CHAPTER 1

Alleviating the Malady of Low Ethical Awareness Using PRME as a Tonic Lesson from Europe

Agata Stachowicz-Stanusch

Abstract

The present-day widely discussed ethical concern about the lack of responsibility in the contemporary business world has implicated the necessity of a thorough change, not only of corporate behaviors, but also of academic attitudes toward the process of education of future business leaders.

That is why such initiative as Principles for Responsible Management Education (PRME) has come into existence, which is dedicated to improving the process of education, and is a useful instrument that provides clear guidelines for educational programs, giving business schools the opportunity to fulfill its ethical objectives.

In this chapter, the author presents some solutions compliant with Principles for Responsible Management Education that are implemented in curricula of European PRME signatories and are published in Sharing Information on Progress reports. The analysis was based on more than a hundred reports from 24 countries and was conducted in terms of seven criteria.

Introduction

The present-day ethical challenges of the contemporary business world are not only limited to companies but also include academic society, which constitutes a substantial element of the business environment, and whose members equally need moral reflection. Widely publicized corporate scandals (Enron, WorldCom, Global Crossing, Tyco, Quest, and Adelphia, to name a few) have pushed public trust in business to an all-time low and have raised the question about the role and effectiveness of university education in developing moral competencies among students–future business leaders.¹ Moreover, in recent years new demands have been placed for more active roles of corporations and institutions as citizens within society.²

Thus, there has come into existence the necessity of reflection on the role of management education in developing a new generation of leaders capable of managing the complex challenges faced by business and society in the 21st century (as stated by J. Forray and J. Leigh³).

The educational system in general, and business education in particular, were immersed in a wave of criticism as being responsible for moral ignorance of the business world and for the failure to inculcate in students the standards of good conduct.⁴

Current thought even suggests that educational systems have actually weakened the moral character of students. Present business education has been criticized for failing to deter and even for encouraging recent executive misconduct through its limited emphasis on student ethical development.⁵ Critics of today’s educational system (and business education particularly) are not only aimed at the system of higher education, but more frequently at the university as an institution. With alarming frequency, episodes of unethical conduct come from behind the university walls. The examples are cases of plagiarism, master’s theses written on request, or the unreliability of conducted research, cheating, and academic dishonesty (such as fabricating or falsifying a bibliography).⁶

The intensive discussion is also provided by scholars.⁷ For instance, Mitroff⁸ offers a particularly scathing assessment, saying business school faculty are “guilty of having provided an environment where the Enrons and the Andersens of the world could take root and flourish … we delude ourselves seriously if we think we played no part whatsoever.”⁹ Ghoshal¹⁰ provides one of the most highly discussed critiques of business school education. His primary thesis is that today’s business education, with its foundations in agency theory and economic liberalism, contributed significantly to the recent stream of unethical business practices.¹¹

The above and widespread concern fueled legislative reactions such as the Sarbanes-Oxley act in the United States.¹² On the other hand it resulted in some initiatives undertaken by academic society, very often in collaboration with business, in order to hinder the negative influence of business education on corporate scandals and on the more recent economic crisis, as well as to foster their graduates’ morality. One of such initiatives is the establishment of Principles for Responsible Management Education (PRME),¹³ which is a multilateral effort that represents a comprehensive academic collaboration between the United Nations and higher education undertaken to embed corporate responsibility and sustainability in the core mission and learning activities of schools of business. Its aim is to ensure a continuous improvement among institutions of management education in order to develop a new generation of business leaders who will be capable of managing the complex challenges faced by business and society in the 21st century.

In general, the PRME initiative is about promoting responsibility in business education and it provides a framework for academic institutions to advance the broader cause of corporate social responsibility and incorporate universal values into curricula and research. It encourages actions like curriculum development around the corporate responsibility agenda and research in support of sustainable management systems, as well as public advocacy and opinion leadership to advance responsible business practices.

The main objective of this chapter is to identify the ways of implementing the PRME practices incorporated in European schools’ curricula in order to significantly improve teaching course content and methods.

Challenges for Implementation of Principles for Responsible Management Education in Educational Programs

The PRME, supported by the United Nations, is a global platform and it makes an urgent call for business schools and universities worldwide to fill the gap and gradually adapt their curricula, research, teaching methodologies and institutional strategies to new business challenges and opportunities.¹⁴ It provides a kind of new “standard” that is a response for questions about the best way of implementing solutions dedicated for effectively teaching responsibility.¹⁵ The PRME are therefore a timely global call for business schools and universities worldwide to gradually adapt their curricula, research, teaching methodologies, and institutional strategies to the new business challenges and opportunities.

