How to Renew Business Ethics Education?

Introduction

In his article ‘After Business Ethics’, Dierksmeier (2024) argues that business ethics continuously fails to deliver on its promise. He suggests that an ethical grounding of business theory and corporate practice requires a critique of conventional economics, and we should replace the mechanistic paradigm of economics with a humanistic alternative.

Ethics education is about helping the learners to find answers to deep existential–spiritual questions like ‘Who am I?’, ‘How should I live?’ and ‘What can I hope for?’. Business ethics education is not an exception from that. In this article, I will argue that the adequate response to the failure of conventional business ethics is not the demolition of the discipline but a radical renewal of it.

The renewal of business ethics education requires a critique of conventional economics as Dierksmeier suggests but even the victory of the humanistic management paradigm would not make business ethics education superfluous or redundant. Business education needs the distinct and critical voice of business ethics to give room for both students and faculty for transformational learning and moral growth.

What Is Wrong with Conventional Business Ethics Education?

Dierksmeier characterizes conventional business ethics education as follows:

After introductory chapters that pronounce the desirability of ethical behavior in a world that increasingly comes under pressure from business practices lacking social and/or ecological sustainability, business ethics textbooks typically set out to introduce, in a few pages each, some ‘major schools’ or ‘preeminent authors’ of ethical thinking. Deontology/Kant, Teleology/Aristotle, Utilitarianism/Bentham, Contractarianism/ Rawls and similar couplings tend to make the cut …. Differences between these conceptions are briefly mentioned before their respective relevance for ethical decision-making is elucidated by suitable examples. After that, since hardly any current author wants to come over as dogmatic, students are informed that, extant disagreements notwithstanding, all these theories have something going for them. Which to apply in practice, and how—such questions are typically deferred to the judgment of the future practitioner. (Dierksmeier, 2024, p. 53)

This is a good description of how business ethics is conventionally taught in business schools today. Students are left disturbed and unsatisfied because what they hear in business ethics classes is in sharp contrast with the often rather dark reality of the business world and also what they learn in other business and economics courses.

Contrary to some innovative and noble efforts to change economics and business education, the mainstream economics and business curricula all over the world still promulgate a distorted view of human nature (humans are motivated solely by greed and purely opportunistic), a narrow and outdated notion of ethics (materialistic egoism) and a limited definition of management (management is about making money and can be captured solely in economic terms) (Mitroff, 2004).

One of the reasons why conventional business ethics education is considered irrelevant and/or useless lies in the fact that business ethics is not ready or able to criticize the neoliberal paradigm of economics dominating today’s business education. The neoliberal paradigm of economics is based on rather unrealistic and limiting assumptions while promoting utility and profit maximization, market equilibrium, and the standard economic policy toolbox relying on monetary incentives (Snower, 2020). It fails to address the current economic complexities and the concomitant widespread ecological destruction and the deterioration of human wellbeing (Shrivastava & Zsolnai, 2023).

Some years ago, we organized a debate about the future of business ethics at the NHH Norwegian School of Economics in Bergen (Ims & Pedersen, 2015). A select group of leading American and European business ethicists participated in the debate. They included Peter Pruzan (Copenhagen Business School), George Brenkert (Georgetown University), Thomas Donaldson (The Wharton School, University of Pennsylvania), Kevin T. Jackson (Fordham University), Georges Enderle (University of Notre Dame), Josep M. Lozano (ESADE Business School, Barcelona), Antonio Tencati (Bocconi University Milan) and me.

One of the conclusions of the debate was that unless business ethics is able

to complement the almost exclusively rational approaches to the field (e.g., analyzing complex decision situations employing consequentialist and deontological approaches) with approaches that emancipate and empower the individual’s inner guidance, we will experience wide-spread and well-deserved skepticism with respect to the raison d’être of the field of business ethics. (Ims & Pedersen, 2015, p. 266)

Another conclusion of the debate emphasized that

One of the most crucial directions that would benefit business ethics is the examination of mainline theories of finance, economics, strategy, and accounting as taught in business schools in an effort to uncover their ethical assumptions that many believe inhibit the role and place of business ethics within these academic institutions.(Ims & Pedersen, 2015, p. 265)

Yet another conclusion of the debate suggested that

If business ethics scholars want to foster careful, collaborative, and responsible attitudes in doing business, they have to foster innovative research at four levels: (i) individual (individual level), beyond the unrealistic homo oeconomicus conception; (ii) firm (micro level), beyond profit maximization and agency theory; (iii) districts, clusters, industries, and sectors (meso level), beyond the five forces model; and (iv) the economy as a whole (macro level), beyond the infinite growth idea. (Ims & Pedersen, 2015, p. 277)

Fortunately, there are business ethics books which openly and forcefully criticize conventional economics by taking a broad, interdisciplinary perspective on ethics and business using new insights from moral psychology, behavioural sciences, corporate law, sociology and anthropology (Nelson & Stout, 2022; Zsolnai 2013). Without providing the students with a fresh, well-informed and realistic view of the complexity and often controversial functioning of business in the real world, students and other faculty members cannot develop trust in business ethics courses and their teachers.

