1. No category

Business School Education: A Means of Promoting Corporate Social
Responsibility (CSR) Within Small to Medium Enterprises (SMEs)
Amidst the corporate scandals of the early 2000s and the fallout from the Global Financial
Crisis, public officials, commentators, and the broader community are re-evaluating the
manner in which corporations operate. Whilst the genesis of the CSR movement can be
traced to an academic debate between two law professors in the 1930s, agitation for smaller
entities to be included in this debate is a relatively new concept. Unsurprisingly, calls for
reform have been aimed primarily towards larger entities. Given SMEs comprise as much as
99% of all business entities and contribute heavily to the economy, this would appear to be a
telling oversight. It is argued in this paper that ethics and CSR teaching within Business
Schools is a means by which CSR can be advanced amongst SMEs. It is intended that this
teaching will be supplementary to existing ethics classes given the significant similarities in
concepts.
I INTRODUCTION
Corporate Social Responsibility (CSR) is a near century old concept with the genesis being
attributed 1 to a series of competing publications between Professors Merrick Dodd and Adolf
Berle in 1931-2. 2 Expanding this discussion into the Small-to-Medium Enterprise (SME)
field would take decades longer, and though there is evidence of SME ethics literature as
early as the 1970’s, it is argued that the concept of promoting CSR within SMEs did not gain
traction until the late 1990’s. 3 I do not propose to address the justifications for CSR within
larger corporations, as they are dealt with extensively elsewhere. 4 From the perspective of
SMEs, CSR can be justified on their overwhelming contributions to the community, both
positive and negative. In Australia, 99% of businesses are SMEs. 5 SMEs also contribute to
57.7% of value added production, 6 46% of total GDP, 7 and 68% of employment. 8 From a
negative perspective, Australian figures are difficult to obtain. However, internationally
SMEs are estimated to generate as much as 70% of global pollution, 9 60% of carbon
emissions, 10 43-60% of commercial waste, 11 15% of emissions released into water and on
1
Albeit, the term was not formally labelled CSR at the time.
Adolf Berle, ‘Corporate Powers as Powers in Trust’ (1931) 44 Harvard Law Review 1049; Merrick Dodd ‘For
whom are corporate managers trustees?’ (1932) 45 Harvard Law Review 1145.
3
Fiona Tilley, ‘Small Firm Environmental Ethics: How Deep Do They go?’ (2000) 9(1) Business Ethics: A
European Review 31, 32.
4
Dodd, above n 2.
5
Australian Bureau of Statistics, Counts of Australian Businesses, Including Entries and Exits (2010) 8165, 8.
6
Department of Innovation, Industry, Science and Research, ‘Key Statistics: Australian Small Business’ (2011)
3-4.
7
Henry Ergas and Jennifer Orr, SME Trends and Achievements (2007) Report prepared by CRA International
and privately commissioned by Telstra Pty Ltd, 3.
8
Figures calculated from ABS, 8155.0 - Australian Industry, 2012-13 available from: Australian Bureau of
Statistics <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8155.02012-13?OpenDocument >
9
Ruth Hillary, Small and Medium-Sized Enterprises and the Environment: Business Imperatives (Greenleaf
Publishing, 2000) 11.
10
Marshall Report, ‘Economic Instruments And The Business Use of Energy’ (1998) Task Force Report 17.
11
OECD, Small and Medium Enterprise Outlook (2002), 54.
2
1
land. 12 Worksafe Australia produced interesting findings that demonstrated small businesses
had the lowest ratio of ‘serious’ injuries, followed by large business, with medium sized
businesses having the worst injury ratio. 13 Using ABS and Worksafe Australia data, I have
been able to calculate SMEs contribution to serious workplace injuries to be 69.9%. 14
Furthermore, I have been able to estimate Australian SMEs’ contribution to ‘serious’ EPA
convictions at 66% and workplace safety convictions at 77%. 15 Clearly then, SMEs must be
addressed as part of a CSR strategy, otherwise a substantial part of the problem is being
ignored.
This paper advances a combination of CSR, ethics, and sustainability education in Business
Schools as a means to promote CSR within SMEs. Education will assist an SME CSR agenda
by changing student attitudes towards the role of business, enabling them to better identify
ethical issues, giving them the skills to address these issues, and hopefully acclimatising them
to the idea that SMEs have an important role in improving environmental and workplace
conditions. Education by itself is not intended as a panacea. Many SMEs will be of a size that
a business degree (or any other form of degree) will not be required to adequately manage the
business, 16 and will not require the sort of professional support staff that often study business
degrees (accountants, mid-level managers, etc). Nevertheless, it is argued that education in
Business Schools can have an impact on enough SMEs to make the endeavour worthwhile.
Importantly, this paper is limited to a consideration of ethics, CSR, and sustainability
education in businesses schools (at both undergraduate and postgraduate levels).
An important definitional point should be made. Dirk Matten and Jeremy Moon describe
CSR as ‘an umbrella term overlapping with some, and being synonymous with other,
conceptions of business-society relations.’ 17 I do not propose to enter the etymological debate
about what CSR is, other than to acknowledge there is indeed a substantial etymological
debate. 18 Perhaps one of the most frequently cited definitions is that CSR is ‘[a] concept
whereby companies integrate social and environmental concerns in their business operations
and in their interaction with their stakeholders on a voluntary basis.’ 19 Clearly this definition
12
Ibid 55.
Safe Work Australia, ‘Comparison of work health and safety and workers’ Compensation Schemes in
Australia and New Zealand: Comparative Performance Monitoring Report’ (15th ed) (2013), 12.
14
This forms part of the contribution to knowledge in my thesis and is thus not explained in any further detail.
15
Again this is a case study from my thesis and the methodology is withheld.
16
For instance, an Australian study noted that only a third of SMEs were operated by people with bachelor
degrees, with only 13% of owners holding a Masters or MBA. It should also be noted that the authors
commented on the use of an alumni network which potentially skewed the results upwards. See: Paull Weber et
al, Western Australian Small Business Benchmarks: Main Report (2009) Curtin University of Technology, 11.
17
Dirk Matten and Jeremy Moon, Implicit and Explicit CSR: A Conceptual Framework for a Comparative
Understanding of Corporate Social Responsibility’ (2008) 33(2) Academy of Management Review 404, 405.
18
For instance, there is an article that addresses the 37 major definitions adopted in journals. See Alexander
Dahlsrud, ‘How Corporate Social Responsibility is Defined: An Analysis of 37 Definitions’ (2008) 15
Corporate Social Responsibility and Environmental Management 1. I have also been able to locate a CSR
Masters by Research Thesis devoted exclusively to the definition of CSR. See: Richard Smith, Defining
Corporate Social Responsibility: A Systems Approach For Socially Responsible Capitalism (Masters Thesis,
University of Pennsylvania, 2011).
19
Commission of the European communities, ‘Promoting a European framework for Corporate Social
Responsibility’ (2001) Green Paper, 6.
13
2
cuts across other similar concepts, such as business ethics and sustainability. 20 For instance,
any measure designed to further business ethics is likely to also have an impact on CSR,
sustainability, or vice versa. From a pragmatic point of view, there is extensive research on
business ethics education, compared with CSR education. Thus the research on business
ethics and sustainability teaching is advanced as a useful proxy, and is therefore relied upon
extensively throughout this paper. To a limited extent, some legal ethics literature is also
relied upon where relevant.