The PRME’s mission is to inspire and champion responsible management education, research, and thought leadership globally. Its main goal is to promote corporate responsibility and sustainability in business education. Institutions like business schools and other academic institutions, which participate in this initiative, make a commitment to align their mission, strategy, and their core competencies (education, research, and thought leadership) with UN values embodied by so called six principles. Those principles are as follows:¹⁶

The first two principles of the PRME are focused on gaining specific goals of management education such as preparing future leaders to work for a more sustainable global economy, as well as incorporating values of social responsibility into academic activity (including creating of integrity within the university).

The second PRME principle refers to the Global Compact that is perceived as the “moral compass” by many institutions.¹⁷ The four main categories promoted within this initiative (such as human rights, labor issues, environmental issues, and anti-corruption) are being developed into the wider array of values embedded in the organizational cultures of particular institutions.

The third PRME principle concerns teaching responsible leadership. The question arises whether or not ethical problems should be taught in stand-alone courses, or systematically integrated across the curriculum (for example how to better integrate responsible management education into the curriculum, how to convince others that integration is necessary and worthwhile). There are generally two noticeable attitudes to the way of implementing PRME in curricula content (that are contradictory to some extent but not mutually exclusive). The first one assumes that responsibility is something that cannot be taught exclusively through one standalone course. The other attitude is that corporate responsibility issues need to be integrated into other courses (such as marketing and finance) to foster their threading across the wider curriculum.¹⁸ That is why great effort is taken by different higher-education schools to apply new teaching techniques supporting educators to reap the full benefits of a business ethics course and make it an experience of great importance for students.

The fourth principle of the PRME is connected with conducting research that has sustainable social, environmental, and economic value. Research and teaching go hand in hand when it comes to responsible management education. This is often reflected in schools that create centers or institutes that specifically address ethical issues, thus attracting scholars to develop their interest in the field of corporate responsibility. It is also a signal for early-career researchers that business ethics related disciplines are worthwhile and desirable these days.¹⁹

The last two principles of the PRME are connected with collaborative work with business executives and the facilitation of dialogue and debate among business schools and business stakeholders. Such partnerships can help to improve the relevance of both teaching and research. Starting with teaching, inviting practitioners to speak in the classroom is a common technique for making course content more interesting. That is why PRME adopters can facilitate dialogue with a wider set of stakeholders with the use of many channels such as conferences which unite different stakeholder groups, multistakeholder panel discussions, and/or lecture series. The communication process may also be facilitated by modern tools that improve networking education and involve the application of ICT, especially social media.²⁰ Such new technologies are also used for recruiting world-class speakers.²¹

Manuel Escudero mentions two basic characteristics of PRME that are required for the rethinking of present-day business education, namely the global range of this initiative (as almost all the relevant associations from the United States, Latin America, Europe, and Africa participate) as well as the focus on the crux of the matter (the need to place the new paradigm of sustainable and responsible value creation at the very core of business education).²²

However, despite the principles being clearly formulated, it is not so easy to implement particular solutions into practice. Just signing onto the PRME as such is not indicative of systemic change or an internal value reflection. For example, the only requirement of PRME participation is to “share information … on the progress made in implementing the Principles,” with approximately 25% of signatory schools failing to produce such a report within set deadlines.²³ Also altering formal curricular goals and content alone is not enough to improve students’ sense of social responsibility. Effective PRME implementation requires close attention to the informal ways of developing good management virtues—hidden curriculum, that is, the implicit dimensions of educational experiences.²⁴ Effort should be taken in order to create synergies between research, teaching, and social initiatives,²⁵ assess a school’s PRME needs and integrate these principles into business school learning environments.²⁶ Moreover, there is also a necessity to overcome implementation problems such as strategic, structural, and cultural barriers (often being the challenges of political character)²⁷ as well as to stimulate faculty support that is a critical driver for implementing the United Nations Principles for Responsible Management Education.²⁸

Forray and Leigh, preparing the special issue of Journal of Management Education that was dedicated to PRME initiative, have indicated the need for affirmative dialog in the 21st century that should help us to²⁹

Research Results

The research was focused on courses, modules, and tools used for implementation of PRME and was based on reports of Sharing Information on Progress (SIP) submitted by European signatories of the initiative.³⁰ The analysis was conducted between February 8 and 20, 2013.

