When Black and White Isn’t: Can Business Ethics Be Taught?

“It takes 20 years to build a reputation and five minutes to ruin it,” claims billionaire investor Warren Buffett. “If you think about that, you’ll do things differently.”

Corporations such as Enron, Adelphia Communications and Arthur Andersen were permanently ruined due to poor decisions. If the people involved in these incidents could turn back time, you wonder if they would make the same choices. You hope they learned from their mistakes.

But, is it possible to teach people to make the right choices and do the right things? Many experts think it is, and they argue that the preparation should begin in business schools. They believe that if we teach students about ethics while they are still in the classroom, there might be fewer problems in the boardroom, and we might prevent future business leaders from making headlines for all the wrong reasons.

In response to the numerous corporate scandals and recent economic crisis, business schools across the country have changed the way they integrate ethics courses into their curriculum. The UCF College of Business Administration is no exception and has set the bar high. Dean Thomas Keon is leading the charge, and his efforts are paying off. The college is quickly gaining a reputation for its research prowess, and business ethics is becoming an area of excellence.

Students enrolled in the college have access to leading experts in the field. Unlike most of its business school counterparts, UCF has three endowed professorships in ethics: Robert Folger, Distinguished Alumni Endowed Professor in Business Ethics; Maureen Ambrose, Gordon J. Barnett Professor of Business Ethics; and Marshall Schminke, BB&T Professor of Business Ethics. Additionally, Richard Lapchick, director of the DeVos Sport Business Management Program, is a recognized champion in ethics.

These experts, along with other faculty members, ensure that all business students of every major, both undergraduates and graduates, are taught ethics. With an enrollment of more than 8,000 students, that has a far-reaching effect.

“In order for businesses to earn and keep the trust of the public, it is imperative that we ensure that our students understand the importance of ethical decision making,” says Keon. “Their decisions will impact the business world.”

The Gray Areas

One problem with decision-making and moral issues is that not everything is black and white. And it’s often the gray areas that get people into trouble.

Last fall, an incident in the college made national headlines when nearly 200 students were charged with cheating on an exam administered in the testing lab. Students accessed the test questions from an online test bank prepared by the book publisher. The incident sparked a debate among students and educators across the country. The episode did not occur because of testing lab flaws or teaching errors, but because of a misconception among students. Some felt it was not cheating because they found the information on the Internet. The case was a real eye-opener and cause for alarm for business school administrators.

As a direct result of that event, procedural changes have been made to the Cornerstone Course, which is the first required course for all undergraduate business students, regardless of major. Cameron Ford, who teaches the class, now gives a presentation at the beginning of the semester that familiarizes students with the Golden Rule. He posts the information on the course website so it serves as a constant reminder, approves all study guides shared by students outside of class, gives students a detailed description of key success factors and offers personal support to discourage them from seeking other means to succeed.

Research shows that if students understand the process from the beginning, they are less likely to compromise integrity. “I let my students know that UCF is marching toward greatness,” says Ford. “We have just been ranked nationally in research and athletics. The students are part of a really good school with increasing standards. It’s up to them to live up to the aspirations.”

Keon added that the entire incident was a reinforcing reminder that it is important to stress ethical behavior and decision-making in any curriculum. “We just can’t teach theory,” he says. “Students need to examine actual case studies and hear from speakers who have experience in the corporate world.”

One such speaker is Laurette Koellner, ’77, the retired president of Boeing International who now sits on three corporate boards. A member of the Dean’s Executive Council and the college’s Hall of Fame, as well as a Distinguished Alumna Award recipient, Koellner has spoken to the Executive MBA students. As a top executive, she always warns employees to avoid the gray areas.

Koellner states that many large corporations have ethics offices or ethics hotlines set up for employees who have questions. She recommends that new employees become familiar with these resources and use them if they feel they are heading toward a gray area, because the consequences are too severe.

“The repercussions can affect everyone at the company,” she says. “Fines and penalties have increased dramatically over the years and are designed to hurt the organization financially, as well as affect its employees. Poor actions and decisions can cause a public relations nightmare, and in the end can actually benefit your competition.”

If you feel you are stepping into a gray area, she encourages you to ask, “Would you feel comfortable if this story ended up on the front page?” More importantly, “Would your mother feel comfortable if this story ended up on the front page?”

Teaching Ethics

While many business schools emphasize ethics only at the graduate level, Schminke feels it is important to reach undergraduate students as well.