Critically, more than 200 sources relating to CSR, ethics, or sustainability education were
consulted for this paper, revealing only a handful of references to SMEs (all of which were
superficial and contributed little). As much as this paper argues for greater ethics and CSR
teaching that is relevant to SMEs, there is virtually no SME specific literature. This is not
entirely desirable, however the more general literature (and even literature specifically
directed at larger enterprises) is still relevant. Given SMEs more marginal existence 21 and
arguably a perceived irrelevance 22 to environmental and other social concerns, promoting
ethics and CSR amongst larger businesses is a valid starting point. The ideal solution(s) is not
intended to act independently of other ethics and CSR teaching, it is merely an extension of
existing teaching methods and content. Thus, much of the literature on potential reforms will
be relevant, irrespective of the size of a company. If students do not accept a need to exhibit
ethical conduct, or to pursue CSR in larger enterprises, then they will not accept this for
SMEs either. Any successful SME education will require this foundation. 23 However once
this foundation has been established, Business Schools need to go further and promote the
need for ethics and CSR within SMEs. The statistics above highlight that if Business Schools
ignore SMEs, they are simply ignoring half of the problem.
This paper is split into three parts. First, it considers the question of whether education will
actually improve the behaviour of business students. This section addresses the proposed
‘natural’ proclivities of business towards unethical behaviour. It also considers the potential
benefits of teaching ethics, CSR, and sustainability. Secondly, it considers the barriers
currently in place that inhibit the effectiveness of this teaching. Thirdly, it advances potential
solutions and ways to better promote CSR in any business curriculum. Dennis Gioia has
proposed that ‘[i]f we really believe in life-long learning, we should act as if we can change
attitudes toward ethical and responsible behaviour in positions of organizational
20
The most widely cited definition of sustainability is the Brundtland definition which defines sustainable
development as ‘development that meets the needs of the present without compromising the ability of future
generations to meet their own needs’. See International Institute for Sustainable Development, What is
Sustainable Development? < https://www.iisd.org/sd/>
21
For instance, In Australia SMEs have only an 81% chance of surviving their first 2 years, which is a high
attrition rate. Ergas and Orr, above n 7,1
22
E.g SME owners frequently underestimate their environmental impact. See: Netregs, SME-environment
Survey 2009: UK, 3. This survey can be accessed at Netregs, NetRegs surveys, Netregs <
http://www.netregs.org.uk/about_netregs/surveys.aspx>; Christopher Wilson, Ian Williams and Simon Kemp,
‘An Evaluation of the Impact and Effectiveness of Environmental Legislation in Small and Medium-Sized
Enterprises: Experiences From the UK’ (2012) 21 Business Strategy and the Environment 141, 151.
23
It is likely to be a much ‘easier sell’ to students that large enterprises should take some responsibility given
examples such as BP, Ford Pinto, Tobacco Companies, James Hardie, etc.
3
leadership.’ 24 It is in this spirit that any reform aimed at promoting greater ethics and
responsibility within businesses should involve the institutions most actively involved in
shaping this behaviour which ultimately includes Business Schools. 25
II WILL EDUCATION HAVE AN IMPACT ON STUDENTS?
Obviously if promoting CSR education is to be a worthwhile endeavour, there has to be some
possibility of changing behaviours. On this point, opinions are somewhat mixed. 26 Attitudes
towards ethics vary on the basis of ‘cultural background, 27 gender, 28 age, 29 and prior
exposure/knowledge,’ 30 thus making generalizations difficult. There are many empirical
studies which suggest business students tend to have more unethical tendencies than other
members of the community. Clearly there is a problem if students have entered university
with an unethical mindset, which will make it is less likely that education will change their
attitudes. For instance, one study showed that students who are ‘more materialistic’ are
generally ‘not comfortable with businesses having a social responsibility beyond profits and
wealth maximization’. 31 This lead to a conclusion that people with a greater disposition
towards acquiring material wealth would be less inclined to engage in CSR initiatives.32
Therefore, this highlights that the presence of ethical traits can differ quite substantially
amongst different groups. Even within business majors, differences have been found. For
instance studies have confirmed that ‘finance majors had significantly lower levels of
empathy’ and exhibited greater levels of ‘narcissism.’ 33 A separate study has found
management majors are the most dishonest, whilst accounting majors are the least
dishonest. 34
When comparing business students with students in other fields, they often are seen in a
negative light. For instance, business students have been shown to be greedier compared with
24
Dennis Gioia, ‘Business Education's Role in the Crisis of Corporate Confidence’ (2002) 16(3) The Academy
of Management Executive 142, 142.
25
United Nations Global Compact, The Principles for Responsible Management Education (2007) 3.
26
See Donald Neubaum et al , ‘Business Education and Its Relationship to Student Personal Moral Philosophies
and Attitudes Toward Profits: An Empirical Response to Critics’(2009) 8(1) Academy of Management Learning
& Education 9, 18 which failed to find differences in ethics between students.
27
Judy Tsui and Carolyn Windsor, ‘Some Cross-Cultural Evidence on Ethical Reasoning’ (2001) 31(2) Journal
of Business Ethics 143, 148-149 Cf John Preble and Arie Reichel, ‘Attitudes towards Business Ethics of Future
Managers in the U.S. and Israel’ (1988) 7(12) Journal of Business Ethics 941, 947; Steven Lysonski and
William Gaidis, ‘A Cross-Cultural Comparison of the Ethics of Business Students’ (1991) 10(2) Journal of
Business Ethics 141, 147 – 149.
28
Julie Fitzpatrick, Business Students Perceptions of Corporate Social Responsibility (2013) 47(1) College
Student Journal 86, 93.
29
Durwood Ruegger and Ernest King, ‘A Study of the Effect of Age and Gender upon Student Business Ethics’
(1992) 11(3) Journal of Business Ethics 179, 184; Elizabeth Danon-Leva, Frank J. Cavico, and Bahaudin
Mujtaba, ‘Business Ethics: A Cross-Cultural Comparison between Hong Kong and the United States’(2010)
1(4) Journal of Business Studies Quarterly 1, 11.
30
Liz Sidiropoulos, ‘Irene Wex, and Jonathan Sibley, ‘Supporting the Sustainability Journey of Tertiary
International Students In Australia’ (2013) 29(1) Australian Journal of Environmental Education 52, 70.
31
Robert Kolodinsk et al, Attitudes About Corporate Social Responsibility: Business Student Predictors (2010)
91 Journal of Business Ethics 167, 176.
32
Ibid 172.
33
Todd Brown et al, ‘Ethics and Personality: Empathy and Narcissism as Moderators of Ethical Decision
Making in Business Students’ (2010) 85(4) Journal of Education for Business 203, 207.
34
Carter Rakovski and Elliot Levy , ‘Academic Dishonesty Perceptions of Business Students’ (2007) 41(2)
College Student Journal 466, 476.
4
education students. 35 When justifying their actions, the education students also made far
greater reference to concepts of fairness than their business counterparts. 36 Similarly,
business students have been shown to more actively engage in academic dishonesty. For
instance, when questioning students about their intended occupation, those proposing to enter
the business field admitted to the highest level of academic dishonesty at 76%, with
Engineering/Science second at 72%, whilst those hoping for an education degree cheated the
least at 58%. 37 When comparing areas of study, business students were again the worst, with
87% admitting to some form of academic dishonesty. 38 Whilst this study is dated, and
certainly in an era of Turnitin, 87% of students cheating does not seem likely, it is perhaps
the justifications given for the cheating that are worrisome. Responses such as ‘you snooze
you lose’, references to a low likelihood of being caught, material wealth expressed as a
major goal in life, and expressing a need to cheat because ‘students [are] getting ahead by
cheating and leaving you behind’ are concerning. 39 This outlook on life can easily be applied
to a business context and even if the 87% is now 0.1% due to the advent of Turnitin, this still
does not solve the issue that such a large number of students would act unethically if they
were not constantly monitored. This suggests a broader problem where many students are less
likely to be receptive to some form of ethics training. It should be noted that these claims are
challenged to a degree and there are studies which refute differences between business
students and those in other courses, or at least could not find any evidence of these
differences. 40
It is easy to focus on a few, albeit telling, flaws without analysing students beliefs about the
role of business. After all, CSR, ethics, and sustainability are all concepts primarily
concerned with what students think about business’ role in society, as well as how they will
behave once they are employed. In a survey of students (not exclusively business students),
respondents believed that employers should exercise responsibility towards employees
(78%), customers (68%), the environment (53%) and local community (49%), with
shareholders last at 35%. 41 The same study outlined how graduates specifically research their
employers history of ethical behaviour, 42 suggesting that whilst ‘their main concern was to
get a job’, the employers record was a ‘differentiating [factor] in their choice of job’. 43
Within this study, high levels of students engaging in recycling, donating to charity,
volunteering, investing ethically and purchasing environmentally friendly products was
reported. 44 Another study produced findings that 82% of business students believed that
businesses should adhere to some form of ethics, but only 25% thought the current ethical
standards were meeting society’s requirements, 70% thought standards were falling, and 70%
believe they could be taught business ethics. 45 These findings seem to dispel the notion that
35
Long Wang, Deepak Malhotra, and Keith Mirnighan, ‘Economics Education and Greed’ (2011) 10(4)
Academy of Management Learning & Education 643, 648.
