Catholic
Colleges & Universities
Corporate scandal as a teaching
moment
By PATRICIA LEFEVERE
St. Paul, Minn.
At least five former students telephone Jeff Cornwall or show up
in his office here every week. Many are recent graduates of the University of
St. Thomas’ elite College of Business.
They come because “they’re facing cutting-edge concerns
and realizing very quickly how difficult it is to navigate the business arena
within the grade. A lot want to know how they can keep an Enron-like debacle
from happening in their company,” Cornwall told NCR.
The scandals that have darkened the face of corporate giants like
Enron, WorldCom, Global Crossing, Adelphia, Qwest, Sunbeam and others have
startled the business school, which currently enrolls some 2,100 undergraduates
and some 3,300 graduate students -- half of St. Thomas’ enrollment. The
scandals have given deans, instructors and students pause to rethink how the
ethical principles that students come to know throughout their years at St.
Thomas can support their decisions in and out of the workplace for their entire
lives.
Enron has become “a teaching moment” at St. Thomas,
noted William Raffield, interim associate dean for the College of Business.
Corporate malfeasance has caused the school to “look in the mirror,”
and ask: “Are we doing enough? Are our students getting out with the
ethical awareness they need” for their futures?
This business school “embraces the ‘Catholicness’
of all that we do here,” said Cornwall, who holds the Sandra Schulze Chair
in Entrepreneurship. As a business college within a Catholic university, the
school “is trying to find unique ways to deliver on our
commitment.”
One of the ways is by integrating the liberal arts and the
professional school’s curricula. Business students take two-thirds of
their courses outside the business curriculum. Efforts are made to bring ethics
into all the professional courses.
All students take an introductory required course in ethics and
end their studies with a capstone course that aims to relate ethical
responsibility with their field of competence.
“We really want to see ethics as a flagship -- not a fig leaf
-- of the curriculum. It’s what makes St. Thomas different,” said
Kenneth Goodpaster, holder of the Koch Endowed Chair in Business Ethics.
But “unless the entire faculty owns the ethics agenda,
it’s not going to work.”
After 20 years of teaching at Notre Dame and Harvard and 12 years
at St. Thomas, he’s certain that students take their ethics from “the
whole, not just from one professor.”
Goodpaster has written print and Web-based textbooks and case
studies that are used around the world for teaching ethics. He has also
persuaded teachers with doctorates and years of experience to weave ethics into
a finance, marketing or management course.
Goodpaster’s workshops for faculty and fulltime research
associates come with ready-for-the-classroom videos, which he labels
“irresistible.” The videos present case portfolios highlighting
ethical issues that relate to a particular sector of corporate life.
St. Thomas is one of the few universities that address ethics in
every course evaluation, he said, and has been doing it since the 1980s. The
evaluation form asks whether ethics came up and whether or not it was handled
sufficiently in the course. Determining which university departments could use
“a little reinforcement” is one of the ways the college tries to have
values and virtues permeate the entire curriculum, he said.
What Enron and other scandals have shown is that the crisis in the
corporate world today is a crisis in ethics, Goodpaster said. It is also a
“crisis of professionals” in law, auditing, consulting, investment
banking and financial analysis -- all fields in which graduates of St. Thomas
and other Catholic business schools are employed.
“We’re seeing professional judgment being
displaced” by economic pressures and by greed, he said. Conflicts of
interest are proving “much more serious than we’d imagined.”
The desire to provide a values-endowed workplace has attracted
many alumni and other Twin Citians to two popular courses. One -- a 14-week
evening course titled, “Spirituality and Management” -- has
been endowed by an anonymous donor.
About 60 professionals -- most of them from the business world,
but some from law and education -- select the Great Books Seminar each year.
Goodpaster, who has moderated the seminar for years, said it has the potential
“to put the MBA in a wider context.” The course, which has a hefty
pre-assigned reading list and a final paper, meets 8 hours a day for six days
in Owatonna, Minn.
About 80 percent of participants take part in a field trip to a
Minneapolis courtroom where they sit in the jury box and listen to the judge
talk about the process of justice. Here they begin to understand what
philosopher Thomas Hobbes saw as “the war between people and attempts to
keep the peace,” Goodpaster said. Many respondents report that it’s
been “a lifesaving” experience, one that goes “much deeper than
careerism.”
This semester Goodpaster and attorney Thomas Triplett, an adjunct
faculty member in the new University of St. Thomas Law School, located in
downtown Minneapolis, are offering a capstone course on business strategy and
implementation with ethics as its unifying theme. The 14-evening sessions will
showcase 12 firms, a foundation and a local government commission.
Enron’s collapse
“We’re also spreading Enron across the semester,”
Goodpaster said. On Sept. 24 the MBA candidates discussed avenues for ethical
analysis in general management. They looked at conflicts of interest in
professional life with an eye to recurring patterns and techniques for
reconciling them.
