Developing Values in Business Education

By Nigel Duncan

This article considers how we might best prepare students for ethical business practice. It considers recent developments in evolutionary research and neuroscience to explore the development of empathy and moral courage. It applies theories of moral development, learning theory and the experience of those training ethical practitioners to make practical proposals as to how to design case studies and learning experiences to achieve these goals effectively.

 

How do new business graduates identify the ethical course of action? They will have learnt about anti-bribery laws, yet may be faced with markets where entry requires facilitation payments and a corporate culture which places value on intense competition. They may encounter employers who regard the cost of prosecution for non-compliance with safety or pollution regulations as a risk factor to be weighed against the higher profits. The ultimate duty might be regarded as maximising shareholder profit. Even the existing rules may not be adequate to cover new problems or there might be conflicting, but nevertheless ethical, responses to a dilemma.

As a business community we understand that corruption can undermine fundamental principles of sound business practice. Nepotism and bribery do not give us the best employees or business partners. The corrupt, often wealthy, are the winners. The losers are ordinary members of society and the ethical businesses. Thus unethical behaviour can be costly as well as offending our sense of justice. It corrodes the reputation of the business community.

This article starts from the perspective that ethical decisions are not simple, but require reflection on one’s own values and a degree of courage. It considers recent findings in neuroscience, evolutionary ethics and learning theory to propose methods by which we might prepare students for an ethical business career and assist further with effective continuing professional development.

The mere presence of ethical individuals does not ensure the integrity of a business. The organisation itself needs to operate a system which identifies, models and rewards high ethical standards. This article will assume organisations which seek to meet these standards. However, organisations are composed of individuals, universities and business schools must be able to develop graduates who will contribute constructively to the ethical organisations they enter.

 

Integrity 


The psychological underpinnings of ethical behaviour have stimulated intense debate in recent decades. Research into evolution and neuroscience has qualified the ‘nature versus nurture’ debate. At one extreme, those who regarded humans as determined by their evolutionary background argued that survival of the fittest dictates a hard, competitive approach which is inimical to moral behaviour if it does not provide the maximum advantage. At the other extreme, it was posited that the child was a blank canvass; she or he could be educated into beliefs and actions that would override ‘primitive’ behaviour. Pessimists saw a danger in this as new entrants to business organisations would be corrupted by the amoral environment they might find there.

Neither position is now viewed as tenable. Most research suggests that our behaviour is a function of both nature and nurture, although we may disagree about the proportion by which each is relevant.

Modern Darwinists understand that natural selection is a nuanced concept. One key feature of human beings is their sophisticated communication skills. They gain great advantages by co-operation, initially within the family group, then with wider groups when opportunities to further mutual interests are perceived. Imagine two populations, developing on neighbouring islands with similar resources; the island inhabited by people who learn to co-operate is likely to develop more successfully than the island where people only compete on an individual basis.

In order to co-operate with people with whom we do not share a close background we need a capacity for empathy. Gary Olson suggests that people may be ‘hard-wired’ for empathy, citing studies which suggest ‘that large-scale co-operation within the human species – including with genetically unrelated individuals within a group – was favoured by selection.’¹ Thus there is reason to believe that people have the genetic equipment to develop empathic responses to others. We will consider below the place this has in preparing ethical professionals and methods we might use to encourage it.

Neuroscientists have conducted research revealing mechanisms which may explain our capacity for empathy. Ramachandran describes experiments where (in both monkeys and people) the same neurons fire when the subject observes another undergoing a positive or negative experience as when undergoing it themselves.² He describes these as ‘empathy neurons’ and proposes that they are a step towards explaining our ability to empathise with others, even if they are not close friends or family.

What impact do environmental influences have on our behaviour?  It is true that there are pressures in a competitive business environment that may encourage individualism and self-centred behaviour. But business organisations also encourage members to work for the collective interests of the organisation, and reward those who do so effectively. If we intend to avoid problems connected to unethical and corrupt behaviour, corporate ethos must reflect those values. Guidance in developing such a corporate culture is available.³

As to individuals: they face a complex environment where positive values and ways of achieving personal and corporate goals are presented in addition to opportunities for corrupt or fraudulent behaviour. There are ways in which we can prepare students to be more responsive to environmental influences that encourage ethical behaviour, and resistant to those that encourage misconduct.