How Can Business Ethics Education Be More Authentic and Useful?

To be authentic and useful in business school settings, business ethics education should address not only the technical/scientific aspect of the of business problem but also the deeper interpersonal/social, ecological/systemic and existential/spiritual aspects of it (Mitroff, 1998).

In the past 30 years, I have taught various business ethics courses in leading business schools in 10 countries, including the University of Oxford, Bocconi University Milan, NHH Norwegian School of Economics, Bodo Graduate School of Business, Copenhagen Business School, Helsinki School of Economics, Vienna University of Economics and Business, University of St. Gallen, EHSAL Management School Brussels, Central European University, Europe University of Viadrina, Heilbronn Business School and Corvinus University of Budapest. My experience is that business school students are hungry for finding meaning and purpose related to their future careers in the business world. Many business school students are looking for meaning and purpose that go beyond the mere pursuit of self-interest or producing profit for a company.

Developmental psychology and neuroscience reveal that in the age of early adulthood, people are very receptive to seeing a bigger picture of reality; they integrate information from multiple sources and perceive themselves as seekers on their own path. This moves beyond the achieving type of awareness, where the central question is ‘How can I get and keep what I want?’ to an awakening type of awareness with the central question ‘What is life showing me now?’ (Miller, 2021).

Gregory Bateson (1972) suggested to differentiate between three levels of learning. Learning 1 is using experiences from the past, driven by an underlying mental model and controlled via a goal and the resulting outcome. The learning outcome is knowledge about the optimal choice in a static set of alternatives. Learning 2 is revising the set of alternatives from which the choice is made. It is similar to Learning 1, but it works with a changed and extended set of alternatives. Learning 3 is changing the system of sets of alternatives from which a choice is made. The focus is on the transformation of the underlying mental model, which is strongly connected to a set of underlying needs and values (Kaiser, 2018).

Most of the courses in today’s business schools, including conventional business ethics courses, function at the level of Learning 1 or at best Learning 2. But what we need in business ethics education is to arrive at Learning 3, that is, transformational learning. It involves changing the underlying mental model of the students about business and ethics alike.

There are several methods and tools which can be used in business ethics education to help the students to become reflective, ethics-oriented practitioners who are inclined to serve the greater good of society and to restore the ecology of the planet.

These methods and tools include but are not limited to the following:

Experimental teaching (using moral dilemma decision-making exercises to enhance moral imagination)

A variety of extracurricular activities can provide further opportunities for transformational learning in business ethics courses for students (and also for faculty). They include using innovative art forms (e.g., psychodrama), working with progressive social and business enterprises, engaging in meaningful community projects at home and abroad and making field trips to get first-hand knowledge about non-Western, non-consumerist cultures and socio-economic practices (e.g., Indigenous ones).

Conclusion

I fully agree with the proposition of Claus Dierksmeier that we have to replace the mechanistic paradigm of economics with a humanistic alternative. I have been working on humanizing economics for decades. Our research programme in Oxford on ‘Economics as a Moral Science’ is an attempt to move the economics discipline in this direction (Rona et al., 2021, 2024; Rona & Zsolnai, 2017, 2018, 2020; Thate & Zsolnai 2022). The moral science perspective sees people as agents having intentionality and freedom who can exercise their capacity for moral agency in different economic roles.

However, I do not think that even a fully humanized economics and humanistic management paradigm would make business ethics obsolete. There is always a gap between ‘Sein’ and ‘Sollen’, between ‘Is’ and ‘’Ought’ in business and other fields of life. The mission of business ethics is to critically reflect on these gaps and to help producing creative, novel solutions to reduce or overcome them.

In my view, business ethics is irreducible to any other subject taught in business schools. It has a vital function to provide a safe space for personal transformation and moral growth.

Lisa Miller, the founder of the Awakened Campus Initiate at Columbia University in New York, rightly says that in professional higher education, we should employ a ‘quest orientation’, which means

to search for answers to meaningful personal decisions and big existential questions; to perceive doubt as positive; and to be open to change, or more accurately, open to perceiving with fresh eyes, and then using new experience to fuel change. (Miller, 2021, p.144)

This position is not far from the conception of the late S. K. Chakraborty, a pioneering management scholar who founded the Center for Human Values at IIM Calcutta, and the related Journal of Human Values. He represented a position that business ethics should go beyond compliance ethics (codes and legislations) and cognitive ethics (abstract intellectual theories) and arrive at consciousness ethics inspired by spiritual communion (Mukherjee & Zsolnai, 2022). This position is more relevant today than ever before.