Sustainable Business Ethics Education

Abstract

Recent events, like the failure of Enron, the US financial crisis and closure of other United States-based finance companies, the European Union (EU) financial crisis, the Brexit and the campaign over high board room salaries, have focused attention on the ethics of managing business. This has provided added momentum to those in charge of management education, to integrate a critical perspective on business ethics.

Sustainable development is broadly defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland, 1987). Sustainable ethics is a novel discipline that concerns present society’s moral obligations to future generations with respect to the environment.

For supporting sustainability through education requires not only critiquing the current mechanistic educational paradigm, its theory and practice (Lozano et al., 48, 10–19, 2013), but also offering a credible and practical alternative; an ecological paradigm (Zhou et al., 8(6), 2013) that starts with a vision of a fairer society and a better world, re-examination of core values embedded in education, and design of learning models to signify and improve ethics education in business schools (Hooker, 2004).

A cognitive perspective assumes that business ethics can be taught through acquiring knowledge by reasoning, intuition, and perceptions. An affective perspective contests such a premise, suggesting that ethics is better learnt through emotional experiences. This latter perspective lies at the heart of experiential learning activities (ELAs) and critical action learning (CAL)—already methods of teaching in business schools but under-utilized in teaching within the discipline of business ethics.

This study examines the collective impact of ELA and CAL on student learning of management ethics. Students’ personal narratives were obtained through focus groups and semi-structured interviews following their participation in experiential and action learning activities. Results indicate that teaching business ethics through ELAs and CAL leads to social benefits for students, co-creation and improved and increased engagement with peers, academics and industry.

Introduction

The chapter argues the existence of an ethical “hole” in recent international business practices that requires urgent repair. For example, Matthews and Heimer (2016) reported that 2016 was a year dominated by corporate scandals, including pharma giant Mylan imposing big price increases on users of its life-saving EpiPen, the batteries exploding in the new Samsung Galaxy Note 7, and Wells Fargo’s employees creating fake accounts in the names of real customers.

The need for an ethical workforce has always been high (Carucci, 2016), but this apparent vacuum in business standards prevents transfer of ethical values to subsequent generations of corporate managers. As a result, the academic community faces increasing demands for better and more sustainable ethics education in business programmes (Nijhof, Wilderom, & Oost, 2012). Society needs professionals who can be trusted and relied on to behave ethically for the benefit of all stakeholders.

Business ethics education by tradition is taught from a cognitive perspective—by transmission of knowledge, reasoning, and intuition. To meet the current demand for more corporate social responsibility, it is necessary not only to review current mechanistic educational paradigms (Lozano, Lukman, Lozano, Huisingh, & Lambrechts, 2013) but also to provide credible and practical alternatives (Sterling, 2004). New methods need to be identified to apply these ideas to real-life practices (Maclagan, 2012), and one that has been under-explored is teaching ethics from affective and behavioural perspectives.

Learning through experience was first popularized in 1938 by John Dewey (2007). His idea of creation of meaning through direct experience was later developed by Lewin (1951) and then Knowles (1980). Experiential learning activities (ELAs) and critical action learning (CAL) are contemporary models designed to empower students to achieve real and material changes in how they interact with others and the environment, and what theories and frameworks they use to interpret the world around them (Kemmis & McTaggart, 2005).

The ELA model has been researched extensively, based on Kolb’s (1984) theory of learning styles . Applied to the study of ethics, it indicates possibilities for helping students to become more ethical citizens by increasing their ability to transfer university-acquired knowledge to their workplaces (Beard & Wilson, 2006). CAL is an approach to individual development where students work in small groups, tackle important organizational issues or problems, and learn from their attempts to solve them (Trehan in Pedler, 2011). CAL concerns the ways in which individuals classify data and how these might be channelled into more productive relationships between learning and practice (Anderson & Thorpe, 2004). There is growing consensus (Vince, 2008) that ELA and CAL engage students not only cognitively (as they acquire new knowledge, in this case of ethics) but also emotionally—for example, they might be encouraged to feel empathy towards victims of unethical practices (Werhane, Hartman, Archer, Bevan, & Clark, 2011).

