Moral Education

Moral education in a business and society context involves learning to make consistently correct moral judgments as a guide to behavior that is self-regulated instead of externally coerced in the realm of commerce. The literature on this enterprise is largely a product of scholarly projects in business degree programs at select universities and colleges. Moral education in this context is inextricably bound up with the mission of higher education in general and the university in particular. From its Greek origins, the university has been associated with the pursuit of knowledge for its own sake as well as the practical development of personal intellect and character. According to Darryl Reed, the medieval university extended this mission by preparing students for certain professions, most notably the clerical, medical, and legal, while emphasizing public service to the community or state. Business schools, shaped by both Greek and medieval traditions, typically require that students take liberal arts coursework as preparation for the more technical, professional education delivered in business degree programs. Given this tradition, it can be said that moral education involves three interrelated aspects: imparting knowledge that explains the nature of the business and society relationship, developing the personal intellect and character of students, and encouraging graduates of business schools to become socially useful practitioners.

The first aspect of moral education can be framed in terms of a social contract between business and society. A common interpretation of this contract derived from utilitarian ethics is that society grants legitimacy to business as an institution because of its potential to serve the greater good. According to William C. Frederick, this potential involves two major value processes: economizing or the ability of business organizations to convert inputs to outputs efficiently through competitive behaviors and ecologizing or the capability to forge symbiotic, integrative linkages between organizations and their communities that function adaptively to sustain life. Because business firms are embedded in communities, they are subject to various stakeholder expectations, also inherently value laden. For instance, social activists who pressure a firm for the proper disposal of toxic waste typically assert a community's right to a healthy environment that sustains life. At the same time, the costs of toxic waste disposal may adversely affect the economic performance of a firm, its ability to compete with other firms in the industry, and financial returns to its shareholders. As this example shows, ecologizing and economizing values can be in tension and subject to trade-offs. Historically, the government's role in business and society has been justified by the goal of ameliorating the negative spillover costs of business, such as toxic waste, with public policy that seeks to balance such value tensions. A moral education necessarily sheds light on these institutional roles in terms of the values and ethics at stake and the distribution of benefits and costs to various groups in society.

Ideally, the second aspect of moral education, the practical development of intellect and character, is enhanced by the first. That is, students who grasp the nature of the business and society relationship may also develop the potential to reason at higher levels of moral development or at least comprehend the decisionmaking models that incorporate such reasoning. In terms of Lawrence Kohlberg's widely applied theory, there are three levels of moral development, each embodying two sequential stages of learning. Specifically, the preconventional level involves a focus on self based on a reaction to punishment and seeking of rewards in Stages 1 and 2, respectively. If individuals learn to move beyond this self-centeredness to consider the expectations of others, then they are able to reason at the conventional level, conceptualized as Stage 3 or conformity to family and peer group conceptions of right and wrong and Stage 4 or an adherence to the rule of law and custom. In comparison, a person who can reason on the postconventional level of Stage 5 is able to focus on humankind in terms of moral principles, including human rights, social contract, and constitutional precepts, that are broader than those embodied in immediate referent groups or a particular society's customs and laws. Stage 6, the apex of moral reasoning in Kohlberg's framework, is denoted by an ability to define right and wrong in terms of principles of justice, fairness, and rights that can be generalized to the entire humankind. In terms of postconventional reasoning, moral education may help prepare students for the dilemmas in international business environments, where multinational corporations operate in developing countries that lack the legal or customary protections afforded to workers and consumers in more advanced industrial economies.

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