The original sample consisted of all of the 427 submitted reports. In some cases a particular organization had submitted the SIP report more than once as it revealed progress in PRME implementation in subsequent years. See Figure 1.1.

Figure 1.1.

Source: Author’s own study based on http://www.unprme.org/sharing-information-on-progress/

Generally, the SIP reports have been submitted by 268 participants, among which 119 come from 24 countries in Europe.³¹ Those organizations have prepared a total of 188 reports and its number increases every year. To compare its volume and share of the total number of SIP reports submitted in particular years see Figure 1.2.

Figure 1.2.

Source: Author’s own study based on http://www.unprme.org/sharing-information-on-progress/

Nevertheless, the research sample consisted of only 119 of the most current reports submitted by a particular school (only one prepared SIP report was analyzed for each particular signatory) in order to reflect the structure of participants (see Figure 1.3). Symbols for countries were based on ISO 3166-1 alfa-2 standard.

Figure 1.3.

Source: Author’s own study based on http://www.unprme.org/sharing-information-on-progress/

Ultimately the above number was constrained to 115 as four documents were prepared in the national (non-English) language and they were not subject to study.

The conducted research is the continuation of analysis presented by the author³² and focuses on 7 of the 54 criteria in the previous study as it relates to the implementation of PRME in curricula. The criteria are presented in Table 1.1.

Table 1.1. Criteria for Sharing Information on Progress Reports Analysis

Criterion of analysis		Description
Curricular content	Ethics and/or CSR courses in curriculum	Signatory that incorporates ethics or CSR issues in its curricula as a separate subject or as an integrated module of the core course
	Environmental responsibility issues	Signatory incorporates environmental problems in core ethical/CSR course or includes ethical dilemmas in courses for environmental management
	Financial (and fiscal) responsibility issues	Signatory incorporates financial/accounting/fiscal problems in core ethical/CSR course or includes ethical dilemmas in courses for finance
	Legal responsibility issues in curriculum	Signatory incorporates legal problems in core ethical/CSR course or includes ethical dilemmas in courses for law
Curricular range	Special programs for MBA	Signatory that incorporates ethics or CSR issues in its curricula especially for MBA course
Curricular methods	Case studies	Signatory uses case studies as an educational method within CSR related courses
	Projects for a company (or other organization)	Signatory’s students conduct projects for a company (or other organization) within CSR related courses

Source: Author’s own elaboration based on Stachowicz-Stanusch, A. (2011).

The above criteria are usually the integral elements of the first, second, and third PRME elements, namely purpose, values, and method.

The PRME signatories in 102 cases (92%) do include ethics or CSR courses in their curricula but to the different extents. Some of them treat social responsibility as the theme for all the offered courses:

However, more often the additional ethical related subjects are included in some of the existing programs:

Quite often the educational courses try to integrate responsibility issues into their traditional management subjects related to environment, finance, and law. Compared to the results gained within the same methodology in 2010 for all the submitted SIP reports, issues of financial responsibility seem to be more extensively incorporated in the CSR-related curricula (see Figure 1.4), while the other content seems to be present in educational programs to a similar extent.

Figure 1.4.

Source: Author’s own study based on http://www.unprme.org/sharing-information-on-progress/ and Stachowicz-Stanusch A. (2011).

The most popular issue (included by over a half of the analyzed schools) is related to environmental management and is incorporated within various modules:

The field of financing and accounting is also enriched with the responsibility considerations (by 45% of signatories):

Also legal aspects are the subject of responsibility management education, despite not being so popular (only 23% of analyzed schools reporting):

In many cases the PRME assumptions are the basis for preparing MBA courses as more than half of signatories (62 out of 115) declare to include ethical modules for those studies:

One of the most popular methods used for implementing responsibility management within curricula, enabling to educate and discuss ethical aspects and to relate managerial decision to corporate responsibility is the case study method used by over a half of the analyzed organizations (54%):

Moreover, the case study method is not only implemented but quite often developed by the faculties on their own or in cooperation with companies and local society:

In a few cases there were also elaborated complex educational programs for implementing the PRME that were outcomes of educational endeavors of particular scholars.³³

Scrutinized reports also reveal that nearly one-third of PRME signatories from Europe (32 cases) include projects realized by students for external organizations and partners as another educational method:

The presented outcomes of the conducted analysis for the European state of PRME implementation in schools’ curricula are quite similar to those presented for all the PRME SIP reports submitted till the end of 2010.³⁴ The percentage reflection of this implementation is presented in Table 1.2.