“Studies show that the moral reasoning capacity is not complete until you are 25 years old, so the muffin is not done yet, so to speak. We can still make a difference,” he explains.

Ethics is integrated across the undergraduate curriculum both in general business courses and major-specific ones such as accounting and management. The college also offers stand-alone ethics classes.

In addition to the Cornerstone Course, all undergraduate students are required to take a business law class. The course focuses on ethics and addresses areas such as artifice, cheating, misrepresentation, fraud, deceit, lying and criminal behavior. Students also have the option to take several electives in ethics.

In their last semester, all undergraduate students are required to take the Capstone Course, where they integrate and apply all the lessons learned in their business courses, including ethics.

Students seeking a graduate degree learn about ethics in MBA courses as well as accounting and other areas, particularly the DeVos Sport Business Management Program. The program has not only made a difference at UCF, but has served as a model for other schools, as more and more sport management programs are beginning to integrate diversity and service, along with ethics and leadership, into their curriculum.

“Ethics is an underlying theme and permeates throughout all classes,” comments Lapchick, who is also the director of both the National Consortium for Academics and Sports and the Institute for Diversity and Ethics in Sport.

Students seeking their doctoral degrees often choose UCF over other business schools due to all the research that has been conducted, notes Schminke, citing that it’s important to reach the doctoral students because they are the professors of tomorrow. “We aren’t just teaching our research to a small group. They take that research and knowledge, bring it to other universities, and ultimately, it reaches thousands of students,” he says.

One example is Anke Arnaud, ’06, the first person to graduate in the Ph.D. program, management track. She won the prestigious William H. Newman Award from the Academy of Management based on her ethics-based dissertation, defeating finalists from schools such as MIT and Harvard.

Arnaud is now an assistant professor at Embry Riddle University in Daytona Beach, where she is considered the “go-to” person when it comes to ethics.

“I now teach what I learned at UCF to my own students,” she says. “I still keep in contact with my professors, especially Marshall Schminke, and don’t hesitate to contact them if I have a question.”

The Future

One growing trend among business schools is to have students sign or recite loyalty oaths upon graduation, similar to the Hippocratic Oath adopted by medical doctors. The DeVos Sport Business Management Program already has such an oath, and college administrators are looking into adopting one in the near future.

The DeVos Oath of Ethics

I solemnly swear to base all my professional and personal decisions on the highest standards of ethical and moral principles. I will give my best efforts to make my sports organization as successful as possible while recognizing the contribution it can make to the greater society. I will use my position and work to make a difference to make this a better world and, wherever possible, to extend a hand to those who need my help. I will hold myself accountable for all my decisions. Finally, I pledge that I will leave a legacy for those who follow for what I have sworn today.

When students learn the right skills, they should be able to integrate ethical concepts into business decision-making and management practices, UCF faculty members and administrators believe. They realize that you cannot always change a student’s principles and values, but it is possible to educate them and increase awareness.

“I am satisfied that our graduates leave here prepared to make the right decisions in the corporate world,” concludes Schminke.

Alumni Support

The ethics program would not be thriving if it were not for the support and guidance from the business world, including graduates from the college.

Stan Horton, ’73, lived through one of America’s most famous corporate meltdowns as the former chair and CEO of Enron Transportation Services.

Enron Corporation was one of the world’s leading natural gas and electricity companies before being caught up in a widespread accounting scandal and filing for bankruptcy in 2001. The company falsely inflated revenues and hid debt and losses in subsidiary partnerships. The scandal caused the dissolution of Arthur Andersen, which at the time was one of the world’s top accounting firms. The event became one of the reasons for the creation of the Sarbanes–Oxley Act of 2002, which set new or enhanced standards for all U.S. public company boards, management and public accounting firms.

Not involved with the scandal, Horton stayed at Enron post-bankruptcy to help the employees. He saw a lot of heartache. “I experienced firsthand what happens when you don’t have strong business ethics, and the tremendous harm it can cause,” he recalls.

Unfortunately, he adds, good people sometimes do bad things or make bad decisions. “People need training,” he contends.

To help with the training, Horton made a gift to the college to establish the Distinguished Alumni Endowed Professorship in Business Ethics currently held by Folger. In addition, Horton, a member of the college’s Hall of Fame, shares his own wisdom by serving on the Dean’s Executive Council and judging student competitions.

“It’s important that we don’t just teach the technical aspects. We must also teach the right types of behavior,” he says. “If you look around corporate America, there is a trend in teaching better behavior.”