Panel Discussion, Kreps Symposium 2025 - Teaching Ethics and Responsible Leadership in Business

Key Concepts

• Unethical conduct in business (individual virtue, organizational architecture, societal rules)
• Ethical reasoning vs. motivation
• Instrumental vs. ethical arguments
• Moral leadership
• MBA oath (effectiveness, design, context)
• Tensions in ethical decision-making (loyalty vs. truth, justice vs. mercy, individual vs. community)
• Ethical use of AI (impact on employment, concentration of power, societal effects)
• Creative destruction
• Role of business vs. society/government
• Power and ethics

Main Topics and Key Points

1. Framing the Problem of Unethical Conduct

• The problem of unethical conduct in business can be viewed at three levels:
  • Individual Virtue: Are individuals (e.g., CEOs) inherently unethical?
  • Organizational Architecture: How is the company or organization structured to encourage or discourage ethical behavior?
  • Societal Rules and Laws: What are the rules of the game that govern business conduct?

2. Ethical Reasoning vs. Motivation

• Rebecca's Perspective: The central problem is not knowing what is ethical, but motivating ethical behavior even when the right course is clear.
  • Rooting oneself in personal values and wishing for the well-being of the community are key to ethical behavior.
• Adam's Perspective: Ethical analysis is still important, but understanding motivation is crucial.

3. Instrumental vs. Ethical Arguments

• Question: Are actions driven by ethical principles or instrumental goals (achieving desired outcomes)? Or both?
• Example: Tammy Joe Schultz (Pilot): Her actions (calming passengers, speaking to them individually) elevated her from a skilled professional to a moral leader by reducing psychological harm.
  • Even though she had the skills to land the plane without those actions, her concern for the well-being of others made her exceptional.

4. The MBA Oath

• Professor Kreps' Question: Is the MBA oath effective in promoting ethical behavior? Will there be a difference in ethical behavior 20 years later between those who took the oath and those who didn't?
• General View: Codes are somewhat useful if properly framed during students' lives.
• Critique of American Honor Codes: They often require reporting breaches by peers, creating a conflict between loyalty and other dimensions of honor.
• Hypocratic Oath: A powerful guiding principle ("do no harm") that solves dilemmas doctors face daily.
• Dave's Perspective: The effect of the oath depends on the context, intention, and cost associated with taking it. Rituals can be powerful if taken with a group, after discussion, and if they demonstrate a commitment.
• Critique of the MBA Oath: It's too complex (multiple points) and therefore less effective than a simple principle.
• Counterargument: The specific words of the oath are less important than the sense of committing to doing the right thing in front of friends and family.

5. The Power of Examples

• Examples are crucial for illustrating ethical behavior and providing models for action.
• Tetanus Shot Study: Commitment to a specific time for vaccination, along with a map, was more effective than a fear-based approach.
• Question: What is the value of commitment versus the value of a channel (e.g., example or principle)?

6. Ethical Use of AI

• Maria France's Question: How do we teach the ethical use and implementation of AI, especially in Silicon Valley?
• Impact on Employment: How do we use AI without decimating entire industries?
• Workplace Identity: The importance of jobs and feeling a sense of connection.
• Meta Question: Whose job is it to think about the impact of AI on employment? (Political solutions are needed.)
• Concentration of Power: AI could lead to enormous concentration of power, wealth, and control, potentially creating a surveillance state.
• Effects on Education: If AI can reproduce early learning, how will people learn those things?
• Effects on Everyday Interaction: Will AI manipulate us?
• Internet Use and Loneliness: Initial hopes that the internet would reduce loneliness were not realized; it was correlated with more loneliness.

7. Creative Destruction and Protecting the Losers

• New technologies destroy old jobs (e.g., the phone destroyed the telegraph).
• How do we protect those who lose out due to new technologies? (Political and societal question.)

8. Business vs. Society/Government

• The opposing state of business and society is not quite right. Society can create industrial policies to incentivize businesses to create worthwhile jobs.
• The state and civil society should be engaged in modifying the effects of technologies.
• There are certain things where the profit motive shouldn't be present (e.g., water privatization, healthcare).
• Some things we want to do better, even if it means sacrificing efficiency.

