Introduction

The relevance of ethics education in business schools has been reinforced in the past decade. Increasingly, there is a normative emphasis on ethics education by international accrediting agencies such as the Association to Advance Collegiate Schools of Business (AACSB) (Hartman and Werhane 2009; Sims and Felton Jr. 2006). Over the years, corporate leaders have also put forward the demand to make ethics an integral part of a business management curriculum (Henle 2006). The outbreak of several high-profile corporate scandals in recent decades has further underscored the need for ethics education (Beggs and Dean 2007). As part of this effort, business schools are taking a stronger stance on the need to infuse ethical values in participants at the foundational stage itself (Giacalone and Calvano 2012; Giacalone and Wargo 2009; Podolny 2009). Consequently, skepticism regarding teaching of business ethics has evolved from “should it be taught” to “how best can it be taught” (Alsop 2006; Ryan and Bisson 2011). This has prompted stakeholders in business ethics education to seek innovative solutions.

The incorporation of ethics into the curricula of business schools has been progressive and has taken various forms, such as a stand-alone course or a module in an existing course. Such pedagogical choices aim to foster a deep transformation of participants by assimilating and adopting values of moral leadership (Windsor 2004). Presently, the fundamental goal of instilling ethics as a core value in participants is far from being achieved (Caldwell 2010; Swanson 2004). The current state of business ethics in systematically improving the moral reasoning of participants is “deeply questionable” (Ohreen 2013). It is beleaguered by short-lived enhancements in ethical awareness and reasoning skills (Balotsky 2012; Weber 1990). The broad disconnect between ethical theories and real-world events as well as the disjointed presentation of interlinked incidents present serious challenges. Attempts at addressing these have led to an exponential increase in ethics pedagogy literature exploring the constituents of an effective and efficient pedagogy.

Academic endeavors in ethics pedagogy have been gradual as scholars have disparately focused on establishing linkages between core theories and their real-life applications, contrasting between domain specific and inclusive assessments, and emphasizing outdated or developing new teaching techniques. We find there is limited consensus on a pedagogy that comprehensively addresses the various concerns faced in business ethics education. More specifically, our article contributes to this discussion in a few key ways. We first review the existing body of literature to assess the current approaches in business ethics pedagogy. This helped us structure the focus of the literature into three overarching domains, namely Approach (A), Content (C), and Delivery (D). Within each of these domains, we identified two distinct themes that we term as binaries. These binaries put forth two alternative viewpoints within each domain. Collectively, the six binaries across the three domains represent an overarching theoretical framework (ACD framework) for business ethics pedagogy. Approach and Content form the basis of an effective pedagogy—the core ethical values that are to be communicated. Delivery determines how efficiently these values are inculcated in the participants. The 408 articles we reviewed brought out dispersed focus on domains and binaries. None of the pedagogies proposed within these articles address the binaries comprehensively as they were not based on a foundational framework. To overcome this gap, we build on the foundation provided by the ACD framework to propose a contemporary pedagogy—Integrative Live Case (ILC).

An ILC uses a current incident to foster participants’ learning of ethics. It provides a generic modular pedagogy for conducting a stand-alone business ethics course. It is also flexible in addressing the mandate for an ethics course. Using a current ethical incident—Volkswagen Dieselgate (VW Dieselgate)—we demonstrate the execution of the ILC pedagogy.

Challenges of Business Ethics Pedagogy

Business school instructors’ pursuit of infusing strong ethical values in participants is replete with challenges. Among which, the first and foremost lies in overcoming the “collective conscience” of profitability for businesses in the long term (Ghoshal 2005; Mitroff 2004; Podolny 2009). Participants are indoctrinated with the ideology that the primary motivation of human behavior is self-interest (Folger and Salvador 2008), which places profitability near the top of the hierarchy of values. For ethics to feature in core values and rise higher in the hierarchy, instructors need to motivate participants to develop a sense of empathy (Cohen 2012) and broaden their cognitive competence (McWilliams and Nahavandi 2006). Hence, the goal of ethics pedagogy should be to inspire participants to become managers who no longer solely focus on maximizing shareholders’ wealth (Hill and Rapp 2014). This would also enable building relevance of business ethics in the context of socially oriented professions such as social entrepreneurship (Dzuranin et al. 2013). Participants need to recognize that ethical issues originate in and affect a broader ecosystem of business.

