Business Ethics, Moral Authority and the Schools – The Curious Case of the Living Nightmare

Sadly, some things don’t change.

In 2001, the Enron scandal exploded into the headlines. Since then, we have found ourselves living a nightmare waiting for the other shoe to drop — either in the form of the next scam or in another spectacular white-collar criminal conviction. Since Enron, nothing has changed. Every year, the shoe has dropped multiple times. Curiously, nobody seems to care. Apparently, the status quo is acceptable. As cheating in one form or another has emerged as the single greatest ethical crisis our business leaders and business school deans face, they are seemingly powerless to stop it. Does this strike anyone else as even mildly curious?

As our leaders and the deans have fiddled, Rome has burned. Now, engulfed in the smoke and ashes, we’ve found ourselves living through that nightmare — a situation akin to the nightmare of working with an expensive law firm. Some of us have been in that particular nightmare. For those that haven’t, this might help describe the current nightmare we’re experiencing.

In our law firm nightmare, there’s a problem we need solved, but, unfortunately, it can only be solved by the lawyers in our expensive law firm. We can’t do it ourselves. We are powerless. We’ve already committed to this firm. It would be too expensive for us to start the process again with another firm. The only savings grace is that we know that the sooner they present us with their solution to our problem, the sooner we’ll know if their solution is worth a damn. For our law firm, they know that the sooner they present a solution, the sooner they’ll have to stop billing us for every waking hour they spend on our case. They have no incentive to speed up the process. None…

As our law firm nightmare continues, we start to receive their monthly bills. Seems they are meeting a lot and chatting incessantly. They are also generating regular reports that someone is reviewing and correcting before sending them out to others to read to comment upon. And each comment then begets another comment that begets more meetings that begets more documents, which must all be read and commented upon. And the meter never stops. As our exasperation at their lack of progress increases, they respond by bringing in more high-priced reinforcements. And, all we know with any certainty is this: unless they solve our problem quickly, we face total and complete financial ruin. But they’re in no rush…

To our total relief, we finally awaken — albeit with a jolt. Still in a cold sweat from our nightmare, we pour over the morning papers clutching our steaming coffee. We find ourselves reading about the sub-prime mortgage debacle and the real-life financial ruin it created. We are astonished to read about what almost brought the world’s economies to their knees. It was a series of wacky financial schemes that were built on fluff, pixie dust and lies.

It seems these deals were conceived and sold by our very finest and brightest. These creative souls were all the alumni of our best business and law schools. And as they conceived their schemes, did their colleagues recognize the fluff, pixie dust and lies? Absolutely. And did anyone raise his or her hand and suggest that something was not right? No, they did not… Why was that? Then we realized that this was nothing new. This is what had happened at Enron, WorldCom, HealthSouth, Bernard Madoff and countless less high-profile scams. 

Where are the schools now?

Certainly with respect to the business schools, they have made no meaningful progress in the fight against the cheating — unless you regard the introduction of ethics courses and Honor Codes as progress. Based on the number of scams since the Enron scandal, however, the practical impact of these courses and Honor Codes has been minimal to nothing. And a measure of the extent to which they have not worked is one indisputable fact: academic dishonestly continues unabated in the business schools despite the courses and Codes. The culture of cheating and looking the other way is alive and well and thriving in our schools. And this is why our nightmare continues… Surely somebody is accountable for this?

The schools can’t afford to continue to do nothing, yet they seems to be doing nothing as new generations of business leaders graduate as their alumni. And as the deans stand by and accept cheating on any level as nothing too serious, and as they effectively look away as cheating occurs, can we really be surprised when their alumni later follow their example? 

A closer look at the business school deans and their lack of moral authority…

Over the years since the Enron scandal and the countless commissions, we’ve been reassured the deans were actively addressing the crisis of cheating. But, what were they doing?

Like the lawyers in our law firm nightmare, the deans have presumably spent countless hours chatting about this, or in commissions, or in writing reports or in helping with legislation or in other sundry activities. While they and legions of high-priced experts have kept busy trying to figure out solutions, they have very little to show for their time. But, to be fair, nobody could accuse them of not taking this seriously. After all, they’ve been chatting about this for years now. But what have they been chatting about?

They have been engaging in a seemingly never-ending internal debate about the merits of introducing a mandatory stand-alone ethics course versus addressing ethics across the board in their curricula. Remarkably, as their endless debate continued unabated, their students were engaging in academic dishonesty at unprecedented levels. Cheating was rampant. At the very institutions that were charged with the responsibility of impressing upon their students the need to be honest and ethical and not to cheat, their students were cheating. As the deans were chatting, Rome was burning.

Unless and until someone shakes the deans out of their lethargy and complacency, and unless and until someone addresses the crisis of cheating, we face the sure prospect of more scams and our economy once again being shaken to its roots. We are helpless. We are living a nightmare. What are we to do to awaken from this nightmare? Someone had better figure this out — and quickly. That nobody is holding the deans accountable for their inaction and their refusal to lead is itself a world-class scandal. Somebody should, but who will? Until someone steps up to the plate, the scammers will hold all of the cards and detecting the scam will remain increasingly difficult.

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