36
Ibid 649.
37
Donald L. McCabe and Linda Trevino, ‘Cheating Among Business Students a Challenge for Business Leaders
and Educators’ (1995) 19(2) Journal of Management Education 205, 209.
38
Ibid 210.
39
Ibid 211-212.
40
See for instance: Peter Arlow, ‘Personal Characteristics in College Students' Evaluations of Business Ethics
and Corporate Social Responsibility’ (1991)10(1) Journal of Business Ethics, 63, 65-66.
41
The Higher Education Academy, ‘Employable Graduates for Responsible Employers’ (2008) Report to the
Higher Education Academy 11.
42
Ibid 13.
43
Ibid 14.
44
Ibid 29.
45
Frederick Crane, ‘The Teaching Business Ethics: An Imperative of Business Schools’ (2004) 79(3) Journal of
Education for Business 149, 150.
5
the majority of students who enrol in Business Schools are unteachable moral deviants in
contrast to the findings of earlier studies.
Whilst the negative findings regarding business students are concerning, they do not of
themselves prove that business students are unteachable on the subject of ethics and CSR.
Although they might start from a lower base of ethics, as long as students are being educated
in a way which pushes their ethical tendencies in the right direction, this makes ethics or CSR
education worthwhile. On this subject, the literature is again mixed, but somewhat more
promising. James Glenn summarised the earliest work in this field noting that of the ten
studies, six noted a positive impact, two found no impact, one noted a positive impact, which
then diminished to having no impact over time, and one study was mixed. 46 In this respect, it
does seem as though the majority of studies that could not find a link between an
improvement in ethics and education are somewhat dated. 47 More recent studies confirm a
generally positive trend. When students were asked whether business ethics should be taught,
68% answered affirmatively, which increased to 88% after students had taken the course.48
Furthermore, in the same study, there were noticeable improvements in responses to
questions such as ‘the only moral of business is making money’ and ‘moral values are
irrelevant to the business world.’ 49 Other studies have recorded similar findings for questions,
such as the responsibility of a company is to ‘maximise value for shareholders’ 50 and
‘comply with all laws and regulations’. 51 Positive improvements after undertaking some form
of ethics training have been noted in many instances. 52 There is also evidence showing
graduates continue to refine these attitudes outside of Business school, with greater work
experience, which is a double edged finding. 53 This reflects that Business schools could be
doing more to shape the ethical attitudes of their students, but also disproves the notion that
business students are unmalleable on the subject of ethics. Business Deans certainly believe
the education they receive at university makes them more alert to ethical issues. 54 It seems as
though students’ views on academic dishonesty can be modified, with a finding that students
cheat less at universities with ‘honour codes’, 55 and those without such codes more readily
46
James Glenn, ‘Can a Business and Society Course Affect the Ethical Judgment of Future Managers?’ (1992)
11(3) Journal of Business Ethics 217, 218.
47
See for instance T.R. Martin, ‘Do Courses in Ethics Improve the Ethical Judgment of Students?’ (1981) 20(2)
Business Society 17, 21.
48
Cubie Lau, ‘ A Step Forward: Ethics Education Matters!’ (2010) 92(4) Journal of Business Ethics 565, 571.
49
Ibid 573.
50
Obviously this is consistent with legal obligations, however the question arises as to whether a blind
adherence to shareholder maximization produces ethical outcomes, or even long term shareholder maximization,
where companies are making short term decisions. An Australian study of directors suggests that most directors
understand their duties to the company to be quite broad with 94 percent suggesting they can take into account
groups other than shareholders and not a single response evidenced a short term shareholder maximization
approach. See: Malcolm Andersen et al ‘Evaluating the Shareholder Primacy Theory: Evidence from a Survey
of Australian Directors’ Uiversity of Melbourne Legal Studies Research Paper No. 302, 10 Available at SSRN:
http://ssrn.com/abstract=1031301.
51
Denise Kleinrichert et al, ‘The Effect of a Business and Society Course on Business Student Attitudes Toward
Corporate Social Responsibility’ (2013) 88(4) Journal of Education for Business 230, 235.
52
Terry Loe and William Weeks, ‘An Experimental Investigation of Efforts to Improve Sales Students' Moral
Reasoning’ (2000) 20(4) The Journal of Personal Selling and Sales Management 243, 248.
53
Fitzpatrick, above n 28, 9191; Diannah Lowry, ‘An Investigation of Student Moral Awareness and Associated
Factors in Two Cohorts of an Undergraduate Business Degree in a British University: Implications for Business
Ethics Curriculum Design’ (2003) 48(1) Journal of Business Ethics 7, 15.
54
Fred Evans and Leah Marcal,‘Educating for Ethics: Business Deans’ Perspectives’ (2003) 110(3) Business
and Society Review 233, 239.
55
McCabe and Trevino, Cheating Among Business Students above n 37, 208
6
attempted to rationalise their conduct. 56 Education has also been shown to improve the skills
related to ethics, raising the ability to recognise ethical situations in one study by close to
50%. 57 Ultimately, it is hoped that if students are accustomed to considering the ethical
consequences of their decisions in Business School, then this process will continue in their
professional life. 58
Lawrence Kohlberg has advanced a theory of cognitive moral development, 59 which states a
person’s moral development develops well into adulthood with most adults operating at a
‘conventional level’ where they attempt to meet others’ expectations. 60 This is supported by
one study which found ethics education to be most effective in the oldest age bracket studied
(24+) and least effective in the youngest (13-14). 61 However, the study offers the fact that the
older groups studied ethics as an elective, which is likely to attract more willing students, as a
possible explanation for the findings. 62 In perhaps the strongest indication of the effect of
ethics education, a survey of recent MBA alumni found that education had a profound effect
on the next stage of their career. On average, in the proceeding 2.8 years after completing the
MBA, 47% of students switched employers, 12% started their own business (27% were
motivated to start a new company) 63, and 14% were working for the same company, but in a
different field. 64 Importantly, 75% of graduates operated in positions where sustainability
held greater importance in their job description. 65 These findings alongside the earlier study,
which noted students who had completed an ethics course were 50% more likely to spot
ethical issues, raises a valid point. The benefit of such education is not just to change
mindsets, but also give those who are already oriented towards ethics, and CSR, the skills to
translate this mindset into action. Thus the literature, (especially more recent studies) viewed
as a whole, supports the conclusion that teaching ethics has a positive influence on the ethical
mindsets and behaviours of business students.
III CURRENT BARRIERS TO ETHICS AND CSR EDUCATION
Having established the likely benefits of some form of ethics or CSR-oriented education, it is
necessary to consider whether the current efforts by universities to embed these topics into
56
Donald McCabe, Linda Trevino, and Kenneth Butterfield, 'Academic Integrity in Honor Code and Non Honor
Code Environments', (1999) 70(2) The Journal of Higher Education 211, 224.
57
Frederick Gautschi and Thomas Jones, ‘Enhancing the Ability of Business Students to Recognize Ethical
Issues: An Empirical Assessment of the Effectiveness of a Course in Business Ethics’ (1998) 17(2) Journal of
Business Ethics 205, 212.