The second challenge that instructors continue to grapple with is the integration of business and ethics. Integrating “what is” in business and “what should be” in ethics needs to be conceptually resolved by considering the relationship between the two. It is difficult to inculcate ethical sensitivity in participants as part of natural order of things and not as something distinct (Arce and Gentile 2015). For instance, despite numerous suggestions that consumer perceived ethicality is important, ethical branding is not always the primary consideration when marketing strategies are developed (Singh et al. 2012). Over time, three distinct relationships have emerged in business and ethics: parallelism views business and ethics as being mutually exclusive; symbiosis indicates a cooperative and collaborative relationship; and integration advocates a stronger melding of normative and empirical approaches (Weaver and Trevino 1994; Wempe 2009). Donaldson and Dunfee (1994) propose a symbiotic relationship via the Integrative Social Contracts Theory, as a way forward. Similarly, Norman (2004) recommended an integrated approach where he explores the option of having an ethicist on the management education team. Likewise, Hasnas (2013) proposed the “principles approach” to bridge the gap between philosophical perspectives derived from abstract theories of ethics, and an atheoretical perspective that enables participants to analyze cases and propose solutions.

Thirdly, participants may not readily grasp the links between ethical theories and their real-world application. Consequently, identification of ethical issues and their ethically valid solutions becomes a challenge. To address some of these concerns, innovative techniques have been recommended over and above traditional pedagogies. Some notable examples are the use of Venn diagrams as visual tools (Fleig-Palmer et al. 2012), and simulation games for “giving voice to values” (GVV) (Arce and Gentile 2015). These recommendations aim to “leverage wisdom in the classroom” and in the process draw the linkages between theory and real world, fostering ethical learning collaboratively (McDonald 2015).

These three key challenges need to be negotiated while inculcating ethical values into participants at the foundational stages. Hence, the adopted ethics pedagogy needs to be persuasive enough to build ethical values in participants, sensitize them about the different constituents of the business ecosystem, and have a lasting effect on them. However, the strategies to develop such pedagogy have largely been disparate and disjointed, and the fundamental question arises: what are the key components of an effective and efficient ethics pedagogy?

A Framework for Business Ethics Pedagogy

For a comprehensive understanding of the growing literature on business ethics pedagogy, we reviewed relevant articles published in leading management journals. As the first step, we selected leading business ethics journals such as Journal of Business Ethics, Business Ethics Quarterly, and Business Ethics: A European Review and searched for articles on “pedagogy”. Simultaneously, we searched pedagogy focused management journals such as Academy of Management Learning and Education and Management Learning for articles on “business ethics”. Further, we selected all articles in the journal specializing in business ethics pedagogy, namely, Journal of Business Ethics Education.Footnote 1 We reviewed 408 articles published between 1991 and 2016 across these journals.

At the onset, a preliminary review was conducted to identify an article’s key research question. Based on the patterns observed, we categorized the main focus of the extant literature on business ethics pedagogy into three primary domains: approach, content, and delivery. These domains reflect academia’s concerns regarding the pedagogical challenges in business ethics education. Approach (A) refers to the philosophical viewpoint adopted; Content (C) encompasses the different constituencies addressed; Delivery (D) focusses on the execution of the pedagogy. To further develop our understanding of these domains, we revisited the articles. This helped us identify two alternatives within each domain that we term “binaries.” The three domains and the binaries within them comprise the ACD framework. A paper was assigned an indicator value in each of the three domains depending upon the binary that it addressed. In each domain, a paper could address either one or both binaries together.Footnote 2 For each article, the identification of binaries was done based on expert consensus among an odd number of authors, that is, it had to be agreed upon by at least two of the three authors. The findings of the review are summarized in Table 1, and Fig. 1 depicts the trends in the coverage of domains and binaries in the literature between 1991 and 2016.Footnote 3

Table 1 Summary of articles reviewed based on ACD framework
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Fig. 1
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Trends in binaries covered in business ethics literature across domains

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Approach Domain

Tracing the motivation for ethics pedagogy, the first domain, Approach, focuses on the core philosophy of the article. The question arises: Is the pedagogy discussed rooted in normative values of ethics, or is it based on a positivist view? Put simply, Approach identifies the article’s position in the spectrum ranging from overarching theories to their real-world applications.

Business ethics delivered from a normative standpoint seeks to develop theoretical insights and bring conceptual clarity to the participants. For instance, some scholars emphasize the utility of adopting approaches such as teleology, deontology, feminist approaches, and theories of moral development for business ethics education (Christensen et al. 2007). We term this approach as theory-laden. This approach equips the participants with fundamental concepts under the assumption that they will be able to apply them to a real-world problem. The onus for application, however, rests with the participants. The alternative approach takes a positivist viewpoint and aims to develop a sophisticated understanding of ethical principles by assessing real-world events. The rationale lies in enabling participants to weigh the relevance and application of ethical principles within the business ecosystem, starting from a real-world context. This facilitates visualization of patterns in real-life incidents and connects the dots from practice to theory. We refer to this approach as real-world connectedness. Some examples of pedagogies taking the real-world connectedness approach are the principles approach (Hasnas 2013), peer influence-based learning through a “dialogic process” (Ohreen 2013), problem-based learning exercises (Sidani and Thornberry 2012), and focus on the ecosystem (Giacalone and Calvano 2012).

