A positive approach to business ethics education

Business students are not effectively learning to become ethical business managers. Prevailing business ethical educational pedagogies are negative, unattractive, inconsistent, confusing and counterproductive. Positive business ethics is not about not doing the wrong thing. It is about doing the right thing for a reason, and doing it better. Positive business ethical behaviors build trust, which creates competitive advantages through reputations, relationships, reduced costs and risk management. Positive business ethics fundamentally asserts that business people’s role in society has great worth. A positive approach will motivate business students to learn and retain business ethics by making it relevant to their careers. The outdated chains of compliance are retooled into implements to fulfill positive career aspirations by customizing positive ethical behaviors to each business discipline. Synthesized historical and current practice, seminal theory, case and empirical studies all converge to support that ethical behavior simultaneously creates long-term value and an important role in today’s world. Learning is enhanced through an attractive and consistent basis for rational management decision making. A positive ethical lens filters and focuses the section and delivery of curriculum, turning ethical dilemmas into opportunities pursued by career motivated students. Business students are transformed into ethical managers and leaders contributing to their successful virtuous organizations, where unethical individuals are poor team players. Integrating a positive approach to business ethics education across the business disciplines will improve educational effectiveness, enhance business schools, prepare the next generation of ethical managers and leaders, enhance careers, add value to businesses, and benefit society at large.Running Head: A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION A Positive Approach to Business Ethics Education Jeffrey L. Hillard A Thesis Submitted to the Graduate Faculty of University of Maryland University College In Partial Fulfillment of The Requirements for the Degree of Doctor of Management Submitted to: Dr. Eric Dent and Dr. G. David Andersen April 10, 2013 A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 2 © Copyright by Jeffrey L. Hillard 2013 A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 3 Acknowledgements The first and most important expression of true appreciation goes to my family, my wife Janet, and my daughters Laura and Kaylee Hillard. Over the past three years, they have provided a great source of encouragement while tolerating a nearly constant stream of positive business ethics. I appreciate their sacrifices while enduring my physical and mental absence, and love them all the more for their forgiveness and insights. I also sincerely appreciate all that my parents, Kitty and Lew Hillard, have done in setting an example for a happy and meaningful life. In a family, personal and their business context, my parents have always provided the most wonderful role models that a son could ever hope for. I am so thankful for my loving family. The doctoral journey would not be possible without scholars willing to share their wisdom and encouragement. My mentor, Dr. Dan Singer exemplifies this role, adding true friendship and a lot of bagels. The candid and relevant subject matter expert panel recommendations from Dr. Singer, Dr. Roy Lewicki and Dr. Norman Endlich provided critical redirection and focus one year ago. My trusted friends at Baltimore City Community College, Dr. Shawn Lane and John Wiley, both generously provided thoughtful listening and insights throughout the DM program. Outstanding UMUC faculty provided critical guidance at particular points along the path. These scholarly lamp holders include: Dr. John Sherlock for initial direction, Dr. Thomas Vernon for evidence-based research, Dr. Laura Drake Witz for argumentation and how to write a paragraph, Dr. Robert Bromber for guidance toward completion, and Dr. David Anderson for this role as thesis advisor. Dr. Eric Dent’s extraordinary scholarly guidance has consistently shown the way to the successful completion of this thesis. I gratefully acknowledge and sincerely thank all of my family, friends, and mentors during this doctoral journey. A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 4 Dedication Two of my best friends passed away during my doctoral journey. In their own unique ways, these friends were true role models of positive business ethical management and leadership, and how to live a happy and fulfilling life. This thesis is dedicated to the enduring fond memories of Dr. Leo Y. Min and R. Kevin Coleman. A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 5 Abstract Business students are not effectively learn ing to become ethical business managers. Prevailing business ethical educational pedagogies are negative, unattractive, inconsistent, confusing and counterproductive. Positive business ethics is not about not doing the wrong thing. It is about doing the right thing for a reason, and doing it better. Positive business ethical behaviors build trust, which creates competitive advantages through reputations, relationships, reduced costs and risk management. Positive business ethics fundamentally asserts that business people’s role in society has great worth. A positive approach will motivate business students to learn and retain business ethics by making it relevant to their careers. The outdated chains of compliance are retooled into implements to fulfill positive career aspirations by customizing positive ethical behaviors to each business discipline. Synthesized historical and current practice, seminal theory, case and empirical studies all converge to support that ethical behavior simultaneously creates long-term value and an important role in today’s world. Learning is enhanced through an attractive and consistent basis for rational management decision making. A positive ethical lens filters and focuses the section and delivery of curriculum, turning ethical dilemmas into opportunities pursued by career motivated students. Business students are transformed into ethical managers and leaders contributing to their successful virtuous organizations, where unethical individuals are poor team players. Integrating a positive approach to business ethics education across the business disciplines will improve educational effectiveness, enhance business schools, prepare the next generation of ethical managers and leaders, enhance careers, add value to businesses, and benefit society at large. Keywords: Business Ethics, Positive, Education, Management, Value Creation. A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 6 Table of Contents (1 of 3) Acknowledgements .............................................. .......................................................................... 3 Dedication ...................................................................................................................................... 4 Abstract .......................................................................................................................................... 