CAMPUS CORRESPONDENCE : Business Schools That Shun Ethics Courses Should Go Straight to Jail
Junk-bond buccaneer Michael Milken sits in jail, serving out his 10-year sentence for violations of Securities Exchange Commission regulations and tax law. The shock waves generated by his actions and those of raiders who plundered companies continue to reverberate throughout the U.S. economy.
Former employees of businesses that fell victim to the raiders might prefer that Milken spend the rest of his natural life in jail. While I tend to side with Milken’s victims, their judgment seems blinkered--limited to his personal deeds. To me, it’s not only Milken and other Wall Street criminals who should be held accountable for following the spirit of the decade--one in which Reaganomics became a political ideology and avarice was acceptable and even promoted. The blame should be shared by American business schools, which continue to instill misguided principles in today’s students.
Even here at Moravian College--a small, traditional, religiously affiliated liberal-arts college in Pennsylvania--nearly 300 of the 1,200 students enrolled belong to the Business and Economics Department. Only two students are majoring in religion, one in philosophy.
Dr. Omid Nodoushani, a professor of management here who received his doctorate at the University of Pennsylvania’s Wharton School of Business, laments, “Our business schools have lost their sense of value and social responsibility. When they are evaluated for quality, usually the sole criterion is how much money their graduates can make in the job market.” What’s omitted, he says, “is the instilling of values, which should be one of the most essential elements in any educational mission.”
An exemplar of this creed, though certainly not the only practitioner, is Wharton.
Four years ago, Russell Palmer, then dean of Wharton, hailed Donald Trump, Milken and Saul Steinberg for possessing Wharton’s “golden touch” of business intuition. He said he would change the curriculum in favor of entrepreneurial training and teaching.
Soon afterward, Wharton’s links to the University of Pennsylvania’s liberal-arts curriculum were severed, and the Sol Snyder Entrepreneurial Center became the dominant force at the school. Gone was a brand of management schooling that integrated ethics and social responsibility into business practice.
Wharton--widely regarded as among the best of the business schools--placed Milken’s picture on its “Wall of Fame,” erected by Wharton students to honor “prominent alumni for their outstanding achievements and contributions to society.” It was only grudgingly removed following Milken’s indictment.
And in the ivy halls of Columbia University, takeover artist Asher Edelman, in his course titled “Corporate Raiding: The Art of War,” promised $100,000 to any student who found a company he could seize.
In the process of adapting and expanding, business schools distorted their principles and outlooks on venture business, in many cases failing to educate responsibly. Learning how to make money instead of making a product is still promoted. And the concept of business is taught value-free, whereby the only responsibility a business holds is to make profit.
While many institutions now claim to have a course on ethics in their business programs, often it’s presented as an afterthought, even taught outside the department by a professor of religion or philosophy. Business ethics isn’t ingrained in the other courses.
In Wharton’s spring, 1991, undergraduate-course roster, and in the graduate offerings at the Sol Snyder center, not a single course in business ethics is offered. But “Mergers and Acquisitions,” “Entrepreneurial Venture Initiation” and “Corporate Venturing” are prominent.
One Penn senior who shares an apartment with two Wharton students and who once considered the school for himself said that the stereotypes are still alive and well. “Wharton students are assumed to be after big jobs and six-digit salaries, and those attitudes are reinforced at the business school.”
Despite the recession, despite the collapse of the big merger-and-acquisition departments on Wall Street, I still see business students with dreams of future deal-making and quick money, the big home, fast cars and swimming pool. I look at the professors and wonder which ones are responsible for encouraging this kind of thinking. When the business climate turns bullish again, will we find we’ve nurtured another batch of Milkens?
Like athletic programs put on probation for bad recruiting practices, American business schools should take the blame and share Milken’s jail cell. For if business schools continue to promote MBAs that place profit over production and deal-making over responsible management, we can be sure that laws, ethics and morality will continue to be seen as obstacles to big bucks.
