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Ethical malfeasance at major corporations sometimes makes headlines because the behavior is so egregiously wrong. Everyone can agree that Volkswagen was wrong to program its software to pass emission tests while covertly producing up to 40 times the legal amount of pollutants, for instance.
Few cases are so clear, however. In a world awash in gray areas, the ability to make ethically correct decisions can be a nuanced task.
Ethics have been a bedrock of the Darden curriculum since the School’s founding, and the study of ethical considerations isn’t limited to ethics class. Instead, Darden infuses consideration of responsible business practices throughout the curriculum, from Accounting to Leadership and Organizational Behavior. And that broad focus on ethics across functions and responsibilities has allowed the Darden faculty to develop a compendium of practical insights on applying ethical considerations in real-world business contexts.
These Darden Ideas to Action articles discuss ethical considerations from a variety of standpoints and in a variety of sectors. They contain lessons for business leaders, employees and consumers.
Most public companies found to have misstated their earnings never own up to the fact and restate earnings with the correct numbers. Why? In “Cooking (And Uncooking) The Books: Corporate Financial Reporting,” Professor Justin Hopkins considers the surprising dearth of companies that admit to errors, and whether the makeup of boards or corporate leaders influenced the decision to act. One key finding: Company directors were often ousted from their roles after restatements were issued, offering a strong disincentive to doing the right thing.
One key ingredient — which, when it’s missing, prevents workplaces from operating at the highest level: courage. In “Courage in the Workplace: Why Many Important Behaviors Happen Far Too Infrequently,” Darden Professor Jim Detert explores why acts such as taking responsibility for a subordinate’s mistake or confronting a peer for inappropriate behavior occur less than half the time. Detert’s research considers how leaders can encourage courage, and why courageous behaviors are key to an organization’s success.
How do you teach ethics? Start by ensuring you’re asking the right questions. In “The Business of Ethics: How to Ask the Right Questions,” Professor Bobby Parmar offers three keys to asking the right questions: seeking out dissenting views, questioning routine actions and considering multiple angles. The findings have implications for students, teachers and practitioners.
The public is generally skeptical of big business. Corporate leaders, generally speaking, are acutely aware of this phenomenon. In “The CEO is a Good Guy. Trust Me.,” Professor Andy Wicks, who, along with other Darden faculty members, helped prepare reports and papers and edited the book Public Trust in Business, all of which detailed the state of public trust, shows how low levels of public trust impacts business and how public trust in business might be restored.
For every company that devolves into a spectacular ethical failure, there are 10,000 “good” companies trying to do the right thing and solve the right problems, according to Professor Ed Freeman. In “Is Profit the Purpose of Business?,” Freeman says we must recast the way we think about business and cast off conceptions of businesses as vehicles for profit maximization above all else. Instead, the purpose of business should be the benefit of stakeholders — investors, certainly, but also suppliers, employees, customers and the community. It’s an influential idea infused throughout Darden and, increasingly, the wider world.
An expert on leadership and ethics, Detert’s research focuses on workplace courage, why people do or don’t speak up, and ethical decision-making and behavior. His research and consulting have been conducted across a variety of global high-technology and service-oriented industries, in addition to public sector institutions, including K–12 education.
Detert has received awards for his teaching in MBA and Executive MBA programs, as well as academic best paper awards for his work, which appears in many online and print media outlets. Prior to coming to Darden, he taught at the Johnson School of Management at Cornell University.
BBA, University of Wisconsin; MBA, University of Minnesota; M.A., Ph.D., Harvard University
Freeman is best known for his work on stakeholder theory and business ethics, in which he suggests that businesses build their strategy around their relationships with key stakeholders. His expertise also extends to areas such as leadership, corporate responsibility and business strategy. Since writing the award-winning book Strategic Management: A Stakeholder Approach in 1984, countless scholars, business leaders and students worldwide have cited Freeman’s work.
Freeman also wrote Managing for Stakeholders: Survival, Reputation and Success and Stakeholder Theory: The State of the Art.
B.A., Duke University; Ph.D., Washington University
Hopkins’ research interests include the effects of regulation on financial reporting, governance and economic outcomes. He focuses on securities and income tax regulation.
Prior to joining Darden, Hopkins worked as an auditor for Ernst & Young LLP and consulted for the Justice Department and Asian Development Bank. He is a Returned Peace Corps Volunteer from the Dominican Republic.
B.S., M.P.Acc., Montana State University; Ph.D, University of North Carolina at Chapel Hill
Lynch’s expertise and research interests are primarily in how to best pay or otherwise give incentives to bosses that will make their companies succeed. The focus of her work can be broadly characterized as an exploration of how incentives and compensation systems are structured to encourage the desired behavior by the individuals or organizations. Her work has examined incentive issues such as stock options, compensation in post-merger integration efforts and the effect of financial reporting, accounting and regulation on incentive compensation.
Before joining the Darden faculty, Lynch was assistant vice president at Roche Biomedical Laboratories Inc. and held positions in finance and accounting at Roche, Northern Telecom (NorTel) and Procter & Gamble.
Lynch is author and co-author of several articles published in leading accounting and finance journals.
B.S., Meredith College; MBA, Duke University; Ph.D., University of North Carolina
Parmar is an authority on how to make good decisions — one of the toughest challenges in leading a business. He focuses on how managers make decisions and collaborate in uncertain and changing environments to create value for stakeholders. Parmar’s work helps executives better handle ambiguity in their decision-making. His recent research examines the impact of authority on moral decision-making in organizations.
In 2012 Parmar wrote the article “Moving Design from Metaphor to Management Practice” in the Journal of Organizational Design.
B.A., MBA, Ph.D., University of Virginia
Wicks specializes in ethics. He is an expert in international business ethics, corporate social responsibility and ethics in public life.
Wicks’ research interests include stakeholder responsibility, stakeholder theory, trust, health care ethics, total quality management and ethics, and entrepreneurship. Wicks also specializes in religion and public life, particularly as it pertains to businesses.
Wicks is co-author of three books — Managing for Stakeholders: Survival, Reputation and Success; Business Ethics: A Managerial Approach; and Stakeholder Theory: The State of the Art. He has published more than 30 journal articles in business ethics, management and the humanities.
B.A., University of Tennessee, Knoxville; M.A., Ph.D., University of Virginia
The Critical Role of Ethical Considerations: 5 Insights From Darden Faculty