institutional type, control, and geographic location. In order to determine if ethics programs have an effect on the behavior of business school graduates, it is first necessary to determine if there is a sufficiently comprehensive business ethics

Table 1 Surveys of Business

Ethics Education

in the U.S.A.,

1975-1986

Year

Author

survey Population

1975 1979 1979 1979 1980 1986

McMahon [32] Huber [28] ORC’ [28] Buchholz [14] Hoffman [26] George [22]

All USA Business Schools Amer. Assoc. of Colleges (AAC) AACSB Accredited Grad. Schools AACSB Member Schools All USA Business Programs AACSB Accredited Schools

Total/Popn.

‘) Opinion

Research

Corporation.

Percent of Schools With “Business Ethics” Courses

Response

428/ 625 217/ 640 57/ 134 372/ 530 648/l 200 131,’ 224

Rate

Total

(68%)

39% 40%

(34%) (42%) (70%) (54%) (58%)

U.G.

Grad.

16% 55% 47%

34%

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A.I. Katz / Business Ethics Education

program. What is the extent of course offerings? Is there a difference between undergraduate and graduate programs? Does the extent of the programs differ as a function of enrollment, AACSB accreditation, control, type of institution, etc.? Are computer ethics courses offered? To answer these questions, a survey was designed to determine what the schools were doing with respect to course offerings. To ensure a high response rate, questions were not included on whether business ethics should be a part of the curriculum or the courses that should be covered. None of the broader issues of the role higher education in encouraging increased “morality” were addressed.

Survey

Methodology

In June 1987, the survey instrument was mailed to the deans of the 663 U.S. member institutions of the American Assembly of Collegiate Schools of Business (AACSB) This was followed by a mailing to non-respondents in July and a further telephone followup in August/ September. Four hundred and ten colleges responded to the survey for an overall response rate of 61.8%.Data from the survey responses were stored on a data base management system (DataEase@). In addition to the survey data, the following parameters for each of the 663 colleges were incorporated: 1. NCES Category U.S. Department of Education, National Center for Education Statistics (NCES) definition of institutional categories. Category I - doctoral level institutions with significant level and breadth of activity in doctoral-level education; Category II - comprehensive and general baccalaureate institutions with diverse post-baccalaureate programs. (These institutional categories are used by the American Association of University Professors (AAUP) [6]), 2. AACSB Accreditation Status. 3. Control (Public or Private) [5], 4. Institutional Enrollment [5], Total full-time and part-time headcount [5], 5. Business School Enrollment [7] Full-time and part-time headcount by level: Undergraduate and Graduate,

@ registered

trademark

of Dataease

International,

Inc.

125

6. Geographic

Location North Atlantic; Southeast; Great Lakes and Plains; West and Southwest (NCES grouping of states)

Results

Profile of Respondents (X-squared tests for independence at the 0.05 level of signifigance showed no difference between respondent and nonrespondent colleges with respect to AAUP category, AACSB accreditation, control, graduate business school enrollment, total enrollment, and geographical location (Table 2) Thus responding institutions appear to be representative of the entire population off 663 AACSB member colleges. However, the respondent schools differ from non-respondent schools with respect to undergraduate business school enrollments. The proportion of smaller schools among the respondents is greater than the proportion of nonrespondent schools. Institutional

Overview

Summary data from all responding institutions are presented in Table 3. The proportion of the responding schools with undergraduate business degree programs that offer “business ethics” courses (49.9%) is somewhat inflated by a significant number of schools that identified courses such as “Business and Society”, “Business and Its Environment”, and “Law, Business, and Society” as ethics courses. Without the 32 schools that included such courses, the proportion of undergraduate programs with “business ethics” courses drops to 41.9%. A situation similar to, but not as extensive as, undergraduate programs prevails in graduate education: courses such as “Business and Society” have been included as “business ethics.” If the five questionable courses in this category are not included, the proportion of graduate programs that offer “business ethics” courses drops from 28.0% to 26.5%. Only 8 schools offer computer ethics courses (less than 2%) The general approach to computer ethics (privacy, control, crime, etc.) is to include

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Table 2 Profile of Respondent and Non-Respondent Institutions.