Ethics Education

The issue of ethics in business has come under a brighter spotlight of late due to corporate corruption scandals that have plagued international business. In dire need of higher ethical standards, the business community has turned to higher education programmes for help. Therefore, there has emerged a sense of urgency and readiness to include business ethics subjects in curricula in higher business education.

It is important to understand that business ethics education is relatively young, as major American universities began teaching it only around 33 years ago (Velasquez, Freeman, Gentile, Friedman, & Hanson, 2003). Bampton and Cowton (2002) found that in the early years of the twenty-first century few classroom teachers taught ethics issues explicitly; the longest reported teaching period being five hours in an accounting subject. Reasons were lack of training for teachers, lack of time or materials, lack of motivation, a view that ethics is not really part of an accountant’s rigorous practical training, and the prevailing culture of business schools.

The development in the field has shown some progress, including a very important integration of business and ethics. Some reports (Velasquez, 2003) have noted that in study areas such as the environment, race relations, and consumer relations, the frequency of unethical behaviour has decreased, demonstrably due to the effectiveness of business ethics education (Chawla, Khan, Jackson, & Gray, 2015; Dzuranin, Shortridge, & Smith, 2013; Floyd, Xu, Atkins, & Caldwell, 2013). Yet the overall results of teaching business ethics at universities are at best piecemeal and at worst irrelevant, with academic commentators noting that business ethics have not permeated the business world (Freeman & Newkirk, 2011; Freeman, Stewart, & Moriarty, 2009).

There are differing opinions on how best to teach ethics at a higher education level. One argument is that little has been accomplished because of marginalization of business ethics outside the mainstream discourse on business at universities (Martin & Freeman, 2004). To create a new type of inclusive relationship between business ethics and the curriculum, educators can apply three approaches. Business ethics subject matter can be incorporated:

• Through micro-insertions of mini lessons lasting only a few minutes each;

• As complete business ethics modules (large insertions of ethics instructions) integrated in business-related courses, including marketing, accounting, and finance (Slocum, Rohlfer, & Gonzalez-Canton, 2014);

• As free standing ethics courses (Davis & Riley, 2008).

The effectiveness of the more integrated approaches have been demonstrated to be greater, although there has been limited research in this area (Davis & Riley, 2008). Bampton and Maclagan (2005) state that what is required is research which shows that goals, content (rules and stages or moral philosophy), methodology (stand-alone courses or integrated courses), pedagogy (experiential or non-experiential) can all be linked.

Teaching Business Ethics

Ethics are extensively taught using cognitive approaches including didactic and cognitive learning activities (Hartman, Wolfe, & Werhane, 2008). It is argued this is the best method because it equips students with theoretical frameworks to spring off, shows them their underlying assumptions, and invites them to critically analyse those. This makes students more capable of making grounded judgements in ethically challenging situations and more aware of, and courageously not to follow blindly, the rules and regulations (Sia, 2008).

Nielsen (2001) argues that a cognitive understanding of both policy and individual level ethics is important; however, there can be cognitive understanding without affective, emotive concern—which can lead to understanding without motivation. An action-learning approach to organizational ethics can join cognitive understanding of policy and individual level issues with affective concern, to stimulate and enable ethical character.

Cognitive activities encourage students to identify stakeholders by looking at all possible decisions and being aware of each decision’s impact on each stakeholder (Hartman et al., 2008). It is claimed that this creates integrity in their decisions, as they are looking at the whole picture and considering all implications. Hartman et al. (2008) suggest that ethics are best taught by showing both positive and negative cases of ethics in business, which are then analysed and discussed by the students using ethical theory. Advocates of cognitive approaches argue that such presentations of dilemmas allow the students to find the morality that fits within “what we are and where we are” (Wishloff, 2003, p. 91). This method assumes that though students should receive this information passively, yet changes to their ethical systems will still occur.

