TEACHING BUSINESS ETHICS: THE INTEGRITY CAPACITY APPROACH AT WRIGHT STATE UNIVERSITY Dr. Joseph A. Petrick Director, Institute for Business Integrity Raj Soin College of Business Wright State University Dayton, Ohio USA July 22, 2004 AGENDA Teaching Business Ethics at Wright State University A. Business Curriculum Courses B. Institute for Business Integrity (Extracurricular) C. Integrity Capacity Approach to Business Ethics 1. 2. D. Business Integrity Capacity Approach: Process, Judgment (R2C2), Development & System Empirical Documentation of Effectiveness (N = 400) Summary Goal Competencies of Teaching Business Ethics • Cognitive Competence • Character-Strengthening Competence • Conduct Expectations/Sustained, Responsible Behavioral Competence • Context-Enhancement Competence Business Integrity Capacity The individual and collective business capability for repeated process alignment of moral awareness, deliberation, character and conduct that demonstrates balanced judgment, enhances sustained moral development, and promotes supportive systems for moral decision making. Instrumental Value of Business Integrity Capacity Business Integrity Capacity Reputational Capital Sustainable Competitive Advantage and World-Class Business Performance in the External Environment Business Process Integrity Capacity The alignment of individual and/or collective business moral awareness, deliberation, character, and conduct on a sustained basis, so that enhanced reputational capital results. Business Process Integrity Capacity MORAL AWARENESS  Perception  Sensitivity MORAL DELIBERATION  Analysis  Resolution MORAL CHARACTER  Cognitive Readiness to Act  Volitional Readiness to Act MORAL CONDUCT  Responsible  Sustainable Business Judgment Integrity Capacity The balanced and inclusive use of key ethics theories and their correlated cognate theoretical resources in the analysis and resolution of individual and/or collective business moral issues. Judgment Integrity Capacity (R2C2) Flexibility Build Virtuous Character Enhance Supportive Contexts Internal Follow Right Rules Achieve Good Results External Control Positive & Negative Zones of Judgment Integrity Capacity (R2C2) Negative Zone Character Abdicates Authority Positive Zone Wastes Energy Context Shows Consideration Slows Production Facilitates Interaction Envisions Changes Disrupts Continuity Acquires Resources Negative Zone Amoral Manager Collects Information Neglects Possibilities Maintains Structure Stifles Progress Provides Structure Offends Individuals Initiates Action Destroys Cohesion Rules Results EXTREME BUSINESS MANAGER CONCERN FOR PROFITS Flexibility Character (INVOLVEMENT) Context (ADAPTABILITY) Internal External Rules (CONTINUITY) Results Control (EFFECTIVENESS) Positive & Negative Zones of Human Reality, “Business Philosophy” & Economic Theories “Developmentalist” Community Capitalism Negative Zone Abdicates Authority Positive Zone Wastes Energy “Experimentalist” Entrepreneurial Capitalism Slows Production DRIVE TO BOND DRIVE TO LEARN Disrupts Continuity Negative Zone Amoral Manager/Follower Neglects Possibilities DRIVE TO DEFEND DRIVE TO ACQUIRE Destroys Cohesion “Structuralist” Regulatory Capitalism Stifles Progress Offends Individuals “Pragmatic” Investor Capitalism Business Developmental Integrity Capacity The improvement of informal work culture, as well as, individual and collective business moral reasoning capabilities from a stage of selfinterested connivance, through a stage of external conformity, and onto a stage of internalized commitment to moral principles. Organizational Developmental Integrity Capacity Stages Principled Integrity Democratic Participation HOUSE OF INTEGRITY (Commitment) Allegiance to Authority Popular Conformity Machiavellianism Social Darwinism HOUSE OF MANIPULATION (Connivance) HOUSE OF COMPLIANCE (Conformity) Business System Integrity Capacity The development and alignment of the moral infrastructure within the business organization and the shaping of the external moral environment of the business organization to provide a supportive context for sound moral decision making. Business Organization Internal Systems 1. Compliance-Based System - U.S. Federal Sentencing Guidelines - Sarbanes-Oxley Act - External Conformity Infrastructure 2. Integrity-Based System - Ethics Needs Assessment - Ethical Leadership Development - Value Commitment Infrastructure Business Organization External Systems 1. Domestic External Environment -Corruption Elimination and/or Control -Proactive Positive Stakeholder Relations & Triple Bottom Line Accountability 2. Global External Environment -Corruption Elimination and/or Control -Proactive Positive Stakeholder Relations & Triple Bottom Line Accountability SUMMARY Teaching Business Ethics at Wright State University A. Business Curriculum Courses B. Institute for Business Integrity (Extracurricular) C. Integrity Capacity Approach to Business Ethics 1. 2. Business Integrity Capacity Approach: Process, Judgment (R2C2), Development & System Empirical Documentation of Effectiveness (N = 400)