MBAs and Ethics

A look at the ethical preparedness
of MBA students and how
it might be improved

By

Vince Cavasin

April 30, 1999

For

Professor Louis Chauvin

Winter 1999 Independent Study

Executive summary

Virtually all professionals are confronted with ethical quandaries in their
work, but I contend that those faced by the manager generally have the highest
potential impact on society. The importance of business ethics implied by this
statement coupled with the general lack of attention given to it by most MBA
programs led me to formulate the hypothesis for this project: that the study of
ethics is as fundamental to a business education as a study of accounting or
marketing, and that while any number of ethical systems can be employed in the
context of business, future business leaders are ill-equipped to apply any of
them due to a lack of training.

The project was based on a survey of about 1500 MBA students at over 16
schools worldwide. The survey is built around questions that present
business-related ethical quandaries and offer a series of multiple-choice
answers to each. Each answer models one of six ethical theories (the selection
of which is outlined below); the same theories are modeled for each question.
Respondents are asked to choose the answer that best matches their thought
process in solving the quandary. The survey mainly looks for consistency in
answers across the quandaries, in hopes that correlations can be drawn between
consistent answers and certain respondent attributes.

This paper presents an overview of ethical thinking throughout history, and
identifies 13 main ethical systems that can potentially be applied to business:
Virtue Ethics, Judeo-Christian ethics, Machiavellianism, Social Contract Theory,
Individualism, Kantian ethics, Utilitarianism, Social Darwinism, Socialism,
Rawlsian Justice Theory, Objectivism, Libertarianism, and Communitarianism.
Based on the selection criteria of 1. applicability to business, 2.
modelability, and 3. overlap, I distilled these 13 theories into a more
manageable 6 for the survey: Objectivism, Machiavellianism, Contractarianism,
Moral Absolutism, Ethical Relativism, and Utilitarianism.

While there were many problems with the survey, its results basically support
my hypothesis; 29% of respondents are what I classify as "ethically
consistent."

After some analysis of the survey details, this paper draws the following conclusions:

Ethics is as fundamental a business discipline as any other MBA core
requirement;

Ethical development is a long, personal process that requires commitment
and interest from the person in question;

Business schools must accept the need to offer ethical training, and the
complexities of doing it effectively, which requires an integrated, concerted
approach that ideally would span the length of the MBA, including core and
elective classes as well as out-of-classroom opportunities to further ethical
development.

Contents

Preface *

Introduction *

Hypothesis *

Overview *

A brief overview of the survey *

Ethical theories *

A brief history of ethics *

Theories considered *

Selection criteria *

Theories rejected and why *

Virtue Ethics *

Judeo-Christian and Kantian ethics *

Social contract theory and Rawlsian Justice *

Individualism and Libertarianism *

Social Darwinism *

Socialism and Communitarianism *

Theories chosen *

Utilitarianism *

Machiavellian *

Objectivist *

Contractarian *

Moral Absolutism *

Ethical Relativist *

The Survey *

Goals *

Personal goals *

Method *

Survey construction *

Quandary/response construction *

Testing *

The final survey *

Sampling *

Known Biases/problems with quandaries
and response modeling *

General statistics *

Analysis of responses *

How many MBAs are ethically consistent? *

What ethical systems do MBAs favor? *

Correlations between consistent responses and other attributes *

Side effects *

Conclusions *

So, have I proved my hypothesis? *

The fruits of reflection *

Planting the seed *

And where do we go from here? *

Create interest *

Require an ethics core course *

Promote ethics *

And the last word... *

Endnotes *

Bibliography *

Acknowledgements *

Exhibit 1: BE core requirements and
response rates per school surveyed
*

Exhibit 2: The survey, with key *

Exhibit 3: Rejected survey questions *

Exhibit 4: Rough draft survey *

Exhibit 5: Summary country statistics *

Exhibit 6: Summary individual consistency statistics *

Exhibit 7: Breakdown of ethical system choices *

Exhibit 8: Consistency by industry and MBA concentration *

Preface (or, Sob Story)

A preliminary note concerning two major problems that severely affected the
success of this project is in order.

The foundation of the analytical portion of this project was an email survey
of students enrolled in 16 MBA programs worldwide. Careful survey construction
is crucial to a project like this, and the first problem occurred during the
time I had scheduled to construct the survey when a family emergency effectively
occupied more than two weeks of my time, significantly reducing the time I had
to spend on building the survey. In order to allow adequate time for respondents
to respond and subsequently for the survey data to be analyzed, I had very rigid
deadlines for delivering the survey. This forced me into the difficult choice of
whether to send out a hastily constructed survey in order to allow adequate
response and analysis time, or to construct a more rigorous survey, send it out
late, and gamble on insufficient response and analysis time. I chose the former,
which at the time seemed an obvious choice, but in light of the next tragedy,
was unfortunate.

The survey was originally distributed to about 1500 students, and about 250
of them responded. Unfortunately, half way into the analysis of the responses
(and about 4 weeks before the project was due), the second tragedy struck: my
hard drive crashed and I lost all the work I had completed; not having made any
backups, I basically had to start over from scratch. This entailed emailing all
respondents again (which itself proved difficult since I lost all my email
records) and asking them to resend their completed surveys if they still had
them. This yielded about 70 responses over the subsequent three weeks. Refer to
Exhibit
1 for a breakdown of the origins of the responses ultimately analyzed (a
breakdown of the original responses is impossible because all records of them
are completely lost).

Completely lost were over half the responses from Asia, the majority of those
from Europe, and almost all of the responses from U.S. schools that had a
business ethics requirement in their core curriculum (Wharton and Stanford).
Since correlating ethical reasoning to nationality and educational requirements
was one of my main goals, this represented a significant loss. Therefore I have
expanded the paper’s focus on analyzing ethical systems applicable to business,
and lessened its focus on the survey. However, I believe that even the limited
survey responses compiled here offer some interesting insights, which I will
explore.

Introduction

Virtually all professionals are confronted with ethical quandaries at least
occasionally in the course of their work; those faced by the teacher, the
doctor, and the lawyer are easy to imagine. However, of the many professionals
who face ethical quandaries, I contend that upper managers are the group whose
approach to their resolution potentially has the largest impact on society [1].
A doctor's ethical decisions in the treatment of an individual may be a matter
of life and death, but the impact of their effects will be limited to the
patient and her immediate family. An executive, on the other hand, may well face
ethical decisions that have life and death implications for generations of
thousands of families, as shown by the Bhopal Union Carbide pesticide plant
disaster (Bhopal, 1985).

Given the importance of the ethical decisions future business leaders may be
called upon to make, I find the emphasis place on ethical development in MBA
programs to be inadequate, to say the least. Of the Business Week top 20
U.S. MBA programs, only 8 have a core requirement in business ethics (see Exhibit
1). Several of those that don't have a core requirement don't even regularly
offer a Business Ethics (BE) elective, and BE courses offered are typically
concerned more with teaching social or legal responsibilities of business rather
than with providing any kind of foundational ethical frameworks. MBA students
are universally taught the fundamentals of financial statement analysis, the 3
C's, Porter's 5 Forces, and numerous other analytical tools for use in thinking
about business problems in core courses; these tools are then used and built
upon in subsequent courses. On the other hand, if they are taught ethics at all,
the fundamentals are frequently ignored in favor of syllabi that immediately
emphasize analysis of real-world cases [2].
This is analogous to putting a student in an Options and Futures class before he
has been taught how to calculate an NPV.

Hypothesis

The importance of ethics to business people coupled with the lack of
attention it is given by MBA programs led me to formulate the hypothesis for
this project: that the study of ethics is as fundamental to a business education
as a study of accounting or marketing, and that while any number of ethical
systems can be employed in the context of business, future business leaders are
ill-equipped to apply any of them due to a lack of training. I had originally
hypothesized, as a corollary, that there is a correlation between core MBA
requirements in ethics and consistency in ethical decision-making, but as
mentioned in the Preface, meaningful analysis of this was made impossible by the
hard drive crash.

Overview

The core of this project was a survey of MBA students at over 16 MBA programs
worldwide. This survey, described in detail further on, was intended to measure
consistency in ethical reasoning and correlations between consistency and
various respondent attributes, and to thereby provide evidence for or against my
hypothesis.

This paper begins with a comprehensive overview of various ethical theories
and evaluates them for their applicability to business [3].
After determining the most applicable theories, it presents the survey and an
analysis of responses, then draws conclusions based on this
analysis.

A brief overview of the survey

In order to clarify the context of the next section, I’ll provide a brief
overview of the survey here. Comprehensive coverage is given in the
Survey section.

The basic idea behind the survey is that, when confronted with an ethical
quandary, people go through some kind of reasoning process to decide what to do.
Consider the following example from everyday life: you’re stopped at a red light
at 3 a.m.; there are no other cars anywhere in sight, and you know it’s a long
light. Do you run it? You might reason that the law is always to be obeyed, so
you will wait for the green; you might reason that you’d like to run it, but are
afraid there may be a cop lurking around the corner, so you won’t to avoid the
risk of getting a ticket; you might reason that lights are for people who are
too stupid to know when to stop at intersections, and proceed; I could go on.
The point is, each of these choices represents the application of a different
system of ethical reasoning to solve the same problem—whether to run the light
or wait. The thought process might not be as explicit as I’ve made it out to be,
but this would likely owe to the fact that you’ve thought through it so many
times before it has become unconscious (such automation of ethical reasoning
would be an interesting thing to explore in itself, but is beyond the scope of
this paper).

My survey is built around questions that present business-related ethical
quandaries and offer a series of multiple-choice answers to each. Each answer
models one of six ethical theories (the selection of which is outlined below);
the same theories are modeled for each question. Respondents are asked to choose
the answer that best matches their thought process in solving the quandary. The
survey mainly looks for consistency in answers across the quandaries, in hopes
that correlations can be drawn between consistent answers and certain respondent
attributes.

Ethical theories

The Oxford English Dictionary, that omniscient crutch of uncreative grad
students, defines ethics as:

The science of morals; the department of study concerned with the principles
of Human duty.

Science? Morals? Principles? Duty? Sounds like a definition to pull
out if you want to start a fight! It's no wonder that I find society unconcerned
with ethics; the very words used to define it are, in combination anyway,
controversial. It’s much easier to ignore ethics than to think about or study
it, especially if you’re a manager working 80 hours a week. However, few would
argue that we, as members of civilized society (and even as managers), have
moral duties. What I'm concerned with here is the science aspect—the
study, formulation, and understanding of those duties, and their application to
real life situations.

A brief history of ethics

Concern with standards of human conduct is as old as civilization itself, but
the birth of western ethics is generally credited to the ancient Greek
philosophers. The first Greek to develop a formalized ethics was Pythagoras
(Collinson, 1987), but Greek ethics probably reached its pinnacle with
Aristotle, whose Nicomachean Ethics, written in the late 4th century BC,
has spawned modern Virtue Ethics and has had an immeasurable influence on
countless ethicists over the last 2300 years [4].
Virtue Ethics defines as right actions that facilitate some highest good; for
Aristotle, this good (stated in extreme summary) is individual happiness [5].
Ethics that define right according to the facilitation of some end (in Greek,
telos) such as this are called teleological ethics (Lacey,
1996).

Unsurprisingly, religious beliefs have always influenced (and been influenced
by) philosophical ethical theories; the Greek religion Orphism served as the
basis for Pythagoras's ethics. Prior to that, the Jews enumerated their moral
beliefs in the Torah, which is perhaps the first comprehensive written record of
a moral code and continues to form the basis for Jewish moral philosophy and
part of the basis for Christian moral philosophy. Jewish and Christian ethics
are teleological, but rather than pursuing Aristotle’s individual happiness
telos, their telos is pleasing God.

In the West, the evolution of Christianity illustrates the ongoing interplay
between religion and philosophy. Saints Augustine and Thomas Aquinas worked in
the fourth and thirteenth centuries, respectively, to integrate Greek ethics
with the teachings of the Church. Christ's golden rule, "So whatever you wish
that men would do to you, do so to them..." (Matthew 7:12) is the fundamental
statement of Christian ethics, and its influence can be seen in Kant's
categorical imperative (Velasquez, 1995), Rawlsian Justice Theory, and even
modern Libertarianism and Objectivism.

In the 16th century, Niccolo Machiavelli began to move the basis of ethics
away from religion and toward humanism. His ethics, intended to guide the
actions of rulers rather than the common man, define morality in terms of what
is necessary to maintain power and the order of the state (Machiavelli,
1983).

A more rigorous and general secularization of ethics began in the 17th
century with social contract theory as developed by Thomas Hobbes and John
Locke, and refined in the 18th century by Jean Jacques Rousseau. Many modern
ethical systems, especially those most often employed in business, owe much to
Locke’s theory of natural rights—the rights to liberty and property that
every person would possess in a perfect state of nature. Also in the 18th
century, David Hume and Adam Smith put forth Individualistic theories of ethics
that identified right and wrong based on individual happiness, with the
assumption that individuals working for their own good also worked for the good
of society. Smith's Wealth of Nations is probably the first book to
integrate ethical theory into the study of business, drawing upon the ethics
developed in his earlier work Theory of Moral Sentiments (Microsoft,
1997).

Then came Kant, whose categorical imperative determines right and wrong based
on motivation and duty, effectively secularizing the golden rule. However,
Kant's ethics are fundamentally different from Christian ethics in that it
rejects the notion that right is determined by the outcome of the action (i.e.
the God-pleasing telos of Christian ethics), and instead stipulates that right
is determined by the intention of the action alone. This is called a
deontological approach (Lacey, 1996).

In contrast to Kant's deontological ethics is the return to teleology
represented by Utilitarianism, developed by Jeremy Benthem in the late 18th
century and John Stuart Mill in the 19th century. Utilitarianism’s telos depends
on which Utilitarian philosopher you consult, but rather than pursuing
Aristotle's greatest individual happiness, Utilitarianism generally pursues the
happiness of the greatest number of people in judging right and wrong (Lacey,
1996).

