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The San Diego Union-Tribune has an interesting guest column by Craig Barkacs, who teaches business ethics at the University of San Diego's Executive Leadership Program, in which he addresses the importance of ethical foundations – which can be created in business schools, and that should be modeled by senior executives responsible for setting the tone in their companies.

Examples of ethical lapses in our modern world are many, ranging from Barry Bonds to Martha Stewart to executives from companies as varied as Rite Aid, Enron and Kmart. One question that has to be considered in this environment is whether these people are inherently bad people, or whether they are basically decent people who found themselves on the ethical slippery slope, propelled in that direction by crossing the ethical line once, then again, then again…usually propelled by greed and then becoming mired in a quagmire of cynicism and self-interest.

Barkacs writes, “Studies have shown recurring themes among individuals…who make poor ethical judgments. First, there is what is called super optimism. This is the notion that anything is possible and the transgression will go undetected. This is accompanied by a sense of entitlement – the individuals feel they have worked hard to earn special treatment and various rewards. They deserve them, and the regular rules just don't apply.

“Add to the above that in most business cases, individuals engaged in these types of behaviors are very bright people. As we all know, however, very bright people can be very good at rationalization or concocting excuses.”

Can business schools effectively teach ethics, asks Barkacs. “The best we can hope to do is explore ethical issues, engage individuals in more self-analysis, teach them to be more critical, and remind them to examine motivations. Given a formal moral framework, business leaders will be more cognizant of moral reasoning and will be better able to avoid rationalization and self-deception when making ethical choices.”

Whether or not students are willing to learn about ethics in business school, he writes, “it is imperative for business schools and business leaders to articulate ethics policies. We can't leave wiggle room for super optimists, or for overachieving rationalists. The marketplace demands ethical behavior, and business leaders who practice it will see their companies reap rewards over the long term.”
KC's View:
We’ve all worked for people who we knew in our hearts were unethical, and we’ve all worked for people that we knew were decent ethical people. And there usually is a sense in an unethical environment that the oxygen is being sucked from the room, that it is difficult to maintain equilibrium under such circumstances.

But we can’t help but think that while business schools and industry leaders have an absolute responsibility to teach ethics, the real responsibility lies with parents. If we don’t teach our kids how to behave, the difference between right and wrong, then the foundation upon which they build the rest of their lives is ultimately flawed.

That said, we have to say that we’re tired of the rationalizations often made by people who are caught in ethical lapses; often they seem more upset by the fact that they’ve been caught than any sense of shame about having done something wrong. (Shame seems to be an old fashioned notion, which is maybe one of the things wrong with society…)

Once there was a major business executive in our community who plead guilty to a crime, and he said he’d made a mistake. Our eldest son, who must have been nine or ten at the time (he’s now in college), looked at us and said, “He didn’t make a mistake, Dad. He did something wrong on purpose.”

Out of the mouths of babes…