Approximately, half the articles reviewed focus on only one of these binaries, with 23 and 26% of the articles discussing theory-laden and real-world connectedness, respectively. The remaining half, 51% of the articles, addresses these binaries together. A sharp increase in discourse on real-world connectedness is noticed since the early 2000s (Fig. 1a). In addition, the focus on theory-laden approaches has witnessed resurgence from 2006. Notably, there has been an upsurge in the binaries being addressed together since the beginning of the period covering our review. This is indicative of an emphasis on real-world connectedness without undermining the relevance of exposing the participants to fundamental concepts, and vice versa. Incorporating (addressing) the binaries of approach simultaneously help to discernibly identify generalizable outcomes of a problem from highly contextualized applications in the real world, which may not be obvious otherwise.

Content Domain

Content, the second domain, sets the canvas for the pedagogy. It refers to how the pedagogy is structured, which can be rooted in one or many different aspects. These aspects may range from different business functions within an organization (e.g., accounts, operations, marketing), stakeholders of businesses (e.g., shareholders, customers), or even multiple ethical dilemmas associated with an ethical incident. We refer to these aspects as “constituencies.” These may even range across different disciplines. Content refers to the number of constituencies that are being addressed. A given pedagogy may focus on one or two constituencies in great depth or explore many to provide breadth. Focus on these constituencies could encompass theory-laden as well as real-world connectedness approaches.

Critical and comprehensive assessment of one or at the most two specific constituencies is referred to as depth. For instance, an ethics course may be specifically designed to discuss financial management and accounting aspects—functions that are under the ethical lens quite frequently. The other binary for content, breadth, focuses on multiple constituencies simultaneously. Such content may trace the origins of an ethical incident across different divisions within a firm or present an ethical incident across different business segments within a society. This multi-tiered and cross-connected assessment of an ethical issue provides a better temporal mapping of causes and effects of an incident.

Our review shows that there is greater focus on breadth (65% of the articles reviewed), as opposed to depth (24% of the articles reviewed). Interestingly, breadth has been the predominant binary for content over the last two and a half decades witnessing a sharp increase in focus from the early 2000s (Fig. 1b). However, attempts to address depth and breadth together have been few and far between (11% of the articles). This highlights the lack of simultaneous attention to the binaries. While depth tends to have a narrow focus, breadth is dispersed. Depth alone may not present a complete picture as the intra- and inter-linkages between business functions and the broader aspects motivated by society could be overlooked. Similarly, topical coverage across many constituencies provided by breadth may make the participants struggle with comprehension. Addressing the binaries together is desirable as it would offset their respective shortcomings.

Delivery Domain

The final domain, Delivery, has a direct interface with the participants, implying that the instructor’s focus is now on the choice of pedagogical tools. The instructor tailors the sessions to achieve the aim of the pedagogy defined in the approach domain with a focus on the chosen content. Approach and content primarily deal with planning and preparation. Delivery, on the other hand, refers to the execution of the pedagogy.

The use of conventional techniques is termed as traditional delivery. This includes both lecture-based learning and the case-study method. However, the criticism of one-way flow of knowledge in these methods has led to the emergence of many alternatives in the last decade and a half. Advocating the use of these styles comprises the other binary, namely, innovative delivery. This method of delivery is in alignment with the current expectations of the participants—knowledge packed in innovative forms that have direct relevance in their professional careers. Moreover, the current audience is a generation with an instrumentalist view of education, looking for a return on investment in whatever they learn (Carlson and Fleisher 2002; Clayson and Haley 2005). Educators often need to adopt innovative techniques to engage participants. For instance, to address the millennial participants’ mindsets, new pedagogies like digital storytelling (Elmes and King 2012), peer influence through a “dialogical process” (Ohreen 2013), and gamification (Pellegrino et al. 2014) have been proposed.

More than half the articles reviewed (57%) focus on only one of the binaries, with traditional and innovative deliveries receiving nearly equal attention (27 and 30% of the articles, respectively). The evolution of debate on ethics pedagogy in the delivery domain since the mid-2000s is characterized by a marked increase in the emphasis on innovative methods such that it surpassed the focus on traditional ones (Fig. 1c). Forty-three percent of the articles deliberate over both the binaries together. It is noteworthy that this simultaneous focus on both the binaries has been consistently increasing throughout the chosen review period (1991–2016). One of the main drivers for this pattern is the potential increase in robustness of innovative techniques when supported by core theory.