1. AACSB Accreditation Accredited UG&Grad Non-Accredited UG&Grad 2. NCES Category Type I Type II N/A 3. Control Private Public N/A 4. Business School Enrollment Undergraduate < 1000 1000 < 2000 2000 i 5000 > 5000 N/A Graduate i 200 2008b1500 500 i 1000 1000(b12000 z 2000 N/A 5. Institutional Enrollment < 1000 1000 < 2500 2500 < 5000 5000 < 10000 10,000 < 20 000 > 20000 N/A 6. Geographic Region North Atlantic Southeastern Great Lakes/Plains West/Southwest

Respondents

NonRespondents

35.0% 65.0%

38.1% 61.9%

21.2% 73.2% 5.6%

28.3% 65.3% 6.4%

44.2% 50.8% 4.9%

36.6% 58.5% 4.9%

22.4% 18.9% 14.0% 3.5% 41.0%

12.4% 18.1% 17.0% 3.0% 49.8%

21.7% 11.4% 9.6% 5.4% 1.2% 50.8%

17.7% 18.5% 7.9% 2.6% 1.1% 52.1%

4.2% 15.6% 21.9% 25.2% 18.9% 9.8% 4.4%

5.7% 13.6% 20.0% 20.0% 22.3% 12.1% 6.4%

26.1% 26.1% 22.4% 25.4%

23.3% 29.2% 24.1% 23.3%

pValue 0.403

0.079

0.117

0.015

0.065

0.385

0.959

the topic under the rubric of business ethics. Since so few schools offer a computer ethics course, they were subsumed under the general category of “business ethics course.” About 5/6 (86.1%) of the 410 responding colleges with business degree programs specified “some approach” to teaching business ethics. This includes college-wide lectures on ethics, business courses with relevant ethics component, and specific business ethics courses.

Institutional

Differences

Two instructional categories were used to define an “approach to business ethics education”: 1. No business ethics in the curriculum, and 2. A specific course in business ethics offered for academic credit. These two categories were chosen because they reflect opposite positions on the issue of business ethics education. Intermediate positions such as the inclusion of ethics modules in other business courses or ad hoc business ethics seminars were not included because they vary considerably in breadth and depth not only among institutions but from year-to-year within the same institution. Using the chi-square test for statistical independence (0.05 level of signifigance), a comparison was made of the “approach to business ethics education” at undergraduate and graduate levels for each of six institutional parameters: 1. AACSB Accreditation 2. NCES Category 3. Control 4. Business School Enrollment 5. Total Enrollment 6. Geographic Location Based on this model, both the undergraduate and graduate “approaches to business ethics education” were statistically independent of all parameters except Institutional Control (Table 4). While one-half of the responding undergraduate and graduate programs in private institutions offered a course in business ethics, only one-third of the public institutions had such a course (Table 5). This was not an artifact due to difference in size between respondent public and private institutions. The enrollment distribution for public and private college respondents was similar to that for the public and private colleges for all AACSB member schools. The proportion of private schools that offer Business Ethics courses, however, is greater than that of the public schools four both larger institutions and smaller ones (Table 6). Many private schools have a religious affiliation and a concommitant interest in ethics. Thus it is not unreasonable to conclude that the difference between public and private schools towards business ethics education is real and not attributable to a sample bias or an enrollment artifact.

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Table 3 Data Analysis of Institutions

A.I. Katz / Business Ethics Education

Responding to the Survey Undergraduate Business Programs (Total = 401)

Graduate Business Programs (Total = 336)

Number

Percent

200 84

49.9 20.9

94 52

28.0 5.5

116 113

46.0 44.8

92 4

Jointly-Business and A and S Data not provided Total Courses 4. Ethics Courses Taught by:

14 9 252

5.6 3.6

5 4 105

87.6 3.8 4.8 3.8

School of Business Faculty A & S Faculty Jointly-Business and A & S Data not provided Total Courses

102 115 27 8 252

40.4 45.6 10.7 3.2

82 8 10 5 105

1. Offer Ethics Courses 2. Ethics Course Required 3. Ethics Courses Offered by: Business School Arts & Science School

Qualitative

Results

Number

The most repeated

Percent

78.1 8.6 9.5 4.8

ones were:

Comment

More than one-fourth (26.6%) of the respondents made freeform comments about business or computer ethics in the business school curriculum.

