How Student Perceptions of Ethics Can Lead to Future Business Behavior

By Shurden, Susan B.; Santandreu, Juan et al. | Journal of Legal, Ethical and Regulatory Issues, January 1, 2010 | Go to article overview

How Student Perceptions of Ethics Can Lead to Future Business Behavior


Shurden, Susan B., Santandreu, Juan, Shurden, Michael C., Journal of Legal, Ethical and Regulatory Issues


Unethical business behavior of many "white collar" business professionals has made major headlines over the past years. One recent example is the misuse of funds on Wall Street such as the massive bonuses paid to employees of American Insurance Group (AIG). This and other ethical dilemmas are being discussed by teachers, parents, employers, and peers of students enrolled in business schools across the country. Opinions abound as to the ethics and morality of those involved. In fact, these very individuals who participate in misconduct have children that will most likely emulate their actions. What is the perception of students enrolled in business schools regarding this type of behavior and other ethical situations that arise? Can these students be influenced in a positive direction so that they can go into the business world with values that are "above reproach" and admirable by those whom they lead. The purpose of this paper is to conduct an analysis of three years of surveys from the Wall Street Journal Ethics Quiz that were given to business students at a small, southeastern public university. An analysis is then made as to whether or not those students' perceptions of sensitive ethical dilemmas have changed over time.

INTRODUCTION AND LITERATURE REVIEW

Of recent interest is the highly debated situation of American Insurance Group (AIG) and the $ 1 65 million in executive bonuses, mostly paid to London traders who created the massive losses that resulted in government bailout money of $170 billion given to AIG. Were the AIG bonuses "legal"? In reality the bonuses were only one tenth of one percent of the total bailout amount. Additionally, AIG claimed they were contractually obligated to pay the bonuses. A government mistake was that there was no consideration of the possibility of bonus payouts in the structuring of the bailout terms by Treasury Secretary, Tim Geithner. Therefore, the AIG bonuses were contractual and legal. However, the question arises as to how ethical the bonuses were, and should there be some obligation on the part of the recipients to repay the money (Reed, 2009)?

Our laws are a starting point for ethical conduct and are implemented in order for society to avoid extreme situations. In other words, obvious unethical behavior is any behavior that is illegal or blatant (offensive) misconduct (Kullberg, 1988). The question then arises as to "Is any type of behavior 'ethical' as long as it does not violate a law or a rule of one's profession" (WhittingtonPany, 2004)?

The word "ethics" is derived from the Greek word, ethos, meaning "customs", "conduct", or "character" (Northouse, 2007). For a formal definition of ethics, Webster 's New World Dictionary (1995) defines the term as "the study of standards of conduct and moral judgment". Ethics are important to individuals because we are concerned with what leaders do and who they are - their conduct and character. Numerous theories exist as to how followers are motivated to follow their leader/employer. Teleological theories are those that stress the consequences of a leader's conduct, and they come from the Greek word "telos" meaning ends or purposes. When looking at consequences, two types of theories occur. The first type is Ethical Egoism and deals with an individual choosing an outcome that produces the greatest good for themselves, perhaps receiving a promotion if their division excels. The second type of teleological theory is Utilitarianism, which states that a leader will behave in a manner to create the greatest good for the greatest number of people. An example is when a part of a federal budget is allocated to preventing an illness through immunizations rather than all to a catastrophic illness. Close to Utilitarianism is Altruism, which is almost a total concern for others, such as was the case with Mother Teresa (Northouse, 2007).

These theories emphasize the consequences of the leader's behavior. In analyzing the actions of the AIG management, they acted in accordance with their self-interest, defined by Ethical Egoism, which falls under the teleological theory.

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