Insights from the Literature Review

A descriptive summary of the binaries addressed in the reviewed articles reveals an increasing emphasis on the simultaneous coverage of binaries in two out of the three domains—approach and delivery. In contrast, the content domain has witnessed an increasing emphasis on the breadth binary. We further assess these data to develop a better understanding of the patterns within and across the three domains. Pearson correlation coefficients (r) presented in Table 2 reflect the co-occurrences of binaries in the literature.

Table 2 Pearson correlation coefficients (r)a of binaries across domains based on the ACD framework
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Some distinct patterns emerge in the choice of binaries addressed across the domains. In the context of approach and content, a simultaneous focus on theory-laden and real-world connectedness is positively correlated with a focus on depth and breadth together (r 0.14). This indicates that scholars who focus on both binaries of approach also recognize the importance of collectively addressing the binaries of content. Similarly, there is a strong association between the adopted approach and the choice of delivery. Traditional delivery is correlated positively with theory-laden (r 0.42) but negatively with both real-world connectedness (r −0.22) and the approach binaries together (r −0.16). A focus on innovative delivery is positively correlated with real-world connectedness (r 0.61) but negatively correlated with both theory-laden (r −0.10) and the approach binaries together (r −0.46). Together, traditional and innovative deliveries exhibit a high positive correlation with both binaries of approach considered together (r 0.57). An overview of these correlations is indicative of a greater likelihood of the theory-laden approach being accompanied by traditional delivery, real-world connectedness by innovative delivery, and both binaries of approach by both binaries of delivery together. In a similar vein, content binaries together are negatively correlated with traditional (r −0.09) as well as innovative (r −0.14) deliveries but positively correlated with both binaries of delivery considered together (r 0.21). Thus, the overall results indicate that the selection of a binary in one domain limits the available choices in other domains. Pedagogical debates focus narrowly on only a few conducive combinations of binaries instead of the many possible combinations using all six binaries.

We posit that for a given pedagogy to be truly comprehensive, it must address all components of the ACD framework. Together, the components allow the instructor to transition seamlessly from the perspective of ethics to the constituencies involved and to how best it can be taught. We find that only 26 (6%) articles refer to all six binaries. These articles were revisited to assess their approach in addressing the binaries. Several of these articles are literature reviews emphasizing the lack of comprehensiveness in ethics pedagogies, reinforcing our conclusion. Some articles contained propositions, while others presented concrete solutions. Noteworthy recommendations include integrating moral judgments in actual situations (Maclagan 2012), building a holistic approach and the case development method (Plewa and Quester 2006), taking the context of a lifecycle case study (DesJardins and Diedrich 2003), adopting a team teaching approach (Norman 2004), and corporate emotions engineering (Fineman 1997). In addition, the proposed pedagogy falls short of being comprehensive in each of these cases. This can be partly attributed to a missing intermediate step—development of a theoretically motivated framework to serve as the foundation for the pedagogy. We account for this crucial missing step by implementing the ACD framework to develop an alternative pedagogy. Ideally, for logical consistency, such a pedagogy should sequentially address the domains. The formulation of a pedagogy should begin with decisions about approach, followed by those regarding choices of content and finally the mode of delivery (Fig. 2). We develop such a pedagogy called the Integrative Live Case (ILC) and present its stylized illustration in the following sections.

Fig. 2
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Domains in ethics pedagogy

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The Integrative Live Case (ILC) Pedagogy

ILC pedagogy revolves around a significant and current business incident emerging from ethical dilemmas in the real world. It is based on the ACD framework, is “integrative” of the six binaries, and “live” in context. The incident need not necessarily be an ethical transgression of colossal proportions. It can be an exemplar case of ethical transformation that has the potential to transform the industry itself. It should be exciting and engaging, with extensive media coverage and promise to linger in public memory in the foreseeable future. A set of attributes that qualify such a live ethical incident are described in the subsequent subsection; this is followed by a subsection on the ILC’s integrative nature.

Attributes of an ILC

An ILC has three distinctive attributes: no retrospective bias; temporal proximity; and touching the millennial pulse. These characteristics also clearly differentiate it from the traditional case method. First, a live incident is characterized by speculations regarding the origin of the ethical dilemmas and the protagonists involved. Since the ultimate outcome is not yet known/certain, there is no retrospective bias. While a case gets outdated once written (Markulis 1985), the live incident ensures that the context for the ILC pedagogy is consistently renewed. An ILC is also not impersonal and sterile like the traditional case, as the live incident has a greater sense of “realisticness” (Markulis 1985). In addition, the unstructured nature of the live incident makes it an engaging exercise, involving discovery and, therefore, a higher level of participant centricity.

