Business Ethics Education and the Socratic Insight

Abstract

This chapter shifts from “an adequate normative account of applied ethics” to the moral formation of the next generation of business leaders. In other words, this chapter concentrates on the critical role played by pedagogy in the field of business ethics. I begin by sharing my experience as a professional philosopher being mentored into a radically new kind of teaching: the case method. One of the principal motivations behind the use of this method is described in an eloquent article entitled: because wisdom can’t be told. I learned that the art of questioning was central to the case method, especially to teaching ethics by the case method. Re-enter Socrates, who was the master of the art of questioning. And enter too a fourth insight in my business ethics career. I call it the Socratic insight because it springs from the instructor’s realization of his or her calling to participate in the moral formation of those with whom he or she is in dialogue. It is the manifestation in the classroom of Royce’s moral insight: the realization of the other (student, employee, executive) as one whose moral awareness can be elicited through respectful dialogue. I complete this chapter by providing a guide to the viewpoints through which case method questions may be shaped: the “four avenues” for ethical analysis: interests, rights, duties, and virtues. Finally, I compare the pedagogy of business schools with that of executive education, noting that executive interactions based on the case method are principally designed to elicit from the participants’ experience the threats to personal and organizational conscience. This chapter is an organic part of a larger work about the overall contribution of Kenneth Goodpaster to the field of applied ethics and is best read in the context of that larger work.

5.1 Adding a Fourth Insight

In this chapter, I want to shift the focus from the subject matter of business ethics as a field (Conscience, Corporations, and the Common Good) to the pedagogical point of view. (See Fig. 5.1.) If ethics is to be incorporated (1) into the curricula of the nation’s business schools and (2) into the curricula of the nation’s employee and leadership development programs, it matters how that is done.

Fig. 5.1

Four chapters, four themes, and a fourth insight

5.1.1 In the Academy

As I indicated in Chap. 1, there simply is no discipline within business administration that can afford to ignore the call of conscience. Business is about human relationships and our human living environment. Indeed, if business aspires to be a true profession, and an institution in the classical sense, the moral formation of its future leaders must be addressed by a faculty and an administration that are fully committed to this calling (Goodpaster 2002, 2007, 2012; Naughton et al. 2012).

In this chapter, I offer some practical suggestions on how to accomplish this task in the academy and in corporate education programs. The case method, used with care and discipline, is surely one of the most valuable tools in the educator’s toolbox, but the “care and discipline” qualifier makes all the difference.¹

My friend and colleague in Minneapolis who taught at the University of Minnesota, Norman Bowie, asked me 20 years ago to write an article for a volume of original articles that he was preparing for Blackwell Publishers: A Guide to Business Ethics (my contribution: Goodpaster 2002). He wanted to have an article devoted to teaching by the case method, since (a) he knew I had taught for 10 years at a school where the case method is the primary pedagogy, and (b) he appreciated that the case method was an important vehicle for moral education both in business schools and in corporate in-house education programs. What follows in the next section of this chapter is autobiographical and is borrowed from the opening of that paper.

5.1.2 Teaching and Learning Ethics by the Case Method

When I joined the Harvard Business School faculty in 1980, a wayward philosopher seeking to connect ethical theory with management education, I confronted an enormous intellectual and cultural gap. I discovered that philosophers were trained to think differently from professional managers. They usually zigged when managers zagged. They ascended the ladder of reflection toward premises and assumptions when managers descended the ladder toward pragmatics and action; they often insisted on examining a goal or purpose while managers often cared more about implementing it (Fig. 5.2).

Fig. 5.2

The ladder of reflection

The effect was, at first, exasperating. Both the substance and the style of my training ran counter to the distinctive practical orientation of business administration. Nevertheless, I was convinced that philosophy—specifically moral philosophy or ethics—had as much to offer as to gain from a “joint venture” with management education.

On the gain side, there was the practice-oriented pedagogy of the case method. Moral philosophy in the twentieth century had been preoccupied with conceptual analysis. Questions about the meanings of terms like “right” and “good” had dominated the philosophical landscape to the exclusion of questions about what actions are right and what things are good. Conceptual analysis had run amok in many ways and a return to “applied” ethics was needed.

