BLACK or white. Right or wrong. Honorable or dishonorable. Patriot or traitor. With us or against us.
While some leaders try to construe the world in such absolute terms, in reality most of life is more complex. The University code of ethics may be simple - do not lie, cheat or steal - but how this translates into working life can be difficult to understand. A college education does not give students as much help in understanding ethics as it should. Universities should require all students to study practical ethics and learn to think critically about what they will be doing after graduation.
Many people who do not enroll in undergraduate or graduate business schools become involved in business nonetheless. They will start flower shops, manage franchises or become executives in Fortune 500 companies. American universities fail to inculcate ethical business practices into all of their graduates, and this is a serious gap in higher education.
Deepa Challa, a business major at the University of Michigan, noted that her classes teach her how to manipulate consumers and move numbers, but do not give lessons about when using this knowledge is inappropriate. Students do not have to think about whether they should be creating car-payment plans with unclear terms; they just learn how to do it.
We all know lying is wrong, but we do not all know what qualifies as lying. Are we lying when we use methods learned in accounting class to make debts harder to see? How about using subliminal suggestions in advertising?
Although public discourse has referred negatively to the Enron debacle too often - to the point that merely saying "Enron" has the same effect as drawing a pentagram and invoking Satan - the corporation's collapse does highlight the distinction between what is legal and what is ethical.
It's possible that Enron executives never did anything illegal. However, they clearly acted unethically. Congress cannot legislate on every possible action by businesses. Companies advertise their efficiency by saying they move "at the speed of business," not at the speed of government. Even if Enron escapes criminal liability, its executives have been branded as unethical.
Such outcomes may be averted by better education. Though an ethics class cannot make someone an ethical person, it can teach certain modes of thinking. Darden Business School requires all MBA candidates to take a course in business ethics.
However, even good business ethics classes do not address all problematic practices. For instance, the textbook used at Darden covers a wide range of issues, including sexual harassment, the environment and international business, but does not mention corporate financing of political campaigns.
Giving money to politicians who support policies favorable to a business' interests appears to be an entirely acceptable business practice. Campaign finance reform would not have been necessary had corporate executives been ethical enough to refrain from contributing millions of dollars.
Maybe executives are not trying to buy public officials. Maybe they just like the politicians' stances on abortion, or the death penalty or some other issue totally unrelated to the corporation's balance sheet. If so, giving money to grassroots organizations devoted to educating voters might be a better way to change the political process. At the moment, the present system just looks too quid pro quo - and the schools are not teaching any better.
Instead, students graduate and often become business people who treat ethics as a barrier to maximizing profits. Yet successful people can be ethical people as well.
Multibillionaire Warren Buffett is a prime example. At a recent Securities and Exchange Commission conference, he criticized CEOs who attempt to claim ignorance of their company's practices. "We own 100 percent of some companies and believe me, we can discipline the CEO if he doesn't tell us what's going on" ("Buffett assails CEOs who claim financial ignorance," San Diego Union-Tribune, March 5).
Buffett practices what he preaches and has shown that ethics can save a business. When Salomon Brothers became enmeshed in a Treasury scandal in the early 1990s, Buffett cleaned house, replacing management with people who had no involvement in the violations. He offered to make whatever reforms the government wanted, including having an SEC enforcement lawyer sit in his office and having Salomon plead guilty to a felony charge ("Some Lessons For Andersen From Scandal At Salomon," The New York Times, March 18).
Universities arm their graduates with the knowledge and credentials to go far and influence much. Like the old posters said, knowledge is power. The present state of ethics in business, however, indicates colleges too often give students power without the wisdom to use it well.
(Pallavi Guniganti's column appears Tuesdays in The Cavalier Daily. She can be reached at pguniganti@cavalierdaily.com.)
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