Montana State University

College of Business News

Can business be ethical? MSU and Wonderlust students find out

 

Joe McCarty, former FedEx executive, teaches ethics at the College of Business
With the less-than-model behavior of Enron, WorldCom and Arthur Andersen making news in recent years, business ethics has been a hot topic. Joe McCarty, an attorney and former FedEx executive, teaches ethics to seniors in the College of Business at Montana State University and to adult learners through Extended University s Wonderlust.

Business ethics is not a black or white situation, McCarty told a recent Wonderlust gathering. Ethics depends on whose shoes you re standing in.

McCarty s take-home message for both college-aged students and adult learners is to consider all of a business s stakeholders be they customers, creditors, distributors or regulatory agencies before passing judgment on the company s actions. What might seem ethical to one group might be taboo to another, and stakeholders often have interests that conflict with one another. For example, McCarty said, consider a business that lays off workers because there s not enough work to do. To the employees, that s unethical. Shareholders may view the move as good strategy. A community member might think simply that it s wrong to throw people out on the street.

You can t judge or be willing to judge until you see all sides, said McCarty. He likened the challenge of managing all stakeholder interests to Whack-a-Mole, the classic amusement park game in which the player whomps a mole across the head, only to be confronted with two more popping up across the board.

And though the media may make unethical businesses seem common, McCarty said it s actually quite rare, and that the vast majority of businesses are trying their best to act responsibly.

McCarty said the evils of business are a common theme in contemporary entertainment. For at least 20 years now, business has been portrayed in popular culture --movies, TV and novels--as big, bad and predatory. We see the evils of business all around us, and we re quick to judge business as being unethical. That s just not the truth.

So why are unethical businesses so common in the news? Because more information is available today, and because citizens are interested, said McCarty.

When I came out of law school, people weren t interested in talking about business ethics, he said, adding that there were, of course, indiscretions in business, particularly in the area of sexual harassment. In previous times, the laws were different, and the reporting was more liberal, said McCarty.

Since 2002, businesses have been operating under the Sarbanes-Oxley Act, a national law that calls for more transparency in accounting and reporting practices, McCarty said. All publicly traded companies have a chief ethics officer or a chief compliance officer, and corporate executives have more legal and personal responsibility for the accuracy of a company s financial reports.

Now, ethics are more culturally top-of-mind, said McCarty, adding that many consumers--and stockholders--want to be engaged with companies that practice social responsibility. That s tough, however, he said, when socially responsible business practices, such as paying a living wage or tackling environmental issues, can eat into profits. And while many individual investors are willing to trade a small share of profit for responsible corporate behavior, that s difficult when the majority of today s stocks are owned by institutional investors, not individuals.

McCarty said the Wonderlust learners, many of whom are retired after decades in the corporate world, and the MSU students have similar views of what s ethical, so there s no generation gap-- though they d like to think there is, he joked.

At the end of each class, whether it s a full semester or two hours, McCarty says he feels successful if students are pausing before making assumptions about a business s behavior.

There is no one right answer, he said. There are always two sides to look at.

McCarty s class is part of the College of Business mission of supporting critical thinking. The Wonderlust program is part of MSU s Extended University outreach program to promote the development and delivery of exciting learning opportunities for people who want to study with others in the Gallatin Valley. For a list of upcoming classes, visit: http://.eu.montana.edu/wonderlust

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