What philosophy had to offer was an inheritance and a talent. The inheritance was a body of thought about the nature of ethics and the human condition that had developed over more than two millennia. The talent was an eye and an ear for distinguishing cogent reasoning from its counterfeits. At a time when the ethical aspects of professional management were coming under increasing scrutiny, this seemed like a valuable resource.

Learning aimed at integrating ethics and management education called for a different pedagogy. Professor Donald Schöen of MIT once suggested an image that may have special meaning in this context:

In the varied topography of professional practice, there is a high, hard ground which overlooks a swamp. On the high ground, manageable problems lend themselves to solution through the use of research-based theory and technique. In the swampy lowlands, problems are messy and confusing and incapable of technical solution. The irony of this situation is that the problems of the high ground tend to be relatively unimportant to individuals or to society at large, however great their technical interest may be, while in the swamp lie the problems of greatest human concern. The practitioner is confronted with a choice. Shall he remain on the high ground where he can solve relatively unimportant problems according to his standards of rigor, or shall he descend to the swamp of important problems and non-rigorous inquiry?²

I found myself departing the high ground and entering the swamp. In the process, I came to believe that if the field of business ethics were to have a future, a new kind of discipline would have to be formed that did not yet exist. A generation of educators was needed that could think and teach using the skills of management education and the reflectiveness of moral philosophy at the same time.

On the advice of several Harvard colleagues, therefore, I learned business policy by the case method. Never mind that I was on the instructor’s side of the desk. I considered myself a learner. I had to relinquish my “expertise” to learn. It was like starting a second career after having become established in a first. But my students and faculty colleagues helped.

I learned the hard way and the only way: from teaching and from practice. At first, I could not appreciate the so-called “administrative point of view”—how competent managers think about problems; the way they identify issues, formulate and implement strategy, and generate action plans. This appreciation was neither part of my experience nor part of my background in moral philosophy. I had to walk in the moccasins of the general manager. I had to puzzle over the strategic, organizational, and interpersonal challenges that general managers face. And I had to do it case by case.³

I gained a new respect for the vocation of the manager, charting a course amidst the uncertainties of physical events and human nature: trying to motivate others, remaining loyal to providers of resources, setting goals, imposing new structures, monitoring progress and performance, and achieving purpose through cooperation and the exercise of authority. I listened and I learned how the mind of the manager was different from the mind of the philosopher. Not better or worse. Different.

There were challenges on the other side of the desk too. My first classes in business ethics, using the case method, were no small challenge to my students. On some days, looks of glazed incomprehension were a relief from looks of irritation. What had Plato or John Stuart Mill to do with this marketing strategy and these accounting practices? What was the point of comparing and contrasting utilitarian and social contract theories of justice? But they learned, often in spite of their professor, that questioning ends was healthy and that questioning means to ends was healthy too; that moral reasoning was more than shooting from the hip; and that their fellow students were actually following certain tried and true patterns in the way they joined their realism with their idealism.

The “joint venture” eventually began to happen. It happened as I acknowledged that the frameworks and concepts that are the stock-in-trade of philosophy often blush in the face of the complexity and concreteness of management decisions. What was needed was an ethical point of view, not an ethical algorithm. I had believed this many years ago but had forgotten it. I began to change, to think differently. Outer dialogues became inner dialogues. A case method teacher had joined the philosopher in me, and slowly the case method had become my philosophy of moral education.

5.1.3 Because Wisdom Can’t Be Told

This philosophy of education in practice was Socratic at its heart, dynamic, anchored in dialogue, and student centered. It called for a different kind of preparation on the part of the instructor: the development of “teaching questions” and plans for recording student responses on the large black or white boards in the front of the classroom. Most of all, it called for an understanding that practical wisdom “can’t be told”—that it had to be elicited with respect for the learner. As one classic commentator put it:

The outstanding virtue of the case system is that it is suited to inspiring activity, under realistic conditions, on the part of the students; it takes them out of the role of passive absorbers and makes them partners in the joint processes of learning and of furthering learning. The case plan of instruction may be described as democratic in distinction to the telling method. which is in effect dictatorial or patriarchal. With the case method, all members of the academic group, teachers and students, are in possession of the same basic materials in the light of which analyses are to be made and decisions arrived at. Each, therefore, has an identical opportunity to make a contribution to the body of principles governing business practice and policy.⁴ (Gragg 1940)

The art of questioning was central to the case method and especially central to teaching ethics by the case method.⁵ And it was Socrates who was the master of the art of questioning. What this understanding of ethics in education brought with it was a fourth insight in my business ethics career.

