Here's the NYT Article below, but I would be interested in finding out more
about Carolyn Hotchkiss' perp-walk power points.  

EDITORIAL DESK  


An Ethics Lesson for Business Schools  
By ROBERT PRENTICE (NYT) 844 words
Published: August 20, 2002

AUSTIN, Tex. - When Joseph Wharton established the nation's first business
school at the University of Pennsylvania in 1881, he made business law one
of five basic business school disciplines. More than a century later, the
study of business law has given way to the study of business ethics. 
But business students do not need to study business ethics so much as they
need to study business law. The scandals at Enron, WorldCom and ImClone did
not occur because executives were not conversant with the difference between
teleological and deontological approaches to resolving ethical questions. It
goes without saying that these scandals involved serious ethical lapses. But
they also involved serious violations of business laws. They occurred, at
least in part, because their participants had an insufficient knowledge of,
appreciation for and, yes, fear of the law. Business schools have played a
role in this disaster. 


Because today businesses face far more complicated rules and regulations
than they did a century ago, the need for managers to have a realistic
appreciation of the legal environment in which they operate is more
important than ever. Some business schools still have strong business law
programs, but most have spent much of the last three decades reducing,
marginalizing and often eliminating their business law faculty as other
disciplines grew in stature and popularity. 

Consequently, in many business schools most students get their only look at
the legal environment in which they will operate from faculty who view the
law as an impediment. Finance professors have told me that insider trading
rules and financial disclosure requirements simply undermine the efficiency
of the markets. Accounting professors have explained to me that rules
limiting the ability of accounting firms to provide internal auditing
services to a client (and thereby prepare the same books that they later
purport to audit independently) are pointless, because accountants would
never risk their reputation by acting improperly. (Many accounting
professors still believe this, but they are quieter in the aftermath of
Enron.) No wonder many business professors impart to their students an
impression that the law exists simply to be manipulated or evaded. 

At several leading business schools, many of the faculty that teach business
law no longer even have law degrees; economists and political scientists
offer policy courses that focus on lobbying. Indeed, much finance and
economics research and teaching is built on the silly (though occasionally
useful) assumption that man is a rational maximizer of his own utilities --
and that these utilities can be measured financially. Not only is this
unrealistic but, as the law professor Charles Pouncy has noted, it also
encourages the view that any business strategy or activity that does not
maximize monetary reward is suspect. This is the message that business
schools tend to send -- and companies like Enron tend to follow. 

With the help of well-intentioned donors, several business schools have
established business ethics centers. Unfortunately, research shows that it
is very difficult to teach ethical values to undergraduates, harder still to
teach them to M.B.A. students and all but impossible to get through to those
enrolled in executive M.B.A. courses. If they didn't get a sense of right
and wrong from their families or their faith, it's unlikely a business
school professor can instill one. 

Ethics courses can help those who are truly well-intentioned find their way
through ethical dilemmas where the law gives no clear answer. But even these
people will founder when they go to work for companies that value results
over honesty; at such firms, acting ethically is always difficult. 

There has never been a more crucial time to emphasize law in a business
curriculum. Too many people forget that capitalism was saved from its own
excesses by the securities laws passed in the 1930's. Recent scholarship
shows that countries with strong judicial systems administering rigorous
financial laws enable companies to raise money more quickly and facilitate
more efficient stock markets. Legitimate companies want laws that require
accurate financial disclosure and rules that punish fraudulent firms. 


Centers for the study of business ethics are necessary to represent the
ideals to which we aspire. But most business students will always view
business ethics as hortatory rather than mandatory, as extra credit rather
than required. 

Instead, business law professors should explain to students that legal
requirements are not optional. Such requirements enable our free-enterprise
system to function -- and disobedience carries a personal as well as a
societal cost. My colleagues and I must tell this story more forcefully than
we have in the past. But to do so we need a more prominent forum in the
business schools of America. 




Drawing (Horacio Cardo)

Regards,
 
 
 
Donna J. Cunningham, J.D.
Assistant Professor of Management
Valdosta State University
[log in to unmask]
(229) 249-2606
 
 

-----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk
[mailto:[log in to unmask]] On Behalf Of Ellis, Liz
Sent: Friday, February 10, 2006 12:26 PM
To: [log in to unmask]
Subject: Re: Advice Needed

Two suggestions:

1.  Robert Prentice's article "Lessons Learned in Business School"  in
the NY Times on Aug. 20, 2002.  I don't have an electronic copy but I
can fax it to anyone who wants it, and maybe someone else can post the
article to the list.

2.  Carolyn Hotchkiss's "perp walk" powerpoint presentation -- all those
CEO's in handcuffs ought to convince anyone of the importance of BLAW.

Liz

________________________________

Lizbeth G. Ellis
Department Head
Department of Finance
College of Business
New Mexico State University
P.O. Box 30001, MSC 3FIN
Las Cruces, NM  88003

505-646-3201 (phone)
505-646-2820 (fax)
[log in to unmask] 

-----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk
[mailto:[log in to unmask]] On Behalf Of [log in to unmask]
Sent: Friday, February 10, 2006 4:27 AM
To: [log in to unmask]
Subject: Advice Needed

Those of you at schools that offer Executive MBA programs that have law
couses, please advise on resources that I might use to convince my
colleagues to retain the legal environment course in our EMBA program.
The program is undergoing a curriculum review and the law course is on
the "chopping block".  I would like to save it but need your advice.

Thanks in advance,
Rick