Table 1.2. Results for Sharing Information on Progress Reports Analysis

Criterion of analysis		% of reports from all PRME signatories (2010)	% of signatories from Europe (2012)
Curricular content	Ethics and/or CSR courses in curriculum	90%	92%
	Environmental responsibility issues	52%	51%
	Financial (and fiscal) responsibility issues	33%	45%
	Legal responsibility issues in curriculum	23%	23%
Curricular range	Special programs for MBA	52%	54%
Curricular methods	Case studies	39%	54%
	Projects for a company (or other organization)	40%	37%

Source: Author’s own study based on http://www.unprme.org/sharing-information-on-progress/

However, when comparing global analysis of SIP contents from 2010 with European declarations from the beginning of 2013, the only noticeable difference (of more than 10%) is connected with the perception of responsible finance as an important element of teaching programs prepared within management courses.

Conclusion

The PRME initiative has attracted many institutions from all over the world and has enabled to set a joint discussion and exchange of experience and best practices in implementing solutions for improving the ethical awareness of present-day business students. The number of signatories is increasing and European schools also seem to be participating in it more intensively.

Integrating PRME into business and management curriculum requires distributing emerging knowledge and best practices, which in turn can promote collective inquiry into associated philosophical, conceptual, empirical, and pragmatic issues³⁵ and that is why there is a need to diagnose the practices existing within signatories of the PRME.

Key Terms

PRME (Principles for Responsible Management Education): supported by the United Nations, its initiative is to inspire and champion responsible management education, research and thought leadership globally. PRME is aimed at promoting effective practices related to six principles (Purpose, Values, Method, Research, Partnership, and Dialogue) among academic institutions and adapting their curricula, research, teaching methodologies and institutional strategies to new business challenges and opportunities. [Source: www.unprme.org]

Integrity: characterizes both the individual and the institutions where he or she works. For individuals, it is an aspect of moral character and experience. For institutions, it is a matter of creating an environment that promotes responsible conduct by embracing standards of excellence, trustworthiness, and lawfulness that inform institutional practices.

[Source: Stachowicz-Stanusch A.: The Principles for Responsible Management Education -a pathway to management education for integrity. Organizacja i Kierowanie, 2013 (in print)].

CSR (Corporate Social Responsibility): the responsibility of enterprises for their impacts on society. CSR is associated with the process to integrate social, environmental, ethical, human rights, and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of:

[Source: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A renewed EU strategy 2011–14 for Corporate Social Responsibility]

Case study: A documented study of a specific real-life situation or imagined scenario, used as a training tool in business schools and firms. Students or trainees are required to analyze the prescribed cases and present their interpretations or solutions, supported by the line of reasoning employed and assumptions made. [Source: http://www.businessdictionary.com]

Study Questions

1.What other curricular methods may be effective in terms of raising the ethical awareness of business students?

2.What are the potential barriers of implementing curricular innovation based on six PRME principles?

Additional Reading

Amman W., & Stachowicz-Stanusch A. (Eds.) (2012). Integrity in organizations— building the foundations for humanistic management. New York: Palgrave Macmillan.

Amman, W., Pirson, M., Dierksmeier, C., Von Kimakovitz, E., & Spitzeck, H. (Eds.) (2011). Business schools under fire: Humanistic management education as the way forward. New York: Palgrave Macmillan.

Caldwell, C. (2012). Moral leadership: A transformative model for tomorrow’s leaders. New York: Business Expert Press.

Ferrel, O. C., Fraedrich, J., & Ferrel, L. (2011). Business ethics: Ethical decision making & cases (9th edition). New York: Cengage Learning.

Palmer, D., & Zakhem, A. (2012). Managing for ethical-organizational integrity: Principles and processes for promoting good, right, and virtuous conduct. New York: Business Expert Press.

Stachowicz-Stanusch A., & Amman W. (Eds.) (2012). Business integrity in practice–insights from international case studies. New York: Business Expert Press.

Trevino, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right (5th edition). New York: Wiley.

Wankel Ch., & Stachowicz-Stanusch A. (Eds.) (2011). Effectively integrating ethical dimensions into business education (HC) (Research in managerial education and development). New York: Information Age Publishing.

Wankel Ch., & Stachowicz-Stanusch A. (Eds.) (2011). Management education for integrity: Ethically educating tomorrow’s business leaders. London: Emerald Group Publishing Limited.

Wankel Ch., & Stachowicz-Stanusch A. (Eds.) (2012). Handbook of research on teaching ethics in business and management education. US: Information Science Reference.