Around the same time, Charles Darwin published his theory of evolution,
inspiring Herbert Spencer to develop the theory of Social Darwinism, which says
that morality results from natural selection in man's social evolution (Meising,
1985). In business, the natural laws of competition determine survival and
punish inefficiency with failure, and in the end society benefits from the
survival of the strongest.

In stark opposition to this was Karl Marx's Socialism, with its notions of
"social rights" and redistribution from the strong to the weak with limited
regard for individual moral rights in the process (Velasquez, 1988).

The most accessible ethical systems to emerge in the 20th century (I'll spare
you—and myself—a digression into the incomprehensible existentialist ethics of
philosophers like Heidegger and Sartre) draw heavily on theories spanning the
entire history of philosophy, but tend to attempt to overcome their individual
shortcomings by combining them into broader theories, and generally strengthen
them with deeper analytical rigor. John Rawls’ theory of justice (Rawls, 1971)
draws upon Locke's notions of individual liberty but tempers them with
exceptions that show the influence of Utilitarianism and Marx.

Ayn Rand's objectivism also builds on Locke, but adopts Aristotle’s telos and
many of his virtues and rejects any notion of positive rights. Robert Nozick's
Libertarianism reaches basically the same conclusions as Rand, but without
Rand’s rigorous derivation from existence to ethics (Nozick, 1974; Peikoff,
1991).

Virtue Ethics, which has gained considerable popularity in the last 20 years,
is an attempt to return to Aristotle's notion of determining the morality of an
action by looking at the character of the actor.

Most recently, Communitarianism, the social philosophy primarily attributed
to Amitai Etzioni, has emerged. Communitarians believe that "strong rights
entail strong responsibilities" (Etzioni, 1992), and that the community is the
best judge of morality and the most appropriate enforcer of
responsibility.

Theories considered

I'll now distill the ethics enumerated above into 13 ethical systems in order
to judge their applicability to business and modelability in a survey. This
gives us:

Virtue Ethics—a broad system covering both Aristotelian and modern views
of virtue-based morality.

Judeo-Christian—a fundamentally absolutist ethics in which right
and wrong are enumerated in the Bible.

Machiavellianism—interpreting Machiavelli's advice to apply to everyone,
not just rulers, provides us with an interesting approach to ethics.

Social contract theory—aggregates the ideas of Hobbes, Locke and Rousseau.

Individualism—aggregates Hume's and Smith's ideas on individual liberty.

Kantian—another absolutist ethics, replacing the golden rule with the
categorical imperative.

Utilitarianism—aggregates Bentham, Mill and many other unenumerated and
widely varying forms of Utilitarianism.

Social Darwinism—Spencer's ethics.

Socialism—Marx’s ethics

Rawlsian Justice Theory—Locke meets Marx.

Objectivism—Locke meets Aristotle.

Libertarianism—Rand Lite.

Communitarianism—the ethics that can be derived from Etzioni’s
philosophy.

Obviously, trying to model all these systems in a survey would be cumbersome,
to say the least. Luckily, they can be paired down further for our
purposes.

Selection criteria

In selecting theories to use in the survey, I had to balance three main
criteria:

Applicability to business—since my audience was business students, not
ethicists, the theory had to be somewhat intuitively applicable to business
situations. In other words, the reasoning that a given theory would specify in
thinking through the solution to a business ethics quandary had to be clear.
Existentialist ethics, for example, would have been hopeless.

Modelability—the reasoning specified by a particular theory had to be
modelable in a clear and concise manner for a broad variety of business ethics
quandaries. This required that the theories chosen be fairly specific in their
ethical guidance. At the same time, the theory had to be flexible enough to
avoid similar wording in responses to different questions, in order to prevent
the emergence of obvious patterns in the multiple-choice answers. I thought
such patterns might encourage gaming in the responses (though in retrospect
this fear seems unfounded).

Overlap—I wanted to minimize the similarities between potential responses
in order to force respondents to take a firm stand and to minimize the
likelihood that they would accidentally choose different ethics for different
quandaries because of the similarity of the solutions. This meant I wanted to
avoid using similar theories, or theories that would appear similar when
modeled.

As I was evaluating my list of ethical theories based on these criteria, I
realized that, taken in aggregate, the criteria specify an overarching goal: I
was looking more for general methods of reasoning than for rigorous
application of some specific ethical theory. All ethical theories have many
subtle details that are seldom intuitive; however, the broader thought processes
behind the details are often quite intuitive (except, of course, in the case of
the dreaded existentialists!) and often subsume more than one ethical system.
For example, the general thought process behind all forms of
Utilitarianism—"will doing act A have a greater positive impact than not doing
it?"—is a fairly intuitive way to approach a problem, and it exists at a level
above the details of act vs. rule Utilitarianism (which are explained further
on). Act vs. rule might make for interesting philosophical debate, but in the
context of contrived survey responses, the distinction is unnecessary because
the quandary being addressed can be designed to avoid the need for
it.

Theories rejected and why

The emergence of the "metacriteria" described above allowed consolidation of
some of the ethical theories, while the lower-level criteria allowed elimination
of some.

Virtue Ethics

Due to its reliance on the personal character of the actor, I found Virtue
Ethics to be insufficiently specific to allow construction of consistent, brief
quandary solutions. In fact, Pincoffs (1986) points out that Virtue Ethics is
perhaps the antithetical approach to the curt quandary-solving approach to
ethics necessitated by my survey. However, the reasoning employed in objectivism
is, at a general level, similar to Virtue Ethics, while the specificity supplied
by objectivism’s concern with individual rights allows more straightforwardly
modelable solutions.

Judeo-Christian and Kantian ethics

As previously mentioned, I consider both of these systems to be absolutist,
albeit for different underlying reasons. Had I modeled them separately, brevity
would have required that the Kantian answer rely on some restatement of the
categorical imperative and the Judeo-Christian answer rely on some restatement
of the golden rule, and they would have looked very similar. Instead, I chose to
use more general Moral Absolutism, as described in the Theories
chosen section.

Social contract theory and Rawlsian
Justice

I consider social contract theory to be an excellent example of how an
ethical system can evolve over time along with societal norms. Born in the moral
Contractarianism of the Greek Sophists, later politicized by Hobbes, Locke and
Rousseau, and most recently revived as the foundation for the work of Rawls and
Gauthier, at its most fundamental level Contractarianism seeks to justify
morality by reference to an implicit or explicit rational agreement (Morris,
1996). I therefore chose to simplify Social Contract Theory and Rawlsian Justice
into simple Contractarianism, as described in the Theories chosen
section.

Individualism and Libertarianism

Nozick’s Libertarianism is to Smith’s Individualism as Rawlsian justice is to
Rousseau’s Social Contract. Libertarianism, Individualism and Locke’s natural
rights are, for practical purposes, subsumed by Rand’s Objectivism; none of the
four are particularly straightforward to model, but the differences are subtle
enough that in many cases it would be hard to distinguish between models of more
than one. Objectivism does tend to rely more on virtue and integrity whereas
Libertarianism, with its goal of naturally evolving minarchist utopias (Nozick,
1974), relies more on Contractarianism to ensure harmony between individuals.
This may create some biases as described further on. Objectivism also offers the
advantages of being the most complete and rigorous of the four, giving it a
higher degree of specificity which helps to facilitate modeling, and its birth
in the context (and loving embrace) of modern capitalism makes it more
applicable to business than the older theories.

Social Darwinism

The decision to cut this theory came down to modelability—modeling responses
based on "survival of the fittest" was difficult for the quandaries I designed
for the survey. While Social Darwinism’s fundamental premise differs greatly
from that of Machiavellianism’s, the Social Darwinist respondent would likely
find Machiavellian reasoning most appealing due to its pragmatic focus on what’s
best for the business.

Socialism and Communitarianism

As with Social Darwinism, these theories were difficult to model.
Fortunately, however, their social and political focus meant that they were
generally not applicable to the business quandaries I constructed. Both the
socialist and the Communitarian are concerned with social rights and
responsibilities, at the expense of moral rights if necessary; the main
difference between Socialism and Communitarianism seems to be where enforcement
responsibilities fall, with the Communitarians favoring more localized and the
socialists more nationalized enforcement. While little is written on
Communitarian ethics, I believe that both of these theories advocate a form of
Utilitarian morality: Communitarians strive to maximize good to the community,
while socialists strive to maximize good to society. Both strive to maximize the
quantity of people positively affected over the absolute amount of good
achieved. The socialist or Communitarian respondent would therefore be likely to
have his reasoning modeled by the Utilitarian response. However, for some cases,
the Communitarian respondent might also consider the Ethical Relativist
response, since for some quandaries it was the one more concerned with the local
community’s view of the good.

Theories chosen

Now we'll look in more detail at the theories I chose to include in the
survey and the assumptions I used in modeling them.

Utilitarianism

The term "Utilitarian ethics" is used to describe a huge number of
teleological ethical systems which judge morality according to its facilitation
of some quantifiable "greatest good", but differ in the way they define and
measure this good; this is no surprise, since the main criticism of Utilitarian
ethics is its lack of specificity in measuring and defining the good.

The two major divisions of Utilitarian ethics are act and rule
Utilitarianism. Act Utilitarians strive to maximize the good on a case-by-case
basis, which makes them especially susceptible to inconsistency. Rule
Utilitarians attempt to avoid this criticism by always following the course of
action that would, in most circumstances, provide the greatest good, even if in
a particular given case it wouldn’t. Utilitarianism can also be divided into
negative and positive camps, with the negative advocating only the avoidance of
evil, while the positive advocates both avoidance of evil and action toward the
good (Lacey, 1996).

These divisions do not specify what the greatest good is, only how
facilitating it should be addressed. The greatest good seems to have as many
different definitions as there are Utilitarian philosophers, with some form of
happiness usually emerging as a common theme. Bentham described it as "the
greatest good, or the greatest happiness, for the greatest number of people."
(Bentham, 1982). Egoistic Hedonism, a form of Utilitarianism that originated in
ancient Greece, exalts personal pleasure without regard for consequences as the
highest good (Microsoft, 1997). George Edward Moore argued that personal
affection is the greatest good (Collinson, 1987). Marx’s "from each according to
his ability, to each according to his needs" implies that good is maximized by
spreading it throughout society to the largest number of people.

In the context of business, the Utilitarian must decide among many
stakeholders and several definitions of the good. Potential goods include
profits, safety, community, and community development; potential stakeholders
include workers, investors, management, the actor, community members, and
society in general.

In modeling my Utilitarian survey responses, I generally combined an economic
perspective with Bentham’s greatest happiness principle. My assumption was that
happiness was facilitated by economic prosperity, and that the broader the base
of recipients of such prosperity, the better. I did, however, reject "Iacoccian"
temptation to put a dollar value on human life, and allowed concern for human
life to override concern for profit. Introducing such a "trump" into an
economically based Utilitarian ethic may not be entirely consistent, but in my
experience is consistent with the views of the average MBA student.

Machiavellian

Machiavelli intended his ethics to apply only to rulers, specifically to
Italian Renaissance monarchs. His moral guidance may be summed up as
"maintaining power at all costs." Leaders are not bound by traditional ethical
norms; their only ethical requirement is to succeed politically and maintain the
support of their "subjects," whom he characterizes as "ungrateful, fickle,
liars, and deceivers" (Machiavelli, 1983). Machiavelli advocates deceit and
cruelty when they are necessary to maintain power.

Unsurprisingly, Machiavelli’s ethics draw criticism. The most fundamental is
that it is neither rigorous nor complete; he assumes many points that most
philosophers would argue, and his ethics offer guidance only for rulers, not for
the common man. Also criticized is his pragmatism and espousal of deceit.

However, in the context of modern business (as well as modern politics, as
evidenced by the current President of the United States), Machiavelli’s ethics
are often, if sometimes unwittingly, embraced. For example, Anita Roddick,
founder of the Body Shop, a cosmetics company, made "social responsibility" a
major selling point for her company’s products for16 years, until her fraudulent
claims were exposed in an article in the September 1994 issue of Business
Ethics (Entine, 1995). While the company publicly repented and made internal
changes, Roddick remained in control and the Body Shop suffered no legal or
financial consequences other than the damage to its image, which it hired PR
firms to repair. It did, however, in true Machiavellian style, lash out with
lawsuits against the reporters that covered the story.

I chose to include Machiavellianism in the survey for two reasons. First, it
is the greediest of ethics, and MBA students are often characterized as being
greedy; it would provide a check for this. Second, its pragmatism requires
little moral development to understand or embrace, so it would provide some
measure of MBA students’ moral development (recall that my hypothesis indirectly
implies that this is lacking). In contrast to the other theories included,
Machiavellian reasoning is simple to model and simple to understand.

Objectivist

In Objectivism, morality "is the science of human self-preservation"
(Peikoff, 1991). Unlike plants and animals, human beings follow no automatic
course of action in order to survive; they must consciously figure out the
correct course and rationally decide to follow it. The best course is the one
that facilitates achievement of man’s highest moral purpose, which, for Rand, is
happiness, and happiness is "that state of consciousness which proceeds from the
achievement of one’s values" (Rand, 1957). These values, in turn, are objective
truths, discovered by man when he actively and rationally pursues them in his
own life.

Rationality, "the recognition and acceptance of reason as one’s only source
of knowledge, one’s only judge of values and one’s only guide to action" (Rand,
1964), is Objectivism’s primary virtue. All other Objectivist virtues—among them
independence, integrity, honesty, justice, productiveness, pride, and
selfishness—derive from rationality. Its primary vice—initiation of force—is
considered the ultimate evil because it disregards rationality. Objectivists
believe that disagreements should be settled through appeals to reason; when a
man initiates force against another man, he must be giving up on rationality,
which is fundamental to everything Objectivism stands for. The initiation of
force is therefore the rejection of Objectivism.