58
Alfonso Oddo, ‘A Framework for Teaching Business Ethics (1997) 16(3) Journal of Business Ethics 293,
294.
59
The seminal work of which is: Lawrence Kohlberg, 'Stage and Sequence: The Cognitive-Developmental
Approach to Socialization', in David Goslin, Handbook of socialization Theory and Research (Rand McNally,
1969).
60
Linda Trevino, ‘Moral Reasoning and Business Ethics: Implications for Research, Education, and
Management’ (1992) (5/6) Journal of Business Ethics 445, 446. This article operates as a good entry point
and explains much of Kohlberg’s work and how it applies to business ethics.
61
Andre Schlaefli, James Rest, and Stephen Thoma, ‘Does Moral Education Improve Moral Judgment? A
Meta-Analysis of Intervention Studies Using the Defining Issues Test’ (1985) 55(3) Review of Educational
Research 319, 344.
62
Ibid.
63
Charlotte Hesselbarth and Stefan Schaltegger, ‘Educating change agents for sustainability learnings from the
first sustainability management master of business administration’ (2014) 62 Journal of Cleaner Production 24,
29, 32.
64
Ibid 31.
65
Ibid.
7
Business School curriculums are sufficient. The argument presented in this paper is that these
efforts, although improving, are insufficient and more can certainly be done. It should be
noted that perfection should not be the measure of sufficiency. A ‘no more Enrons’ standard
is simply too high. Education should not be viewed as a panacea, and not be judged a failure
if a few bad apples completely ignore what they learned in Business school. However, when
scandals are still a relatively frequent occurrence, some self-reflection is required to consider
whether everything that can be done is being done within universities. As will be
demonstrated below, this is simply not the case.
A The Integration of Ethics and CSR Teaching
A substantial part of the problem is a lack of content. Ethics related topics are simply not
been taught often enough to a sufficient number of business students. It is not a case of
university leadership believing ethics and CSR as irrelevant, it is a case of ambivalence,
whereby it is relegated behind ‘core’ courses, in part due to institutional pressures outlined
below.
An example of this lack of teaching can be found in a survey of course coordinators, which
suggested they believed there should be more teaching on the subject than there currently
is. 66
A survey of Business School Deans has also yielded high levels of agreement for the
proposition that there should be more ethics education taught in Business schools. 67 By way
of example, a study conducted in 2003 noted only a third of European universities had
compulsory CSR-related courses. 68 Earlier research in the United States yielded a 20% figure
for compulsory ethics courses. 69 Some of these studies are again dated, given the rapid
changes to business education in the past decade. However, recent studies confirm the same
trend with Business Deans believing that there should be more teaching at undergraduate
level 70 than is currently the case. 71 Early studies have shown when specifically considering
CSR, as opposed to ethics, the situation is in fact worse. A study in 2004 found that only 12%
of the surveyed MBA programs had a ‘dedicated’ CSR course, whilst only 32% offered
electives. 72
When confining the analysis to Australia, the situation is equally concerning. A study by
Jodie Fisher and Ingrid Bonn suggests that more than half of Australia’s universities engage
66
Carolyn Nicolson and Michelle DeMoss, ‘Teaching Ethics and Social Responsibility: An Evaluation of
Undergraduate Business Education at the Discipline Level’ (2009) 84(4) Journal of Education for Business 213,
215.
67
Evans and Marcal, above n 54, 237.
68
Louise Gardiner and Peter Lacy, ‘Lead, Respond, Partner or Ignore: The Role of Business Schools on
Corporate Responsibility’ (2005) 5(2) Corporate Governance: The International Journal of Business in Society
174, 176.
69
Adolph Katz, ‘The Status of Business Ethics Education in Business School Curricula’ (1990) 18(3)
Information and Management 123, 128.
70
Note that in this same study, the reverse was true with regards to postgraduate study.
71
Jeananne Nicholls et al, ‘Ethics, Corporate Social Responsibility, and Sustainability Education in AACSB
Undergraduate and Graduate Marketing Curricula: A Benchmark Study’ (2013) 35(2) Journal of Marketing
Education 129, 134
72
Dirk Matten and Jeremy Moon, ‘Corporate social responsibility education in Europe’ (2004) 54 (4) Journal of
Business Ethics 323, 328.
8
in sustainability and environmental education, but only in a superficial manner. 73 In the
study, 57.5% of Australian universities made no reference to sustainability in any of its
relevant ‘course information’ and 93.75% made no reference to sustainability at a ‘course
level’. 74 Of the remaining courses that made reference to sustainability, most did so only in
relation to a ‘single functional area or context (e.g. marketing or tourism)’, rather than in a
general comprehensive way. 75 These findings lead to the authors concluding that
sustainability has a ‘low profile in over half of Australian universities’ business/management
courses.’ 76 In a separate study, Sharyn Rundle-Thiele and Walter Wymr also found that only
25% of Australian universities offer ‘dedicated’ ethics courses. 77 When judging the overall
quality of education, research undertaken on behalf of the Australian Government
Department of the Environment and Heritage was similarly pessimistic. When judging MBA
programs at 37 universities on the basis of sustainability, they found that zero were ‘world
class’, 3 were ‘good practice’ schools, 13 were ‘acceptable’, with the other 17 containing
‘little or no’ relevant sustainability education. 78 The minimum requirements of ‘acceptability’
require a university to have electives addressing sustainability, relevant assignments, faulty
research, and ‘limited involvement’ with business stakeholders. 79 These are not onerous
requirements, yet half of the universities in Australian did not meet them. This is consistent
with similar claims made by Kate Sherren that ‘[o]n the whole, sustainability is not very
thoroughly or uniformly integrated across Australian universities.’ 80 This ambivalence
towards CSR generally and towards related fields, is having genuine impacts with the
suggestion that professionals feel there is a lack of ‘accessible, career value-adding and
needs-tailored formal education services’, leading them to seek ‘self-education’ opportunities
outside of traditional institutions, with many sourcing their information from NGO’s such as
the United Nations Environment Program (UNEP). 81
Even when introducing topics such as ethics and CSR into business courses, they are
generally taught in a minimalist fashion and are peripheral to core subjects, such as
accounting or finance. 82 On the subject of improvement over the past decade, the findings are
mixed. Business schools worldwide have seen an increase in ethics based courses from 34%
in 2001 to 79% in 2011, which are the most recent figures. 83 Equally, a review of Business
Schools from the United States and Europe found that 75% of undergraduate and 55% of
73
Josie Fisher and Ingrid Bonn, ‘Business sustainability and undergraduate management education: an
Australian study’ (2011) 62 Higher Education 563, 563.
74
Ibid 567; see also Daniella Tilbury, C. Crawley, and F. Berry (2004) ‘Education About and For Sustainability
in Australian Business Schools’ Report prepared by the Australian Research Institute in Education for
Sustainability (ARIES) and Arup Sustainability for the Australian Government Department of the Environment
and Heritage, 55; Ian Thomas & Jennifer Nicita, ‘Sustainability Education and Australian Universities’ (2002)
8(4) Environmental Education Research 475, 486.
75
Fisher and Bonn, above n 73, 568.
76
Ibid 569.
77
Sharyn Rundle-Thiele and Walter Wymr, ‘Stand-alone ethics, social responsibility, and sustainability course
requirements’ (2010) 32 Journal of Marketing Education, 5, 8 ; See Evans and Marcal, above n 54, 240 for
similar figures in the United States.
78
Tilbury, Crawley, and Berry, above n 74, 22, 27, 30.
79
Ibid 21.
80
Kate Sherren, ‘Core Issues: Reflections on Sustainability in Australian University Coursework Programs’
(2006) 7(4) International Journal of Sustainability in Higher Education 400, 403.
81
Tilbury, Crawley, and Berry, above n 74, 50-51.
82
Gioia, above n 24, 143.
