These acts are all done, by and large, unthinkingly. In the terminology of Nobel laureate Daniel Kahneman, they’re processed automatically by our System 1 thinking—that is, the thinking that’s driven by intuition and emotion. If we could only force the System 2 part of our brain, which reasons logically through decisions, with full appreciation of the many biases that plague our intuitions and instincts, we might behave differently. So a first step is at least equipping business school students (also future lawyers, doctors, accountants, and probably everyone else) with a basic understanding of our psychological frailties and vulnerabilities—greater self-knowledge is at least a first step towards a solution.
However, mere knowledge of our flaws isn’t necessarily enough to stave off unconscious temptation. As Kahneman notes in his best-seller, Thinking Fast and Slow, “My intuitive thinking is just as prone to [cognitive errors] as it was before I made a study of these issues.” No one, Kahneman and Bazerman included, is immune to ethical blind spots.
Encouraging people to act ethically, then, can take some ingenuity. But often a minor change can make a lot of difference. Take something as simple and seemingly irrelevant as where you sign a legal document. These days, signatures verifying that you’ve provided truthful and accurate information usually come at the end of documents like tax returns and insurance claims. Yet according to a recent study, signing a pledge of honesty before filling out a form resulted in half as many misreported expenses as signing at the end. Like a courtroom oath, signing first invites a commitment to ethical principles. Some solutions may involve thinking more proactively about removing temptation altogether. Consider an example from the classroom. In MBA programs, professors sometimes like to give take-home, closed-book exams, trusting their students not to peek at their texts as they take the test. But the temptation to cheat and rationalize (everyone is doing it) may simply be too great for too many when given such an easy opportunity. By confining closed-book exams to in-classroom tests, we remove the temptation. Regulation can serve a similar function: the Glass-Steagall Act prevented commercial banks from getting into the investment banking business. With its repeal in 1999, banking CEOs were drawn into using the safe and secure resources of their commercial side for risky speculation, a decision that they no doubt rationalized as profitable in the short-run but ultimately contributed to the financial crisis.
The fundamental problem with the partitioning off of ethics and values from the rest of the business school curriculum is that students will think about self-serving bias and discrimination and moral disengagement only so long as it’s the focus of classroom conversation, then forget it amidst discussions of marketing, finance, and accounting. In addition to greater self-awareness, we need a discussion of the kinds of structural solutions that force people to confront ethics rather than leaving them in the background. This will help our students with their own ethical lapses and help them in their roles as future business leaders.
What we need to do is equip our students to become “Moral Architects,” to create environments that naturally lead people—themselves included—in the right direction. Being a moral architect can involve modest organizational changes (like shifting where people sign a document) to more complex ones (like introducing an ethical checklist for all important decisions, in the way that doctors and pilots use checklists to reduce errors and save lives). It also involves training students to know when it’s most valuable to remove a temptation in the first place (for example, designing organizations to minimize conflicts of interest).
The only way we’ll get our students to integrate their moral compasses with the practical tools of business we teach them is to incorporate the topic of ethics throughout the curriculum. This will require the accounting and finance and marketing professors to grasp the ethical blind spots inherent in their respective areas, and to appreciate and recognize approaches to lessening them. Professors, in other words, need to be moral architects themselves.
When you stop and ask students whether they’d like their dying words to be “I maximized profits,” a wave of laughter ripples through the class, as all but the most callous have higher aspirations for themselves. When we ask MBA students why they might want to be a CEO, the first two responses are “I want to make a difference” and “I enjoy a challenge”; “Making gobs of money” always comes in third. We need to work harder to equip students to live up to those aspirations. And if we’re not going to make a better-faith effort in this endeavor, perhaps we should remove discussion of ethics from business schools altogether. Otherwise, it serves merely as empty PR for MBA programs and to appease the consciences of those who teach in them.