Whatever our individual views as to the contribution of nature and nurture to our individual capacity for ethical behaviour, there is reason to have a degree of optimism about our ability to use education, training and the workplace ethos to develop ethical practitioners. We will now consider the components of ethical behaviour.

 

Moral psychology and professional education


Rest, building on Kohlberg’s identification of stages of moral development,⁴ designed a Defining Issues Test to assess moral development. He also developed a ‘Four Component Model’ of moral behaviour.⁵ He identified four possible reasons for moral failure:

• Missing the moral issue;
• Defective moral reasoning;
• Insufficient moral motivation; and
• Ineffective implementation.

To address these he identified four capacities, each of which is necessary (but none alone sufficient) for moral action.

•  Moral sensitivity, identifying the need for a moral decision;
•  Clear ethical reasoning;
•  Identity-formation which will prioritise the moral decision over competing interests;
•  Competence to implement the moral decision.

Recognising this can help to devise a curriculum and learning methods which will make a contribution to the moral development of our students. Bebeau⁶ achieved this in the field of the professional development of dentists, and her work can be applied to any profession. It can be applied to the design of university curricula and also inform the design of in-service continuing professional development. What characteristics of a business education will develop each of the four capacities above?

1. Recognising the moral issue


Students need to learn the rules, including the relevant law, codes of professional conduct and the mission statement of their organisation. More, they should recognise an ethical dilemma. This suggests problem-based learning, either as the basis of individual work, group discussion or simulation. This, however, is insufficient if ethical dilemmas are to be recognised in context, when they arise. They should therefore be embedded within other problems, and not flagged up as such. Case studies which are realistic and within which ethical dilemmas arise naturally, are likely to contribute to the most effective educational activities in developing moral sensitivity.

 

2. Ethical reasoning


Having recognised an ethical dilemma a student who knows the rules may still find herself in a dilemma. There may be conflicts between ethical principles. For example, should the desire for transparency override issues of confidentiality? There may be grey areas where it is uncertain whether the ethical codes, written in general terms, should be applied. Here students must apply principles of reasoning and underlying values: for example, how would a Kantian analysis resolve the dilemma? Would a hard-thought-out consequentialist analysis support that conclusion or test it? Might a virtue ethics approach help the student to come to a conclusion?⁷ The latter, if seriously undertaken, would encourage a reflective approach by which the student would consider her own values critically.

Pedagogic approaches to encourage such analysis and reflection would be based on similar learning methods to those described in the previous section. However, two additional components would be valuable.

a) A requirement to read relevant ethical literature, to provide a theoretical basis for decision-making. This provides a theoretical basis for practical decision-making and encourages a hard critical analytical approach which belongs well in an academic educational programme. It should be an element of seminar or group discussions on the ethical dilemmas encountered in the problems used.


b) Encouraging a reflective approach to one’s own values and learning. This will be developed below when we consolidate these proposals into a more coherent approach to business education and training.

 

3. Identity formation


Individuals enter an organisation with their own values, whether consciously-held or not. This identity must accommodate to the identity of the organisation or profession which the individual is joining. Organisational codes must be supported by:

a) Effective sanctions for unethical or fraudulent behaviour, whether on behalf of the individual or the organisation, and


b) Appropriate rewards for responding to dilemmas ethically.

Employees should prioritise their professional identity over actions for purely individual goals or to achieve organisational goals through means not acceptable to organisational norms.

Risks to this arise from pressures from others as well as internal motivations. Individuals may be faced with managers or clients who suggest unethical behaviour. Attention should therefore be paid to the development of moral courage. Approaches to this are suggested by the work of Steven Hartwell,⁸ who experimented with his students while training them in interviewing technique. Students were faced with a client who wished to perjure herself. Hartwell was in a neighbouring room to provide supervision and, when consulted by students, said they should advise the client to perjure herself. Nearly all did so in spite of their knowledge that it contravened the law and the professional Code. Hartwell also noticed that as students developed a reflective practice in client interviewing, they became more sympathetic and ‘more vulnerable to manipulative and aggressive clients’. Common to both problems was students’ reluctance to make independent judgments. He used Kohlberg’s theoretical framework in seeking to understand what was happening. As a result he introduced three innovations to his course:

• Assertiveness training.
• Kohlberg’s theory of moral development, so that they analysed different responses to dilemmas in Kohlbergian terms.
• Simulations in which students faced with ethical dilemmas had to consider the proper responses, devise rules in respect of those issues, and justify those rules.