83
The Aspen Institute, ‘Beyond Grey Pinstripes <http://www.beyondgreypinstripes.org/data-analysis>
9
MBA degrees offered CSR courses. 84 This study also noted a correlation between the
universities’ reputation and greater CSR content. 85 This confirms earlier findings that top
universities generally have high levels of ethics teaching. 86 However, at a broader level, it
seems as though there are still problems within universities, with recent surveys
demonstrating low levels of integration in CSR and sustainability with the content being still
relatively uncommon across the curriculum. 87 Other studies confirm that whilst the number
of courses has increased, the structure has not changed with 75% of these courses still being
offered as electives. 88 It may seem trivial to focus on elective status, but there is the very real
issue of ‘preaching to the converted’ if ethics and CSR courses remain voluntary. 89 This is
not to say that voluntary courses have no value. As mentioned above, they enhance the skills
of the ‘converted’ so that they may act upon their beliefs. However there is also the argument
that the people who would opt out of an ethics class, in favour of more interesting core
subjects, are exactly the people that should be learning about ethics and CSR.
B Course Content
Aside from the argument that Business Schools are not teaching enough ethics and CSR, an
argument has been raised that Business Schools are actually contributing to the poor ethics of
students by teaching self-interested and mean spirited concepts and theories. It is believed
that students can actually leave with worse ethics than when they entered Business School. 90
As has been noted earlier, student perceptions are malleable, which means they will absorb
what is taught, thus taking away both positive and negative messages. For instance,
economics students have been shown to have a predisposition towards greed and an ability to
rationalise greedy behaviour. 91 Furthermore, studies have shown that some MBA students
leave Business School with a greater sense that shareholder maximization is the ‘prime
responsibility’ of business. 92 There are empirical studies which suggest even a single course
can have negative impacts on ethical mindsets. 93 The reality is that Business Schools
propagate theories that demonstrate a very negative view of human behaviour. The most
84
Jeremy Moon and Marc Orlitzky, ‘ Corporate social responsibility and sustainability education: A transAtlantic comparison’ (2011) 17(5) Journal of Management & Organization, 583.
85
Ibid
86
Lisa Jones et al, ‘Ethics, CSR, and Sustainability Education in the "Financial Times" Top 50 Global Business
Schools: Baseline Data and Future Research Directions’ (2007) 73(4) Journal of Business Ethics 347, 351.
87
Jonathan Doh and Peter Tashman, ‘Half a World Away: The Integration and Assimilation of Corporate Social
Responsibility, Sustainability, and Sustainable Development in Business School Curricula’ (2014) 21(3)
Corporate Social Responsibility and Environmental Management 131, 136-137.
88
Andrea Rasche , Dirk Ulrich and Ingo Schedel, ‘ ‘Cross-Disciplinary Ethics Education in MBA Programs:
Rhetoric or Reality?’ (2013) 12(1) Academy of Management Learning & Education 71,71, 75.
89
Ibid 71,77-78.
90
A good summary of literature coming to this conclusion can be found in: Joseph Wolfe and David Fritzsche,
‘Teaching Business Ethics with Management and Marketing Games, Simulation and Gaming’ (1998) 29(1)
Simulation and Gaming 44, 45.
91
Wang, Malhotra, and Mirnighan, above n 35, 657.
92
Gioia, above n 24, 142.
93
For instance, one such study asked questions both at the start and end of a economics course relating to
whether students would report instances of their business being ‘undercharged’ for goods or whether they would
personally return money addressed to someone else. The study found that the ethical response was worse after
the course than before. See: Robert Frank et al, ‘Studying Economics Inhibit Cooperation?’ (1993) 7(2) The
Journal of Economic Perspectives 159, 168-169.
10
relevant to business ethics is agency theory, which presupposes managers ‘cannot be trusted
to do their jobs’ 94 and they are ‘motivated solely by greed’. 95 When constantly bombarding
young impressionable minds with material that presumes greed and self-interest to be the
norm, it is unsurprising when students are ‘freed … from any sense of moral responsibility’. 96
Inevitably, this leads to some students believing they have to ‘sell their souls’ to succeed, 97
thinking whistleblowing is ‘career suicide’, 98 and that they need to cheat just to keep up. 99 It
is exactly this kind of thinking that suggests Business Schools are failing in their duty to
prepare students for their careers. 100 It is also argued that some of the games and simulations
routinely used in Business Schools are presented in a vacuum, identifying neither the positive
or negative contributions of business, effectively creating a ‘value free learning
environment’. 101 When analysing these same games and simulations, the authors uncovered
students engaging in conduct bordering on price fixing. 102 If the content of a business degree
is promoting some students to act unethically in simulations, then clearly there is a problem.
C Institutional Problems
There are a number of institutional problems that, whilst small, can operate as barriers to the
potential uptake and the full integration of CSR, ethics, and sustainability teaching within
Business Schools. The most notable barrier is a lack of adequate professional development
opportunities. For full integration to be achieved, ethics must be taught across multiple topics
in Business School. There is little point in teaching a single ethics course that is contrary to
every other subject within that degree and proclaiming success. Therefore, this requires the
entire business faculty to have some technical understanding of CSR and ethical issues. Even
a minimalist approach would require lecturers to give some form of balance to the more
negative aspects of business teaching such as agency theory. For instance, it is not the
teaching of the concept itself that is the problem, but a failure to introduce balance to the
teaching, such as suggesting that whilst the theory assumes self-interest, most managers do
not act in this way, and such behaviour would likely result in negative personal consequences
in the long term.
94
Sumantra Ghoshal, ‘Bad Management Theories Are Destroying Good Management Practices’ (2005) 4(1)
Academy of Management Learning & Education 75, 75.
95
Ian Mitroff, ‘An Open Letter to the Deans and the Faculties of American Business Schools’ (2004) 54(2)
Journal of Business Ethics 185, 185.
96
Ghoshal, above n 94, 76.
97
Michael Lane, Dietrich Schaupp, and Barbara Parsons, 'Pygmalian Effect: An Issue for Business Education
and Ethics' (1988) 7(3) Journal of Business Ethics 7(3) 223, 228.
98
Joanne Cuilla, ‘Do MBA students Have Ethics Phobia’ (1985) 53 Business and Society Review 52, 54
99
McCabe and Trevino, above n 37, 211-12
100
Robert Schwartz, Sami Kassem, and Dean Ludwig, ‘The Role of Business Schools in Managing the
Incongruence Between Doing What is Right and Doing What it Takes to Get Ahead (1991) 10(6) Journal of
Business Ethics 465, 467.
101
Wolfe and Fritzsche, above n 90, 57.
102
Ibid 56-57.
11
There is only one Australian university which offers a specific sustainability professional
development course for its staff, 103 making it unsurprising that a lack of professional
development opportunities is seen as a problem. 104 The opportunities which are currently
available in Australia are described as ‘ad-hoc’, ‘short term’, and ‘variable in terms of quality
and delivery’. 105 Although conducted in the United States, a study of Business Deans
demonstrated they have a disappointingly low opinion on the need for prior experience in
order to teach an ethics, CSR, and sustainability course, which might reflect why this is the
case. 106 The usefulness of professional development also relies upon staff being willing to
change, which is not always true. The literature highlights that not all professional
development programs are successful, as ‘teachers hate being taught’. 107 There is also
evidence of some resistance as teachers find comfort in teaching ‘what they know’, downplay
the importance of ethical issues, and are reluctant to integrate content that they have little
expertise in. 108 A dearth of materials such as textbooks, 109 region specific research, 110 and
other aids also act as significant barriers to the uninitiated. It is hoped at a minimum,
promoting ethics in Business Schools will entice a greater number of full time academics,
thereby improving research and teaching quality. 111
It is particularly problematic that institutional barriers operate as disincentives to change.
