2008 Mark W. Johnson 91
CORPORATE GREED: A MANDATORY REASON
TOWARDS BUSINESS SCHOOL REFORMS
Mark W. Johnson (PHD)
Social Responsibility Development Institute S.L.
42 Flinders Street
Darlinghurst NSW 2010
Sydney, Australia
Telephone 02 9265 9322
Abstract
In the wake of recent dishonest practices by Enron, WorldCom, Global Crossing, Xerox, Qwest,
Arthur Andersen, and Merck many people are asking how people believed to be so well educated and
leaders in corporate America lacked the moral courage to seek and state the truth. Business Ethics has
been thrown to the side as a Wild-Wild-West form of capitalism has taken hold on our corporate
leaders. This corporate malfeasance has costs thousands of jobs, trillions of dollars in stockholder value,
and skepticism of our once revered free economic system. In this proposal I will show why a lack of
Business Ethics is such a far-reaching problem in our society and suggest reforms in the business school
curriculum to help instill responsibility and accountability in our business leaders. I will also show how
consumer education classes would help protect individuals from becoming victims of corporate greed.
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
92 Business Intelligence Journal July
Allan Sloan describes this current
INTRODUCTION paradigm shift in his recent Newsweek
article, Greed Isn’t Good, stating,
In the wake of recent dishonest “… let’s look at the big picture and see
practices by Enron, WorldCom, Global what the Andersen story really tells us.
Crossing, Xerox, Qwest, Arthur Andersen, The verdict is the clearest signal yet that
and Merck many people are asking how the market-bubble ethos of greed being
people believed to be so well educated and good—heck, even a desirable mainstream
leaders in corporate America lacked the value—is over. Sure, that “greed is good”
moral courage to seek and state the truth. speech by Gordon Gecko in the movie
Business Ethics has been thrown to the “Wall Street” dates back to the 80s, but the
side as a Wild-Wild-West form of point back then was that we were
capitalism has taken hold on our corporate supposed to be horrified by the notion. In
leaders. This corporate malfeasance has the 90s, people said it with a straight face
costs thousands of jobs, trillions of dollars or even with a smile as their fattening
in stockholder value, and skepticism of our portfolios fueled dreams of early
once revered free economic system. In retirement and second and third and fourth
this proposal I will show why a lack of homes. Adam Smith’s invisible hand of
Business Ethics is such a far-reaching the market—which translated the pursuit
problem in our society and suggest of self-interest into public benefit—
reforms in the business school curriculum metastasized into a broad sense our self-
to help instill responsibility and interest in the market’s performance would
accountability in our business leaders. I benefit the public”.
will also show how consumer education Sloan goes further to advance the
classes would help protect individuals notion that greed is indeed not good by
from becoming victims of corporate greed. stating, “Now the Andersen verdict is
certain to help clear up any doubts over
CORPORATE GREED: THE what greed really is. Greed—defined as
PROBLEM an inordinate desire for wealth—is not
good, and it doesn’t drive markets. Greed
The Current Economic Crisis
drives people to cut corners for short-term
gain, a message that’s been repeated like a
Just this week President Bush traveled
jackhammer in recent weeks” (Sloan 37).
to Wall Street to make a speech regarding
Sloan is correct in his commentary
the current economic crisis brought upon
regarding the large amount of recent
by lack of corporate ethics. President
greed, but Sloan fails to mention exactly
Bush told the Wall Street crowd that the
why this greed is so pervasive in our
United States, “must usher in a new era of
society and what actions can the nation
integrity in Corporate America” in the
undertake to solve the problem.
wake of “abuses and excesses”. These
abuses have cost thousands of jobs and Corporate Greed Causes Predatory
trillions of dollars in retirement accounts. Lending Practices
The greed of these CEOs and accounting
firms have hurt literally millions of people Corporate executives are not only in the
and have changed the mindset in America practice of intentionally inflating profits
that perhaps greed is not so good after all. but also undertake unethical practices in
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
2008 Mark W. Johnson 93
lending to our nation’s poor. Jeanette but I wonder how many different financial
Bradley, a director of the Community institutions are involved. I also am curious
Reinvestment Association of North about issues such as why actions have not
Carolina discusses these unethical tactics been taken to shed light on this unethical
in her article, “Predatory Lending”, that practice and what can consumers do to
appeared in the January 2000 issue of protect themselves? Where can
Dollars & Sense. She describes this individuals go to find out more on this
practice as, “… any unfair credit practice topic?
