T EACHING E THICS IN THE B USINESS S CHOOL M ILIEU : B EYOND C ORPORATE S OCIAL R ESPONSIBILITY (CSR) Gwen Alexis, Ph.D., J.D. Associate Professor Leon Hess Business School Leadership and Ethics Track Hindelang Business Professors Teaching Summit 2014 LeBow College of Business, Drexel University Philadelphia, PA - May 15,

Teaching Ethics in the Business School Milieu: Moving Beyond CSR 2

How should Business Ethics be addressed? Pre-Enron Method: Post-Enron, Post-SARBOX, and Post U.S. Sentencing Guidelines Amendment: 3 Outside Elective – 3 Credits “What the hell are they teaching them in business schools?”

The 2002 Sarbanes-Oxley Act 4 Greater Corporate Transparency, Better Corporate Governance, Increased Shareholder Confidence in Securities Markets Enhanced oversight responsibilities for Board of Directors Companies are required to protect whistle- blowers  must make it possible for employees to report wrongdoing without fear of retaliation Enhanced civil and criminal sanctions for securities fraud Resulted in Amendment of U.S. Sentencing Guidelines to provide greater incentives for better corporate governance (organizational oversight) to detect wrongdoing

Management Education: A broader Definition 5

How to Best Add Ethics to the Management Training Agenda 6 Will Ethics Training interfere with teaching the management skills necessary to achieve the performance goals of a traditional for-profit business enterprise? Core Curriculum in Business Schools Finance and Banking Marketing Accounting Strategic ManagementProfit Maximization Training Entrepreneurship Corporate Governance Leadership Training

Who is the Beneficiary of Profit Maximization Training? 7 One Stakeholder: The Shareholder (Investor- Owner)

Task of Business Ethics = Giving other Stakeholders a Fair Shot at Winning the Affections of Managers-To-Be! 8 VS. Shareholder- Investor Employees Consumers Community Environment Other Stakeholders

Business Ethics = Organizational Ethics =Applied Ethics 9 Needed: A New Paradigm to Replace the following “Applied Ethics” Staples in Business: Stakeholder Perspective Corporate Social Responsibility (CSR) Good Corporate Citizenship

My Suggestion: Bringing Back Philosophical Ethics Teaching Ethical Theory to cultivate the “ethics buds” of Business School Students Major Philosophical Approaches to Resolving Ethical Dilemmas – Teleological or Consequence-Based Approach – Deontological or Duty-based Approach (Kantian Ethics) – Aretaic Approach or Virtue Ethics (as expounded by Plato and Aristotle) 10

Three Staples of Ethical Theory (Philosophical Ethics) 11 Teleological Theories Focus on the consequences or results of the actions they produce Deontological Theories Focus on duties Aretaic Theories Focus on virtue

Principle of Justice is Outgrowth of Philosophical Ethics 12 Principle of justice involves considering what alternative promotes fair treatment of people and i Types of justice Distributive (sharing of benefits and burdens) Compensatory (compensating for past injustice) Procedural (fair decision-making practices) Rawlsian (“Justice as Fairness” Theory of the late John Rawls)

From Moral Decisions to Moral Organizations 13 Moral Decisions Moral Managers Moral Organizations

Questions? Discussion? 14