Dennis Gioia has expressed the view that these courses are treated as ‘some sort of trifling
requirement that students should get out of the way quickly, so they can get on with other
"more important" things’ because Business School rankings ignore these subjects. 112
Additionally, entering these areas is viewed amongst some in academia as ‘career suicide’, or
at least uncertain in the context of moving away from established areas of expertise.113
Inevitably, student demands hold significant sway within degree design. As previously
discussed, students generally view ethics courses as important. Yet there is an apparent need
to fast track progress in either their career or the degree itself, 114 especially in MBA
programs, which could explain why a peripheral subject such as ethics or CSR is not taken as
seriously as it should be. Jeffrey Pfeffer and Christina Fong summarise in detail the market
pressures faced by Business Schools, pointing to various sources that rank how quickly
students from each Business School see a return on investment, and critiques on whether an
103
Sarah Holdsworth et al, ‘Professional Development for Education for Sustainability How Advanced are
Australian universities?’ (2008) 9(2) International Journal of Sustainability in Higher Education 131, 131.
104
Thomas and Nicita, above n 74, 485-486.
105
Phil Smith, Grahame Collier, and Hazel Storey, ‘As Aussie as Vegemite: Building the Capacity of
Sustainability Educators in Australia’ (2011) 27(1) Australian Journal of Environmental Education 175, 176177.
106
Nicholls et al, above n 71, 136.
107
Karel Mulder, Jordi Segalàs, and Didac Ferrer-Balas ‘How to Educate Engineers For/in Sustainable
Development’ (2012) 13(3) International Journal of Sustainability in Higher Education 211, 213.
108
Malik Naeem and Mark Neal, ‘Sustainability in Business Education in the Asia Pacific Region: a Snapshot
of the Situation’ (2012) 13(1) International Journal of Sustainability in Higher Education 60, 66-67.
109
Doh and Tashman, above n 87, 139.
110
Naeem and Neal, above n 108, 66.
111
Debra Rhode, ‘Ethics by the Pervasive Method’ (1992) 42(1) Journal of Legal Education 31, 44.
112
Gioia, above n 24, 143.
113
Delyse Springett and Kate Kearins, ‘Gaining Legitimacy? Sustainable Development in Business School
Curricula’ (2001) 9(4) Sustainable Development 213, 215.
114
A simple Google search of ‘fast track’ and ‘MBA’ will reveal pages over university websites claiming to
‘fast track’ your career or offering ‘fast track’ modes of MBA completion.
12
MBA is financially rewarding. 115 It is claimed this pressure serves to prevent Business
Schools to ‘uphold business education as professional rather than vocational education.’116
Therefore, Student demand becomes a powerful force driving curricula especially in the
MBA market.
IV POTENTIAL SOLUTIONS
A Institutional
There are solutions to many of these barriers which would require institutional change. For
instance, the University of Dubai includes the ‘Instructor’s role in developing students’
course specific skills: Ethical and legal responsibilities in organisations and society’ as a
component of their student evaluations of teaching. 117 Faculty who do not meet the required
3.5 score (on a 5 point Likert scale) are required to form a plan to improve their performance
in this area. 118 Furthermore, Deans can emphasize the importance of ethics in induction
processes, offer addition support to faculty to allow them to attend conferences and receive
adequate training, and actively pursue highly qualified staff. 119
B ‘What’ To Teach:
It is argued that to ‘actively seek to persuade students to a particular ethical point of view is
misguided.’ 120 The general purpose of ethics teaching is to educate students on the multiple
ways of dealing with any situation, and, upon making this realization, students need to be
able to justify their actions. 121 As was mentioned earlier, ethics education can simply assist
students to identify ethical issues, and whilst this by itself does not guarantee an ethical
decision will be made, it will likely reduce unethical conduct resulting from ignorance or
indifference. 122 It is also argued that by having their ‘backbones stiffened’, recent graduates
are more likely to resist the potentially unreasonable and unethical demands of their
employers. 123
At a more specific level, a need for greater emphasis on humanities has been advanced in
areas such as ‘ethics and business law’, ‘social and industrial history’, ‘politics’,
‘psychology’, and ‘sociology and social anthropology’. 124 One would assume that business
115
Jeffrey Pfeffer and Christina Fong, ‘The Business School “Business”: Some Lessons from the US
experience’ (2004) 41(8) Journal of Management Studies 1501, 1507-1508.
116
Christine Trank and Sara Rynes ‘Who Moved Our Cheese? Reclaiming Professionalism in Business
Education’ (2003) 2(2) Academy of Management Learning & Education 189, 198.
117
The Global Compact, ‘Inspirational Guide for the United Nations Implementation of PRME : Placing
sustainability at the heart of management education’ (2012), 54-55.
118
Ibid.
119
Christa Walck, ‘Integrating Sustainability Into Management Education: A Dean's Perspective’ (2009) 33(3)
Journal of Management Education 384, 387.
120
Duncan Webb, ‘Ethics as a Compulsory Element of Qualifying Degrees: Some Modest Expectations’ (2001)
4(2) legal Ethics 109, 126.
121
Ibid.
122
Ibid 124.
123
Sue Nelson, ‘Reflections from the International Conference on Legal Ethics from Exeter’ (2004) 7(2) Legal
Ethics 159, 165.
124
Michael Small, ‘A Case for including Business Ethics and the Humanities in Management Programs’ (2006)
64(2) Journal of Business Ethics 195, 196.
13
law courses are covered at length in most Business Schools, but some of the other ideas are
quite informative, and only a brief introduction to the subject could have a positive influence.
Studying history could introduce students to corporate charters, the ‘Bubble Act’, and the size
and boundary restrictions placed on corporations throughout the 18th and 19th centuries.
Importantly, this would highlight a time where the purpose of corporations was to serve a
public function, and to acknowledge the concerns of prominent figures, including several U.S
Presidents, who believed corporations were becoming too powerful. 125 Equally, brief sessions
in sociology and psychology could dispel some of the more pessimistic assumptions of
human behaviour that are routinely taught in Business Schools. In addition, when dealing
with the specific question of ethics, students require practical examples. Ethics should not be
about ‘window dressing’, students should learn that ethics forms a critical aspect ‘of daily
decision making, not just a code hanging on the walls.’ 126 Specific examples of assessment
have been advocated, such as researching real company policies, and analysing potential
areas of improvement. 127 Students need to be aware that even when in mid-level positions,
they play a crucial role in the ethical culture of a business. 128 Merely by acting in an ‘open,
fair, trustworthy, and caring’ manner, they influence the behaviour of those around them. 129
Importantly students must understand the consequences of their behaviour, which is argued to
be the ultimate goal of any ethics or CSR education. 130 Having hopefully changed mindsets
and oriented students towards ethical behaviour, there is a need to teach the practical skills by
which students can action their new mindsets. 131 How do you establish an ethical culture,
how should ethical behaviour be encouraged or unethical behaviour discouraged, what should
be in code of conduct, and what are the likely scenarios that students will encounter that will
test their willpower? Ethics and CSR education hopefully allows students to answer these
relevant questions.
C When to Teach
There are conflicting views on when the appropriate time is to teach ethics or CSR. It is
argued that if you teach ethics early, you can address students while they are their most
idealistic. 132 A study of preferences amongst academics found the preferred timing differed
depending upon whether the subject was ethics, CSR, or sustainability. Early exposure was
the favoured choice for ethics (45%) and CSR teaching (39%), whereas continuous teaching
was the favoured method for sustainability (45%). 133 Late exposure was the least preferred
125
For instance in 1864, Abraham Lincoln lamented that ‘corporations have been enthroned’, suggesting ‘an era
of corruption in high places will follow … until wealth is aggregated in a few hands … and the republic is
destroyed.’ See: Jem Bendell, ‘Barricades and Boardrooms – A contemporary History of the corporate
accountability movement’ (2004) United Nations Research Institute for social development Business and
Society Programme Paper number 13 ,11.
126
Ronald Alsop, ‘Business Ethics Education in Business Schools: A Commentary’ (2006) 30(1) Journal of
Management Education 11, 13-14.