The class is examining Enron’s collapse from global,
corporate and personal perspectives. Its impact on investor confidence in the
stock market, how it has affected Enron’s competitors and what the scandal
has cost executives Jeffrey Skilling and Andrew Fastow as well as its laid-off
employees are all part of the discussion.
“Speculate whether players like Skilling and Fastow are truly
‘bad people,’ ” Goodpaster exhorted the class. “If they
are, how did they get to where they were in the corporate hierarchy? If they
are not, what happened to them along the way?”
Students want to know what to make of all that’s been
occurring in the last year. So Goodpaster invited a local business writer to
discuss the media’s oversight responsibility.
St. Thomas’ new dean of the College of Business, Christopher
Puto, arrived from Georgetown University in August. Like many at the school
he’s more disappointed than angry over the current crop of corporate
miscreants. “My personal retirement [fund] is down 25 percent,” he
noted.
However, the scandals present all schools with the opportunity to
enhance their values-based education, especially Catholic colleges, because
church teaching “is so consistent,” Puto said. Faculty members must
take these “remarkably complex” issues and get their students to
imagine what it would have been like to face such situations.
That’s a hard task, he admitted, especially for
undergraduates who often lack the framework for distinguishing between
what’s unethical but still legal, even as the legal landscape in corporate
America continues to shift. “When you have an option to reveal data or
not, what do you do?” Puto asked, tossing his hands into the cloud of
unknowing that confronts many in the business world.
Value structures
That’s why graduates are returning for refresher courses. Not
exactly one-to-three-day moral boot camps, but a chance for faculty to
capitalize on skills the enrollees already have and give them confidence to
work through problems as they arise.
“By the time 19-year-olds get to us, our key mission is to
get in touch with the value structures that are there, to reassess them, give
them a process for recognizing -- ‘I’m in conflict here’ -- and
then let them find appropriate resolutions.” Whistle-blowing, which can
sometimes result in a cover-up, isn’t their only way out, the dean
noted.
Puto believes that a St. Thomas graduate would probably close a
factory at about the same time as a graduate from any other U.S. business
school, given the economic necessity to close. But he hopes that a St. Thomas
alum would have first tried to find a buyer for the factory and would have
treated its workers fairly.
“We want to be known for producing highly principled global
business leaders. … That’s why students come here. But is it how they
live?” Puto asked. The job of the university is nothing less than
transformation of the individual, he believes. “We can shine here; we have
the responsibility of reminding ourselves of this on a regular basis,” and
in so doing graduates -- aware of their values -- can change the corporate
world, he said.
In the case of Enron, going into the attack mode in the classroom
is not the way to instill values, he said. Rather the faculty needs to
demonstrate how businesses can get to the right goals without all the
negativity.
Most business schools teach that profit is the end goal of
business. But St. Thomas instructors endeavor to show that profit is a reward
for delivering superior value to your customers, for discovering their needs,
producing a product they want and can use, and selling it at a fair price. The
global business leader will also pay a just wage, provide a safe work
environment and respect the role of the physical environment, Puto said.
The belief that corporations exist to make a profit is the chief
reason why “ethics is on the defensive” in most enterprises, said
Peter Vaill, who teaches management -- the leading major in the business
school. Vaill opposes indoctrination but thinks that students must be
confronted with the ethical dilemmas managers face. When it comes to returning
students and MBA candidates, some have had “a heavy dose” of ethics,
and some practically none, he said.
Although ethics is everywhere in the curriculum, it’s not
enough to state principles, Vaill said. “There’s a danger that some
of these issues are falling through the cracks.”
For the first time in its history the Academy of Management has
begun to consider “our responsibility as faculty members -- to what extent
do we supply the tools for an Enron to exist,” Vaill said.
He cited a recent example in which 200 senior managers were
challenged to make the case that the primary reason for the existence of a
corporation is for employment, not profit. None could. “That’s quite
a dramatic indication of individual companies marching to a different
drummer.”
“While most executives are not evil,” most are caught in
a system they didn’t create, under crushing pressure to perform or be
fired. That’s why they are highly motivated to make as much profit as
possible, he said.
A consultant to an auto firm for 10 years, Vaill saw how lavishly
compensated executives became insulated to the realities of daily life most
people face. “These guys don’t know what it’s like to put gas in
a car or buy insurance. They’re out of touch and running an organization
as if it were primarily a money machine instead of a human community.”
It’s not enough to lay ethical principles before students,
Vaill said, noting that these principles don’t apply clearly. Often two or
more can be in conflict. Instead he calls for “ethical reasoning,”
whereby business leaders work out an “ethical stance” -- making the
case say for firing or retaining someone.
In a culture of sound bites where people think in bullets rather
than connecting a series of thoughts, Vaill’s challenge is daunting and
requires judgment, decision-making and choosing a course of action. When he has
taught ethics, Vaill has frequently found that what students call an ethical
question is not one at all. “It’s clear that a certain practice is
wrong. Why isn’t it being seen as such?”