The effectiveness of this approach to teaching business ethics requires further research. Purely cognitive approaches may lack emotional connection to the issues and result in generalized knowledge with little emotional understanding of actions (Rest, Turiel, & Kohlberg, 1969). An experiential learning model may be a more effective teaching method (Loescher, Hughes, Cavico, Mirabella, & Pellet, 2005; McPhail, 2001). McPhail (2001) passionately appeals for examination of the very purpose of teaching ethics in higher education, advocating that it should entail disruption of existing beliefs and assumptions, and encouragement of cognitive dissonance to prepare students to learn. Teaching should include the development of a broad social and political ethical context for organizational management and the development of students’ moral sensibility.

The experiential learning model, then, is argued to be beneficial to students because it involves them emotionally, disrupting their old beliefs and assumptions while providing a safe environment for change, through discussions, small group activities, real-life case studies, role plays, simulation exercises, films, literature, and personal reflective journals (Chavan, 2011, 2015; Loescher et al., 2005; McPhail, 2001).

The Research

The research question—in what ways do ELAs and CALs appear to help undergraduate students make connections between business ethics theory and practice?—arose from lack of research into the effects on students of business ethics teaching. In seeking answers, it was not the ELAs and the CALs per se that were the focus, but the role they play in making learning business ethics relevant and useful to students.

Answering the question entailed development of an interpretive framework, based on a qualitative analysis—using focus groups and interviews—of the sampled students’ experiences of ethics teaching by action and ELAs. It investigated the extent to which students were able to learn cognitively from the various exercises and whether, affectively, they enjoyed the experience, because liking a learning activity is directly related to the degree of learning acquired (Church, Baskwill, & Swain, 2007).

Research Design

The research design took a mixed method approach and included focus groups, followed by individual semi-structured interviews to achieve breadth and depth of understanding (Hesse-Biber & Leavy, 2011). The focus groups allowed the researchers to tap into the social nature of students’ shared experiences and gave them a chance to understand the social fabric of the student group that participated in the ELA and CAL activities.

Following the experiential activities, 50 students participated in five focus groups with approximately 10 students in each focus group (five international and five domestic students). The number of students per group was as recommended by Patton (2002) as an optimal number for sustaining and controlling a discussion.

Individual semi-structured interviews are argued (Yin, 2009) to generate deeper meanings and to evoke more nuanced insights into student experiences of ELAs and CALs . Interviews in the study lasted approximately 20 minutes and were face-to-face, in which open-ended questions served as the a priori structure, guiding students in discussing what they learnt about business ethics when they participated in ELAs and CALs during their course (Yin, 2009). Students who were individually interviewed also participated in the focus groups. Examples of ELAs and CALs are attached in theAppendix.

The interview questions in the semi-structured individual interviews included the following:

• Q1. Which of the ELAs did you enjoy/like the most and why?

• Q2. Which of the ELAs helped you learn the most and why?

• Q3. In which situations were you able to apply ethics material learnt through ELAs and CALs to real-life situations?

Data collected through both the focus groups and the individual interview were rich, and combining the two allowed for the comparison between emergent individual and group interview patterns and reinforcement of the main developing themes. Narratives of individual students were checked against their performance in the focus group and interview settings, thus providing triangulation of the data.

The Research Samples

Students from a large undergraduate unit were invited to participate in both focus groups and interviews. Students attended a large metropolitan Australian university and were undertaking commerce undergraduate degrees in their final year of study. Local and international students were equally represented. Students who are Australian citizens or residents were regarded as local and students who arrived from other countries were considered international students. In this study, the international respondents were predominantly from Asia and specifically from China, Hong Kong, India, Indonesia, Pakistan, Singapore, Sri Lanka, Taiwan, and Vietnam. This study was approved by the ethics committee.