Objectivism is fundamentally egoistic, meaning that it considers
oneself to be the only proper beneficiary of one’s moral actions.

In extreme summary, then, Objectivist ethics require a person to rationally
determine the values that will facilitate attainment of happiness in her own
life, and to pursue them while respecting the rights of others.

As mentioned, Objectivism resembles Virtue Ethics in that happiness is its
telos and morality is highly dependent upon personal character and integrity,
which Objectivism defines as loyalty to rational principles. The fundamental
egoism, rejection of positive rights and admonition against initiation of force
implicit in Objectivist ethics also make them attractive to Libertarians and
Individualists. I chose to include Objectivism not only because it generally
subsumes these other ethics, but also because it offers the highest degree of
specificity, making it easiest to model. And of course, because I consider
myself an Objectivist (see the Biases section, which
follows).

Contractarian

As mentioned, I chose Morris’s (1996) simple Contractarianism, which seeks to
justify morality by reference to an implicit or explicit rational agreement, for
the survey because it represents the least common denominator among the various
Contractarian ethical theories. This made sense since, in the context of
business, neither the socio-political orientation of Hobbes, Locke and Rousseau
nor Rawl’s socio-economic Utilitarian modifications (Velasquez, 1988) were
necessary. I wanted to present respondents with a more pure Contractarian choice
more in line with Friedman’s (1970) philosophy, which is extremely
business-centric. Simple Contractarianism was much more straightforward to model
than the other forms, and I assumed that the socially concerned respondents who
might be attracted to a Rawlsian response would find the Utilitarian choice
adequate.

Simple Contractarianism considers an action wrong if a contract prohibits it;
if not, no judgement is passed on the action and it is considered permissible
(and by implication, right). The contract in question may be explicit (as in a
written or verbal employment contract), or it may be an implicit contract
commonly assumed in a business relationship (e.g. that your boss has the right
to tell you what to do). Each Contractarian response clearly states the contract
on which it is based. I consider Contractarianism to be a form of weak moral
absolutism, with the moral absolute being "do what you agreed to do", but with
lower-level absolutes enumerated in the agreement.

Moral Absolutism

In contrast to the weak absolutism of Contractarianism, what I’m calling
Moral Absolutism is basically a more general deontological approach;
circumstances and consequences are irrelevant, ethical notions of right and
wrong are universal, and value judgements are based on these ethical absolutes;
this is what Meising (1985) calls "Universalism." While I didn’t introduce
notions of teleology or deontology into the Moral Absolutist responses (the
business ethics context didn’t require me to), I generally based their reasoning
on Judeo-Christian ethics, since I assumed these would represent the most common
instinctual absolutist responses given my survey population.

Ethical Relativist

This previously unmentioned system owes to Meising (1985) and was included
for completeness since its reasoning is the exact opposite of Absolutism.

Both Relativism and Absolutism can be considered meta-ethics; they are
concerned with whether the concepts "right" and "wrong" are absolute or relative
to some contextual issue such as time or culture. A classic example is
cannibalism, a practice that was considered right and even incorporated into
religious ceremonies in some ancient cultures, yet is almost universally
considered wrong today. The die-hard Relativist would allow cultures that
practice cannibalism to be ethical, and in fact may call opponents of the
practice in those cultures unethical. The Absolutist, of course, would consider
cannibalism to be wrong (or perhaps right) always and everywhere regardless of
the circumstances.

Machiavellianism is the only clearly relativistic ethic examined here since
its notion of right is based on whatever’s necessary to facilitate control.
Social Darwinism might also be considered Relativistic because it allows the
notion of right to evolve over time.

I am tempted to call Virtue Ethics Relativistic given its reliance on the
individual character of the actor, but I believe that various schools of Virtue
Ethics provide enough specificity within themselves to avoid the Relativist
label; Aristotle’s Nicomachean Ethics certainly leaves little room for
doubt as to his views on the absoluteness of right and wrong.

I consider the rest of the ethics presented to be Absolutist since they
provide clear rules for determining the right. One may argue that
Utilitarianism’s various ways of measuring the good make it relativistic, but
this is more of a weakness in the ethic rather than a sign of relativism;
Utilitarianism’s intent, regardless of its practical achievement, is to
define an absolute good.

So if Relativism and Absolutism are already covered by other ethical systems
in the survey, why include them? Because the other systems in the survey add
many layers of reasoning to the pure notions of Absolutism and Relativism that I
want to test for, as demonstrated by the explanation of Absolutism. Similarly,
the Ethical Relativist quandary solutions strip the concept down to a minimum,
removing Machiavelli’s power telos and allowing the respondent to base his
answer solely on cultural norms—a common way of ethical reasoning among people
in the typical MBA age and education brackets.

The Ethical Relativist answers were simple to model; they generally reasoned
that if the issue in question was okay in the local culture, it was
right.

The Survey

Now that I’ve (hopefully) justified my choice of ethical systems to examine,
let’s look at the actual survey that examined them. While specific questions
will be examined in the Method section which follows, the entire survey
is attached for reference as Exhibit
2. This copy includes key data indicating which answers map to which ethical
systems.

Goals

As previously stated, the survey’s main goal was to measure ethical
consistency among the respondents. Specific characteristics I hoped to
measure were:

Ethical consistency of individual respondents—Integrity is a fundamental
virtue in nearly all ethical systems, and its definition is the subject of
much philosophical debate. However, one thing that philosophers agree on is
that consistency in beliefs is common to any definition of integrity
(Cavasin,
1998 [6];
Calhoun, 1995; McFall, 1987; Peikoff, 1991; Taylor, 1981, just to name a few).
Looking at an individual respondent, how consistent were his answers? Did he
reason through the majority of the quandaries using the same ethical system,
or was his ethical reasoning all over the map? This tests my fundamental
hypothesis, and all other characteristics I looked for were correlated to
consistency.

Correlation between academic background and consistency—Does academic
ethical training make respondents more consistent? My hope was to measure the
correlation between MBA business ethics core requirements and consistency in
quandary answers, but as mentioned, the hard drive crash reduced the number of
respondents from schools with BE core requirements to insignificance. However,
I did end up with a fair number of respondents who had studied philosophy or
business ethics, so I looked for correlations there. I also collected data on
undergraduate major and MBA concentration which I analyzed for correlations
with consistency.

Correlation between nationality and ethical consistency—Are certain
nationalities more ethically consistent than others?

Correlation between work experience and ethical consistency—Does more (or
less) overall experience lead to higher ethical consistency? What about
management experience? What about a respondent’s pre-MBA industry?

Correlation between age and ethical consistency—Meising (1985) found that
maturity did influence adherence to the business philosophies he tested for in
his survey (which was radically different from mine). Rather than looking for
a correlation between age and affinity for specific ethical systems, my
analysis simply looked for correlation between age and
consistency.

Personal goals

This project had personal learning goals as well as the primary academic
goals outlined above. One was to pursue publication, but given the problems
encountered, I have abandoned that unless I can somehow retrieve the lost data
at some point in the future.

Another was to gain experience in independent survey-based research.
Fortunately or unfortunately, depending on how you look at it, I did
learn a lot about the challenges of successfully completing a project like this,
especially the importance of performing regular backups!

This experience also gave me a new respect for the importance of careful,
deliberate survey design and testing, and for the complexity of doing a thorough
job on a project like this. This in itself was probably worth as much as what I
learned about ethics and MBA students.

Method

Survey construction

My construction of the survey began with research into ethical systems, and I
went through a distillation process similar to (though not as polished as) that
presented in the Ethics theories section. I had the rather arbitrary goal
of testing for five different ethical systems; when I had culled the short list
to the six actually used, none seemed a better candidate to eliminate than any
other, so I included all six.

Quandary/response construction

When I had decided on the six systems I wanted to model, I set about
constructing the quandaries and their answers. In doing so, I found that for
some quandaries it was impossible to model the Objectivist and Contractarian
responses separately (refer to exhibit
2, numbers 7 and 8). This is not surprising, since Objectivism’s regard for
rationality, integrity and individual rights cause it to take contracts very
seriously. Though I had hoped to avoid it, I was not particularly disturbed by
the overlap, since there were enough other questions to allow respondents to
clearly show a preference for one of these ethical systems over the other.
Ideally, I would have replaced these quandaries with ones that allowed clearly
separate Objectivist and Contractarian answers, but given time constraints, this
was impossible.

The actual process of constructing the quandaries and responses was more
challenging than I had imagined. Aside from requiring me to understand 5 ethical
systems I had never formally studied before, it required me to provide enough
detail to ensure that respondents’ choices weren’t complicated by confusion over
the facts, and to do all this using fairly simple language (since the survey
would be taken by some non-native English speakers) while keeping the physical
size small to avoid scaring off potential respondents who were concerned with
time commitment.

Despite my efforts, from the beginning it was evident that this was going to
be a difficult and time-consuming survey for respondents to complete; I
initially set 15 minutes as an average completion time goal, but after tests
revised this to 30 minutes. This time limit would be the ultimate factor
determining the number of survey questions.

Testing

After developing the quandaries and responses, I added the background
information questions, basically probing for any respondent attribute that I
thought might have some impact on ethical consistency (as outlined under
Goals above and shown in Exhibit
2). I then sent this rough draft survey (attached as Exhibit
4) to three friends at the University of Texas who I knew shared my interest
in ethics. In addition to pointing out that it took too long to complete, they
made many useful observations on the clarity of survey questions. Furthermore, I
was encouraged by the fact that one of them scored as I would have expected him
to, given my knowledge of his philosophical background. (Another one, an
argumentative and militant Marxist, inserted her own answers for most of the
quandaries, and while I admired her commitment, I didn’t expect such a response
to be typical of the average MBA student.)

The final survey

I originally developed ten quandaries: the eight actually used (refer to Exhibit
2), and the two presented in Exhibit
3, which were cut by process of elimination after most test respondents took
more than 30 minutes to complete the ten question survey. I’m not sure there’s a
"magic number" of questions for a survey like this, but by using eight, I at
least required respondents to choose the same ethic a minimum of twice!

A brief explanation of the quandaries used follows.

The bribe—This was inspired by a quandary presented in a management class
at UT, although the circumstances of the version presented here are much more
rigorously specified; I wanted to force respondents to decide whether bribery
was ever okay. This is fundamentally an issue of Ethical Relativism vs.
Absolutism, but note that the Utilitarian response comes to a different
conclusion than the other Absolutist responses.

Photocopies—This was inspired by being an MBA student and watching
virtually everyone I associate with photocopy virtually any piece of
copyrighted paper they could get their hands on. I wanted to include at least
one quandary with which all respondents had had some prior experience.

Toxic Sludge—This was inspired by the Love Canal case as described in
Velasquez (1988). It forces the respondent to grapple with serious life and
death consequences that can justifiably be passed on to someone else.

Those Damned Unions—This was inspired by Salem (1994). Like Toxic Sludge,
it requires the respondent to make a hard choice regarding the acceptance or
rejection of responsibility that will affect many people, only in this case,
jobs rather than lives are on the line, and legal technicalities strongly
favor the Utilitarian response.

The Drunk Competitor—This was based on a personal experience I had when my
job included doing competitive analysis for Hewlett Packard, although the
consequences are extremely exaggerated. I thought the intellectual property
issues were unique and interesting, and I know from personal experience how
tempting the Machiavellian approach is for this one (because at the time, it
was the one I took). I like this quandary because it represents the sort of
situation we all might find ourselves in some day when we least expect it (I
certainly didn’t expect it when it happened to me!).

Remchester—This is based on an actual case that happened to a firearms
company in the states. I thought the context would be unfamiliar and
discomforting, especially to respondents not comfortable with the gun culture
in the U.S., and I thought it would be useful to test ethical reasoning under
such a context. In retrospect, I think that the Moral Absolutist solution I
presented is rather out of place and extreme, but to my surprise, many people
chose it.

Edith and Archie—This was inspired by a quandary presented during the
closest thing UT has to a core ethics requirement: a half day ethics seminar
during first-year orientation. As with The Bribe, I have added a lot of detail
to the version presented here. Also like The Bribe, this is fundamentally an
issue of Ethical Relativism vs. Absolutism, but here only the most fundamental
Moral Absolutist response completely dispenses with utility.

Recycling Consultants, Inc—This was inspired by a story I heard last year
during my preparation for consulting interviews about a major consulting firm
that turned a report in to a client but forgot to remove references to the
client they had originally created it for (extensive research turned up no
reference, so maybe this is an urban legend). This represents yet another
situation many of us may one day face.

Sampling

Given my position (lacking the authority, expertise, time and money to
arrange for a scientific sample), I had no choice but to use accidental sampling
(Fink, 1985). This means I simply sent the survey out via email to as many
students (about 1500) as I could get access to through my personal network, and
hoped for a representative response. As discussed under General
statistics, it appears as though I actually got one.

Known Biases/problems with quandaries and response
modeling

The following structural problems with the survey became apparent as I
tallied responses:

There’s an error in my choices for age range (26-30, 30-35);

Several respondents were confused by the "Primary work experience"
question;

My choice of year ranges for work experience was probably not specific
enough, since many foreign students have none, and they were forced to choose
"2 or fewer"; I shouldn’t have constrained responses on this one.

My list of industries was incomplete; common entries in "Other" were
Advertising, Oil/Gas, Energy, Utilities, Defense and High-Tech;

My choice of ranges for number of philosophy and ethics classes was
probably not specific enough for reasons similar to those cited for the work
experience ranges;

I glaringly omitted Strategy from the choices for MBA
concentration.