Secondly, an ILC urges participants to seek information on the various aspects of an incident that is currently unfolding. This temporal proximity of an ILC provides a higher level of connectedness compared to conventional classroom deliveries, such as lectures and the traditional case method. In contrast to the standard case method with a predetermined session plan, an ILC inspires instructors to leverage practices such as “wisdom in the classroom” (McDonald 2015). This, coupled with myriad possibilities of class engagement via activities focusing on experiential-based learning, differentiates an ILC from traditional delivery formats.

The third attribute of the live incident, touching the millennial pulse, is the logical fallout of the live incident’s attribute of temporal proximity. Millennial participants’ tendency to live in the moment and a high degree of receptivity to teaching based on current business scenarios makes a live incident a perfect foil to existing delivery techniques. Laced with an “elevated degree of realism” (Camarero et al. 2010), ILC excites the millennial participant by instigating their inherent inquisitiveness only to be satiated by their eagerness to retrieve relevant information through search engines. Information on a carefully chosen case context would be abundant and easily accessible.Footnote 4

An ILC is not the first attempt at exploiting a current incident for contextualizing management education (for e.g., see Culpin and Scott 2012). Literature recognizes that a real-life context provides a feasible alternative to overcome the pitfalls of the case method (Hoover 1977). Live cases have been adopted as part of “client-based learning” where participants interact with a practitioner, thus taking the real-world connectedness approach. It requires participants to pursue client-specific projects with an in-depth view and address the challenges therein. This innovative pedagogy has gained traction in marketing education (Abston 2014; Bove and Davies 2009; Camarero et al. 2010), where it can be viewed as an ILC if the chosen client project is contemporary. However, this approach is unsuitable to examine ethical issues. Assessment of the ethical aspects of an organization requires transparency of information and candid flow of opinions. This is highly unlikely between an organizational representative and the participant, who is an external agent not formally associated with the organization. Moreover, even if the communication does take place, a complete understanding of the ethical context is difficult due to the inherent ambiguity in the organization’s value system and its core assumptions (McWilliams and Nahavandi 2006). The ILC pedagogy circumvents these limitations by introducing an ethical live incident context, but not requiring direct client interactions.

ILC Pedagogy and ACD Framework

The ILC pedagogy presents a unique opportunity to integrate divergent binaries across the three domains of the ACD framework. Its comprehensive implementation, that is, covering the six binaries simultaneously, addresses the key components highlighted in the literature to improve the efficacy of the pedagogy. We next discuss how the ILC pedagogy addresses each of the domains of the ACD framework.

ILC and Approach

Business ethics education often grapples with an overdose of philosophical discourses, long readings, disconnected contexts, and a strong current of moral overtones. At the same time, there is evidence that learning immersed in real-world context results in cognitive conflict and puzzlement (Savery and Duffy 1996). The contemporary pedagogy of an ILC allows for the integration of binaries—theory-laden and real-world connectedness—in the approach domain. The instructor can discuss theoretical concepts, while remaining connected to the real world. The ILC pedagogy provides a rich context for fundamental debates in conflicts such as shareholders versus stakeholders (Freeman 1984; Friedman 1970); separation thesis versus integration thesis (Freeman 1984); and relevance of organizational ethics. Discussions veering around the ethical navigation wheel (Kvalnes and Øverenget 2012) and ethical decision-making (Awasthi 2008; Bastons 2008) become more persuasive when rooted in real-world context. Similarly, evaluating a live incident via the lens of ethics theory such as responsibility principle (Freeman 1984), moral muteness (Bird and Waters 1989), moral schemas (Rest et al. 1999), and fudge factor (Ariely 2012) contributes to a robust understanding. Further, learning placed in realistic contexts leads to learning that has a longer gestation period by encouraging the transition from “inert to indexicalized knowledge,” that is, the ability to apply knowledge spontaneously to new situations (Grabinger and Dunlap 1995).

ILC and Content

Organizations are a complex web of systems and subsystems, closely interwoven. Specifically, business functions play a key role both as stand-alone subsystems and also as part of the larger organization, with numerous interdependencies, and require to be viewed through an integrative lens. This requires one to dwell simultaneously on the depth aspects and also the breadth aspects when discussing business ethics. The ensuing choice, taking the breadth and/or the depth perspective, is a function of constituencies— one/two/multiple business functions; multi-tiered decision-making; relevance of one/two/many stakeholders, or even financial viability versus environmental sustainability. Typically, these have been viewed as zero-sum games wherein the breadth aspect is sacrificed when one chooses to emphasize the relevance of depth and vice versa. An ILC resolves this problem of constricted choices by giving instructors the option to simultaneously retain the respective virtues of both. Instructors can choose a specific constituency to dissect and decipher the layers therein. At the same time, instructors can also instigate participants’ inquisitiveness to explore the inter-linkages between the constituencies and build a comprehensive view. Catalyzed by tools of collaborative learning, participants develop a sense of inter-relatedness in a world of scattered information. As they debate among themselves wearing different hats, participants are better able to appreciate the nuances of decision-making. In other words, an ILC helps participants in developing a sense of professional empathy in their dealings across functions and hierarchies.