9. The Importance of Ethical Business Leaders

• It would be helpful if a few business people demonstrated that acting ethically is consistent with running a successful firm.
• It would be useful if a few business people thought that supporting democracy was a good thing.

10. Specificity and Personal Experiences

• Can we get students to agree on the value of words like empathy, justice, and fairness?
• Should business leaders be required to shadow poor people to understand their experiences?
• Boeing Example: Moving headquarters to Chicago and managing entirely on numbers led to a decline in quality and safety.
• Southwest Airlines Example: Employees rotating through different roles to create empathy.

11. The Role of Philosophers

• Philosophers can help develop a deeper understanding of the concepts people use to live their lives.
• Providing people with a set of tools for making sure they've thought about the right things.
• It's helpful to give people the right concepts, but figuring out how to motivate them is crucial.

12. Power and Ethics

• Jeff Feffer's Argument: Getting, keeping, and using power are in a different universe from ethical behavior. Apologizing is a way to lose power.
• Counterargument: There are times when apologizing can increase power.
• Tensions: How can business schools teach paths to power and leading with values simultaneously?
• Protecting Kids: What things do you protect your kids from versus let them experience?
• Some of the most powerful people have been deeply ethical.
• The job of society is to develop control mechanisms to manage those who seek power.
• Power is not an end in itself; it should be used instrumentally to serve other purposes.

Notable Quotes

• Adam: "We teach ethics, but people have these reactions; you're like people have these reactions, but we need to teach ethics."
• Rebecca: "If you are truly rooted in yourself and wishing for the well-being of the community and yourself, that you are much more likely to behave ethically."
• Adam (referencing Kirk Ray): "All of sort of moral reasoning comes down to a central question of does this cause harm or not?"
• Dave: "Rituals can be very powerful if they're taken with a group, if there's been a lot of discussion about why this ritual is important, if the ritual is costly in some way."
• Adam: "What you need is you need a single... in the courtroom, truth matters, right? In the hospital, harm matters."
• Ken: "It doesn't matter a nut what's actually in the oath; the students are not going to remember... hopefully, what they remember is that sense of committing in front of their friends and their families to when they came to difficult moments trying to do the right thing."
• Ken: "It would be really helpful if a few business people at least demonstrated that acting ethically was consistent with running a successful firm."
• Anthony: "Power is not an end in itself; you should be after it for its instrumental value in serving other purposes."

Technical Terms and Concepts

• Utilitarianism: An ethical theory that determines right from wrong by focusing on outcomes. It is a form of consequentialism.
• Kantianism: A deontological moral philosophy developed by Immanuel Kant based on the idea that: "Act only according to that maxim whereby you can at the same time will that it should become a universal law".
• Rawlsianism: A political philosophy based on the works of John Rawls, focusing on justice as fairness and the idea of a "veil of ignorance" to create a just society.
• Creative Destruction: The process by which new technologies and innovations destroy old jobs and industries.

Logical Connections

• The discussion starts with the broad problem of unethical conduct and then narrows down to specific examples and solutions.
• The MBA oath is discussed as a potential tool for promoting ethical behavior, but its effectiveness is questioned.
• The ethical use of AI is presented as a new challenge that requires careful consideration of its impact on employment, power, and society.
• The role of business vs. society/government is debated, with the conclusion that both have a role to play in promoting ethical behavior.
• The discussion ends with the complex relationship between power and ethics, with the recognition that power can be used for both good and evil.

Data, Research Findings, or Statistics

• Kirk Ray's Theory: All moral reasoning comes down to the question of whether something causes harm.
• Carnegie Mellon Study: Internet use was correlated with more loneliness.
• Tetanus Shot Study: Commitment to a specific time for vaccination, along with a map, was more effective than a fear-based approach.

Synthesis/Conclusion

The discussion highlights the complexity of ethical decision-making in business and the need for a multi-faceted approach that considers individual virtue, organizational architecture, societal rules, and the motivations of individuals. The MBA oath is seen as a potentially useful tool, but its effectiveness depends on its design and implementation. The ethical use of AI is a major challenge that requires careful consideration of its impact on employment, power, and society. Ultimately, the goal is to create a society where ethical behavior is both valued and rewarded, and where power is used for the common good.