5.2 The Socratic Insight

I will call it the Socratic insight because it manifests itself in the instructor’s realization of his or her calling to participate in the moral formation of those with whom he or she is in dialogue. The Socratic insight is the manifestation in the educational process of the moral insight in the general case of agents and recipients. It is the realization of the other (student, employee, executive) as one whose moral awareness can be elicited and even enhanced through respectful dialogue.⁶

The following autobiographical reflection on teaching by Parker Palmer in his masterful book on education helps express the spirit of the Socratic insight:

I [often] forget that genuine solutions and authentic answers can only come from within my students, that to “educate” them I must speak words that draw out their understanding rather than impose my own. Even the facts and theories I must speak will not be absorbed if they are not spoken into the receptiveness of a compelling question. . . . I have learned to ask questions that open up a space where students can listen to their own experience, to each other, and to the subject at hand—not merely to the authority of the teacher. Teaching by questioning was the genius of Socrates.⁷ (Palmer 1993)

We have come full circle to Josiah Royce’s account of conscience applied to the relationship between teacher and student in the academic and executive classrooms: “the realization of one’s neighbor, in the full sense of the word realization” (Royce 1885).⁸

5.2.1 Four Philosophical Avenues for Ethical Analysis of Cases

The contribution of moral philosophy to the art of questioning, as I saw it, was to provide a reliable set of viewpoints through which case method questions could be shaped. I sought a guide for conscience that had some claim to represent the principal thought patterns of philosophers over two millennia. The guide that I developed was called “Four Avenues for Ethical Analysis” and a summary of these avenues follows.

Interest-Based Avenues

One of the most influential types of ethical reasoning, at least in the modern period, is interest-based. The fundamental idea here is that the moral assessment of actions and policies depends on their practical consequences, and that the only consequences that really matter are the interests of the parties affected (usually human beings). On this view, ethics is all about harms and benefits to identifiable parties. Moral common sense is governed by a single dominant objective, maximizing net expectable utility (happiness, satisfaction, well-being, pleasure). Critical thinking, on this type of view, amounts to testing our ethical instincts and rules of thumb against the yardstick of social costs and benefits. (Problems and questions regarding interest-based thinking are several: How does one measure utility or interest satisfaction? For whom does one measure it (self, group, humankind, beyond)? What about the tyranny of the majority in the calculation?)

Rights-Based Avenues

A second influential type of thinking is rights-based. The central idea here is that moral common sense is to be governed not (or not only) by interest satisfaction but by rights protection. The relevant rights are of two broad kinds: rights to fair distribution of opportunities and wealth (contractarianism), and rights to basic freedoms or liberties (libertarianism). Fair distribution is often explained as a condition that obtains when all individuals are accorded equal respect and equal voice in social arrangements. Basic liberties are often explained in terms of individuals’ opportunities for self-development, work rewards, and freedoms including religion and speech. (Problems and questions regarding this avenue include: Is there a trade-off between equality and liberty when it comes to rights? Does rights-based thinking lead to tyrannies of minorities that are as bad as tyrannies of majorities? Is this type of thinking excessively focused on individuals and their entitlements without sufficient attention to larger communities and the responsibilities of individuals to such larger wholes?)

Duty-Based Avenues

Duty-based thinking is perhaps the least unified and well-defined. The governing ethical idea is duty or responsibility not so much to other individuals as to communities of individuals. Critical thinking depends ultimately on individuals conforming to the legitimate norms of a healthy community. Ethics is about playing one’s role as part of a larger whole, either a web of relationships (like the family) or a community (communitarianism). This line of thinking was implicit in John F. Kennedy’s inaugural address: “Ask not what your country can do for you, ask what you can do for your country.” In management, duty-based thinking appears in appeals to principles like fiduciary obligation. (Problems and questions regarding this type of thinking include the concern that individualism might get lost in a kind of collectivism (under a socialist or communitarian banner). Also, how are our various duties to be prioritized when they come into conflict?)