AACSB Accreditation NCES Category Control School of Business Institutional Enrollment Geographic Location

Undergraduate

Graduate

0.396 0.713 0.000 0.719 0.292 0.074

0.518 0.508 0.000 0.491 0.517 0.080

Table 5 Cross Tabulation of “Approach to Business Ethics” by Institutional

Total - Undergraduate and Graduate Programs No business ethics in curriculum 36 Offer a course in business ethics 146 Undergraduate Programs No business ethics in curriculum 9 Offer a course in business ethics 113 Graduate Programs No business ethics in curriculum 8 Offer a course in business ethics 64

38 12 11 11 9 7

These comments tend to support the contention that the business schools believe they currently have a reaonable approach to ethics education,

Control

Private Number

Number of Occurrences

ethics is part of other courses. left to judgement of individual to incorporate into courses.. computer ethics handled in introductory course(s). . considering course/component for the future cannot teach ethics can only confront students with ethical or moral issues no policy for business ethics course

Table 4 p-Values of Cross Tabulation of “Approach to Business Ethics Education”

1. 2. 3. 4. 5. 6.

121

’ Public

Percent

Number

Percent

12.4 50.3

64 101

21 .o 33.2

5.0 62.4

43 101

19.8 33.2

5.4 43.0

32 29

17.3 15.7

’ Percentages do not add to 100% since non-course approaches to business ethics education are not included.

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Table

InJormution & Management

6

Distribution

of Business Ethics Courses

Head Count

Offered

by Institutional

Enrollment

Public

Enrollment

Total

Undergraduate
and Control Private

Offer

Percent

BE’ Course

Offer

Total

Offer

Percent

BE Course

Offer

Programs 2

1

50.0%

16

8

50.0%

lOOO<

2500

14

6

42.9%

48

31

64.6%

2500~

5000

44

13

29.5%

47

32

68.1%

5000 < 10000

62

24

38.7%

45

30

66.7%

59

27

45.8%

19

11

51.9%

36

15

41.7%

6

217

86

39.6%

181

2

1

50.0%

5

3

60.0%

14.3%

30

13

43.3% 43.2%

10000>

20000

> 20000

Graduate Programs
2500

7

2500~

16.78 113

62.4%

5000

33

5

15.2%

44

19

5000 < 10 000

51

3

5.9%

43

16

37.2%

10000 < 20000

57

8

14.0%

21

9

42.9%

35

11

31.4%

6

4

66.7%

185

29

15.7%

149

> 20000

’ BE

64

43.0%

Business Ethics.

even though they may not have a specific course to address the issue. In addition to these responses, 20 comments were submitted that were favorably oriented towards the inclusion of business ethics in the curriculum. For example, business incorporate in . attempting to courses. . . . . . business ethics not required, but courses are popular and over-enrolled.. . . . . should be required in all business schools.. . . . ethics are a priority in business courses. making business ethics a require. . . considering ment rather than elective.. . . . . “deficient/sensitive” in this area.. . In general, comments supporting the inclusion were more numerous than negative comments.

Conclusion

Media reports of considerable action in business ethics education is not borne out by the study. Less than 20% of the business schools in the U.S.A. have a required course in it. Apparently the schools are not concerned and taking action. Business schools, however, may be motivated to

follow the recent action of the Harvard School of Business to require a business ethics course for all MBA students. With competing demands for such subjects as international business, information systems. office automation, business and tax law, etc. however, it is doubtful that business ethics will become more important without a major revision in the business curriculum. The fact that almost 90% of the current undergraduate instruction in business ethics is divided almost equally between the business school and arts and science faculties suggests that the courses may not be a good mixture of ethical theory and practical business theory. Only 10% of the undergraduate courses were team-taught. In graduate business education, there is less integration of academic skills in ethics with practical business problems than in undergraduate business programs. Almost 90% of the business ethics courses are taught entirely by business school faculty. AACSB accreditation, institutional and business school enrollments, and academic status (NCES category) have no apparent relation with the presence of business ethics in the curriculum. But it is related to institutional control, since

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62.4% of the private colleges offer undergraduate business ethics courses versus 39.6% at the public institutions. At the graduate level, almost three times as many private schools include business ethics courses in their curriculum (43.0%) than do the public institutions (15.7%). Because there is no current concerted and coordinated effort by the business schools to implement business ethics programs, it is not feasible to judge, on a national basis, whether or not higher education is a significant influence on business managers’ ethics.

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