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The increasing importance of business ethics

In the wake of the global financial crisis, there has been a strong case for MBA providers to place greater emphasis on ethics, sustainability and social responsibility

In the wake of the global financial crisis, there has been a strong case for MBA providers to place greater emphasis on ethics, sustainability and social responsibility. The Executive MBA programme at Cambridge Judge Business School has faced this challenge head-on – fostering a broader view of business and society throughout the entire content of the course.

Part of the ethical component of the Cambridge EMBA is taught by Dr Philip Stiles, University Senior Lecturer in Corporate Governance. He believes that the economic meltdown is not the only impetus for ethics gaining a more central role in business school curricula.

He says: “Business ethics is a term which draws out a wide variety of responses from business leaders. Some think it is an oxymoron, some that it is a luxury that should not be indulged, while others believe that actually it is integral to the way we conduct ourselves both at an organisational, team and individual level.

Those with a more positive view of business ethics are gaining ground.”

“Those with a more positive view of business ethics are gaining ground. This is partly to do with the rise of related fields of environmentalism, corporate social responsibility, and the stakeholder model of business.”

Dr Simon Learmount, Director of the EMBA programme and Lecturer in Corporate Governance, believes that MBA programmes of the past have encouraged too narrow a focus on the company, in isolation from its wider role within society. He says: “One of the problems with the traditional model is that it taught how to do business in a very compartmentalised, non-systemic way.

“What that means in terms of finance is that there is a basic model that says the organisation – the firm – is really just an asset, and needs to be treated as such. All we need to do is make sure it’s run as efficiently as possible, and generates as much profit as possible.

“That’s all well and good. But is that a sufficient view of an organisation, and does it really represent what business means to society?”

Learmount believes that the format of traditional MBAs, with the syllabus divided into self-contained modules, has made it difficult to integrate ethical considerations across the whole programme. He is also adamant that a “bolt-on” approach of simply adding ethics modules would not have been sufficient to equip Cambridge EMBA students with the skills and knowledge to tackle such issues in their own organisations.

“One response has been to say, well, let’s introduce more ethics classes, or electives that deal with corporate social responsibility or environmental issues,” he says. “But the second approach – which the Cambridge EMBA and a few other programmes are following – is to teach business and management with a more holistic approach.

“It’s to acknowledge that business has a licence to operate in society, and to think about what the purpose of business is: how can we think about wealth generation rather than just profit maximisation?”

Perhaps most importantly, this element of the Cambridge Judge EMBA has evolved to fulfil a genuine demand from prospective students. “Often, when people join the programme, they might say that they want a more holistic view of finance, and that they think they’ve had too much of a narrow operational view of these issues,” says Learmount.

“But they don’t have the language to articulate their needs and expectations. In the course of the programme, they find the right language, and can take it back into their organisations.

What we’re trying to do is to get people to think far more systemically about business.”

“What we’re trying to do is to get people to think far more systemically about business. One of the driving ideas behind the Executive MBA is to help senior executives see business as far more than the aggregate of a bunch of functional parts. And I think we’re successful at achieving this.”