Analysis

The process of research was inductive and supported the interpretive nature of this qualitative study, because analytic induction has a goal “to discover meaning and to achieve understanding” (Benner, 1994, p. 10). NViVo was used to manage the coding process and upgrade codes to group and model levels (Bazeley, 2007; Richards, 2005). The software helped to organize data in an ascending, inductive process to higher levels of abstraction (Bazeley, 2007).

A three-step approach to data analysis involved preliminary observations of the transcripts, identifying themes through clustering (resulting in formation of constructs), and categorizing through grouping (resulting in formation of categories). Data analysis became a conceptual activity of clustering “the particulars into the general”, in which “the analyst shuttles back and forth between first-level data and more general categories, which evolve and develop through successive iterations” (Miles, Huberman, & Saldaña, 2014, p. 286), whether the units of meaning are called themes, dimensions, codes, or categories (Creswell, 2014; Denzin & Lincoln, 2011).

Findings

Selected data are presented to answer the research question, in what ways do ELAs and CALs appear to help undergraduate students make connections between business ethics theory and practice? The focus group and interview data revealed that ELAs and CALs allow students to gain confidence in applying business ethics to a range of issues in a safe learning environment. There were some interesting outcomes concerning social benefits and co-creation that emerged from the relevant ELAs and CALs for understanding business ethics.

Indicative Quotations from Focus Groups and Interviews

Data analysis, supported by reports of the focus groups and interviews identified social benefits and co-creation as two important student needs that educators designing ELAs should be aware of, to maximize the learning potential of ELAs and CALs . Applied to a business ethics context, co-creation refers to joint activities between teachers and students, and between students, that involve effort from both parties. This and the identified social benefits were found to influence students’ perceptions of value derived from the experience of the learning activities.

Social Benefits

Six constructs are said to contribute to formation of the category of social benefits as an emotional aspect of student and teacher relationships in a process of self-efficacy and belonging (Bandura, 1997; Curtin, Stewart, & Ostrove, 2013; Pool & Qualter, 2012; Maslow & Lowery, 1998).

Friendship

Making friends through participation in ELAs and CALs was one of the most consistently identified themes. It was discussed at length in all the focus groups and during the individual interviews, with findings from the two methods reinforcing each other. Most of international and some of domestic students spoke about their initial loneliness and the contrast between high school, where they “knew everyone” to sitting in a lecture theatre and knowing very few, if any, other people. Examples are as follows:

I was motivated to come to class every week as I got to know new (students) every week, particularly the ones from Korea as my parents are from Korea but I was born and bought up in Australia. I got to know a lot about Korea from these students and how and why their perspectives on ethics differed from mine (Local Student).

In India we get to know the lecturers and they know every one’s names which is a good thing and a bad as sometimes there is favouritism…. I like the experiential activities as we do get to know the lecturer more than when we did in the face to face lectures and make more friends (International Student).

Language

The theme of improving one’s English or awareness of the need to improve it was a consistent theme discussed by international students. After participating in the experiential activities, they reported in both the interviews and focus groups that their interactions had been affected by their English language proficiency (or lack of). This theme related strongly to ideas of self-worth and social acceptance. This is reflected in the following quotation:

I liked (the experiential activities) because every student had to speak and there was no right and wrong answer. It was a discussion which improved my language skills and I got to learn a lot and take part in the role plays and share my views and thoughts about how it was done in China and that it was not unethical to give a job to your relative. I learned a lot on how things were done differently in varied countries (International Student).

Engagement with Academics

This was a prominent theme in the accounts of both international and domestic students. Given the inherently relational nature of social benefit, as the dynamics between students and teachers, ELAs and CALs shift the responsibility for learning from the teacher towards a student (Moon, 2002). This is evidenced in the following:

It was good as the lecturer too took part in the activities too and we got to know her better and she helped us and directed us with the ethics game we played and it was a really fun interactive way of learning because it brought together the knowledge we learnt (International Student).

