Sunday, November 03, 2002
Copyright © Las Vegas Review-Journal

WORKPLACE BEHAVIOR: The route of all evil

Amid scandals, efforts boosted to help students skirt ethical pitfalls

Sean Oliver knows the news. Throw out the names of various chief executive officers and the University of Nevada, Las Vegas master's of business administration student can link them with their disgraced companies. Bernie Ebbers, WorldCom. Kenneth Lay, Enron. Dennis Kozlowski, Tyco. He knows the stories' common issue is ethics.

Oliver is enrolled in "Law, Regulation and Ethics," an MBA class exploring the topic extensively. But even before the semester started, the rash of headlines and hours of CNN coverage had him pondering the topic.

"There certainly has been more of an effort to focus on these issues," said Oliver, a former Boy Scouts of America executive who now occupies out-of-class time as a stay-at-home father.

With ethics so hot, Richard Flaherty, dean of UNLV's College of Business, said he wanted all faculty to teach and discuss it. Ethics are always important, he said, affecting all business practices and decisions.

"I asked them to look hard and seriously at ethical issues in their classrooms and how they could integrate lessons about ethics into what they're teaching," Flaherty said. "And I mean integrate it, not just treat it as an add-on issue."

Professors say they've heeded Flaherty. Management Chairman Keong Leong said several of the management major's component classes cover ethics. For example, he said, new business-college enrollees must take "Business and Society," a class requiring an immediate paper on ethics. Another course, "Current Issues in Business," addresses issues in the news, such as ethics, affecting business.

Accounting professor David Donnelly said professors in his department also include ethics in lessons, using current events examples in discussions of financial-results reporting and the use of generally accepted accounting principles,

Although ethics lessons seem particularly prominent now, Leong said they've been so before. In the 1980s, for example, the savings and loan scandals filled the newspapers and sparked classroom discussions.

"This topic is as old an anything," he said.

Many of Oliver's UNLV classmates likened ethics to "sandbox issues," universal lessons people learn as children. Their UNLV course, they said, was designed to help them identify potentially sticky situations so ethical behavior could follow. Daniel Cereghino, a UNLV MBA student with a bachelor's from the University of Richmond, agreed with Leong. He said it's misguided to declare ethics is a new academic wrinkle; ethical dilemmas are as old as business and academia themselves.

"I don't think the material changes," Cereghino said. "I don't think an ethics course teaches us anything we didn't already know."

Darrin Young, an MBA student who is an asthma educator with GlaxoSmithKline out of class, mostly concurred with Cereghino. Basic ethics, he said, amounts to basic rights and wrongs.

"If you don't sleep with a (prostitute), you don't wake up with one," Young said.

Michael Lissack, founder of the Institute for the Study of Coherence and Emergence, a Boston group encouraging dialogue to help business managers better manage, said considering ethics in such black-and-white terms is dangerous; dilemmas are never so simple.

Businesses will deliberately make decisions with externalities, he said, effects that occur layers away from decision makers. If business really were like the sandbox, and decisions like buckets of sand, Lissack said, the buckets would pass through three or four sets of hands before getting dumped on a far-removed playmate's unsuspecting head.

College courses may not always address ethical complexities, Lissack said. When he was learning accounting as a Yale University undergraduate, Lissack said professors taught how accountants could shift assets to inflate profits, the very chicanery at the core of some of the well-publicized scandals. Nobody discussed consequences, he said.

"Do you think we had a discussion about the ethics of this? No," he said. "Do you think they're still teaching things that way? Absolutely."

UNLV MBA student Patricia Rowe said she's learned about ethical subtleties both in class and on the job, as a finance and administration manager for insurance broker Marsh USA. Circumstance and company culture affect everything, she said. So, an accountant may consider it tacit acceptance if his colleagues don't complain when he fudges finances to pump profits.

"Someone might do certain things that may not seem to him like stealing and lying, but are," Rowe said.

Craig Walton, a philosophy professor coordinating UNLV's Ethics and Policy Studies program, said greed and wickedness motivated some of the scandalous decisions in the news. But he said other, subtler, motivators affect ordinary, honest business people, including physical distress (such as lack of sleep or hunger) and emotional distress (quarrels at home or with colleagues).

UNLV accounting professor David Donnelly said clocks also drive decisions.

"Say a student is one day involved in an audit and a deadline is fast approaching," Donnelly said. "If the student is behind because of time restraints, he may have a tendency to make a casual examination of audit documents rather than giving them the real, professional review they deserve."

The quickie approach would offer short-term gains: the auditor gets paid and avoids possibly annoying his client with a request for more time, Donnelly said. But the gains could become expensive later if the client finds errors in the audit and if the mistakes damage the auditor's reputation.

Because fairness and justice often figure in people's sense of ethics, UNLV professor Joseph Gilbert, who co-teaches "Law, Regulation and Ethics," spent a recent class discussing them as they relate to pay. Would the students be more comfortable, he asked, earning in a system that paid based on years or service or seniority, the way a unionized worker might. Or, he asked, would they prefer to earn their money strictly on performance, the way a salesman who earns based on commissions might. Each time, Gilbert asked the students whether they considered the systems fair.

"If a system isn't perceived as fair, it doesn't work as fair," Gilbert said. "It's got to have the perception of fairness."

Donnelly said no one can mandate ethical behavior. The best professors can do is prepare their students, describing possible pitfalls and offering plans for avoiding them, he said.

"So many times, people will make bad decisions because they've gotten into a bad dilemma they didn't even realize at first was a dilemma," he said. "We can say is, `Hey this is one kind of dilemma. You have to be prepared when it arises to make right call.' "

Lissack said public dialogue is key to stemming scandal, and Flaherty believes the university can help encourage the dialogue, both for students and the community.

"I hope that by paying a little more attention at the margins, we can make a difference," he said. "I don't pretend education is the solution to the problem, but I think we can make a contribution."