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April 1, 2004

In Wake of Corporate Scandals, Katz Takes new Approach to Ethics

At the nadir of the Enron and WorldCom scandals, when the term “business ethics” was sounding ever more oxymoronic, Pitt’s Katz Graduate School of Business eliminated the lone required course in ethics from its full-time MBA curriculum, choosing instead to integrate ethics across the curriculum.

The school’s dean, Frederick W. Winter, calls the change — which took effect last fall — “a bold step that, we think, makes ethics more interesting and relevant to our students and provides for greater comprehension” than the former stand-alone ethics course. Katz students had complained the course was redundant and detached from the rest of the graduate curriculum, according to the dean.

But William C. Frederick, a Katz school professor emeritus who used to teach the ethics course, calls its elimination “shameful.”

During a March 25 Pitt conference on corporate codes of conduct, Frederick protested that “The answer to the question ‘Do business schools teach ethics?’ at Pitt is ‘No’ if we’re talking about the MBA program.”

Following the “Beyond Rhetoric” conference, former Katz Dean H.J. Zoffer said he agrees with Frederick that eliminating the ethics course was a bad move. But he mildly scolded Frederick for claiming, before an audience of business leaders and faculty, that Pitt’s MBA program no longer teaches ethics, period.

Zoffer pointed out that:

• Katz requires full-time MBA students to attend a seven-hour immersion program in business ethics shortly before the beginning of the academic year.

• The school recently held a full-day ethics competition in which students competed for prizes by debating ethical aspects of case histories from the business world. Business ethics professionals judged the competition.

• Katz faculty members, from accounting instructors to finance experts to marketing profs, are expected to incorporate ethics in their courses.

In addition, four years ago Katz established its David Berg Center for Ethics and Leadership.

“Now, I’m not saying that [the new curriculum] is as effective as doing all of those things and having the required ethics course,” Zoffer told Frederick. “But they’re experimenting with this new approach. I don’t agree with it, and you don’t agree with it, but it is not accurate to say that ethics has been taken out of the MBA program.”

In an interview, Zoffer said: “Professor Frederick is a believer in a required course in ethics for MBA students, and I agree with him. But my successor, Rick Winter, and many of the [Katz] faculty do not see the same degree of complexity that we do in the ethics issue.

“It’s very difficult to say to a finance professor or an accounting professor, ‘You don’t know enough about ethics, friend, to teach students how to analyze complex business situations.’ I mean, it’s not just a question of right and wrong. There would be no reason to teach ethics at all if it were that easy. It’s the gray areas that cause the problems,” said Zoffer.

According to Frederick, who served on the Katz faculty from 1963 to 1991, ethics “is the only area in the business school curriculum where the assumption is made that just anybody can teach it. You wouldn’t think that is true about finance or accounting or marketing or information technology.”

Frederick said that, in teaching Katz’s ethics course, he combined his training in economics and anthropology with his study of real-life ethical dilemmas in business. “I used case studies to put students in the context where they had to role-play and grapple with the realities of some actual business situation,” Frederick said. “If you hammer at this long enough over the course of a term, and if students are required to do it, you can get the message across. That’s the thing that Pitt’s MBA program no longer provides.”

Bradley R. Agle, who directs the Katz school’s Berg Center, taught the ethics course for six years before it was eliminated. Like Zoffer, he favors both integrating ethics across the curriculum and requiring a course devoted exclusively to ethics. “I think the only way one can truly do ethics right in the curriculum is by combining both methods,” he said.

In August 2002, Agle voted against approving Katz’s current two-year, full-time MBA curriculum specifically because it eliminated the ethics course. Given the epidemic of corporate scandals, he wrote to Katz faculty in an Aug. 22, 2002, e-mail: “I believe our timing for such a change is undeniably poor.”

Integrating ethics into all core MBA courses has produced “more faculty interest in the subject of ethics than at any other time in my tenure at Pitt. This is a positive thing,” Agle told the University Times. On the other hand, “integrating ethics into the curriculum requires that faculty not schooled in the discipline of ethics teach the subject. Generally, at universities, we expect that students are being taught subject matter by experts in the field. Thus, integration alone fails to provide the important ethical frameworks developed over thousands of years.”

Dean Winter countered, “I would put one of our accounting professors up against anybody who teaches ethics full time, in terms of being able to best describe how it’s possible to create deceptive financial statements. I’m a former marketing professor, and I think I have a few things to say on how there could be deceptive practices in marketing.”

Winter drew a parallel between ethics and international business. “Before the 1970s,” the dean said, “business education focused on national markets. Then, as our economy became more global, schools began creating international business courses. Most of those have since gone by the wayside, and you now see that international marketing, international finance and, indeed, the whole concept of international business is pervasive throughout the curriculum.”

Winter noted that business schools across the country are debating the merits of stand-alone ethics courses versus an inclusive approach. “In our school, we agonized over this question for years,” he said.

While Katz’s two-year MBA program cut its ethics course, ethics remains a required course in all other business programs at Pitt, including the evening MBA, executive MBA and undergraduate business programs. A few weeks ago, Pitt’s undergraduate College of Business Administration started a certificate program in leadership and ethics, the first such program in the United States for business undergraduates.

According to a March 21 New York Times story, many business schools are playing catch-up on ethics instruction. Harvard’s business school, for example, just began requiring ethics courses this year.

An informal survey last spring by the Association to Advance Collegiate Schools of Business, which accredits business school programs, found that 35 percent of its member schools required students to take an ethics course. About the same percentage of AACSB schools required ethics courses in 1988.

The New York Times quoted Winter as stating that Katz administrators and faculty “decided that having a separate ethics course was a lot like telling students that they could be bad during the week, but just had to go to church on Sunday.”

Some Katz professors, past and present, say the school should teach its students to be good during the week and make them go to church on Sunday.

—Bruce Steele

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