Working with People (in Career)

The data from both the focus groups and interviews confirmed existing literature on the contribution of experiential activities to the development of students’ abilities to see the application of the business ethical issues in their work situations. The students shared their perceptions of becoming more sensitive to ethical issues in the workplace and the exercise of caution was considered important. This is witnessed in the following:

I started to analyse every operation and activity in my work place and tried to apply what I had learned in class and I could see what I had learned and how it has been beneficial to critically look at the way things are done …more aware of how ethics plays role in business and managerial decisions ( Local Student).

The activities in class demonstrated real cases and incidents and….. the consequences of unethical behaviour which were frightening …forced us to think more in depth about how ethics affects business (Local Student).

Networking

ELAs, as the data demonstrated, provided opportunities for students to network and to acquire networking skills, which could help them in their working life in the future:

Earlier I hardly got to know anyone in class, but because of these group activities and submissions we had to work together and email each other all the time so made more friends …….perhaps not a huge impact but allowed me to read other people’s/peers views (Local student).

As we worked in groups for the experiential activities I got an opportunity to learn a lot about my Thai group member and we caught up for drinks later and he invited me over for the Thai festival in the weekend which was awesome (Local student).

Satisfaction with University Experience

Participation in experiential activities appeared to involve excitement about new insights to about business ethics, and overall greater satisfaction with the course. The latter has been correlated in research with overall satisfaction with university experience (2014 UES National Report, 2016), to which students in the focus groups and interview settings attested:

Most units that I took at this university had a unique element to it which encouraged a lot of interactive activities and this unit was the best as it had a double edge. Made me think a little broader and prioritise certain ethical issues and it helped us make friends from the first class and assisted us understand the consequences of unethical behaviour through play (Local Student).

Co-Creation

The category of co-creation is formed by six themes in a dynamic process of knowledge co-construction: motivation, engagement, teamwork, experiencing another culture, experiencing different learning styles, and self-discipline (Bowden & D’Allesandro, 2011).

Student Motivation

The theme of motivation was identified as characteristic of domestic students. It involves an understanding by students of the social nature of knowledge creation and the interdependence of students’ relationships:

I think it is indispensable in our current world to learn on ethics. It was mandatory to participate in these activities, so it was not like we could procrastinate as we did with our other studies, you learned if you participated and you got the marks if you were active, so students were motivated all the time Experiential exercises were a good way to practice what was learnt (Local Student).

Student Engagement

ELAs by their very nature involve and engage students as they participate and co-create knowledge with teachers and fellow students. It was an interesting way to communicate ethical and cultural issues between students. They had to take on more responsibility for the learning and apply business ethics to the situations by which they were confronted. The engagement was compared to more traditional styles of teaching and learning such as lecturing:

Every week we had a new activity or a guest lecture or a game or a movie and it was never boring so I looked forward to this class although it was a lot of work because it increased my awareness and knowledge regarding different cultural values…. It’s great to see how important ethics is and that it is seriously being addressed.

Teamwork

Teamwork emerged strongly as a force in co-creation of knowledge as the teams progressed through the ELAs. Whilst group work is often disliked by many undergraduate students, the experiential activities appeared to change this attitude. It was the sense of team that appeared to added value to the knowledge created:

Every member in the group was allocated a task hence every student in the team had to co-operate to win the game. It was a competition so every team wanted to win so they all took active part in the activities ( International Student).

This course is quite challenging and it was an appropriate level with increased knowledge and a more superior and mature approach to work, both University and professional work.

Experience of Other Cultures

Focus groups’ reports were very strong on the theme of experiencing other cultures within the ELAs. Culture sharing provided a social aspect to knowledge co-creation as students worked with each other during the ELAs and CALs to understand and apply the given ethical situations. It served as a pragmatic tool to expand their horizons and increase their understanding of different cultures to tackle business ethical dilemmas in the future:

I did not expect to be taught about (business) ethics in a cross-cultural unit, and was surprised to learn how ethics varied across culture and what was unethical in one culture could be just fine in another (Local Student).

