Sustainable Business Ethics Education

Abstract

Recent events, like the failure of Enron, the US financial crisis and closure of other United States-based finance companies, the European Union (EU) financial crisis, the Brexit and the campaign over high board room salaries, have focused attention on the ethics of managing business. This has provided added momentum to those in charge of management education, to integrate a critical perspective on business ethics.

Sustainable development is broadly defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland, 1987). Sustainable ethics is a novel discipline that concerns present society’s moral obligations to future generations with respect to the environment.

For supporting sustainability through education requires not only critiquing the current mechanistic educational paradigm, its theory and practice (Lozano et al., 48, 10–19, 2013), but also offering a credible and practical alternative; an ecological paradigm (Zhou et al., 8(6), 2013) that starts with a vision of a fairer society and a better world, re-examination of core values embedded in education, and design of learning models to signify and improve ethics education in business schools (Hooker, 2004).

A cognitive perspective assumes that business ethics can be taught through acquiring knowledge by reasoning, intuition, and perceptions. An affective perspective contests such a premise, suggesting that ethics is better learnt through emotional experiences. This latter perspective lies at the heart of experiential learning activities (ELAs) and critical action learning (CAL)—already methods of teaching in business schools but under-utilized in teaching within the discipline of business ethics.

This study examines the collective impact of ELA and CAL on student learning of management ethics. Students’ personal narratives were obtained through focus groups and semi-structured interviews following their participation in experiential and action learning activities. Results indicate that teaching business ethics through ELAs and CAL leads to social benefits for students, co-creation and improved and increased engagement with peers, academics and industry.

Appendix. Sample Ethics-Based Experiential Learning Activity (ELA) and Critical Action Learning (CAL) Used in the Course

Activity I: Simulation in Genetically Modified Food

This simulation is designed to develop skills at cross-cultural negotiations with an emphasis on multi-stakeholder dialogue and exchange. It raises ethical questions of selling and using genetically modified food. This exercise provides an interactive case simulation in which students are assigned to a group that will assume the role of one of several stakeholder groups in the actual dispute between the United States and the European Union (EU) over trade in genetically modified organisms (GMOs).

In this case, the US government, on behalf of US farmers and the biotech industry, argued that the EU is in violation of global trading rules. Europe responded that it has the right to protect the health and safety of its population and domestic crops, given the uncertainties over the effects of GMOs on humans, animals, and plants. This simulation assumes that the United States and the EU proceed through the World Trade Organization (WTO) dispute-settlement procedures, and it places participants in the roles of the various disputants: the US government, the European Union, a consortium of GMO companies, a group of interested developing countries, a group of NGOs, and a WTO Dispute Settlement Panel.

Activity II: The Bribery Scandal at Siemens AG—Case Study

In December 2008, the Munich, Germany-based Siemens AG agreed to pay fines to the tune of €1 billion towards settlement of corruption charges that had hit the company since 2006. This is an eleven-page case study where students must analyse the ethical and corporate responsibility issues and participate in a case presentation and discussion and submit a written analysis with recommendations. The case study is on the unit webpage on Black Board (online learning platform).

Activity III: Sample International Bribery Scenario

Students are placed in a role of an International Executive, informed by the Company’s African market Sales Representative that the newly formed African Organization for Protective Economics (AOPE) has adopted a Resolution authorizing its executive management to selectively exclude overseas manufacturers and exporters from its markets where the management in its sole judgement deems appropriate.

While the Executive is processing the information about the Resolution that had appeared in the Wall Street Journal, Business Week, and Fortune, the events in the African market start developing rapidly with the receipt of an email from the Sales Representative stating that a Senior Official advised that in order to operate in the African market new regulations require the Company to secure an import licence from AOPE.

The Sales Rep subsequently requests the Executive’s urgent presence in Africa to conduct negotiations to secure a license. Upon arrival, the Executive and the Sales Representative commence discussions with the Senior Head of the AOPE Department dealing with the Executive’s product group. The negotiations of specific terms dealing with product specifications and quality, price levels, technical support to be provided and logistic details as well as submission of relevant financial data proceed smoothly and are apparently completed satisfactorily.

On the final day of negotiations, however, the Senior Department Head extends the Executive the invitation to a private luncheon meeting with the Minister-Director of AOPE. Upon arrival, the Executive is warmly greeted by the Minister-Director and introduced to the only other person present, his “Consultant” on importer qualifications. At the conclusion of the luncheon and over brandy and coffee, the Minister-Director expresses his pleasure at the culmination of the negotiations but advises the Executive that the import licensing agreement must be countersigned by the “Consultant” who remained silent and did not participate in the luncheon discussion.

The Minister-Director further explains that the Consultant’s fee of $500,000 must be borne by the Executive, and paid immediately. The tone of the request, however, indicates that the Consultant might be agreeable to a lower amount. The Executive starts explaining that this fee, as a new development, has not been factored into the cost component of the negotiations, while internally weighing in such factors as existence of The Foreign Corrupt Practices Act (FCPA) of 1977, mounting pressure to revoke it, and the possibility of being excluded from the growing market in case of the refusal to pay.

Students are then asked, if in the shoes of the Executive, whether they would agree or refuse to pay. They are also asked to explain their decision and outline the plan of dealing with its consequences.

Activity IV: The Global Strategy Game

An International Business Ethics Simulation. This was an online game that students played during the semester as a part of their assessments competing with students from other universities.