The Business of Ethics

By Naomi GoldinOct 25 2006; The Cornell Daily Sun

Two days ago, former Enron CEO Jeffrey Skilling was sentenced to 24 years in prison for his involvement in one of the largest corporate scandals of the decade. Skilling was convicted of federal felony charges including conspiracy, insider trading and securities fraud.

A few weeks ago, Yale student Aleksey Vayner made national headlines for his over-the-top 11-page cover letter and video resume in which the I-Banking applicant made a number of false claims. Vayner credited himself with running a charitable organization, serving as the CEO of an investment firm and writing a book on the Holocaust. Research by bloggers has shown that all of these claims are fabricated.

And, earlier this month, Hewlett-Packard’s former chairwoman, Patricia Dunn, was charged with four felony counts for data-mining. In her effort to discover the source of continuous company information leaks, Dunn spied on the home-phone records of fellow board members. Dunn found the director; the lawsuit found Dunn.

So, what do these current events tell us about the state of America’s corporate values? Unfortunately, nothing good. It seems as though a trade-off exists between business ethics and business profits — meaning that one comes at the expense of the other. Of course, there are those of us out there who know that this is simply not the case.

In fact, there are plenty of socially responsible corporations and business practices that have their fair share of financial success, such as Ben & Jerry’s or DuPont. Still, we cannot hide from the reality of increasing corporate malfeasance in recent times.

In his Business and Professional Speaking course, Professor Brian Earle recently discussed a survey taken by the Ethics Officers Association which revealed that an alarming 48 percent of employees have engaged in unethical or illegal activity within the past year. The annual cost of these unethical or illegal actions? $400 billion! Perhaps what is even more disconcerting about white collar crime, however, is that it occurs at every level. Like Aleksey Vayner (well alright, maybe not quite like Aleksey Vayner), many job applicants fabricate their past experiences and credentials.

According to a study released by Avert Inc., a company that performs background checks, 44 percent of job applicants have falsified information about their work experience or education on their resumes. Therefore, it is not surprising that screening and selection services, such as those offered by Avert, are increasingly used by corporations. (Now might be the right time to change that bullet on your resume from “Spearheaded the development of new financial contract database” to “Participated in the development …” … just a thought.)

But what should be done about the apparent lack of ethical standards in corporate America?

In the wake of recent corporate scandals, some business schools have found that the answer rests with education. More and more universities are instituting courses on ethics and social responsibility. For example, FSU’s College of Business has created a “Business Ethics and Moral Leadership Course” in order to increase students’ awareness of the importance of ethical decision-making. Bentley College is recognized for its Center for Business Ethics, which is similar to UC Berkley’s Center for Responsible Business in its Haas School of Business. Additionally, Northwestern’s Kellogg School of Business, ranked as the 4th best business school in the U.S. by U.S. News and World Report, inserted an ethics segment into the basic organizational leadership course that all students are required to take. And Cornell’s undergraduate business program currently offers a 2-credit course on Business Choices and Consequence. Yes, business programs all around the country are adding required courses on ethics to their curriculum.

One of my best friends attends the Stern School of Business at New York University. She recently informed me that NYU also added a required course on business ethics to their undergraduate program, in which she is currently enrolled. The course, Professional Responsibility and Leadership, “is designed to help students consider the purpose and function of business in society and the ways in which a business profession is incorporated into a successful human life.” However, rather than being considered a serious component of the business curriculum, the course seems to offer more comic relief than anything else. (...) ?