127
Obeua Persons, ‘Incorporating Corporate Social Responsibility and Sustainability Into a Business Course: A
Shared Experience’ (2012) 87(2) Journal of Education for Business 63, 67.
128
AACSB ‘Ethics Education in Business Schools’ Report of the Ethics Education Task Force to AACSB
International’s Board of Directors (2004), 11.
129
Ibid.
130
Scott Williams, and Todd Dewett, 'Yes, you can Teach Business Ethics: A Review and Research Agenda'
(2005) 12(2) Journal of Leadership & Organizational Studies 109, 112.
131
AACSB, Why Management Education Matters: Its Impact on Individuals, Organizations, and Society (2005)
A Report from an AACSB International Task Force of the Committee on Issues in Management Education 6.
132
David Link, ‘The Pervasive Method of Teaching Ethics’ (1989) 39(4) Journal of Legal Education 485, 489.
133
Nicholls et al, above n 71, 135.
14
option but still ranked moderately highly at 17%, 25% and 24% respectively. 134 This is in
stark contrast to the findings mentioned earlier that ethics education is most effective at an
adult (24+) level, and progressively less effective as the subjects get younger. 135 There is
always a tension between allowing enough time to pass in a degree so students are best
placed to absorb some of the more difficult content. However, this can then cause the
problem of students already developing ‘prior mindsets’. 136 This leads to the conclusion that
it should be integrated and taught continuously in several key areas. 137 It should not be taught
in first year and forgotten or alternatively ignored completely until it is a culture shock in
final year. ‘Standalone’ subjects are argued to have ‘value’, 138 and some literature even
suggests the impact of teaching beyond a 10-12 week semester has little impact.139
Nevertheless, it is argued that a single subject is insufficient which necessitates each
discipline within a Business School to identify areas that they can incorporate ethical issues
into their subjects. 140 It would be a hollow way of learning ethics or CSR if it was presented
completely separate to the rest of the degree, if other subjects were contradictory, and
students were not exposed to practical examples in different disciplines.
If done correctly, there is no reason why the extra content should be onerous or detract away
from teaching core competencies. Using a legal ethics example, the Adelaide Law School has
demonstrated how seamlessly ethical issues can be integrated into core subjects. For instance,
in the Foundations course, when students are learning how to read cases, they are assigned
ethics cases which considered students eligibility for admission, and applications for striking
off practitioners. Additionally in its corporate law course, students are briefly lectured on
ethics and an assignment question is devoted to expressing an opinion on a contentious
corporate law case. These are only small examples, but they illustrate how ethics can be
slowly introduced over an entire degree in a seamless way, relevant to individual topics, thus
insuring that ethics is not a one topic then forget proposition for students.
D How to Teach
An important aspect of teachings ethics is to have industry guest speakers. Many of the
institutional barriers previously discussed stem from the perceived legitimacy of the subject.
Students want to be taught ‘core’ topics that are valued by industry, thus making them more
employable. This causes universities to be more ambivalent towards the topic, and affects the
resources they are willing to contribute to ethics teaching, which in turn causes individual
academics to question whether teaching and researching in ethics or CSR-related fields is a
sound career move. Students are more likely to respond positively, on the subject of ethics, to
someone who has an established career in private enterprise because they can clearly dispel
some of the negative assumptions about the business world. Merely the fact that the guest
lecturer has survived in private enterprise with high personal values demonstrates that it is not
134
Ibid.
Schlaefli, Rest and Thoma, above n 61, 344.
136
Leigh Holland, ‘Experiences from a Student Programme Designed to Examine the Role of the Accountant in
Corporate Social Responsibility (CSR)’ (2004) 5(4) International Journal of Sustainability in Higher Education
404, 415.
137
Dale Fitzgibbons, ‘Integrating Corporate Sustainability and Organizational Strategy Within the
Undergraduate Business Curriculum’ (2013) 10(4) Organization Management Journal 255, 261.
138
Kathryn Hegarty et al, ‘Insights into the value of a ‘stand-alone’ course for sustainability education’ 17(4)
Environmental Education Research 451, 464-465.
139
Schlaefli, Rest and Thoma, above n 61, 345.
140
Terrence Bishop, ‘Integrating Business Ethics into an Undergraduate Curriculum’ (1992) 11(4) Journal of
Business Ethics 291, 297-298.
135
15
‘career suicide’. Hopefully, they can also provide concrete examples of how they have dealt
with ethical dilemmas in the past, share cautionary tales about how unethical employees have
been punished, and again demonstrate that acting ethically is not a disadvantage. In this
respect, not only does a guest lecture improve the perceived legitimacy of an ethics course,
but also its overall quality. In a study of the ‘special teaching tools’ used in CSR teaching,
one in three respondents has incorporated business speakers into courses with one in five also
incorporating a NGO speaker, 141 suggesting guest speakers are already a reasonably popular
teaching aid.
In expanding teaching specifically into CSR or sustainability, there is potentially a need for
greater industry input which could be facilitated by universities forming partnerships with an
industry partner or trade association. It is generally accepted that universities lag behind
business on the subject of CSR and sustainability. This was evident in a previously
mentioned Australian government-funded project linking universities with businesses, which
demonstrated the difficulty of academics keeping up with their corporate partners. The
technical aspects of fields, such as sustainability, are so ‘rapidly changing’, that it required
tirelessly updating teaching materials far quicker than the usual textbook cycle, and with the
expectation that the academics were ‘subject matter experts’. 142 This leads to the conclusion
that industry experts can assist with the knowledge constraints of universities in teaching
subjects, such as CSR, sustainability, and ethics. Businesses have specialist staff members
that have a full time interest in the discipline, can share examples and case studies, and
ultimately add a practical element to the course. 143 There is a common theme that successful
sustainability initiatives in Australian universities have involved some form of industry
partnership, 144 making it an unsurprising recommendation in several studies. 145 Trade and
industry associations can have a positive impact with these industry partnerships by linking
interested members to universities, and promoting the benefits of such partnerships hopefully
causing more members to show an interest. If the association itself has an involvement in the
CSR or sustainability research outputs, they can also disseminate this information to its
members.
The manner of delivery in a subject such as ethics or CSR is also quite important. One key
issue relates to whether academics should actually be trying to forcibly change student
mindsets. Research suggests that a majority of deans (67%) believe so. 146 The execution of
the teaching therefore becomes quite important. In some circumstances academics are
accused of being overly accommodating to the point of failing to ‘endorse such basic virtues
141
Matten and Moon, Corporate Social Responsibility Education in Europe’, above n 72, 330
Janelle Thomas and Suzanne Benn, ‘Education about and for Sustainability in Australian Business Schools
Stage 3’ (2009) A Report prepared by the Australian Research Institute in Education for Sustainability for the
Australian Government Department of the Environment, Water, Heritage and the Arts 68; Other research
projects also note the benefits of involving corporate partners as including ‘decreas[ing]the gap between current
“best practice”. See: Hunting et al, Education About and For Sustainability in Australian Business Schools:
Embedding Sustainability in MBA Programs (2006), Australian Research Institute in Education for
Sustainability (ARIES) for the Australian Government Department of the Environment and Water Resources,
Sydney: ARIES 10.
143
Hunting et al, Education About and For Sustainability in Australian Business Schools: Embedding
Sustainability in MBA Programs (2006), Australian Research Institute in Education for Sustainability (ARIES)
for the Australian Government Department of the Environment and Water Resources, Sydney: ARIES 6.
144
Thomas and Benn, above n 142, 57.
145
Hunting et al, above n 142, 12.
146
Evans and Marcal, above n 54, 238.