Using Rest’s Defining Issues Test, he was able to show a statistically significant improvement in his students’ performance over the period of this course. Crucial components are: recognising the fact of a moral dilemma, which can be improved by empathy; developing a capacity for moral reasoning, which can be improved by the use of simulation; and exercising a moral choice, which can be improved by assertiveness training.

Our responses to challenge may be conscious or unconscious. To exercise moral courage we need to ensure that a conscious response is engaged. This is best explained by understanding the limbic system of the brain, that part of the brain which ‘is capable of mediating our responses to external data through its ability to “read” and act upon our emotional responses, as well as overriding rational thought’.⁹ In effect, when a person is faced with a challenging stimulus the limbic system, in conjunction with the neocortex (the rational, analytical part of the brain) assesses whether a solution is available. If so, the neocortex will address the situation. If not, anxiety will direct the stimulus to the primitive part of our brain which produces ‘fight or flight’ responses. We can increase the likelihood of our students responding rationally rather than reacting to a challenge. Such situations are characterised by stress. A certain level of stress may be valuable. It stimulates the production of adrenalin, which aids clear thinking and vigorous action. However, an excess of stress leads to the production of cortisol, associated with the fight or flight reaction. We, as educators, can assist our students to avoid this reaction by developing their capability in response to stressful demands.

4. Developing competence


This brings us to Rest’s fourth capacity for moral action: competence to implement the ethical choice effectively. Teachers can develop this in three ways:

1.Multiple iterations of ethical dilemmas. Familiarity, rather than breeding contempt, develops the capacity to exercise control. The more often students encounter challenging ethical dilemmas, the more likely will be their ability to respond rationally. Ethics should therefore be pervasive in the syllabus.
2.Simulated actions as well as theoretical discussions. Students will develop further if challenged to act, rather than merely to say what they would do as in a conventional seminar discussion.
3.Developing competence and expertise. Students should have multiple opportunities to develop skills of analysis, communication and persuasion. This goes beyond mere skills training. In order to develop expertise they should have:

a) Reiterative opportunities to practise and to reflect on those attempts, and,


b) As skill develops and the individual begins to recognise patterns in problems, for reflection during the process of action itself.¹⁰

 

Putting the theory into practice


Much of our students’ work will be with case studies with which they can practise and debate. To prepare them well for the problems they will encounter in early practice case studies should address those problems. Macfarlane suggests:

a) That it is preferable to present dilemmas caused by incompetence, carelessness or unfair pressure from a corrupt superior rather than by major fraud.


b) Examples of exemplary behaviour should be presented.¹¹

Weber has shown how this approach can work in teaching business ethics.¹² To ensure that students achieve the most from this approach it is important to develop their engagement through a process of encouraging reflection on their own developing skills and understanding. Cunningham found that his students’ understanding of professional responsibility in interviewing improved markedly when he went beyond simple presentation of ‘heroes and villains’ case studies. His students were required to role-play the interviews arising in those case studies. These were recorded and then subjected to ‘discourse analysis’, a comparative critique by all students who then proposed the most effective ways of responding to the situations encountered. The best such analyses were then posted on the course website for further evaluation.¹³ Thus students were engaged in their own reiterative process which involved deep reflection on their own and others’ work.

This approach to the use of simulations can be applied in many situations where ethical dilemmas may arise. Conflicts of values could involve a clash between the values of an individual and those of an organisation or between values that are specific to a culture, nation, religion or belief system. Loyalty to a business may damage the interests of a community or the environment. Conflicts may arise between confidentiality and transparency. Real situations where these have arisen are a wonderful source of case study material for students to work with.