The experiential exercises helped me to listen to the views of local students and helped me understand how they feel about (business) ethics… it was good to know their views (International Student).

I learned that … giving and taking gifts (in this country) were not allowed which was surprising for me…increased knowledge on facts of other countries because of the cross cultural facet included in the unit taught (International Student).

I learned that if I have to run my family business successfully internationally it is important for me to understand what is considered ethical globally (International Student).

Experience with Different Learning Styles

In both focus groups and interviews, international and domestic students emphasized the importance of learning in different ways. They saw ELAs and CALs as an opportunity to expand their own repertoire of styles as well as to become more aware of the styles of others. ELAs and CALs allow students to learn by doing rather than simply cognitively processing theory:

I felt that all was interesting …it was definitely a good practical way of teaching (business) ethics… all those things are learned throughout life experience, the class, though, provided an awareness. I thought ethics is common sense, based on personal judgment. No point learning it, but have changed my perspective (Local Student).

The assignment had allowed me to integrate a real-life business problem and apply it academically to the course content. It was a good hands-on activity which had engaged all group members (International Student).

Self-Discipline

The theme of self-discipline emerged strongly in focus groups and interviews in both student cohorts. Students were sometimes confronted by the freedom inherent in experiential learning. Experiencing it through learning activities, they suddenly realised the weight of responsibility associated with freedom of learning, and the importance of self-control and self-discipline when preparing for and participating in experiential activities.

In the beginning some students did not like the activities as it was a lot of work every week and a new task too and it needed a lot of homework too, but then everyone did get used to it and they all participated… I became more confident than before and yes, I think I learned a lot and it will affect how I act in a position of authority (International Student).

The activity was very interactive and engaging which made learning much easier as opposed to the conservative techniques of reading or receiving boring lectures from tutors (Local Student).

Concluding Remarks

Results show that business ethics can be taught effectively using ELAs and CALs . These activities appear to enable students to gain confidence in applying ethics to a range of issues in a safe learning environment. Moreover, student needs that ELAs and CALs satisfied included social benefits, improved ethical standards and language skills, increased engagement with academics, improved employability, networking opportunities, and satisfaction with university life.

The perceived effects of ELAs when applied to study of business ethics in real-life situations involved co-creation, that is, increased student motivation and engagement with learning, improved teamwork, greater understanding of different cultures and learning styles, and increased self-discipline.

The results of this study demonstrate the potential value of ELAs in the context of teaching business ethics in undergraduate education. As witnessed in the focus groups and interviews, ELAs appear to assist undergraduate students to make connections between theory and practice through affective learning. In addition, they reported being able to extend the application of this knowledge into other areas such as employability skills and overall satisfaction with their university education.

The adoption of these experiential activities tested the efficacy of Kolb’s (1984) model, by providing real time real-life experiences to students in a classroom setting, and demonstrated that not only can ethical education develop an opportunity for reflection on business ethics but also can extend learning to other graduate capabilities.

From this experience, ELAs and CALs can be developed and applied in large classes to teach ethics, enabling students to make connections between business ethical issues in theory and in practice that can be applied beyond the classroom setting.

Limitations and Further Research

Further research is required to compare this affective style of learning with cognitive learning in other cultures and ethical contexts, such as medicine, nursing and engineering, to further prove this finding. Another possible area for further study is the effect of ethics education on behaviour, that is, how students act after being taught about ethics (Liebler, 2010). A longitudinal study may also be helpful in understanding ethical behaviour of students after they have graduated and are working in business settings, as there is concern as to the level of transference of ethics education into real world applications. The earlier students are exposed to ethics in the classroom, the more likely they will be to engage in ethical behaviour and to adopt ethical attitudes in their daily lives (Borkowski & Ugras, 1998; Desjardine, 2012; Rossouw, 2002).

