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80th Annual Meeting of the VHB

May 23-25, 2017

Magdeburg, Germany

Ethics in Business Administration

Ethics in Business Administration

Translation of a Statement by the Executive Committee of the German Academic Association for Business Research from 13 March 2010

 

 

The issue

Dubious behavior of some managers in the private sector has, beyond addressing the specific cases from a legal perspective, broadly speaking resulted in a considerable loss of trust in the efficiency and moral qualities of corporate management. Therefore, research and education in business administration has also been in the focus of debates throughout society on management failures as a cause of the current financial and economic crisis. Whilst the discipline is not directly responsible for the misconduct of individuals or institutions, it faces discussions as to whether flaws in education or too uncritical a handling of research paradigms, for instance, were a contributory factor in concurrent undesirable developments.     

 

 

Transnational activities

International organizations like the Academy of Management have had a code of ethics for quite some time, which their members are obliged to obey. 

The implementation of the “Principles for Responsible Management Education” (PRME; see appendix) is backed by the United Nations. These principles are endorsed by institutions from all over the world, including some German universities and accreditation agencies. The PRME are a general set of guidelines that address business ethics dimensions in the relationships between universities and their stakeholders. As far as the implementation of the PRME is concerned, the universities are encouraged to find the best feasible approach for them according to their individual situation.   

 

 

Importance of ethical issues for business administration

The Executive Committee of the German Academic Association for Business Research realizes that ethically responsible behavior is a key skill for responsible management. It expects its members to encourage the elimination of deficits identified in a profound ethical reflection of their own teaching and research activities. The association has already been active in this respect in recent years in the form of working groups and workshops, for example, and will continue to do so, most recently also by institutionalizing the analysis of ethical issues in its Section Philosophy of Science and Ethics in Business Administration.

 

 

Evaluation of the PRME

The Executive Committee of the German Academic Association for Business Research regards the PRME as an appropriate starting point for the future advancement of the role of corporate and business ethics in business administration education and research. However, it does not believe that every faculty needs to be actively involved in such research and recognizes the risk of bureaucratizing the subject, how important it is in terms of content through standardized reporting obligations of all parties involved. As to its profound conviction that scientific progress in this field also stands to benefit from a competition of ideas and concepts, the Executive Committee does not perceive its role as explaining its involvement on behalf of its (personal) members and their faculties, but leaving this in their hands instead. Nevertheless, the Executive Committee continues to encourage activities to tackle ethical issues on the corporate and economic levels and give them broader scope in the Association. Furthermore, the Executive Committee urges the faculties to exchange ideas and their implementation.    

 

 

Options for action

The integration of ethical competencies in business education and research can and should take place in a wide variety of different ways. Here are some examples:

–         In many courses on various business administration subjects, it is recommended to raise students’ awareness of ethical issues, especially for dilemmas where the decisions taken from an ethical perspective appear unfavorable from a purely economic point of view.

–         In some faculties, it might make sense to incorporate ethics and philosophy of science into the curriculum, to adjust the priorities to suit business education and to allow subjects like corporate social responsibility to flourish.

–         The corporate and economic ethics competence of young researchers can be boosted by integrating the corresponding content-matter in general postgraduate education and through doctorate programs that feature such topics even as a core theme.

–         For theoretical and empirical research, analyses of the relationship between ethical behavior and career or corporate success and the risks that arise from the violation of ethical principles are recommended.

–         For some situations, it may be useful to import the required competencies from other disciplines in order to approach the originally philosophical area of ethics on an appropriate scientific level. The danger of non-specialist lecturers not being sufficiently familiar with the content-matter of our discipline and their contributions thus standing apart from the business administration teaching can be countered by establishing relevant chairs at faculties of economics and business administration.     

The creativity of all those involved will yield many other useful options for action. The German Academic Association for Business Research encourages its members to participate in such activities.


Appendix

The Principles for Responsible Management Education

As institutions of higher education involved in the development of current and future managers we declare our willingness to progress in the implementation, within our institution, of the following Principles, starting with those that are more relevant to our capacities and mission. We will report on progress to all our stakeholders and exchange effective practices related to these principles with other academic institutions:

  

Principle 1

Purpose: We will develop the capabilities of students to be future generators of sustainable value for business and society at large and to work for an inclusive and sustainable global economy.

  

Principle 2

Values: We will incorporate into our academic activities and curricula the values of global social responsibility as portrayed in international initiatives such as the United Nations Global Compact.

  

Principle 3

Method: We will create educational frameworks, materials, processes and environments that enable effective learning experiences for responsible leadership.

  

Principle 4

Research: We will engage in conceptual and empirical research that advances our understanding about the role, dynamics, and impact of corporations in the creation of sustainable social, environmental and economic value.

  

Principle 5

Partnership: We will interact with managers of business corporations to extend our knowledge of their challenges in meeting social and environmental responsibilities and to explore jointly effective approaches to meeting these challenges.

  

Principle 6

Dialogue: We will facilitate and support dialog and debate among educators, business, government, consumers, media, civil society organizations and other interested groups and stakeholders on critical issues related to global social responsibility and sustainability.

 

We understand that our own organizational practices should serve as example of the values and attitudes we convey to our students.

(Source: http://www.unprme.org/the-6-principles/index.php)