The survey contained the following potential biases:

As a long time Objectivist, it is likely that I unconsciously worded the
Objectivist responses to be more attractive than the others. The only way to
prevent this would have been to perform much more rigorous testing using test
subjects who were well versed in the ethical theories I was testing for, which
would have been extremely difficult. The only simpler solution would have been
to omit the Objectivist choice, which was not attractive since the ethics it
models, along with the ethics it subsumes, are popular business ethics.

As mentioned, the Objectivist and Contractarian answers in two questions
overlapped. When tallying scores, I had to decide whether to score the choice
of these responses as Objectivist or Contractarian. According to the heuristic
I decided to follow, such answers would be scored according to whichever the
respondent picked more often in response to the other questions (where there
was no overlap). If neither was prevalent, I randomly chose one; however, in
the few cases where this came into play it didn’t matter since the respondents
did not choose any ethic consistently enough to reach my "threshold of
consistency", which is described in the Analysis section which follows.

On a broader scale, however, Libertarian respondents might be attracted to
both Objectivist and Contractarian answers, and this might cause them to split
their responses between the two, creating inconsistency where it shouldn’t
exist. In fact, this happened with a Libertarian friend of mine who responded
to the final survey; she chose four Objectivist and three Contractarian
responses.

There is no practical way of knowing how accurately my responses
modeled the systems they were intended to model. To mitigate this, I attempted
to pick broadly divergent ethical systems, and to construct quandaries that
lent themselves to highly generalized answers within a given system. That the
Contractarian and Objectivist answers overlapped for two of the quandaries is
evidence that I wasn’t entirely successful. However, again, the only way to
significantly improve the accuracy of the models would have been to have
several independent ethicists review the survey, which was impractical.

Accidental sampling is the sampling method most prone to bias in
responses, as it prevents the surveyor from having any influence on who
responds. This means that my respondents were probably motivated by 1. an
interest in ethics; 2. sympathy for a fellow MBA student or 3. the $50 reward
I offered, to be given to one random respondent. The only one of these
motivations I see as potentially biasing is 1.; in retrospect, I should have
tested for it by including a yes/no question to the affect "Would you say that
you have an above-average interest in ethics?"

While this looks like a long list of biases and problems, given the
constraints of the survey, I’m actually quite pleased that it turned out as well
as it did.

General statistics

As discussed in the Preface, all original responses and analyses were lost.
All data given here was collected as a result of the second request.

I received a total of 73 responses from 13 schools, as detailed in Exhibit
1. Fifteen of the responses came from six schools outside of North America,
including three in Europe, one in South America, one in Asia and one in
Australia [7].
Unsurprisingly, the highest return rate came from UT, followed by Cornell,
McGill, and a relatively high 6 responses from AIM.

Also unsurprisingly, the vast majority of respondents were U.S. citizens and
had work experience in the U.S.; no other countries yielded significant numbers
of responses in either of these categories. Refer to Exhibit
5 for summary country statistics.

Other background data statistics are presented in Exhibit
6. Overall, they indicate that my average respondent was virtually identical
to the average MBA student: between 26 and 30, male, not subject to a Business
Ethics core requirement in his program, and had never studied much ethics or
philosophy. The only indications of sample bias are:

A proportion of female respondents that is slightly higher than the
proportion found in UT’s MBA program (34% vs. UT’s 25%), where most of the
responses came from;

More than 50% of the respondents had more than five years of work
experience, while the average UT MBA has four. This may reinforce the notion
that interest in ethics increases with age, which I will examine more further
on.

Analysis of responses

I had to figure out what I wanted "ethical consistency" to mean, since
measuring it was my primary goal. Upon looking at some early responses, I was
rather surprised to find that they were less consistent than even I had
thought they would be; the average number of times a given respondent chose
Utilitarian, Objectivist or Moral Absolutist reasoning was around twice; for the
remaining ethics, the average was around once. Overall, each ethic was chosen an
average of 1.3 times. One respondent actually chose every system at least
once.

Was this a reflection on my survey questions or on the ethical consistency of
the respondents? This question will come up again and again in this analysis,
and unfortunately it’s practically impossible to answer definitively; to do so
would require perfectly unbiased response choices and a scientific sampling
method.

However, it is reasonable to expect that even a
highly-ethically-contemplative MBA student isn’t going to apply the same
reasoning to every ethical decision. When I considered this along with the
possibility that there was bias present in my response models, I decided to
define "ethical consistency" as having chosen the same ethical system in
response to at least 4 quandaries. While I could find no literature on ethical
consistency, intuitively speaking, a person who naturally made 50% or more of
her decisions based on principle would be more ethical than average.

Summary individual consistency statistics are given in Exhibit
6.

How many MBAs are ethically
consistent?

By my consistency criteria, 29% of the respondents qualified as ethically
consistent. At first glance, I found myself rather pleased with this; one out of
three ain’t bad. However, it becomes less attractive when placed in the context
of other MBA skills; if over two thirds of a class couldn’t even score 50% on a
simple test of basic marketing or accounting concepts, I think the typical
observer would be shocked. And what if the class average on the same test was
16%? That’s what it was on my survey. Sixteen percent!!

Of course, Business Ethics is not marketing; most of the respondents didn’t
even take an MBA class in it (those few that did did not provide a significant
enough sample to assign any meaning to their level of consistency, which was
lower than those that did not take a class). Still, when you consider that that
16% overall average includes the 1/3 of the class that scored 50% or higher, the
two thirds that I classify as "inconsistent" must have been extremely
inconsistent. So inconsistent, in fact, that I think it’s fair to conclude from
this that they are not equipped with the skills necessary to rationally evaluate
ethical dilemmas, which is a rather disturbing thing to think about the future
business leaders of the world.

What ethical systems do MBAs favor?

This is the section in which the potential for bias in my ethical models
begins to look suspiciously fulfilled. Refer to Exhibit
7 for summary statistics.

57% of consistent respondents chose Objectivism; 24% chose Moral Absolutism,
and 14% chose Utilitarianism. Overall responses—the total number of times an
ethics was chosen, ignoring to consistency—were similar, but the curve was
flatter. 27% of all responses tallied were Objectivist, 22%, Utilitarian, and
20% Moral Absolutist.

While I believe that this does suggest some bias in my models, it also rather
makes sense. More of Meising’s (1985) respondents exhibited Moral Absolutist and
Objectivist characteristics than the other ethics he tested for, although in his
study Moral Absolutism came out on ahead.

The three most common overall ethics in my survey might be partially
explained by familiarity. Moral Absolutism is the ethics of law and of religion;
everyone has experience with the law, and most of us have some experience with
religion as well. Utilitarianism is probably the most intuitive approach, and
may be more intuitive for business students, who are still generally taught to
maximize things like shareholder value, profit, and market share. While I don’t
think intuition alone accounts for Objectivism’s popularity, I would say that
many business students find notions of integrity and respect for property
appealing.

Looking at the breakdown of consistent respondents, survey bias again
probably has something to do with Objectivism’s high rating, but I would also
contend that the logic and intuitiveness of the top three consistent ethics
appeals to ethically consistent people.

Correlations between consistent responses and other
attributes

Now let’s take a look at the potential correlations for the characteristics
enumerated in the Goals section.

Correlation between academic background and consistency

At first glance, Exhibit
6 gives us some hope that there is a correlation between ethical consistency
and an academic background in philosophy or business ethics: far greater
percentages of respondents that had taken 3-5 Philosophy or BE classes were
consistent than those who had taken 2 or fewer classes. However, the tiny
absolute numbers of respondents that fit into these groups cannot be considered
significant samples, especially considering that the numbers of respondents with
2 or fewer classes were so dominantly higher. Also, that respondents with more
than 5 classes scored worst of all brings into question the integrity of this
measure.

How about undergraduate major? As shown in Exhibit
6, the percentage of students of each major that are consistent are
virtually identical.

As shown in Exhibit
8, MBA concentration doesn’t help us either; the numbers of respondents in
each concentration are not high enough to allow us to form a judgement, but even
so, the consistent percentages are pretty much in line with what we’ve seen
elsewhere.

Correlation between nationality and ethical consistency

Unfortunately, the number of respondents with foreign work experience or
citizenship was not significant enough from any single country to make
judgements about a correlation between these factors and consistency, although
the Philippinos that responded appear to be a highly ethical bunch anyway.
Aggregating foreign responses, we still don’t find a significant difference from
those of the U.S.

However, given the general stereotype in North America that assumes that Less
(industrially) Developed Countries are also Less (morally) Developed Countries,
I think it’s appropriate to note here that the respondent with the highest level
of consistency—six Objectivist responses—was born in an LDC and had most of his
work experience there.

Correlation between age/experience and ethical consistency

Looking at Exhibit
6, we find perhaps our first significant correlation. 30-35 year olds, it
appears, are measurably more consistent than their younger classmates (the
over-35 group’s response rate was not high enough to judge). This makes
intuitive sense, and also agrees with Meising’s finding that concern for ethics
seems to increase with age, and with my own mentioned observation of a higher
than average response rate from respondents with more than five years of
work experience.

It doesn’t, however, do much to mitigate the overall lack of consistency my
survey exposes among MBAs in general, since their average age (at UT, and most
top 20 U.S. business schools) is 28. In Europe, the average age is much
younger—around 23.

Perhaps work experience has something to do with it. Looking at the
statistics for years of total and management work experience, we find
encouragement—and another aberration. The encouragement comes from respondents
with 3-5 years of management experience, who were significantly more consistent
than any other work experience group. We can disregard those with more than 5
years of management experience due to the small number of respondents.

The aberration shows up in the Total work experience table. If consistency
should increase with experience, why does it decrease among these respondents?
Unlike with the managers, the >5 year sample is sizable, so it shouldn’t be
disregarded.

Our last potential correlation—between consistency and work experience
industry—is shown in Exhibit
8. It suffers from the same problems as many of the others: insignificant
numbers of respondents. We can’t draw any conclusions from this either.

Unfortunately, in light of these problems, all the age/experience
characteristics allow us to conclude is that ethical consistency does seem to
improve with age.

Side effects

While it’s true that I often have thinly-veiled ulterior motives, I think
this survey had more positive effects than my devious mind had envisioned when I
sent it out.

I received a lot of positive feedback from respondents. Several made
statements to the affect "this makes me want to take a Business Ethics class."
One respondent from AIM praised it as a "worthwhile activity." Many respondents
expressed an interest in seeing the results. I carried on lengthy email
conversations with some of them.

This all points to a happy side effect that I can’t believe I didn’t
anticipate (and do more to foster)—the survey actually motivated interest in
Business Ethics amongst the respondents.

Conclusions

So, have I proved my hypothesis?

Despite the problems that plagued this project and the indeterminate nature
of most of the results, I would say that it offers some compelling evidence in
support of my basic hypothesis that MBA students are ill-equipped to deal with
ethical issues, along with some hope for their capacity and desire to address
the shortcoming. Unfortunately, I’m not sure anymore that a core MBA class is
all that is needed.

Looking at the inconsistency of the limited data I had relating academic work
in philosophy and ethics to survey results, coupled with the equally limited but
more consistent data that showed a correlation between age and ethical
consistency, I might be tempted to say that ethical development is something
that can’t be taught, but rather develops organically as we mature.

However, two things prevent me from acting on that temptation: 1. reflection
on my own ethical development and 2. the significant interest in ethics that
this survey generated among its respondents.

The fruits of reflection

I believe that ethics can be learned when there’s an interest because that’s
how I learned it. I’ve been informally studying ethics for many years, but only
developed a serious interest during graduate school. This interest developed as
I observed the ethical behavior of my classmates and teachers over the course of
my first year, and as this observation caused me to think hard about my own
ethics. By the end of that first year I was hell-bent on undertaking a more
formal course of study in ethics, and I enrolled in a Virtue Ethics class
offered by UT’s philosophy department in the Fall of my second year. While this
class wasn’t about business or even general ethics, it equipped me with the
background knowledge and deepened interest necessary to continue studying on my
own, and here I am.

Passing interest led to observation, which led to deeper interest, which led
to formal study, and the end result of all this is that I’m a much more
ethically consistent person now than I was just a year ago.

Of course, all this happened to a guy in his early thirties, so perhaps age
does have something to do with it.

Planting the seed

But I don’t think so. Nearly every respondent that wanted more information as
a result of doing the survey was in their mid-20’s. This leads me to believe
that if there are maturity prerequisites for learning ethics, they mainly
encompass an educated mind, some experience with life, and the ability to think
analytically about difficult problems. These sound suspiciously like the
prerequisites for entry into every good North American business school.

I believe that the sincere interest I described above is the seed that, when
planted in the soil of these prerequisites, grows into ethical development—in a
business school or any other setting. This should not be a revelation; interest
in a topic always makes it easier to learn. We all have stories about the high
school or college history or chemistry or whatever teacher that "turned us on"
to the discipline with his infectious passion for it.

Such inspiring passion seems to become rarer as we climb higher up the
educational ladder, especially in business school, where too often the
professors are caught up in research or the politics of pursuing tenure, and we
are left to either develop our own interest or, as is far more often the case,
memorize the minimum number of facts required to maintain our desired GPA before
heading off to the weekly drinking event.

And maybe this is the fundamental problem with trying to teach ethics to
business students: it does not lend itself to memorization. By definition,
ethics—regardless of whose system you embrace—are personal. They guide—or should
guide—much of your interaction with the world. You can’t memorize the way you’re
supposed to act like you can memorize Porter’s five forces or the CAPM. This is
not to belittle the analytical tools that most of us learn by memorization in
business school, just to point out the fundamental differences between these
tools and their analogs in ethics.

And where do we go from here?

If my above theory on why teaching ethics in business school doesn’t work is
correct, it seems like an almost insurmountable problem.

However, as you might by now have come to expect, I have some suggestions for
surmounting it. Their overall theme is one of a concerted, integrated approach
to the furtherance of ethical development in MBAs.