ILC and Delivery

The current generation of participants prefers the internet as a knowledge resource over unidirectional knowledge flow from an instructor during a lecture (Dede 2004). Educators have also been debating the pros and cons of the traditional face-to-face method against hybrid teaching (Lacatan 2013). The advent of new delivery techniques and the numerous possibilities of learning through digital technology have added several dimensions to this debate. Moreover, there is pressure from participants to engage them in collaborative learning experiences (Wisniewski 2010). The ILC pedagogy addresses these challenges in a unique way, by touching the millennial pulse. Entrusting the class participants with the responsibility of keeping abreast of the inflow of news keeps them involved. This also ensures that they participate proactively in the class and contribute their own unique information and acquired insights on the subject. Further, as no single participant can possibly read and absorb the vast amount of available information, it compels participants and instructors alike to engage with one another directly or through social media. These peer-to-peer interactions will also facilitate learning. An ILC can integrate specific interventions encompassing traditional (e.g., assignments) and innovative (e.g., role plays) tools to further push collaborative and cooperative learning, which can also serve as assessment tools. In fact, the advantages of innovative delivery emerge in sharper relief when interspersed with traditional delivery techniques.

Implementation of ILC Pedagogy

The ILC pedagogy presented here integrates the binaries within approach, content, and delivery, as discussed above. Another significant characteristic of the ILC pedagogy is its flexible design, with the instructor at liberty to design a course ranging from five to twenty sessions. Here, we propose a five-module structure for a stand-alone business ethics course, which is based on the multilevel management paradigm of individual, business, and society. These modules are depicted in Fig. 3 and summarized in Table 3. Information on the live incident is likely to be unevenly distributed across these levels as media attention on a public event varies over its lifecycle stages, and all cases do not get the same level of media coverage (Rivoli and Waddock 2011). Hence, the instructor can asymmetrically allocate session time across the modules guided by academic training, information inflow on the incident, personal preferences, and institutional course requirements. We next discuss how one can adopt the pedagogy by providing blueprints for each of the five modules.

Fig. 3
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Generic ILC pedagogy

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Table 3 Generic ILC pedagogy
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Introductory Module: Setting the Context

The first module sets the context for the course, introduces the real-world ethical incident to the participants, and conducts a stakeholder debate. Instructor preparation involves increasing awareness on the ethical incident, and acquainting with media coverage on the case. For the introductory module, structured preparation by the participant is not proposed. However, an introduction to the live incident should be provided, whereby participants are encouraged to read from different sources including the internet.

Business ethics instructors face a unique challenge of molding the participants’ perceptions about the importance of an ethics course. One way of addressing this lies in discussing ethical dimensions in everyday context. An ideal choice of such a context would be an incident with temporal proximity. Building on this incident, the ILC should be introduced and participants should be asked to share their spontaneous reflections. The instructor can push the participants to identify the ethical lapses and challenge the media allegations. This class exercise is aimed at appreciating the shades of gray in ethics. It also proposes to bring to the forefront the participants’ unpreparedness to negotiate ethical dilemmas, and underscore the difficulty in asking pertinent questions. More specifically, the first module aims to create numerous doubts about the case in the minds of the participants, and encourage them to apply the limited information they have to present the argument relevant to the classroom discussion. After this session, it is expected that participants would be enthused and interested to research and scrutinize the ethical nuances of the case.

At this point, the instructor can revisit the complexities and ambiguities in ethics. One possible option is to conduct a stakeholder debate in class. Another creative option is to bring forward the issues identified in the previous session and map them to the list of stakeholders the class identifies (Frostenson 2015), which could be a one-to-one or one-to-many mapping. The session can be closed with a theoretical reflection on the classical debate between Friedman’s shareholder and Freeman’s stakeholder theories (Freeman 1984; Friedman 2007).

This class exercise on identifying ethical issues is expected to foster situated learning. Simultaneously, the stakeholder debate aims to initiate active and participative learning. Individual and group level assessments can be carried out by evaluating the participants’ contribution in identifying the stakeholders and their concerns.

Individual and Business Ethics Module

The second module introduces the philosophical underpinnings of the ethical individual and contextualizes it to the case. The role of values, morals, and framing of decision-making at the individual level is proposed to be underscored, to help the person recognize her/his ethical self. In preparation for the session, the instructor should identify the key individuals associated with the case. These individuals can be mapped to the stakeholder groups identified during Module 1. The next step is to identify the past and current actions of these individuals that may have any bearing on the case. Preparation by participants would involve readings on models of individual decision-making. During the session, the actions of the individuals in the real-world context should be assessed using the theoretical lens so as to recognize that even good managers can make wrong decisions.

