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Why New MBAs Place Higher Importance on Ethics

Business ethicsEthics is a difficult subject to describe, let alone teach. Still, as more scandals -- from Enron to the Ponzi scheme of Bernie Madoff -- infect the corporate world, business schools find themselves shouldering the responsibility of teaching values to their students.

"Every time it becomes apparent that many of the leaders of our institutions are ethically lacking, there is an uptick in MBA ethics education," says Mark Pastin, president of the Council of Ethical Organizations, a nonprofit dedicated to ethics in business, government, and the professions. "The problem is that the students who were trained in ethics in the late 1990s included many of the decision makers in the 2008 meltdown. Ethics education has to go beyond a knee-jerk reaction with a course."

In the past, schools would only push ethics on students when scandals snatched headline news. But the tables have begun to turn. Now, MBA candidates are looking for something more in their future careers, and b-schools are following suit.

"What has changed is a new generation of students, who have a different definition of success," says Scott C. Hammond, a professor at Utah State University's Jon M. Huntsman School of Business. "They want a greener world, less conflict, and more time with loved ones. They define success as a chance to innovate, work with good colleagues, and spend quality time outside work."

In that sense, ethics becomes less about avoiding wrongdoing and more about making your work meaningful. Many schools have started to incorporate sustainability courses, meet and greets with green recruiters, such as those from clean energy, and workshops on work-life balance.

Of course, that's not enough. Schools are broaching the subject of ethics by weaving it into traditional classes, such as human resources and accounting, adds Hammond. After all, you still have to learn about the ethical pitfalls you might encounter and have to combat.

At Husson University's College of Business in Bangor, Maine, students can take Leadership and Ethics, Law and Ethics for Nonprofit Organizations, and White Collar Crime. In addition, professors add ethics components to other classes, says Stephanie Shayne, assistant professor and director of Graduate and Online Programs at Husson's business school.

Some schools also try to build ethics into their culture. For example, Georgetown University's McDonough School of Business stresses its foundation as a Jesuit institution and how that has helped them integrate ethics into virtually all aspects of the curriculum.

"Students learn the analytical and persuasive skills needed to succeed in business and understand when to use them and how to evaluate their decisions ethically," according to a profile of the school featured on Poets & Quants. "A new curriculum, launched in 2012, deepens the school's active commitment to educate principled, ethical leaders with a global mindset who are ready to serve business and society."

While everyone agrees that educators have to address the dilemmas that people could face in the workforce -- accounting fraud, embezzlement, and the rest -- no one is quite sure if it makes any difference. After all, the moral fibers of those in their late 20s and early 30s are already fully developed. Recruiters of MBAs want to hire people who won't bilk the company, commit fraud, or act inappropriately with colleagues and clients. But they aren't usually as interested in discussing job applicants' ethics as they are at making sure they can perform the tasks for which they will be responsible.

"If a person is obviously dishonest with the recruiter, that is a red flag," says Pastin. "But other than outright dishonesty, the recruiter will leave ethics assessment to the company's management."

Still, as more scandals pop up and news continues to travel faster and faster, businesses are concerned about allowing employees, especially senior executives, with questionable ethics in their circle. The good news is that the latest wave of MBAs and executives seem more attached to doing right by society.

"Ethics in corporate culture will always reflect the ethics of the leaders of the organization," adds Pastin. "Are we picking more ethical leaders? I think so and there is some hope here."

As long as business schools and companies become more selective -- or at least eventually weed out those with questionable morals -- and continue to explore ethical dilemmas commonly faced in the field, ethics will gain more prominence in the corporate world.