Create interest

As much as I loathe UT’s half-day orientation-week ethics seminar for its
woeful inadequacy, in the context of a more comprehensive program I think it
would be a crucial component. Interactive debate on controversial ethical
quandaries is very effective at generating interest, and doing it during
students’ first week on campus assigns it an appropriate degree of importance.
The key is to continue feeding that interest over the course of the MBA. The
first semester is a crazy, hectic time for MBA students, and given the nature
and volume of the standard coursework they are expected to learn during it, I
wouldn’t advocate an ethics class at this time. However, I would advocate
integrating an ethics module, related to the course material, into 3 or 4
first-semester core classes, spaced out over the term. Such modules are frankly
going to teach students very little about ethics; rather, they are intended to
keep the initial interest alive.

Require an ethics core course

...and don’t let business professors teach it. In my limited
experience, having a business prof—even a business ethics prof—teach ethics is a
recipe for disaster. Such a course should be designed by a team of business and
philosophy faculty, and if possible, taught entirely by a philosophy professor;
if not, it should be team taught. At least half the syllabus should concentrate
on a rigorous course in the fundamentals of philosophical ethics; business cases
might be used for illustration, but the focus should be on the underlying
ethical theories. This portion of the course (at least) should be taught as a
philosophy seminar, rather than in a standard business class format; that means
lots of "thinking assignments" that will be interactively and thoroughly
discussed in the next class. Long, carefully thought-through, highly focused
papers should be required too; they are essential to the process of discovery.
This teaching style should be a welcome departure from the standard business
course format, which, especially in the core, becomes so standard that students
are often not sure which class they’re sitting through at the moment. The
seminar style will also introduce them to a new way of thinking, providing the
fringe benefit of enhancing their creativity. After the fundamentals are
covered, focus on using them to analyze general issues of right and wrong;
how much to pay the peasants sewing your sweaters in Timbuktu can wait,
along with Ben and Jerry’s 7-to-1 rule and animal testing. This is about
building fundamental tools. If the class format is going to change after the
fundamentals are covered, I would advocate moving to a pure case method, which
is, ironically, based on the Socratic method. This ethics core class should be
required during the second semester of the first year.

Promote ethics

Accept that ethics is a more fundamentally important business
discipline than accounting, marketing, etc. and convince the students of this.
Sponsor joint conferences and seminars with the philosophy department. Initiate
an all-night "ethics challenge" to go along with the finance, marketing and
other case competitions that typically take place at good business schools.
Institute ethics course requirements to follow up the core in concentrations
where they are needed most, like investment banking and marketing. Let the best
faculty from the business school and philosophy school team-teach higher level
electives on topics suggested by students. Establish business ethics
fellowships. Create research assistant positions in business ethics. In a
nutshell, assign ethics a status equal to that of all the other business
disciplines.

And the last word...

"Interesting ideas, Vince," I hear you say, "but don’t you think they’re a
little extreme?"

And I reply:

"SIXTEEN PERCENT!!"

Endnotes

[1] Note that the fact that this sentence has utilitarian
overtones has not escaped me.

[2] The kind of instruction I believe is a necessary
prerequisite to discussing pet "social impact" cases like Bhopal, the Ford
Pinto, Love Canal, etc. would entail at least a cursory overview of the ethics
discussed in this paper. For examples of BE course syllabi that seem to eschew
such fundamentals, see http://gsbwww.uchicago.edu/curriculum/coursedesc/564/, http://www.bus.utexas.edu/programs/msis/leb/course1.htm, http://www.bus.umich.edu/prostudents/mbaeve/academics/courses/badmin.html.

For examples of a course that appears to teach these fundamentals,
see

http://www.darden.virginia.edu/mba/mba_prog_curr.htm.

[3] Because of shortcomings in the survey explained in the
preface, I have placed more emphasis on this background portion, in hopes that a
web-published version of this paper might serve as a "crash course" in business
ethics, helping to facilitate my lifelong ulterior motive of educating the poor,
depraved, unethical, unwashed masses.

[4] Perhaps ironically, Aristotle considered trade
exploitative (Solomon, 1988).

[5] But differing from Utilitarian Ethics in its focus on
character and intent.

[6] Sorry, I always wanted to reference myself, and I just
couldn’t resist. Nyuck nyuck nyuck!!!

[7] You should have seen these numbers before the crash.
DAMNIT!!!!!

Bibliography

[Includes works consulted in research as well as those actually cited in the
paper]

Aristotle. Nicomachean Ethics. Translated by Martin Ostwald. New York:
Macmillan, 1962.

Badaracco, Joseph L. Jr. and Allen P. Webb. "Business ethics: A view from the
trenches." California Management Review, v37, n2, Winter, 1995: 8-28.

Baum, Lynne. "Foreign Corrupt Practices Act (Thirteenth Survey of White
Collar Crime)." American Criminal Law Review, Spring 1998 v35 n3 p823.

Bazerman, Max H. and Margaret A. Neale. Negotiating Rationally. New
York: The Free Press, 1992.

Bentham, Jeremy. An introduction to the principles of morals and
legislation. Edited by J.H. Burns and H.L.A. Hart. New York: Methuen,
1982.

"The Bhopal Tragedy: Flaws That Led to the Disaster in India." The New
York Times, Monday, January 28, 1985.

Calhoun, Cheshire. "Standing for something." The Journal of Philosophy,
Volume 92, Number 5, May, 1995: 235-260.

Carr, Alfred. "Is business bluffing ethical?" Harvard Business Review.
Jan-Feb, 1968.

Cavasin, Vince. A Businessperson’s Guide to the Virtue of Integrity.
http://ccwf.cc.utexas.edu/~cavasin/IntegrityInBizFinal.html. November 18, 1998.

Copp, David and David Zimmerman, eds. Morality, reason, and truth : new
essays on the foundations of ethics. Totowa, N.J. 1985

"Cypress CEO takes on the Sisters of St. Francis." Business and Society
Review, Spring, 1996: 4.

DeBow, Michael E. and Dwight R. Lee. " Shareholders, nonshareholders and
corporate law: communitarianism and resource allocation." Delaware Journal of
Corporate Law, Spring 1993 18 n2 p393-424.

DeGeorge, Richard T. Business Ethics. New York: MacMillan Publishing
Company, 1986.

Dobson, John. "Ethics in finance II." Financial Analysts Journal,
Volume 53, Number 1, Jan/Feb., 1997: 15-25.

Drucker, Peter. " The New Meaning of Corporate Social Responsibility."
California Management Review, Winter 1984 v26 p53-63.

Dunfee, Thomas W. and Thomas Donaldson. "Contractarian business ethics:
current status and next steps." Business Ethics Quarterly, April 1995 v5
n2 p174.

Etzioni, Amitai. "Communitarian Solutions/What communicarians think."
Journal of State Government, Volume 65, Number 1, Jan-Mar, 1992:
9-11.

Fink, Arlene and Jacqueline Kosecoff. How to conduct surveys. Newbury
Park, CA: Sage Publications, 1985.

Flew, Anthony. "The Profit Motive." Ethics, Volume 86, July 1976:
312-322.

Friedman, Milton. "The Social Responsibility of Business is to Increase its
Profits." The New York Times Magazine, September 13, 1970: 32.

Halbert, Debora. "Intellectual property law, technology and our probable
future." Technological Forecasting & Social Change, June-July 1996
v52 n2-3 p149(14).

Hampshire, Stuart, ed. Public and Private Morality. Cambridge:
Cambridge University Press, 1978.

Hasnas, John. "The normative theories of business ethics: A guide for the
perplexed." Business Ethics Quarterly, January 1998, v8 n1 p19.

Hosmer, Larue Tone. "Trust: The connecting link between organizational theory
and philosophical ethics." Academy of Management Review, Volume 20,
Number 2, April 1995: 379-403.

Kaltenheuser, Skip. "The real cost of doing business." World Trade,
Volume 10 Number 6, June 1997: p80.

Kirkpatrick, Shelley A. and Edwin A. Locke. "Leadership: Do Traits Matter?"
Academy of Management Executive, Volume 5, Number 2, May, 1991:
48-60.

Koehn, Daryl. "Virtue ethics, the firm, and moral psychology." Business
Ethics Quarterly, July 1998, v8 n3 p497.

Ma, Yulong and Huey-Lian Sun. "Where should the line be drawn on insider
trading ethics?" Journal of Business Ethics, Volume 17, Number 1:
p67.

Machiavelli, Niccolo. The Prince, in A World of Ideas: Essential
Reading for College Writers, compiled by Lee A. Jacobus. New York: St.
Martin's Press, 1983.

MacIntyre, Alasdair. After Virtue: a study in moral theory. Notre
Dame, Ind. : University of Notre Dame Press, 1981.

McCracken, Janet and Bill Shaw. " Virtue ethics and contractarianism: towards
a reconciliation." Business Ethics Quarterly, April 1995 v5 n2 p297.

McFall, Lynne. "Integrity." Ethics, Volume 98, October, 1987: 5-20.

Microsoft Encarta 97 Encyclopedia. "Ethics." CD ROM: 1996.

Miesing, Paul and John F. Preble. "A comparison of Five Business
Philosophies." Journal of Business Ethics 4, Volume 4, 1985: 465-476.

Mintz, Steven M. "Aristotelian virtue and business ethics education."
Journal of Business Ethics, Volume 15, Number 8, August, 1996:
827-838.

Morris, Christopher W. "A Contractarian Account of Moral Justification." In
Moral Knowledge? new readings in moral epistemology, edited by Walter
Sinnott-Armstrong and Mark Timmons. New York: Oxford University Press, 1996.

Nilsson, Michael D. "Foreign Corrupt Practices Act (Eleventh Survey of White
Collar Crime)." American Criminal Law Review, Spring 1996 33 n3 p803.

Nozick, Robert. Anarchy, State and Utopia. New York: Basic Books,
Inc., 1974.

Orlik, Deborah K. "Can you bill two clients for the same hour's work?"
Legal Assistant Today, v11, n5, May/June 1994: 26-27.

Peikoff, Leonard. Objectivism: The Philosophy of Ayn Rand. New York:
Penguin Books, 1991.

Piper, T. R., Gentile, M., and Park, S., eds. Can Ethics Be Taught?
Boston: Harvard Business School Press, 1993.

Pincoffs, Edmund. Quandaries and Virtues. Lawrence: University Press
of Kansas, 1986.

Podgor, Ellen. "Foreign Corrupt Practices Act (Twelfth Survey of White Collar
Crime)." American Criminal Law Review, Wntr 1997 34 n2 p325.

"Psssst. (TRB - insider trading ethics)." The New Republic, June 23,
1986, v194 p4.

Rand, Ayn, Atlas Shrugged. New York: Signet, 1957.

Rand, Ayn. The virtue of selfishness. New York: Penguin Books,
1964.

Rand, Ayn. The Fountainhead. New York: New American Library, 1971.

Rawls, John. A Theory of Justice. Cambridge: Harvard University Press,
1971.

Salem, Mahmoud and Opal-Dawn Martin. "The ethics of using Chapter XI as a
management strategy." Journal of Business Ethics, v13, n2, February
1994:95-104.

Schanze, Erich. "Communitarian attitudes and economic success: A
mismatch?" Journal of Institutional & Theoretical Economics, March
1997 v153 n1 p76(4).

Scheppele, Kim Lane. " 'It's just not right: the ethics of insider trading."
Law and Contemporary Problems, Summer 1993 v56 n3 p123.

Shaffer, Mark and Anna Welch. "Foreign Corrupt Practices Act (Twelfth Survey
of White Collar Crime)." American Criminal Law Review, Winter 1997 34 n2
p697.

Solomon, Robert C. Ethics and Excellence: cooperation and integrity in
business. New York: Oxford University Press, 1992.

Solomon, Robert C. "Corporate roles, personal virtues: an aristotelean
approach to business ethics." Business Ethics Quarterly. Volume 2, Issue
3, 1992: 317-339.

Stauber, John and Sheldon Rampton. Toxic sludge is good for you.
Monroe, Maine: Common Courage Press, 1995.

Stocker, Michael. Plural and Conflicting Values. Oxford: Oxford
University Press, 1990.

Taylor, Gabriele. "Integrity." The Aristotelian Society, Supplementary Volume
55, 10-12 July, 1981: 143-159.

Velasquez, Manuel G. Business Ethics: Concepts and Cases. Englewood
Cliffs, NJ: Prentice Hall, 1988.

Walker, Martin. " Community spirit: (interview of American thinker Amitai
Etzioni)." The Guardian, March 13, 1995 p2.10(2).

Acknowledgements

Ah, to acknowledge or not to acknowledge. That is the question.

On the one hand, I had an enormous amount of help and inspiration over the
course of this project; on the other, considering its scale and importance,
having an "Acknowledgements" section seems almost pretentious. I can hear the
cynical reader saying "who cares?" But then, no one is holding a gun to the head
of the cynical reader forcing him to read this...so I think I’ll go ahead and
thank the people that I feel indebted to, anyway. If nothing else, it will serve
as a personal reminder when I laughingly look back on this in 10 years.

My most sincere thanks to Louis Chauvin, business ethics lecturer at McGill,
for agreeing to sponsor this project with almost no knowledge of my prior work
and despite his own hectic schedule, and also for his infinite patience during
the course of the winter 1999 semester, which turned out to be the most
difficult four months of my life. Of course, his guidance on the content of the
project and his thorough and objective criticism of early survey versions was
also deeply appreciated, as was his willingness to engage in spirited debate on
broad ranging philosophical topics that usually weren’t remotely related to this
paper.

I thank my parents; my Mother’s death during the course of this project
served to remind me of how great an influence she was on my life. By instilling
in me at a very young age a deep respect for morality she unwittingly planted
the seed of interest and passion that would lead me to pursue projects like
this. Likewise, by teaching me to think critically and objectively and by
instilling a respect for knowledge and wisdom, my Dad created the motivation and
ability to take on projects like this.

