"Ethics" - I heard about you somewhere Mr. Ethics

“Ethics and values” was always an interesting topic for me and when I entered into Schulich MBA program, first lecture was on how to respect ethics and values as an MBA student. My intention here is not to discuss that lecture but after completing my first two terms, I realize that ethics play big role while making decisions in business world. However there were many times when some of the courses forced you to think twice about the priority between money and ethics. I faced such a dilemma when I participated in one of the mock exercises in “Negotiation” course. I was a manager and I had to negotiate about the incentives with an employee who was planning to quit the company. This employee had employee stock options and company share prices were quite moderate. However I had internal information that stock prices could go high in few months. This employee’s performance was not satisfactory so company also wanted to get rid of him. Now the biggest dilemma in front of me was whether to tell the employee about the stock price going high or not. I decided to keep silence and offered the employee share prices way below it was expected to be in January. Employee accepted the offer happily and we signed the deal. When the professor revealed the full information about the case, the student who was playing the role of employee was annoyed with me as she thought that I didn’t play ethically.

Although I still think I was right in that situation, how many times managers think about ethics before making a decision. Most of the MBA education’s focus is on making money and generating profits for the companies. Students are so busy in studying balance sheet, income statements and cash flows that they are not left with much time to think about the social responsibilities. So this leaves a very good question on the face of B-School course directors, are the MBA grades more ethical before entering B-schools? Recent economic crisis has been discussed around this issue numerous times and every time the conclusion was that highly qualified and brilliant investment bank managers were making decisions to boost their bonus without taking care of common mass. Interestingly some of the CEOs and CFOs were getting million dollar bonus when employees were fired on the basis of cost cutting.

Theoretically long term vision should take care of social responsibilities to create overall value for the organization but in practical world profit making decisions overshadow the long term planning. Although it is very difficult to measure the ethical and social values added to any organization as compared to monetary profits, major B-Schools should take initiative to come up with a study plan that can help the students to understand the ethical responsibilities as well while making decisions to generate profits.

PS - interesting question to all readers, what would you do if you were in my position in the "Negotiation" course mock exercise ??