 



Ethical infrastructure


Business organisations should provide a suitable environment for the ethical entrant and students should be provided with opportunities to consider how they may contribute to the ethical infrastructure of the organisation. This goes beyond a code and policing system but extends to ‘formal and informal management policies, procedures and controls, work team cultures, and habits of interaction and practice that support and encourage ethical behaviour.’¹⁴ Education and training should prepare students for a role contributing to the workplace ethical environment. Students could be asked to design an ethical infrastructure for a given business organisation which would help its members to respond empathically and rationally to dilemmas when they arise and thus avoid the ‘fight or flight’ responses which might otherwise result. This, if a collective and reflective learning process, should prepare them better to contribute to ethical organisations.

 

Conclusion


Research into the ways in which our brains work, both in interacting with others and in facing challenges, suggests that we have reasons for optimism in the capacity of education and training to influence ethical behaviour. Analysis of the factors which may lead to misconduct suggests the capacities we need to develop in our students and research into learning which gives us direction as to the learning experiences students need, and thus the approaches we should adopt in designing their education and training and continuing professional development.

This should involve work with realistic situations which will relate to the dilemmas they are likely to encounter when entering work; undertaking simulated activities with opportunities built in to reflect on the approaches of themselves and others. Students who have learnt through such approaches should be more sensitive to the dilemmas they will encounter and better able to analyse situations to decide on the best action to take. They should be more likely to develop a strong professional identity and the moral courage to respond properly to challenges when they face them. They should be able to work competently and make a contribution to the ethical infrastructure of the organisation they enter. This is best developed through collaboration between business organisations, the professional bodies and higher education institutions.

About the author


Nigel Duncan is Professor of Legal Education at City University, London. He is editor of the refereed journal The Law Teacher and a National Teaching Fellow of the Higher Education Academy. He is Secretary of the Academic and Professional Development Committee of the IBA and an Honorary Fellow of the Society of Advanced Legal Studies.His recent research and writing focuses on the preparation of ethical professional lawyers and on the challenge of corruption. He has developed the International Forum for Teaching Legal Ethics and Professionalism website and convenes Teaching Legal Ethics UK. He can be reached on [email protected].

References


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2.Ramachandran, V.S. (2007). The neurology of self-awareness. The Edge. Retrieved 2 May 2012 from http://www.edge.org/3rd_culture/ramachandran07/ramachandran07_index.html.


3.Brytting, T, Minogue, R and Morino, V, (2011) The Anatomy of Fraud and Corruption, Farnham: Gower.


4.L Kohlberg, The Psychology of Moral Development: Moral Stages and the Life Cycle, San Francisco, CA: Harper Row, 1984.


5.J Rest & D F Narvaez, Moral Development in the Professions, Hillsdale NJ: Lawrence Erlbaum, pp 1-3.


6.M J Bebeau, Evidence-based character development, in N Kenny and W Shelton (eds) Lost Virtue: Professional Character Development in Medical Education, Vol. 10 (Advances in Bioethics), Oxford, Elsevier, 2006 pp 47-86.


7.B Macfarlane, Researching with Integrity: The ethics of academic inquiry, 2009, New York: Routledge, p. 32-4.


8.Hartwell, S. (1990). Moral development, ethical conduct and clinical education. 35, N Y L Sch Rev. 131-168.


9.Lerner, A. (2004) Using our brains: what cognitive science and social psychology teach us about teaching law students to make ethical, professionally responsible choices. 23 Quinnipiac LR, 643-706, p. 660.


10.Schön, D.A. (1983). The reflective practitioner: How professionals think in action. London: Temple Smith. Kolb, D. (1984). Experiential Learning: Experience as the Source of Learning and Development. Englewood Cliffs: Prentice Hall.


11.Op cit n. 7, p 153, 157.


12.Weber, C.E. (1995). Stories of virtue in business. Lanham, MD: University Press of America.


13.Cunningham, C. D. (2003). How to Explain Confidentiality? 9 Clinical Law Review, 579-621.


14.Parker C., Evans A., Haller L., Le Mire S. and Mortensen R. (2008). Ethical Infrastructure of Legal Practice in Larger Law Firms: Values, Policy and Behaviour. 31 University of New South Wales Law Journal 158-188.