I would like to thank University of Texas Entrepreneurship professor Jeff
Sandefer and Philosophy professor Tara Smith, whose influence in classes taken
in the fall of 1998 caused me to think very seriously about ethics and motivated
me to do further academic work, of which this paper is hopefully only a start,
in the field. Along with Jeff and Tara, I thank UT Philosophy professor Robert
Solomon for valuable comments on early survey questions.

Crucial to the success of this project were early test survey results
provided by UT classmates Robert Cavin, Tim Jesser and Marion Greene, as well as
feedback on the final survey from Kristen Kitchline and Chris Seifert.

Of course, getting the survey out in front of students was the biggest
logistical challenge. For help with this I would like to thank friends and
colleagues at the many business schools that participated: Nick Christoffersen
at FGV-São Paulo, Martha Draayer at Vanderbilt, David Grasch at Cornell, Maria
Grogan at London Business School, Wendy Parish at Wharton, Vincent Robinson at
Stanford, and Andrew Tsang at MIT.

Perhaps my biggest debt of gratitude is owed to the large group of
respondents, which initially numbered about 250 from about 10 different
worldwide MBA programs; I was pleasantly shocked at the help I received from MBA
students around the world who, despite having no idea who I was, took the 30 or
so minutes required to help a fellow MBA out by responding to my survey. That
about 70 of these people took even more time to resend their responses after my
hard drive crashed was even more inspiring.

Exhibit 1: BE core requirements and response rates per school
surveyed

Exhibit 2: The survey, with
key

Key:

[E] Ethical Relativist

[A] Moral Absolutist

[O] Objectivist

[C] Contractarian

[M] Machiavellian

[U] Utilitarian

RESPONDENT INFORMATION

Please place a capital "X" to the left of the appropriate answer,

or fill in text in the space provided.

Do you wish to remain anonymous?

__Yes

__No

Age range:

__25 or under

__26-30

__30-35

__over 35

Please indicate the school from which you will receive/have

received your master's degree.

__Australian GSM

__Copenhagen Business School

__Cornell

__EM-Lyon

__FGV--São Paulo

__Helsinki School of Economics and Business Administration

__London Business School

__McGill

__MIT

__Stanford

__University of Maine

__University of Texas

__Vanderbilt

__Wharton

__OTHER (please specify):________________

Citizen of what country?______________

Primary work experience in what country?_____________

Total years of work experience:

__2 or fewer

__3-5

__>5

Of which were in management:

__2 or fewer

__3-5

__>5

Primary work experience in what industry?

__Academia

__Banking/Financial Services

__Computer/Software Development

__Construction/Skilled Trades

__Consulting

__Health/Medical/Pharmaceutical

__Law/Law Enforcement/Legal Services/Security

__Manufacturing

__Military/Government

__Non-profit

__Retail

__Telecommunications

__Travel/Tourism/Transportation/Entertainment/Lodging/Restaurant

__OTHER (please specify):_____________

Gender:

__Male

__Female

Undergrad major:

__Engineering/technical/science

__Education

__Liberal arts excluding philosophy

__Philosophy

__Business

__OTHER (please specify):_____________

Number of PHILOSOPHY (NON-BUSINESS ETHICS) courses taken (include

both graduate and undergrad):

__2 or fewer

__3-5

__more than 5

Number of BUSINESS ETHICS (NON-PHILOSOPHY) courses taken

(include both graduate and undergrad):

__2 or fewer

__3-5

__more than 5

Does your MBA program require you to take any kind of ethics

course in order to graduate?

__Yes

__No

Please indicate your MBA concentration:

__Accounting/MPA

__Engineering/Manufacturing Management

__Entrepreneurship

__Finance

__General Management/No concentration

__Information Management/Management Science

__International business

__Marketing

__Operations

__Organizational Behavior/Human Resources

__OTHER (please specify):______________

ETHICAL QUANDARIES

Instructions:

* These are all very highly contrived questions; unfortunately,

they have to be in order to facilitate the goals of the survey.

* Please read every possible solution *first* and then pick the

one that *best* describes what you would do. Many of the

solutions are similar; it is important that you choose the one

that most closely models the thought process you go through in

determining your answer. If your thought process is not modeled,

pick the answer that is closest to modeling it; if one of the

answers models your thought process but reaches a different

conclusion, pick that answer.

* Please do *not* go back and change answers based on insights

acquired as you proceed. I'm interested in how you'd think about

each circumstance if you encountered it in isolation.

* If you believe that a question or solution lacks enough detail

to make a choice, please make reasonable assumptions. Also,

assume all companies are based in the U.S. and subject to U.S.

law unless otherwise stated. If you don't know applicable U.S.

law, please make reasonable assumptions.

* Indicate your answer by placing a capital "X" to the left of

the appropriate response.

* Please be sure to answer all eight questions.

Questions:

1. Your company wishes to start doing business in a country where

bribery is common despite being illegal. If you pay a one-time

$1000 bribe, you can start immediately and be guaranteed a

$1,000,000 *profit* on your investment within the next year, as

well as a significant promotion for yourself. If you do not pay

the bribe, it will probably take so long to get the business

going that most profit potential will disappear. No one within

your company will know if you pay the bribe, and the $1000 amount

can be taken from the project budget's "Miscellaneous" line item.

What would you do?

[E]__It's not my responsibility to judge business practices in other

countries; if paying bribes is how they get things done, I would

pay the bribe.

[M]__In this case, expediency must rule; if I don't pay the bribe my

competitor will. Since paying the bribe is best for both me and

my company, I'd pay it, even if I normally have a problem with

bribes.

[A]__Bribes are wrong. I would rather walk away from the business

than pay the bribe. I wouldn't pay it.

[C]__The U.S. Foreign Corrupt Practices Act prohibits me from

bribing foreign officials, so regardless of what my personal

attitude toward the situation may be, and regardless of the end

result, I must not pay the bribe.

[O]__My personal value system requires that I treat others fairly,

and expect them to treat me fairly in return. By demanding

secret, personal remuneration that is not officially part of the

deal, the official is asking me to join him in deceit. To condone

such behavior by paying the bribe would be a violation of my own

integrity, so I wouldn't pay.

[U]__Paying the bribe costs $1000, but the benefit to my

stakeholders is virtually immeasurable: stockholders gain from

the increased profits; my community gains from higher employment

due to increased demand for the product; the foreign community

gains from having access to products that they want to buy; etc.

I would pay the bribe.

2. As a student, you frequently photocopy magazine articles in

order to share them with other students for educational purposes.

If you didn't do this, the students would never see the material

in question. The amount of material copied varies from a single

page to the majority of the work. All the material in question is

covered by U.S. copyright law, which basically prohibits copying

without explicit permission from the copyright owner, but allows

limited exceptions for educational use. You have never obtained

permission to copy anything, and never intend to. Is your action

right or wrong?

[A]__Copying is equivalent to theft; it's always wrong, even for

educational purposes. My action is wrong.

[E]__In the context of educational use, the copies don't harm anyone

and in fact provide benefits to the recipients, so my action is

right.

[U]__If I photocopy and distribute the materials to my friends in

order to help educate them, it will enrich their lives and help

make them more productive members of society, while the copyright

holder loses at most the income from a reprint, which is trivial.

If I don't distribute the copies and as a result my friends never

see the material, society loses this productivity and the

copyright holder gains nothing. Multiply either case by the

number of articles and the benefits of copying become much

greater. Therefore, my action is right.

[C]__Assuming I'm staying within the bounds of the copyright law's

educational exception, or if the exception is not sufficiently

precise to dictate my decision, my action is right.

[O]__Sharing the articles with my friends allows us to discuss them

and to learn as a group, which makes me a better person. Since

the copyright holder secured the copyright with knowledge of the

educational exception, she is not being harmed by my action.

Therefore my action is right.

[M]__My friends and I need these articles to further our education.

The rights of the copyright holder are irrelevant. My action is

right.

3. In your new job as a technical manager for a major chemical

company, you discover that some children have been burned by

chemicals leaking from containers buried on a site that your

company sold to the city 20 years ago (and which the city had

subsequently turned into a playground). When the containers were

buried, all environmental laws were followed, and the city was

informed about the site's history. However, you know that the

chemicals are highly toxic and if they are leaking could cause

significant long-term harm to local residents, including cancer

and birth defects. The company lawyer strongly advises you that

any action on your part may expose your company to significant

legal liability, and that you should therefore not act on the

information. Your boss agrees with the lawyer and cautions you

against telling anyone, even your family, implying that loyal

employees are taken care of, and disloyal ones aren't. Do you act

on the information?

[U]__If I act, my company and its stakeholders may lose a

substantial amount of money to lawsuits. If I don't act, people

will likely die. Clearly, the greater good is served by my

acting, so I act.

[M]__My company did everything it was supposed to; if the city

chooses to ignore toxic waste--that they knew all along was

there--as it oozes out onto a playground, that's their problem. I

don't act.

[O]__I can live with myself if I don't get promoted, but I can't

live with myself if people die when I could have prevented it. I

act.

[E]__If this turns into a big problem, and it seems likely that it

will, society is going to judge me harshly. I act.

[A]__Letting kids play near toxic waste is just plain wrong. I act.

[C]__By purchasing the site with full knowledge of its history, the

city assumed responsibility for any problems that arise, and

simultaneously released my company from those responsibilities.

My primary contractual obligation is to my shareholders, and

since this is reinforced by the duties implicit with the city's

acquisition of the land, I don't act.

4. You are an executive at a profitable U.S. company that heavily

relies upon labor unions. Due to recent changes in the industry,

you cannot remain competitive if you have to honor current union

contracts, and the unions refuse to renegotiate. In fact, you can

show that honoring the contracts would threaten the viability of

your operations, and this entitles you to file for bankruptcy

under Chapter 11 of the U.S. bankruptcy code, even though you are

currently profitable. Bankruptcy would allow you to legally

terminate the union contracts and reorganize into a more

competitive company going forward. Do you file for bankruptcy?

[M]__It's not my problem the unions refuse to renegotiate; I have a

business to run. Chapter 11 is clearly the best choice for my

business, so I would file.

[O]__Exploiting what amounts to a legal loophole in order to get out

of a contract violates my sense of integrity and requires me to

initiate unilateral dissolution of an agreement made good faith.

Therefore, regardless of the consequences, and despite the

unions' unreasonableness, I cannot file for bankruptcy.

[C]__The most explicit contract in question here is that with the

union, and it should be honored; I wouldn't file.

[U]__Filing will allow me to continue to 1. honor my commitment to

my shareholders 2. employ at least some people and 3. provide the

market with another choice. If I don't file, I will likely be

forced into real bankruptcy after a slow, painful decline, and

then I may actually face liquidation, which hurts everyone

involved. Chapter 11 would be the best choice for the most people

in the long term, so I would file.

[A]__Filing for bankruptcy would amount to breaking my word to the

union, which is fundamentally wrong. I wouldn't file.

[E]__Filing for bankruptcy would go against the sense of justice

that is common in American culture, so I wouldn't file.

5. Your job (with a small public company) requires you to collect

data on competitive products for use in formulating company

strategy. You are having a few drinks with Chris, a college

friend that now works for your main competitor, a much larger

public company. He starts discussing--without any prompting from

you--proprietary information about his company's future products.

This information could allow you to significantly improve your

competitive position against Chris's company. What do you do?

[E]__People discuss work all the time, and sometimes these

conversations result in the sharing of information that helps

someone do their job more efficiently. Chris's information helps

me do my job more efficiently, so I would continue the

conversation, getting as much out of it as I could.

[C]__According to U.S. intellectual property law, a company must

take reasonable precautions to protect trade secrets, and if they

don't, the law doesn't protect the secret. Obviously, Chris's

company isn't taking appropriate precautions in this case, so it

is within my rights to listen to him. However, U.S. law also

forbids using excessive measures to obtain trade secrets, so I'm

not entitled to encourage Chris to tell me more than he

volunteers.

[O]__The information Chris is sharing is his company's intellectual

property, analogous to the corporate credit card he carries,

which is his company's physical property. I could benefit if

Chris drunkenly dropped his credit card in my house and I used it

to charge a trip to Hawaii, but such action would be theft (not

to mention a lousy thing to do to a friend). Chris's company's

intellectual property is different only in that it's not as easy

to "give back" after we sober up, so I would tell him to stop

talking about the products.

[A]__To let Chris continue would be taking advantage of his

intoxicated state, which I think is wrong. I would tell him to

stop.

[M]__My primary allegiance lies with my own company; it is not to

act as a policeman for Chris's company. If he's going to provide

information I can use to benefit my own business, I'm going to

try to get as much out of him as I can. I would continue the

conversation, getting as much out of it as I could.

[U]__Given the relative size of our companies, the competitive

advantage Chris's information provides his own (larger) company

will benefit a larger number of stakeholders than it would if I

used it to benefit my (smaller) company. Under these

circumstances, I would tell Chris to stop.

6. You are an executive with Remchester, a major ammunition

manufacturer which about a year ago introduced "Black Claws", a

brand of ammunition that is no more deadly than comparable ammo,

but that has an especially sinister appearance. Black Claws have

been a tremendously profitable product for Remchester; there are

currently no special restrictions on sale of the bullets.

However, they are creating a growing public relations problem as

special interest groups demonize them in the media as "cop

killers" (in reality, police fire Black Claws 100 times more

often than non-police). If you take no action, it is likely that

these groups will succeed in getting legislation passed that

restricts sale of the ammo in about a year-when you expected

competitive products to start substantially decreasing the Black

Claws' market share anyway. Assume that liability lawsuits are

not an issue. Your choices are 1. completely pull the bullets

from the market, yielding to the special interest groups; 2. use

your dealer network to restrict sales to law enforcement, which

would effectively silence the special interest groups; or 3. do

nothing.