5 Figures and Tables .......................................................................................................................... 9 Chapter One - Introduction ............................................................................................................10 Problem Statement ......................................................................................................................10 Purpose Statement ......................................................................................................................10 Context/Background ...................................................................................................................11 Theoretical Bases .......................................................................................................................11 Research Question ......................................................................................................................13 Research Methods .......................................................................................................................13 Definition of Terms ....................................................................................................................13 Business ethics .........................................................................................................................13 Functional schools of business.................................................................................................16 Negative business ethics educational content ..........................................................................16 Positive business ethics education (PBEE) .............................................................................23 Insights from positive psychology for PBEE...........................................................................23 Insights from positive organizational scholarship for PBEE ..................................................25 Assumption and Argumentation Basis........................................................................................28 Delimitations and Limitations ....................................................................................................29 Thesis Significance .....................................................................................................................29 Organization of Thesis ...............................................................................................................30 Chapter Two – Literature Review ..................................................................................................31 Introduction ...............................................................................................................................31 Assessing Current Business Ethics Education ............................................................................31 Bloom’s Taxonomy applied to business ethics education ......................................................33 Empirical evidence of marginal effectiveness of business ethics education ...........................36 Evidence of inconsistency as an inhibitor of effectiveness .....................................................39 Evidence of negativity as the norm and the impact of pluralistic ignorance (PI) ....................42 Assessment conclusion: inconsistency, negativity, norms, and motivation ............................45 Foundations of a Positive Approach to Business Ethics Education ...........................................46 Positive business ethics: A learning objective for student success ..........................................47 Theories of value creation for consistent affective and cognitive learning .............................49 Stakeholder capitalism theory ..................................................................................................53 Relevant corporate codes of conduct .......................................................................................55 United Nations Principles for Responsible Management Education (PRME). ....................56 The Caux Round Table .........................................................................................................56 The Caux Principles ..............................................................................................................57 The Caux sub-principles and stakeholder management guidelines ......................................57 Cognitive ethical management competencies ..........................................................................58 Pro-Management Theory .........................................................................................................60 The mediating role of trust .......................................................................................................63 A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 7 Table of Contents (2 of 3) Chapter Two – Literature Review continued: Examples of Positive Ethical Curricular Content .......................................................................66 Ethical executive leadership role models .................................................................................66 Value creation discussion ........................................................................................................67 Positive case studies .................................................................................................................69 Applied empirical studies ........................................................................................................70 Conclusion of Literature Review ................................................................................................72 Chapter Three – Conceptual Framework ......................................................................................73 Introduction ................................................................................................................................73 Conceptual Framework for Ethical Management as a Learning Objective ................................73 Theoretical foundation ............................................................................................................75 Guiding corporate principles ....................................................................................................76 Management competencies ......................................................................................................77 The positive ethical lens ..........................................................................................................78 Positive ethical lens: Positive psychology ............................................................................80 Positive ethical lens: Positive organizational scholarship ...................................................80 Positive ethical lens: Pro-management theory ......................................................................81 Positive ethical lens: The four reasons of ethical behavior and trust (4Rs) .............................82 Reputations ..........................................................................................................................84 Relationships .........................................................................................................................85 Reduced costs........................................................................................................................87 Risks managed .....................................................................................................................88 Summary: Positive ethical lens ...........................................................................................89 Conclusion to Conceptual Framework .......................................................................................89 Chapter Four – Methodology ........................................................................................................91 Introduction ...............................................................................................................................91 Discussion of Evidence-Based Research and Methodology ......................................................92 Discussion of Relevant Scholarly Evidence ..............................................................................95 Presentation of Expert Panel ......................................................................................................96 Evidence Based Feedback Process ...........................................................................................98 Display and Discussion of Expert Panel Recommendations ...................................................100 Modifications and New Directions Planned based upon Expert Panel Recommendations .....103 Chapter Summary and Conclusions – Redirection of Thesis Scope and Content ...................105 A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 8 Table of Con tents (3 of 3) Chapter Five: Analysis and Discussion ......................................................................................107 Introduction ..............................................................................................................................107 Restatement of Purpose ............................................................................................................107 Restatement of Research Question ..........................................................................................108 Business Ethics Education is Ineffective in Developing Ethical Decision Making ................108 Positive Approaches to the Contributory Causes of Business Ethics Educational Ineffectiveness .....................................................................................................................................................109 Negative tone is inconsistent with business language, hampering attraction to learning .....110 Positive approach: Ethical behavior is a management competency and a leadership quality .....................................................................................................................................................112 Negative expectations of ethical business norms increases pluralistic ignorance (PI) .........113 Positive Approach: Ethical behavior is the norm in a business context ...............................114 Inconsistent goals and level of analysis hamper cognitive affective domain interaction .....119 Positive approach: Ethical behavior is good business ..........................................................122 Complexity of multiple normative philosophical and social ideologies causes confusion ..123 Positive approach: There are four reasons for ethical behavior and trust .............................125 Example of functional area - Accounting ..............................................................................127 Alternative Perspectives ...........................................................................................................129 Summary ..................................................................................................................................130 Chapter 6: Conclusions, Implications, and Recommendations for Future Study .....................133 Introduction ...............................................................................................................................133 Overall Conclusions ..................................................................................................................134 Implications for Management ..................................................................................................135 Implications for management of schools of business ...........................................................135 Implications for management of educational publishing companies ....................................137 Implications for management at large ...................................................................................138 Implications for managerial consulting and corporate training firms ...................................139 Implications of Trends .............................................................................................................139 Sustainability, climate change and environmental awareness ..............................................139 Globalization .........................................................................................................................140 Increasing values of intangible assets ...................................................................................141 Limitations and Areas for Future Research .............................................................................142 Future research: The role of incentive compensation ...........................................................142 Future research: Applying a positive ethical framework to finance .....................................143 Future research: Applying a positive ethical framework to ethical leadership .....................145 Future research: The foundations of a new discipline ..........................................................147 Summary ..................................................................................................................................147 References ...................................................................................................................................156 Appendix A – Subject Matter Expert Panel Supporting Documents ........................................171 Appendix B – Dissertation Presentation at SOARs Event .......................................................181 A POSITIVE APPROACH TO BUSINESS ETHICS EDUCATION 9 Figures and Tables Figure 1: Principles of Management Textbook: Negative Business Ethics Education .................22 Figure 2: Bloom’s Taxonomy Applied to Business Ethics Education ..........................................35 Figure 3: Trust and Distrust: Alternative Social Realities .............................................................64 Figure 4: Conceptual Framework for Ethical Management as a Learning Objective ...................74 Figure 5: The Positive Ethical Lens: Filtering and Focusing for Ethical Management.................79 Figure 6: The Four Reasons of Trust and Ethical Behavior (4Rs) ................................................82 Table 1: Subject Matter Expert Evaluation