In this module, participants would be encouraged to recognize their ethical self, and identify ethical dilemmas. These goals can be achieved through a mix of individual role plays, debates, and theoretical exposure through lecture sessions. The participants can be questioned on their points of view to help them comprehend the complexities of ethics. Alongside, it may be appropriate to introduce the participants to the fundamental aspects of deontology, teleology, decision framing, moral development, and moral schemas through structured lectures. It is recommended that behavior displayed by the participants be labeled retrospectively (before end of the session) with the ethical concepts that have been introduced. This will greatly enhance contextualized understanding at an individual level.

The clarity in thought process, novelty in recognizing the individual context, and depth of understanding can be used to assess the individual’s performance in role plays and measure the learning achieved. Likewise, a short reflective submission contextualizing a live incident to theoretical concepts would enable measurement of the experiential and contextualized learning of the participants.

Business and Business Ethics Module

This module focuses on the key and specific actions of the organization. It seeks to identify the interdependence of organizational aspects and ethical concerns, across functions and hierarchies. This requires a sound understanding of the organization and its performance over time by both the instructor and the participants. In this module, instructor preparation would involve identification of the key organizational actions that can be discussed in class.

The class discussion can be initiated by identifying a list of key decisions and actions of the organization. Each of these can be analyzed while exploring some fundamental questions. For who was value created and for who was it destroyed? Who was harmed and who benefited from these decisions? And, whose rights were enabled and who lost their rights? Whose rights were realized? While addressing these questions, participants can also be introduced to ethical concepts like ethical climate, slippery slope, motivated blindness, moral muteness, potential fall guy, indirect blindness, and inconceivable goals. The class can be divided into interest groups representing specific organizational functions. These groups will first build function-specific plans and later arrive at a consensus on an organizational strategy. Further, consensus between the groups should be sought at two distinct stages: first, placed before the ethical incident, and next placed after the ethical incident. The instructor’s role would lie in tearing down the consensus among the groups on ethical boundaries. The different action plans prepared in the two contexts, before and after the ethical incident, would help identify how changes in the organization’s ethical climate impact managerial actions. The inter-linkages between the decisions of different groups can also be identified across levels and functions.

Group work is aimed at facilitating collaborative and cooperative learning of ethical concerns in an organizational context. The clarity, consensus, and innovation displayed by the groups in proposing and defending their actions can be used to assess the group performance. The scores should reflect the richness in negotiations and the recognition of the boundary conditions. Once again, identification and labeling of ethical concepts displayed during the classroom interactions would increase the contextualized learning of participants.

Society and Business Ethics Module

The final level in our multilevel management paradigm, aggregating individuals and businesses, is society. In this module, the participants are exposed to an overriding societal concern that emerges from the ILC context. These concerns can be about the evolving nature of ethical standards and the changing salience of public issues. At the beginning of the first session in this module, participants should be asked to identify multiple ways of external stakeholders’ involvement, based on media reports. Participants should be exposed to the potential lack of consensus (win–win situations) among stakeholders and the ramifications of a decision on the incident by an external, non-partisan individual/group.

The instructor should prepare to hold a broader discussion while introducing the concerns of sustainability—encompassing environment, society, and economy—in the case context.

The class discussions and debates can be motivated by examining the interdependent relationship of society with individual and organizational actions. What are the industry standards and how do they evolve? Is this a one-off incident or are there more skeletons in the closet? How did society and industry contribute to this ethical lapse? Going forward, how would this incident mold industry, legislation, and society?

Classroom participation can be evaluated based on relevance, clarity, and innovativeness of ideas presented. As a reflective assessment, the participants may be asked to submit a short write-up on the likelihood of them remembering this episode a decade or two into the future. Depending on the context, field visits may also be arranged to encourage situated learning in the participants, and if opportunity and context permit, even service learning.

Concluding Module: Closing the Loop

The last module aims to identify the key ethical inter-linkages between the individual, business, and societal levels. It also provides an opportunity for wrapping up the ethical issues raised, summarized, and debated in class. Attempts at integration should be aimed at recognizing the reciprocal relationship, wherein not only are individual and business actions subject to societal influences, but social standards change, evolve, and adapt over time adjusting to the issues raised by the incidents.

In the debriefing exercise, the participants should be asked to identify an ethical incident (different from the one discussed in the ILC context) and discuss the ethical issue therein, highlighting the dilemma and the ethical gray areas. They should also identify the organizational level at which it lies, and the constituencies that it would involve. This can be an evaluative component, with the metrics comprising the choice of incident, identification of the ethical issue, and recognition of the central dilemma.