[U]__Restrictive legislation could have an enormous impact on

Remchester's future profitability, and therefore should be

prevented. Pulling the bullets completely might make for good PR,

but would have a significant immediate impact on our

profitability, and might create another PR problem with ammo

consumers. Restricting sales to law enforcement would have the

minimal impact on our long-term profitability, and therefore

provide the greatest good for the greatest number of people, so I

would voluntarily restrict ammo sales.

[M]__I don't care what the special interests say, and I don't care

what the ammo buyers say; I just want to do what's best for my

business. Voluntary restrictions on ammo sales seem to be the

best way to do that.

[E]__Generally speaking, Americans are fascinated with guns. In this

cultural context, our main consumers would probably be offended

(and possibly desert us long-term) if we did anything but

continue selling the ammo with no restrictions; legislative

repercussions are not for me to deal with. I would continue to

sell the ammo with no restrictions.

[O]__Consumers have the right to buy what they want, even if it is

nasty-looking ammunition; I have no right to artificially limit

their choices, especially due to irrational political responses

from special interest groups. I would continue to sell the ammo

with no restrictions.

[A]__Guns and ammo just facilitate killing, which is absolutely

wrong, no matter who's doing it. I would pull the ammo from the

market immediately.

[C]__There's no law against selling the bullets, and until there is,

selling them is the best way to maximize my profits. I would

continue to sell the ammo without restrictions.

7. You are an executive with a company that is opening an office

in a less developed country in which women have lower status than

men and are almost never encountered in business. You must send a

manager to open the office in this country. Your absolute best

candidate for the manager is a woman, Edith, and she is willing

to give it a try despite the harsh environment (which includes

some level of physical danger). Your next best candidate is a

man, Archie, whose performance is far inferior to Edith's. You

could send Archie alone, but you would have to send a male

assistant with Edith, since the culture would require her to work

extensively through the assistant in order to accomplish

anything. The profitability of the office would probably be the

same whether you sent Edith with an assistant or the inferior

Archie alone. Also, sending a woman would be seen as an insult by

many of the local business leaders, even if they didn't deal

directly with her. Should you send Archie alone, or Edith and the

assistant?

[M]__I have no social agenda. There is something to be gained by not

alienating the locals, so there is some advantage for my business

if I send Archie, and that's what I'd do.

[U]__Sending Edith does no one any practical good; she's not going

to liberate the women of the country, she is going to alienate

many potential customers, and I'd be giving up two domestic

resources instead of one. Plus, the physical danger aspect

exposes us to a legal liability. Therefore sending Archie would

do the most good for the most people, and I'd send him.

[A]__The local culture that represses women is absolutely wrong and

I would not accommodate it by sending an inferior candidate. I'd

send Edith.

[E]__What's right in the foreign countries in which my company does

business is not necessarily the same as what's right in the U.S.

I must respect the local culture and send Archie.

[O/C]__While I don't agree with the local culture and I respect

Edith's right to advance her career, in this case I must fall

back to my obligation to shareholders and send Archie, since

doing so would minimize the legal liability risk and also do less

damage to customer relations, which would create more opportunity

for long-term gain.

8. You are a management consultant at a small private firm.

Several months ago your firm completed a 6 month, $1 million

study on the competitive situation in client ABC's industry. The

report contained information on all competitors in the industry,

but no confidential client data. According to standard procedure,

a copy of this report was archived in your firm's knowledge base,

and neither the firm nor the client made any statements about the

potential reusability of the report. You have just been staffed

on an engagement for XYZ, one of ABC's competitors; the

deliverable, timeframe (number of billable hours), and fees are

basically identical. XYZ, a public company, has no knowledge of

the previous engagement, and there is no prohibition in its

contract against recycled information. Your team is instructed to

revise the report for XYZ, which will take about a month; your

boss then intends to wait until the end of the engagement

timeframe before delivering it to XYZ, and to collect the entire

contracted fee. Protesting has a high likelihood of limiting your

advancement in the firm. Do you protest?

[U]__The $833,000 differential between the cost of 1 month and the

cost of 6 months would have a positive impact on more people if

it stayed with the public XYZ corporation than if it went to my

private firm, and my career is insignificant compared to that

impact. I would protest.

[E]__Recycling information is common in consulting; in fact, part of

a firm's reputation is often built on how good it is at managing

knowledge acquired over many projects. Also, consulting firms

typically work their employees more hours per day than they

actually bill; why shouldn't they take the opportunity to bill

for more hours than actually worked? I wouldn't protest.

[M]__The client is getting what he paid for. Besides, why should the

new client benefit from money spent by the previous client? And

why should I sacrifice my career for their lack of foresight in

setting up the contract? I wouldn't protest.

[A]__There are many ethical problems with this: working for two

competitors on what amounts to the same project, leveraging work

one company paid for in order to benefit one of its competitors,

fraudulently billing the new company for more than the actual

hours worked. I would protest.

[O/C]__Only 1/6 of the billable hours specified in the new contract

will actually be used to produce the deliverable; this is

fraudulent and therefore wrong. I would protest regardless of any

consequences on my career.

Exhibit 3: Rejected survey
questions

(Badaracco, 1995) As an entry-level management consultant, you are
instructed by your superiors to always record eight hours a day, 5 days a week
on your timesheets despite the fact that you routinely work over 12 hours per
day. You are told that this is just an accounting formality, and that since
your salary is far above what you could make in industry, it shouldn't matter
to you. Written company policy instructs you to record the actual number of
hours worked, but you were told before you took the job that this is just a
formality, and that your workweeks would often exceed 60 hours. Do you
protest, even though doing so is likely to hamper your advancement?

[C] The written policy takes precedence over any verbal agreement. I would
protest.

[O] I entered the situation fully aware of what was expected of me; the
numbers I mechanically enter into a spreadsheet every week are irrelevant. I
would not protest.

[M] There's no way I'm going to jeopardize my career over something so
silly. I would not protest.

[E] If that's the way the company does things, who am I to judge? I
wouldn't protest.

[A] Recording 8 hours a day when I worked a different number of hours is
lying, which is wrong. I would protest.

[U] Protesting is going to waste my time and the people's time to whom I'm
protesting, whereas not protesting wastes no one's time. I wouldn't protest.

(Velasquez, 1988) Your company has requested proposals from several
consulting firms for an upcoming project. On the morning of the deadline day,
all the firms' proposals have arrived except that of XYZ consulting. Your boss
is friends with a partner at XYZ, and tells you that they are behind on the
proposal due to a personal emergency suffered by his friend. Since your boss
can't extend the deadline, to help his friend out, he instructs you to fax a
copy of ABC consulting's proposal (which is marked "confidential") to XYZ, as
this would help them get their bid in before the deadline at 5 p.m. Do you
send the fax?

[E] Who am I to judge my boss's choice? I'd send the fax.

[C] There is an implicit contract in my company's accepting proposals
marked "confidential" from the other firms. I wouldn't violate this by sending
the fax.

[O] A number of ethical issues here all point to the same conclusion: 1.
sending the fax would be effectively defrauding the implicit promise of
confidentiality my company made to ABC; 2. it would upset the free-market
system that is supposed to be inherent in bidding, and in so doing might cause
our company to chose a nonoptimal proposal; 3. while complying may further my
short-term self-interest, it will set a precedent that may encourage my boss
to use me for similar unethical tasks, which will run counter to both my
ethical values and the best long-term interests of the company. Given all
this, I would not send the fax.

[M] The ultimate outcome of this for my company will likely be that XYZ
will come in with the most attractive offer and that they will get the
business, furthering both my boss's relationship with his friend there and my
own relationship with my boss, not to mention getting my firm the best deal. I
would definitely send the fax.

[U] If I send the fax, XYZ is likely to come back with the most
financially attractive offer. Assuming that all the consulting firms
considered are equally capable, this would provide more benefit to my
company's shareholders than taking a more expensive option. I would send the
fax.

[A] Sending the fax is unfair to the other bidders. I wouldn't send
it.

Exhibit 4: Rough draft
survey

Directions:

· These are all very highly contrived and unrealistic questions;

unfortunately, they have to be in order to provide the level of detail

necessary to facilitate the goals of the survey.

· Please read every possible solution *first* and then pick the one that

*best* describes what you would do. Many of the solutions are very
similar;

it is important that you choose the one that most closely models the

thought process you go through in determining your answer. If your
thought

process is not modeled, pick the answer that is closest to modeling it;
if

one of the answers models your thought process but reaches a different

conclusion, pick that answer.

· Indicate your answer by placing a capital "X" to the left of the

appropriate response.

· Please do *not* go back and change answers based on insights acquired
as

you proceed. I'm interested in how you'd think about each circumstance if

you encountered it by itself.

· Assume that all companies are based in the U.S. and are subject to U.S.

law unless otherwise stated. If you don't know applicable U.S. law,
please

make reasonable assumptions.

· Each question should provide all the information you need to make a

choice from the possible solutions; if you believe that a question is

missing necessary information, make any logical assumptions necessary to

answer the question.

· Please be sure to answer all of the questions.

Respondent data:

Wish to remain anonymous? Y/N (if you answer "no" I may contact you for

further research or clarification in the future; the confidentiality of

your answers will still be maintained) No

Age range:

· 25 or under

· 26-30

· 30-35

· over 35

School? UT-Austin

Citizen of what country? US

Primary work experience in what country? US

Years of work experience:

· 2 or fewer

· 3-5

· 5

Years of management experience:

· 2 or fewer

· 3-5

· 5

Primary work experience in what industry?

· Academia

· Banking/Financial Services

· Computer/Software Development

· Construction/Skilled Trades

· Consulting

· Health/Medical/Pharmaceutical

· Law/Law Enforcement/Legal Services/Security

· Manufacturing

· Military/Government

· Retail

· Telecommunications

· Travel/Tourism/Transportation/Entertainment/Lodging/Restaurant

· Gender: M/F

Undergrad major:

· engineering/technical/natural science

· education

· liberal arts excluding philosophy

· philosophy (What kind of bullshit distinction is this!!!)

· business

· other (specify)

Number of philosophy (non-business ethics) courses taken (include both

graduate and undergrad):

· 2 or fewer

· 3-5

· more than 5

Number of business ethics (non-philosophy) courses taken (include both

graduate and undergrad):

· 2 or fewer

· 3-5

· more than 5

Does your MBA program require you to take any kind of ethics course in

order to graduate? No

Please indicate your concentration:

· Accounting/MPA

· Engineering/Manufacturing Management

· Entrepreneurship

· Finance

· General Management/No concentration

· Information Management/Management Science

· International business

· Marketing

· Operations

· Organizational Behavior/Human Resources

· Other (specify)

Questions:

1. Your company wishes to start doing business in a country where bribery

is common despite being illegal. If you pay a one-time $1000 bribe, you
can

start immediately and be guaranteed a $1,000,000 return on your
investment

within the next year, as well as a significant promotion yourself. If you

do not pay the bribe, it will probably take so long to get the business

going that most profit potential will disappear. No one within your
company

will know if you pay the bribe, and the $1000 amount can be taken from
the

project's "Miscellaneous" line item. What would you do?

[E]· It's not my responsibility to judge business practices in other

countries; if paying bribes is how they get things done, I'd pay the
bribe.

[M]· In this case, expediency must rule; if I don't pay the bribe my

competitor will. Since paying the bribe is best for both me and my
company,

I'd pay it, even if I normally have a problem with bribes.

[A]· Bribes are wrong. I would rather walk away from the business than pay
the bribe.

[C]· The U.S. Foreign Corrupt Practices Act prohibits me from bribing
foreign

officials, so regardless of what my personal attitude toward the
situation

may be, and regardless of the end result, I must not pay the bribe.

[O]· My personal value system requires that I treat others fairly, and
expect

them to treat me fairly in return. By demanding secret, personal

remuneration that is not officially part of the deal, the official is

asking me to join him in deceit. To condone such behavior by paying the

bribe would be a violation of my own integrity, so I wouldn't pay.

[U]· Paying the bribe costs $1000, but the benefit to my stakeholders is

virtually immeasurable: stockholders gain from the increased profits; the

local community gains from higher employment due to increased demand for

the product; the foreign community gains from having access to products

that they want to buy; etc. I'd pay the bribe.

2. As a student, you frequently photocopy magazine articles in order to

share them with other students for educational purposes. If you didn't do

this, the students would never see the material in question. The amount
of

material copied varies from a single page to the majority of the work.
All

the material in question is covered by U.S. copyright law, which
basically

prohibits copying without explicit permission from the copyright owner,
but

allows limited exceptions for educational use. You have never obtained

permission to copy anything, and never intend to. Is your action right or

wrong?

[A]· Copying is equivalent to theft; it's always wrong, even for
educational

purposes.

[E]· In the context of educational use, the copies don't harm anyone and
in

fact provide benefits to the recipients, so the action is right.

[U]· If I photocopy and distribute the materials to my friends in order
to

help educate them, it is likely to enrich their lives and contribute to

making them more productive members of society, while the copyright
holder

loses at most the income from a reprint, which is typically trivial. If I

don't distribute the copies and as a result my friends never see the

material, society loses this productivity and the copyright holder gains

nothing. Multiply either case by the number of articles I copy and the

benefits of copying become much greater. Therefore, my action is right.

[C]· Assuming I'm staying within the bounds of the copyright law's
educational exception, or if the exception is not sufficiently precise to
dictate my decision, my action is right.

[O]· Sharing the articles with my friends allows us to discuss them and
to

learn as a group, which makes me a better person. Since the copyright

holder secured the copyright with knowledge of the educational exception,

she is not being harmed by my action. Therefore my action is right.