that harms the borrower or supports a
credit system that promotes inequality and Corporate Power and Greed
poverty. One of the most common Increases Consumer Debt
predatory practices is placing borrowers
into higher interest loans than their credit Everywhere we look corporate America
risk would call for. Although they may be is bombarding us with advertising in the
eligible for a loan in the so-called “prime” hopes of creating demand for their
market, they are channeled into more relatively unneeded products. Britney
expensive fee-padded loans in the “sub Spears dancing around selling Pepsi, the
prime” market supposedly just for credit Dell Computers “Dude you’re getting a
risks. The result: financial services Dell” guy, and the billboards for SKYY
companies end up padding their profit vodka with images of sexy supermodels
margins by draining away the equity are used to create desires for individuals to
borrowers have built in their homes over increase their spending and sink further
the years” (Bradley 12). She goes further into debt. One of the underlying problems
in her article to suggest that this is a that corporations have had is that even if
system that promotes a cycle of debt as they bombard us with sexual images that
this one does can be equated to the past sell products is that our demand can only
system of sharecropping, which was be as big as our pocket books. Corporate
inherently unfair and unequal. Another America then came up with the idea of
article, “Predatory Associates: Citigroup, credit cards, which eased the liquidity
Predatory lending and the credit crunch for problems. An article entitled “Corporate
the poor and working class”, appearing in Power and the Evolution of Consumer
the April 2002 issue of Multinational Credit” appearing in the December 2000
Monitor describes unethical practices by issue of The Journal of Economic Issues,
one of the world’s largest financial John Watkins, professor of Economics at
institutions. As writer Jake Lewis points Westminster College, describes how
out “Citigroup has invested tens of billions corporate power has perpetuated the debt
of dollars in schemes to peddle various crisis in America. Watkins describes an
financial products to low and moderate environment of “perpetual advertising”
income families…consumers are being which aims to mold the worker’s “time,
ripped off through deceptive predatory habits and ideas” with the ultimate goal of
lending tactics employed by Citigroup corporate gains. According to Watkins,
subsidiaries” (Lewis 15). Corporate America has overcome four
The Multinational Monitor article obstacles in it’s pursuit of increasing
singles out Citigroup as an active consumer liquidity, these four barriers
participant in predatory lending practices, were; religion’s anti debt philosophy, lack
of current income, lack of credit on
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
94 Business Intelligence Journal July
demand, regulation of the industry. Berlau points out in his article, “Is Big
Watkins goes further to advance the notion Business Ethically bankrupt?” appearing
that these barriers have been indeed in the March 18, 2002 issue of Insight, “A
toppled by advertising, universal credit boom in business-ethics courses is likely
cards, and lobbying the legislature in the in the wake of the Enron scandal, but
1970s which produced the means to critics say these classes need to focus on
“fleece America” and put individuals in moral, rather than political, correctness…
system of debt (Watkins 909-914). business ethics courses spend too much
Watkins does a wonderful job of time on public-policy issues such as
pointing out areas of corporate influence, environmentalism and inequalities of
but I think more study needs to be done on wealth and not enough time examining
the success of corporate manipulation and such personal virtues as truth-telling and
what active resistance they have integrity that are relevant…A lot of
encountered, if any at all. It would also be business-ethics courses cover topics such
interesting to find other areas of life they as drug testing and privacy, affirmative
have influenced and manipulated for their action, global business regulations. These
own monetary concerns. are interesting and worthy topics, but I
don’t think they affect as many individuals
UNDERLYING CAUSES OF in their day-to-day lives as do another set
UNETHICAL PRACTICES of questions…on virtues and vices in the
everyday business environment” (Berlau
16).
Failure of Current Business Ethics I would be curious as to why the author
Courses of the Insight article thinks that business
ethics courses focus on more political
Currently there is a lot of attention in topics, it fails to address this important
the media regarding the education taught issue that should be known if we want to
in business schools. Knight Kiplinger, solve the problem.
editor and chief of Kiplinger’s Personal
Finance Magazine states this fact in the Consumer Education Needed
May 2002 issue, “ The time is ripe for a
national dialog on ethics, and it must start Currently students have
with our youth. It is heartening to see a misunderstandings when it comes to
new interest in character education in our financial matters, most notably regarding
schools—all the way from the elementary credit cards. A study conducted in 2002
grades through graduate-school programs. by the National Consumers League
Perhaps, in another generation or two, it evidences this fact: “…over half (students)
will bear fruit” (Kiplinger 67). wrongly believe that a credit card is an
Also this week President Bush in his informal agreement to pay the money
speech to Wall Street called on CEO’s and owed. And where are they learning this?
business schools to “set a tone for others”. Sixty-three percent say they get most of
The issue of business-ethics courses is one their information about money, credit, and
of the hottest topics today. Many colleges other financial matters from their parents.
are offering these courses, but the courses But parents might not be the best resource.