The author of Managing as a Performing Art harbors
“deep doubts” that the corporate world will emerge cleansed after its
most recent bout of corruption. “Corporations are totalitarian
bureaucracies” and it takes “enormous courage to maintain your own
personal integrity” within them, he said.
Catholic higher education ought to be about “importing more
courage into this world,” he said. For their part, Vaill and Goodpaster
have developed guidelines for what they call, “the courageous
practitioner.” But better than extolling principles, they -- like many St.
Thomas faculty -- invite executives into the classroom who stand out because of
their ethics.
For more than a century St. Thomas has drawn students who want to
be entrepreneurs. About 400 undergraduates are currently pursuing majors in the
Department of Entrepreneurship. One of their courses -- “Christian Faith
and the Management Professions: An Entrepreneurial Perspective” --
has won the Innovative Entrepreneurship Course Award for 2002 from the U.S.
Association of Small Business and Entrepreneurship.
The gospel and the entrepreneur
What pleased Cornwall and Michael Naughton, who co-teaches the
course, is that the prize has gone to a course that counts as a theology
course. In it the two instructors help students understand the theological
underpinnings for the Christian tradition’s idea of work and leisure. The
pair tries to apply philosophical and theological knowledge to entrepreneurial
issues.
The course examines such questions as: “Is creating wealth a
virtue? What is the role and meaning of spirituality for the entrepreneur? How
does one integrate the intense entrepreneurial lifestyle with the gospel?”
It looks at entrepreneurship as a vocation and models ways of sharing wealth
within an enterprise in light of Catholic social teachings.
One of the course’s aims is to engage in dialogue with those
of differing opinions in an open, critical and creative way. Students say they
like the fact that the course is team-taught and brings the assets of two
distinct disciplines into sharp contrast as well as harmony.
Another objective is to help students appreciate the role of
leisure in the work life of entrepreneurs. Often students have grown up in
households with family-owned businesses and have known the pressures of such a
life.
Naughton, who directs the John A. Ryan Institute for Catholic
Social Thought, imparts an invitation during every opening class and on his
syllabuses. “See me about any questions you have about the class or
anything else.” It’s the “anything else” that draws
students, he said, and gives him the opportunity to live out his vocation as a
teacher.
A favorite book of Naughton’s and one that is on the
entrepreneurs’ reading list is Josef Pieper’s 1937 critique of
America’s overworked society, titled Leisure as the Basis of Culture.
Often Naughton begins his classes with “an experiment” --
five minutes of silence. The effort is to teach how important is a moment
of leisure in recreating one’s day, one’s world, he said.
“We are all so career-minded; our lives are alive with
activity -- acquiring, assessing, managing -- where is there any room for
stillness?” asked Naughton. But once students, many of whom have run to
class, sit silently, they also appreciate its benefits. They report that in
silence they are most receptive, most vulnerable and most true.
Naughton, who practices centering prayer and tries to attend Mass
daily -- or at least weekly on campus -- hopes that after four or more years at
St. Thomas, students will see that spirituality is a discipline.
“It’s the way you organize your life. It’s realizing that God is
always present.”
Enron has given everyone at St. Thomas a chance to “rethink
how we understand ourselves in this world and the institutions in which we live
and work,” Naughton said. To see corporate deceit and corruption through
the eyes of faith means to confront the notion of personal and structural
sin.
The two places where people most likely will save or lose their
souls are within the family and on the job, Naughton said. “This will
strike some as overly intrusive and more pious than necessary, yet, given the
reality of personal and structural sin, a just organization is not the ordinary
human condition.
“Rather,” he said, “it’s something that must
be laboriously built.” This occurs not only through markets, technology
and skills, but through “the spiritual practices that challenge our market
rationalizations, our economic structure and our organizational
policies.”
Enron and the other myriad examples of corporate deceit that have
come to light this year could prompt a new appreciation and invocation of
Catholic social thought on America’s 235 Catholic campuses --163 of them
with undergraduate and 93 with graduate programs in business. Naughton and a
half dozen others with whom NCR spoke on both of St. Thomas’
campuses hope that this will be the case.
But don’t expect it to happen overnight, warned Robert
Kennedy, professor of management and Catholic studies. St. Thomas will continue
to hold breakfast meetings with local and business leaders (see Page 38), to
provide forums for discussions in the parishes and especially to raise
awareness among its students of ethical dilemmas that could await them in the
workplace. After Enron, there’s an appetite for something new, he
said.
Patricia Lefevere is an NCR special report
writer.
Related Web sites
John A. Ryan Institute for
Catholic Social
Thought
www.stthomas.edu/cathstudies/cst
Georgetown Business
Ethics Institute
www.msb.edu/prog/gbei
Net
Impact
www.net-impact.org
St. Olaf Catholic
Church
www.saintolaf.org
St. Thomas College of
Business
www.stthomas.edu/cob
National Catholic Reporter, October 25,
2002
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