Virtue-Based Avenues

In virtue-based thinking, actions and policies are subjected to scrutiny not on the basis of their consequences (for individuals or for communities) but on the basis of their genesis—the degree to which they flow from or reinforce a virtue or positive trait of character. The traditional short list of basic (or “cardinal”) virtues includes prudence, temperance, courage, and justice.⁹ (Problems or questions associated with virtue-based thinking include: What are the central virtues and their relative priorities in a postmodern world that does not appear to agree on such matters? Are there timeless character traits that are not culture-bound so that we can recommend them to anyone, particularly those in leadership roles?) (Fig. 5.3).

Fig. 5.3

The four avenues of ethical thinking seeking the moral point of view

Each of these four main types of ethical thinking represents a concentration of critical thinking in ethical matters. Each represents a “voice” in an ethical conversation across millennia. Individuals and organizations must make their own decisions in the end, but these “voices” may well serve as “consultants to conscience.” And each represents a “pool” of questions for the Socratic dialogue between teacher and student in the classroom as it centers around a case study calling for ethical decision making. All four have in common the aspiration to give practical meaning to the moral insight in human life.

There are clearly overlaps between the matrix offered by Haidt (see Chap. 2) and the “Four Avenues” approach above. Certainly, Haidt’s care/harm foundation and the interest-based avenue cover similar territory, and his fairness/cheating foundation (with the sixth liberty/oppression foundation) align with the rights-based avenue. Haidt’s loyalty/betrayal and authority/subversion foundations appear to align with the duty-based avenue, while the sanctity/degradation foundation calls to mind the virtue-based avenue.

5.2.2 Executive Development

While academic programs represent a systematic but general approach to the moral formation of business leaders—and therefore call for a distinctive pedagogy designed with that in mind—executive development typically represents a more company-specific approach to moral formation. Often, but not always, executive education presupposes an existing corporate culture and (in my experience) calls for a searching engagement with that culture and the mission that guides it.

In my book Conscience and Corporate Culture, I share some of my 10 years of experience with executive education at Medtronic Corporation, a Minnesota-based medical device maker. Medtronic had grown at the time to 35,000 employees from about half that number in a relatively short period of time (less than 10 years). Much of my work with the top executives of this company took place off site in week-long seminars that included case method discussions and other activities devoted to appreciating Medtronic’s origins and its culture.

In the context of ethics education, two ideas (teleopathy and “hypocrisy exercises”) formed the backdrop against which an operational understanding of the company’s values-in-action could be identified and examined and, when found compelling, used to initiate newcomers, promote managers, and guide succession planning at the highest level.

After being thoroughly introduced to the idea of teleopathy (with its three symptoms of fixation, rationalization, and detachment) in the morning session of the first day of the week, executives are asked in the afternoon session to apply the idea (if it applies) to a Harvard case study of mine called H.J. Heinz Company: The Administration of Policy. It becomes clear in discussing the Heinz case that the company’s desire to please Wall Street analysts dictated an executive compensation program that led to significant—and hypocritical—misreporting of earnings over an 8-year period. Once the Medtronic executives saw the Heinz case dynamics, they were asked to get into small groups to discuss possible examples of similar kinds of hypocrisy in Medtronic itself. I refer to these discussions as hypocrisy exercises and I see them as “making friends with hypocrisy” because every person and every organization has a gap between walk and talk, and our ethical challenge is to deliberately, mindfully, reduce that gap as much as possible (Table 5.1).

Table 5.1 Hypocrisy exercise template

Debriefing after these group discussions inevitably surfaced company practices that could be modified to remove dysfunctional incentives—or at least practices that need more careful explanation from senior management. For this reason, the exercise was always debriefed with a member of senior management present.

I mention the above educational practices with executives to supplement my discussion of ethics education and the case method in the academy because they represent practices that are tailored to the specific cultures of the organizations in which executives find themselves, instead of the inevitably more generic ethics education offered in business school settings. But whether in the academy or in the corporation, these practices are born of a central awareness—the awareness I am here calling the Socratic insight. Socrates was convinced that understanding and moral wisdom could only come from respectful dialogue among educators and learners. The case method, in both my classroom experience and my work with business executives, shares that Socratic conviction. This was its aspiration as we saw earlier in this chapter, articulated by Charles Gragg.