142
16
as honesty and keeping one’s word.’ 147 Thus, a careful balance must be struck which allows
students to be ‘open, honest, and respectful towards each other, whilst setting a ‘proper
standard of behaviour for students to emulate’. 148 Academics are often the first members of a
profession that students are exposed to, and even behaviours such as being disorganised in
presenting material or slow to return papers, could have an impact in the way the profession
is viewed. 149
Disappointingly, there is evidence to suggest that many lecturers communicate indirectly (in
some cases even quite openly) that ethics is unimportant. For instance, lecturers leaving
ethical issues until the ‘last five minutes of class, assuring students that the material is not
examinable, and even by appearing ‘apologetic about having to take time away from the
substance of the course’ conveys to students that ethics are not important. 150 This inevitably
leads to students not preparing for class and not taking notes in lectures. 151 In one example of
a mandatory non graded exercise at the Stanford Law School, student responses revealed
students were irritated with the conflicting priorities, with one specific student stating ‘people
will get into [ethics coursework], but only if it's graded and taught with enthusiasm.’152
Teaching ethics, if successful, is likely to challenge students’ value systems; it is not teaching
some objective fact or empirically testable theory. For this reason, the ‘how’ of teaching
ethics is important. Students need to see that individual lecturers and the university itself is
genuinely concerned about ethics teaching, not just tacking it on as an afterthought.
Furthermore, students need to respect the people who are teaching the subject(s), otherwise
there is the risk that they will simply ignore the teachings that are more subjective.
E SME Specific Content?
As much as this paper considers how education might advance CSR amongst SMEs, there
has been little discussion about SMEs when analysing the literature on ethics, CSR, and
sustainability education, for the most part, because there is very little to say. Of the 200+
journal articles, reports, and books consulted for this paper, there were perhaps half a dozen
passages relating to SMEs, none of which were directly related to educating students in CSR
or ethics. This alone does not suggest that SMEs are completely ignored in universities, as the
CSR/ethics education was presented about business generally. For instance, some of the
practical examples may well have involved ethical issues amongst SMEs. However, it is
reasonable to suggest that CSR and ethics teaching is predominantly framed in terms of larger
businesses. With all of the barriers to CSR and ethics education mentioned above, and given
the promotion of CSR or ethics within SMEs is a far less prominent discipline, 153 it is likely
that there is very little content directed towards SMEs. Indeed one of the barriers was a lack
of qualified ethics and CSR academics, which would only be greater in the more specialised
147
Derek Bok, ‘Can Higher Education Foster Higher morals?’ (1988) 66 Business and Society Review 4, 5.
Steven Mintz, ‘Aristotelian Virtue and Business Ethics Education’ (1996) 15(8) Journal of Business Ethics
827, 837.
149
Webb, above n 120, 119.
150
Deborah Rhode, ‘Law Into the Valley of Ethics: Professional Responsibility and Educational Reform’ (1995)
58(3/4) Law and Contemporary Problems 139, 143.
151
Ibid.
152
Ibid 144.
153
See Tilley, above n 3, 32.
148
17
SME discipline. It is reasonable to assume that the starting point for more effective SME
CSR and ethics teaching is to gain greater acceptance of CSR and ethics within larger
enterprises. SMEs are far more marginal enterprises, 154 and has been noted, their
environmental impacts are frequently underestimated. 155 If Business Schools can’t even
convince their students that a Fortune 500, or ASX 200 company (and its employees) should
have social responsibilities, then it is going to be impossible to convince students that a SME
with limited resources should have these same responsibilities.
Much of the general ethics and CSR literature discussed above could be applied here. Clearly,
there would not need to be substantial time devoted to the specific context of ethics, CSR, or
sustainability within SMEs, but again it cannot be a tacked on afterthought. It is not intended
that CSR or ethics, as it applies to SMEs, should be taught independently from other ethics or
CSR courses. Much of the content would be the same. The proposed reform is to integrate
SME content within existing courses.
Much of the previous literature analysed in this paper will be relevant. If it is expected to be
retained and taken seriously, it should be examined. Again, guest speakers could be used.
From a content perspective, the statistics outlined in the introduction is a valid starting point.
Students should be made aware that SMEs are important to the CSR debate, for instance that
they comprise an overwhelming number of businesses, they contribute heavily to the
economy, and also contribute heavily to some of the problems associated with business, such
as environmental impacts and OH&S incidents. One of the major barriers to SMEs engaging
in some form of CSR is a total lack of awareness of issues pertinent to CSR. 156 Studies have
confirmed overwhelmingly that SMEs do not believe their operations have an environmental
impact, 157 even when operating in industries with high environmental impact such as waste
disposal. 158 Additionally, studies have shown that when comparing SMEs who do engage in
some form of CSR with those that do not, the engaged SMEs perception of the associated
costs differed quite substantially. 159 Fiona Tilley, one of the most prominent academics in the
SME CSR field, has previously observed that many SMEs indicate a desire or willingness to
improve their environmental performance ‘but they did not possess the knowledge, skills or
solutions necessary to allow them to fully integrate the environment into their business
practices.’ 160 At the most basic level, the goal when integrating SME components into
traditional CSR and ethics education should be to reinforce what is already taught, but to
dispel the mistaken assumptions that SMEs are somehow different or less important than
their larger counterparts. Whilst a one employee firm changing three lightbulbs, and/ or
engaging in some form of recycling might not seem like much, if replicated by a million
firms, it will have a substantial impact. If students are forced to ponder these questions, then
this is clearly a step in the right direction.
154
Ergas and Orr, above n 7,1.
Netregs, above n 22.; Wilson, Williams and Kemp, above n 22, 151.
156
Andrea Revell, David Stokes and Hsin Chen, ‘Small Businesses and the Environment: Turning Over a New
Leaf ‘ (2010) 19(5) Business Strategy and the environment 273, 281.
157
Netregs, above n 22.
158
Wilson, Williams and Kemp, above n 22, 151.
159
Pavel Castka et al, ‘How can SMEs effectively implement the CSR Agenda? A UK Case Study Perspective’
(2004) 11(3) Corporate Social Responsibility and Environmental Management 140, 143.
160
Fiona Tilley, ‘The Gap Between The Environmental Attitudes and the Environmental Behaviour of Small
Firms’ (1999) 8(4) Business Strategy and the environment 238, 245.
155
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V CONCLUSION
This paper has advanced teaching a combination of ethics, CSR, and sustainability as a
potential solution to promoting CSR within SMEs. Once again, education will not solve the
world’s ills, and is not presented here as a panacea. The coverage of SMEs affected by this
reform will be limited on the basis that smaller SMEs are less likely to require professional
staff, (such as accountants) and managers who have business degrees. Nevertheless, it is
likely to have an impact on a sufficient number of SMEs to make the reform worthwhile.
Importantly, it targets a key weakness of SMEs, which is a lack of awareness of many issues
pertinent to CSR, namely, SMEs underestimating their impacts on the environment,
overestimating the cost in engaging in CSR, and not actually knowing how to engage in CSR.
If you can establish a positive mindset amongst the people most likely to manage or give
advice to an SME, and teach them the skills to action these new found beliefs, then this is a
tremendous starting point for promoting CSR.
Many problems with ethics, CSR, and sustainability teaching were identified throughout this
paper. Whilst this could make the problem seem insurmountable, many of these barriers stem
from student perceptions about the topic. Students are taught ethics are important, yet they
are met with elective course offerings, non-graded assignments, and are persistently taught
concepts that contradict ethical or responsible principles. Students then disengage, making
ethics and CSR a lower priority for Business Schools, who bow to market pressures in the
form of student demand. A number of potential solutions to more effective ethics and CSR
teaching were identified such as industry guest speakers, incorporating ethics into evaluations
of teaching, actively headhunting quality ethics teachers and investing in ethics related
professional development opportunities for staff such as conferences. These ideas will
improve the quality and perceived legitimacy of the subject which in turn should improve
how the subject is received. Importantly, the SME teaching should be supplementary to preexisting teaching, not independent of it. Whilst this paper is advancing the need for better
ethics and CSR as it relates to SMEs, clearly this endeavour requires a solid foundation.
Students must already be enlightened to and accepting of ethics and CSR within any
business, before embarking upon the even more difficult task of extending social
responsibilities to small, and at times, financially marginal enterprises.
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