lack focus on the important issues relevant
to today’s business environment as John
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
2008 Mark W. Johnson 95
The average American family carries In Response to the Greed is Good
almost $9,000 in credit card debt…There Philosophy
is a need in this country for teen financial
education. Teens are eager to take on While greed may hold some benefits in
adult obligations such as earning money a capitalistic society it is my belief that the
and managing credit cards, but may lack inordinate desire for material wealth at any
the financial education to effectively fulfill cost does more harm than good. Our
them. Without a basic financial education society is based on a system of self-
from schools, they must rely heavily on interest, the theory basically states that if
their parents for financial information. everyone pursues what is in his or her best
These teens may face some of the same interest that society will benefit. While
financial setbacks as their parents: credit this was a revolutionary theory and it has
card worries, privacy problems, and produced a wealthy and powerful nation, I
confusion about banking…” (NCL’s 2002 would suggest that a better philosophy
Teens and Financial Education Survey) A would include another detail. This detail
1995 survey of consumer finances also would be that individuals should act in
agreed that educational programs are their best interest while at the same time
needed: “The findings suggest a need for considering what is in the best interest of
education targeted to specific groups of the group. It should not be a system of
adults and the need for finance education greed, but one of self-interest based on
for …students, the consumers of the consideration for others. Greed only
future” (Castellani 12). works in the short term as companies such
as Enron has showed us. The Editorial in
In Defense of Greed the St. Louis Post takes too simplistic of a
view concerning greed, greed can never be
Many psychologists would advance the good when it is only benefiting a few
notion that greed is an inherit feature of while hurting millions as has happened
human nature. George Brockway with the recent corporate scandals.
advances the notion that economists
believe that everyone is greedy in his Proposal
article, “How good is greed?” appearing in
The New Leader, “Since everyone is some Currently the Metropolitan State
kind of economic agent—a producer or a College of Denver has both a Business
consumer or both—they are saying that Ethics course and a Personal Money
everyone is greedy” (Brockway 15). A Management course. I commend the
recent editorial in the St. Louis Post college for recognizing the need for these
supports a position that greed is in the best courses, but would make few suggestions
interest of society by stating, “Greed is on changing the focus of the courses and
good. The pursuit of wealth prompts making them a more integral part of the
invention, the founding of companies, curriculum. As earlier evidenced by
business investment. It puts people to Kiplinger and Berlau, currently, Business
work.” Ethics courses are more focused on
political correctness and do not address
moral issues of the day-to-day business
activities. I have taken the Business Ethics
course at Metro and agree with this
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
96 Business Intelligence Journal July
contention, while it was a very informative the mindset of America. Times of crisis
course with a great instructor; it dealt with such as this are times that we need to look
issues that most business students would at possible causes of the problems and
not be facing in their careers. I think one search for solutions. It is evident that
of the main problems currently is that the Business Ethics courses need to be taught
Business Ethics course in the Philosophy to our future business leaders and where
department. The Philosophy professors they are taught, they focus needs to be
have a wonderful amount of knowledge of changed to address current business trends.
Ethics, but they may lack the ability to I know that teaching business ethics is not
apply it to business concerns. Another a panacea or magic bullet for the problem
thing that should be considered is that the and that is why I have also suggested more
Business school only requires either educational training on consumer finance.
Business Ethics or Ethics. I think this It is apparent that consumers are being
should be changed to requiring Business taken advantage of and being manipulated
Ethics, since this is more applicable to the out of their hard earned money. Consumer
future business careers of the students. education is another way that society will
The Personal Money Management be better able to check the abuses of
course is a great idea but I find two corporate greed. The combination of these
problems with its application. The first two programs should lead to a stabilization
problem is that it too greatly focuses on of our financial markets and a brighter
issues such as estate planning and making future built on the trust and knowledge
investments. While these are important gained through this education.
issues I think the issues of credit
management should be more focused on WORKS CITED
since students will be dealing with these
issues nearly every day of their life. The Berlau, John. “Is Big Business Ethically
second problem is that there is currently Bankrupt?” Insight 18 Mar. 2002: 16.
no strong reason for students to take this
course. Business students would not Bradley, Jeanette. “Predatory Lending.”
receive credit for it since they must take Dollars & Sense Jan. 2000: 12.
Personal Financial Planning which deals
with issues such as employee benefits and Brockway, George. “How Good Is
investments, and other students are Greed?” The New Leader 71 (1988): 15-
currently more encouraged to take 16.
psychology and sociology to meet general Bush, George W. “Corporate
studies requirements. The department Accountability.” New York City. 9 Jul.
needs to change the focus of the course 2002.
and allow business students to receive
credit for completing the course. Kiplinger, Knight. “Ethics on the ropes.”
Kiplinger’s Personal Finance Magazine
CONCLUSION May. 2002: 66.
Our nation is at a crossroads; our whole Lewis, Jake. “Predatory Associates:
capitalistic way of life is being questioned. Citigroup, Predatory lending and the credit
It is a shame that greed is entrenched in
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
2008 Mark W. Johnson 97
crunch for the poor and working class.” wealth to all that Americans do. But the
Multinational Monitor Apr. 2002: 15+. drive, he said, ‘disciples their lives.’ That
lesson’s been forgotten.” Newsweek 24
NCL’s 2002 Teens and Financial Jun. 2002: 37.
Education Survey
St. Louis Post-Dispatch. Editorial 30
http://www.nclnet.org/moneyandcredit/tee Jun. 2002:B2
nsurvey1.htm
Watkins, John P. “Corporate Power and
Sloan, Allan. “The Jury’s In: Greed Isn’t the Evolution of Consumer Credit.”
Good: De Tocqueville traced love of Journal of Economic Issues v34 i4 909+
Johnson M.W. – Corporate Greed: A Mandatory reason Towards Business School Reforms
98 Business Intelligence Journal July
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