[M]· My friends and I need these articles to further our education. The
rights of the copyright holder are irrelevant. My action is right.

3. You are a management consultant at a private firm. Several months ago

your firm completed a 6 month, $1 million study on the competitive

situation in a client ABC's industry. The report contained information on

all competitors in the industry, but no confidential client data.
According

to standard procedure, a copy of this report was archived in your firm's

knowledge base, and neither the firm nor the client made any statements

about the potential reusability of the report. You have just been staffed

on an engagement for XYZ, one of ABC's competitors; the deliverable,

timeframe (number of billable hours), and fees are basically identical.

XYZ, a public company, has no knowledge of the previous engagement, and

there is no prohibition in its contract against recycled information.
Your

team is instructed to revise the report for XYZ, which will take about a

month; your boss then intends to wait until the end of the engagement

timeframe before delivering it to XYZ, and to collect the entire
contracted

fee. Protesting has a high likelihood of limiting your advancement in the

firm. Do you protest?

[U]· The $833,000 differential between the cost of 1 month and the cost of
6

months would have a positive impact on more people if it went to the
public

corporation than the private firm, and my career is insignificant
compared

to that impact. I would protest.

[M]· The client is getting what he paid for. Besides, why should the new

client benefit from money spent by the previous client? And why should I

sacrifice my career for their lack of foresight in setting up the
contract?

I wouldn't protest.

[A]· There are many ethical problems with this: working for two competitors
on what amounts to the same project, leveraging work one company paid for in

order to benefit one of its competitors, fraudulently billing the new

company for more than the actual hours worked. I would protest.

[O/C]· Only 1/6 of the billable hours specified in the new contract will

actually be used to produce the deliverable; this is fraudulent. I would

protest regardless of any consequences on my career.

[E]· Recycling information is common in consulting; in fact, part of a
firm's

reputation is often built on how good they are at managing knowledge

acquired over many projects. Also, consulting firms typically work their

employees more hours per day than they actually bill; why shouldn't they

take the opportunity to bill for more hours than actually worked? I

wouldn't protest.

4. In your new job as a technical manager for a major chemical company,
you

discover that some children have been burned by chemicals leaking from

containers buried on a site that your company sold to the city 20 years
ago

(and which the city had subsequently turned into a playground). When the

containers were buried, all environmental laws were followed, and the
city

was informed about the site's history. However, you know that the
chemicals

are highly toxic and if they are leaking could cause significant
long-term

harm to local residents, including cancer and birth defects. The company

lawyer strongly advises you that any action on your part may expose your

company to significant legal liability, and that you should therefore not

act on the information. Your boss agrees with the lawyer and cautions you

against telling anyone, even your family, implying that loyal employees
are

taken care of, and disloyal ones aren't. Do you act on the information?

[U]· If I act, my company and its stakeholders may lose a substantial
amount

of money to lawsuits. If I don't act, people will likely die. Clearly,
the

greater good is served by my acting.

[M]· My company did everything it was supposed to; if the city chooses to

ignore toxic waste-that they knew all along was there-as it oozes out
onto

a playground, that's their problem. I don't act.

[O]· I can live with myself if I don't get promoted, but I can't live
with

myself if people die when I could have prevented it. I act.

[E]· If this turns into a big problem, and it seems likely that it will,

society is going to judge me harshly. I act.

[A]· Letting kids play near toxic waste is just plain wrong. I act.

[C]· By purchasing the site with full knowledge of its history, the city

assumed responsibility for any problems that arise, and simultaneously

releases my company from those responsibilities. My primary contractual

obligation is to my shareholders, and since this is reinforced by the

duties implicit with the city's acquisition of the land, I don't act.

5. Your company has requested proposals from several consulting firms for

an upcoming project. On the morning of the deadline day, all the firms'

proposals have arrived except that of DEF consulting. Your boss is
friends

with a partner at DEF, and tells you that they are behind on the proposal

due to a personal emergency suffered by his friend. Since your boss can't

extend the deadline, to help his friend out, he instructs you to fax a
copy

of UVW consulting's proposal (which is marked "confidential") to DEF, as

this would help them get their bid in by the 5 p.m. the deadline. Do you

send the fax?

[E]· Who am I to judge my boss's choice? I'd send the fax.

[C]· There is an implicit contract in my company's accepting proposals
marked

"confidential" from the other firms. I wouldn't violate this by sending
the

fax.

[O]· A number of issues here all point to the same conclusion: 1. sending
the

fax would be effectively defrauding the implicit promise of
confidentiality

my company made to UVW; 2. it would upset the free-market system that is

inherent in bidding, and in so doing might cause our company to chose a

nonoptimal proposal; 3. while complying may further my short-term

self-interest, it will set a precedent that may encourage my boss to use
me

for future unethical tasks, which will run counter to both my values and

the best long-term interests of the company. Given all this, I would not

send the fax.

[M]· The ultimate outcome of this for my company will likely be that DEF
will

come in with the most attractive offer and that they will get the
business,

furthering both my boss's relationship with his friend there and my own

relationship with my boss, not to mention getting my firm the best deal.
I

would definitely send the fax.

[U]· If I send the fax, DEF is likely to come back with the most
financially

attractive offer. Assuming that all the consulting firms considered are

equally capable, this would provide more benefit to my company's

shareholders than taking a more expensive option. I would send the fax.

[A]· Sending the fax is unfair to the other bidders. I wouldn't send it.

6. You are an executive at a profitable U.S. company that heavily relies

upon labor unions. Due to recent changes in the industry, you cannot
remain

competitive if you have to honor current union contracts, and the unions

refuse to renegotiate. In fact, you can show that honoring the contracts

would threaten the viability of your operations, and this entitles you to

file for bankruptcy under Chapter 11 of the U.S. bankruptcy code, even

though you are currently profitable. Bankruptcy would allow you to
legally

terminate the union contracts and reorganize into a more competitive

company going forward. Do you file for bankruptcy?

[M]· It's not my problem the unions refuse to renegotiate; I have a
business

to run. Chapter 11 is clearly the best choice for my business, so I'll
file.

[O]· Exploiting what amounts to a legal loophole in order to get out of a

contract violates my sense of integrity and requires me to initiate

unilateral dissolution of an agreement made good faith. Therefore,

regardless of the consequences, and despite the unions' unreasonableness,
I

cannot file Chapter 11.

[C]· The most explicit contract in question here is that with the union,
and

it should be honored; I wouldn't file.

[U]· Filing will allow me to continue to 1. supply profits to my
shareholders

2. employ at least some people and 3. provide the market with another

choice. If I don't file, I will likely be forced into real bankruptcy
after

a slow, painful decline, and then I may actually face liquidation, which

hurts everyone involved. Chapter 11 would be the best choice for everyone

involved in the long term, so I'll file.

[A]· Filing for bankruptcy would amount to breaking my word to the union,

which is fundamentally wrong. I won't file.

[E]· Filing for bankruptcy would go against the sense of justice that is

common in American culture, so I wouldn't file.

7. As an entry-level management consultant, you are instructed to always

record eight hours a day, five days a week on your timesheets despite the

fact that you routinely work over twelve hours per day. You are told that

this is just an accounting formality, and that since your salary is far

above what you could make in industry, it shouldn't matter. Written
company

policy says to record the actual number of hours worked, but you were
told

before you took the job that this is just a formality, and that your

workweeks would often exceed 60 hours. Do you protest, even though doing
so

is likely to hamper your advancement?

[C]· The written policy takes precedence over any verbal agreement. I
would

protest.

[O]· I entered the situation fully aware of what was expected of me; the

numbers I mechanically enter into a spreadsheet every week are
irrelevant.

I would not protest.

[M]· There's no way I'm going to jeopardize my career over something so
silly. I would not protest.

[E]· If that's the way the company does things, who am I to judge? I
wouldn't

protest.

[A]· Recording 8 hours a day when I worked a different number of hours is

lying, which is wrong. I would protest.

[U]· Protesting is going to waste my time and the people's time to whom
I'm

protesting, whereas not protesting wastes no one's time. I wouldn't protest.

8. Your job (with a small public company) requires you to collect data on

competitive products for use in formulating company strategy. You are

having a few drinks with Chris, a college friend that now works for your

main competitor, a much larger public company. He starts
discussing-without

any prompting from you-proprietary information about his company's future

products. This information could allow you to significantly improve your

competitive position against Chris's company. What do you do?

[E]· People discuss work all the time, and sometimes these conversations

result in the sharing of information that helps someone do their job more

efficiently. Chris's information helps me do my job more efficiently, so
I

would continue the conversation, getting as much out of it as I could.

[C]· According to U.S. intellectual property law, a company must take

reasonable precautions to protect trade secrets, and if they don't, the
law

doesn't protect the secret. Obviously, Chris's company isn't taking

appropriate precautions in this case, so it is within my rights to listen

to him. However, U.S. law also forbids using excessive measures to obtain

trade secrets, so I'm not entitled to encourage Chris to tell me more
than

he volunteers.

[O]· The information Chris is sharing is his company's intellectual
property,

analogous to the corporate credit card he carries, which is his company's

physical property. I could benefit if Chris drunkenly dropped his credit

card in my house and I used it to charge a trip to Hawaii, but such
action

would be theft (not to mention a lousy thing to do to a friend). Chris's

company's intellectual property is different only in that it's not as
easy

to "give back" after we sober up, so I should tell him to stop talking

about the products.

[A]· To let Chris continue would be taking advantage of his intoxicated
state, which I think is wrong. I'd tell him to stop.

[M]· My primary allegiance lies with my own company; it is not to act as
a

policeman for Chris's company. If he's going to provide information I can

use to benefit my own business, I'm going to try to get as much out of
him

as I can.

[U]· Given the relative size of our companies, the competitive advantage

Chris's information provides his own company will benefit a larger number

of stakeholders than it would if I used it to benefit my (smaller)
company.

Under these circumstances, I would tell Chris to stop.

9. You are an executive with Remchester, a major ammunition manufacturer

which about a year ago introduced "Black Claws", a brand of ammunition
that

is no more deadly than comparable ammo, but that has an especially
sinister

appearance. Black Claws have been a tremendously profitable product for

Remchester. There are no special restrictions on sale of the bullets, but

they are creating a growing public relations problem as special interest

groups demonize them in the media as "cop killers" (in reality, police
fire

Black Claws 100 times more often than non-police). If you take no action,

it is likely that these groups will succeed in getting legislation passed

that restricts sale of the ammo in about a year-when you expected

competitive products to start substantially decreasing the Black Claws'

market share anyway. Assume that liability lawsuits are not an issue.
Your

choices are 1. completely pull the bullets from the market, yielding to
the

special interest groups; 2. use your dealer network to restrict sales to

law enforcement, which would effectively silence the special interest

groups; or 3. do nothing.

[U]· Restrictive legislation could have an enormous impact on
Remchester's

future profitability, and therefore should be prevented. Pulling the

bullets completely might make for good PR, but would have a significant

immediate impact on our profitability, and might create another PR
problem

with ammo consumers. Restricting sales to law enforcement would have the

minimal impact on our long-term profitability, and therefore provide the

greatest good for the greatest number of people, so I would simply
restrict

sales.

[E]· Generally speaking, Americans are fascinated with guns. In this
cultural

context, our main consumers would probably be offended if we did anything

but continue selling the ammo with no restrictions; legislative

repercussions are not for me to deal with.

[O]· Consumers have the right to buy what they want, even if it is

nasty-looking ammunition; I have no right to artificially limit their

choices, especially due to irrational political responses from special

interest groups. I would continue to sell the bullets with no
restrictions.

[A]· Killing people is wrong, no matter who's doing it. I would pull the

bullets from the market immediately.

[M]· I don't care what the special interests say, and I don't care what
the

ammo buyers say; I just want to do what's best for my business. Voluntary

restrictions on sales seem to be the best way to do that.

[C]· There's no law against selling the bullets, and until there is,
selling

them is the best way to maximize my profits. I would continue to sell

without restrictions.

10. You are an executive with a company that is opening an office in a
less

developed country in which women have lower status than men and are
almost

never encountered in business. You must send a manager to open the office

in this country. Your absolute best candidate for the manager is a woman,

and she is willing to give it a try despite the harsh environment (which

includes some level of physical danger). Your next best candidate is a
man

whose performance is far inferior to the woman's. You could send the male

manager alone, but you would have to send a mail assistant with the
female

manager, since the culture would require her to work extensively through

the assistant in order to accomplish anything. The profitability of the

office would probably be the same whether you sent the woman with an

assistant or the inferior male manager alone. Also, sending a woman would

be seen as an insult by many of the local business leaders, even if they

didn't deal directly with her. Should you send the male manager alone, or

the woman and the assistant?

[U]· Sending the woman does no one any practical good; she's not going to

liberate the women of the country, she is going to alienate many
potential

customers, and I'm going to have to give up two domestic resources
instead

of one. Plus, the physical danger aspect exposes us to a legal liability.

Therefore sending the man would do the most good for the most people, and

I'd send him.

[A]· The local culture that represses women is absolutely wrong and I
would

not accommodate it by sending an inferior candidate. I'd send the woman.

[M]· I have no social agenda. There is something to be gained by not

alienating the locals, so there is some advantage for my business if I
send

the man, and that's what I'd do.

[E]· What's right in the foreign countries in which my company does
business

is not necessarily the same as what's right in the U.S. I must respect
the

local culture and send the man.

[O/C]· While I don't agree with the local culture and I respect the
woman's

right to advance her career, in this case I must fall back to my
obligation

to shareholders and send the man, since doing so would do less damage to

customer relations and therefore create more opportunity for long-term
gain.

Exhibit 5: Summary country
statistics

Exhibit 6: Summary individual
consistency statistics

Exhibit 7: Breakdown of ethical system
choices

Exhibit 8: Consistency by industry and
MBA concentration