Appendix. Sample Ethics-Based Experiential Learning Activity (ELA) and Critical Action Learning (CAL) Used in the Course

Activity I: Simulation in Genetically Modified Food

This simulation is designed to develop skills at cross-cultural negotiations with an emphasis on multi-stakeholder dialogue and exchange. It raises ethical questions of selling and using genetically modified food. This exercise provides an interactive case simulation in which students are assigned to a group that will assume the role of one of several stakeholder groups in the actual dispute between the United States and the European Union (EU) over trade in genetically modified organisms (GMOs).

In this case, the US government, on behalf of US farmers and the biotech industry, argued that the EU is in violation of global trading rules. Europe responded that it has the right to protect the health and safety of its population and domestic crops, given the uncertainties over the effects of GMOs on humans, animals, and plants. This simulation assumes that the United States and the EU proceed through the World Trade Organization (WTO) dispute-settlement procedures, and it places participants in the roles of the various disputants: the US government, the European Union, a consortium of GMO companies, a group of interested developing countries, a group of NGOs, and a WTO Dispute Settlement Panel.

Activity II: The Bribery Scandal at Siemens AG—Case Study

In December 2008, the Munich, Germany-based Siemens AG agreed to pay fines to the tune of €1 billion towards settlement of corruption charges that had hit the company since 2006. This is an eleven-page case study where students must analyse the ethical and corporate responsibility issues and participate in a case presentation and discussion and submit a written analysis with recommendations. The case study is on the unit webpage on Black Board (online learning platform).

Activity III: Sample International Bribery Scenario

Students are placed in a role of an International Executive, informed by the Company’s African market Sales Representative that the newly formed African Organization for Protective Economics (AOPE) has adopted a Resolution authorizing its executive management to selectively exclude overseas manufacturers and exporters from its markets where the management in its sole judgement deems appropriate.

While the Executive is processing the information about the Resolution that had appeared in the Wall Street Journal, Business Week, and Fortune, the events in the African market start developing rapidly with the receipt of an email from the Sales Representative stating that a Senior Official advised that in order to operate in the African market new regulations require the Company to secure an import licence from AOPE.

The Sales Rep subsequently requests the Executive’s urgent presence in Africa to conduct negotiations to secure a license. Upon arrival, the Executive and the Sales Representative commence discussions with the Senior Head of the AOPE Department dealing with the Executive’s product group. The negotiations of specific terms dealing with product specifications and quality, price levels, technical support to be provided and logistic details as well as submission of relevant financial data proceed smoothly and are apparently completed satisfactorily.

On the final day of negotiations, however, the Senior Department Head extends the Executive the invitation to a private luncheon meeting with the Minister-Director of AOPE. Upon arrival, the Executive is warmly greeted by the Minister-Director and introduced to the only other person present, his “Consultant” on importer qualifications. At the conclusion of the luncheon and over brandy and coffee, the Minister-Director expresses his pleasure at the culmination of the negotiations but advises the Executive that the import licensing agreement must be countersigned by the “Consultant” who remained silent and did not participate in the luncheon discussion.

The Minister-Director further explains that the Consultant’s fee of $500,000 must be borne by the Executive, and paid immediately. The tone of the request, however, indicates that the Consultant might be agreeable to a lower amount. The Executive starts explaining that this fee, as a new development, has not been factored into the cost component of the negotiations, while internally weighing in such factors as existence of The Foreign Corrupt Practices Act (FCPA) of 1977, mounting pressure to revoke it, and the possibility of being excluded from the growing market in case of the refusal to pay.

Students are then asked, if in the shoes of the Executive, whether they would agree or refuse to pay. They are also asked to explain their decision and outline the plan of dealing with its consequences.

Activity IV: The Global Strategy Game

An International Business Ethics Simulation. This was an online game that students played during the semester as a part of their assessments competing with students from other universities.