The next section details an instantiation of the ILC pedagogy to the context of a live incident, in this case, VW Dieselgate. In doing so, it provides a detailed coverage of the ACD domains and binaries by the proposed pedagogy.

Illustrative Example: VW Dieselgate

VW Dieselgate is a significant corporate incident with severe ethical implications (USEPA 2016). It involved the German automaker Volkswagen, one of the biggest public companies in the world (Forbes 2015), impacted over eleven million automobiles worldwide (Shankar 2016), led to the immediate resignation of the VW’s global CEO (Boston 2016b), and a loss of one-third of its market value within the space of two weeks.Footnote 5 It also reflected the culmination of a strategic direction that was set less than a decade ago by the CEO: to become “the world’s most profitable, fascinating, and sustainable automobile manufacturer” (Muller 2013). Dieselgate exposed the deliberate attempts by VW to breach emission norms, while claiming credit for sustainable practices at various forums (Russell 2015; Trudell and Horie 2015; Urken 2011). A small hidden code was found installed in the engine control software of VW automobiles, which would kick in emission controls when the automobile was on a test bed. This would enable it to meet the emission standards. However, during normal on-road operations it would allow the vehicle to emit 40 times the permitted emissions, while improving fuel economy and giving higher torque (Economist 2015; Russell 2015). Further, despite numerous evidences indicating this malpractice, the company refused to take responsibility and also obstructed investigations (Ewing 2016; Neate 2015; Sage 2015). It formally took cognizance of the issue only when threatened with denial of roadworthy permits issued to new launches in the US (Gates et al. 2016). The incident involved cars, a daily-use asset and one of the first large purchases by an individual, giving it a high level of contextual proximity. Besides, it is quite possible that some in the audience might own a VW vehicle, and may also have had a direct experience with the incident, which they can share in class.

The first news about the lapse on VW part was aired on September 18, 2015 (USEPA 2016). A year later, no clear responsibilities have been fixed (Welle 2016). The incident is the subject of numerous court battles, globally, and investigations are underway at several levels (Cremer 2016). Any conclusive outcome on the incident is highly unlikely in the foreseeable future. Hence, the case has temporal proximity with no retrospective bias. Moreover, preliminary investigative reports are unclear of the date from which VW started using this software code, and the specific car models using it. Further, the scandal may be widening as it has emerged that other automobile manufacturers, including auto majors such as Daimler, Nissan, Mitsubishi, and General Motors, may have also used alternative mechanisms to cheat on emission norms (Schmitt 2016; Urken 2011). Presumably, the cheating problem could be beleaguering the global automobile industry. There is also no clarity about how the ethical lapse would get addressed by VW, or how VW plans to compensate for the damage that it had caused (Boston 2016a). Hence, there is a lot of ambiguity surrounding the incident (Welle 2016). With an increasing focus on sustainability aspects in business education and also our daily lives, the incident touches the millennial pulse.

Thus, we identify the VW Dieselgate as a possible context for an ILC. Possessing all the salient characteristics desired in an ILC, it is an ideal context to be pursued. Though it may prima facie seem that candidate incidents for use as live context are scarce, a cursory look at the media coverage provides evidence to the contrary. For instance, in 2016, the national press in India extensively covered Sahara India, a conglomerate with a market capitalization of over USD 26 billion (Utkarsh 2016). The organization is facing allegations of following questionable financial practices, crony capitalism, and close nexus with and favoritism from politicians. Its CEO has already spent over six months in prison for not paying public debts. Similarly, Vijay Mallya, an Indian business tycoon, is a wanted man. He owes India’s public sector banks over USD 100 million (ANI 2016). Once a business baron, owning India’s biggest liquor breweries and a growing airline, Mallya is on the run and is seeking asylum in the United Kingdom. Both these contexts can also be used to motivate the ILC framework, and we leave it to the ingenuity of the instructor to make the choice.

“Appendix” provides a detailed pedagogical plan for using the context of VW Dieselgate to conduct a five-module stand-alone course on business ethics. The pedagogical blueprint identifies the structure of the course, objectives of each module, preparatory requirements for instructors and participants, detailed plan for each session, and also a suggested list of assessment options. Additionally, the approach, content, and deliverables of each module are also identified, with a detailed description of how the modules seek to provide comprehensive coverage by integrating across domains and binaries.

VW Dieselgate and Approach Domain

The millennials are enthralled by fashionable and fancy industries such as online gaming, food and beverages, and automobiles. Big corporations, in a bid to expand their customer base, entice them with novel marketing techniques. With the case contextualized in one such industry, that is, the automobile industry, the class is likely to attract an excited and interested set of participants, who are not averse to the context being discussed, and are eager to share their own experiences. Furthermore, with a history of unethical behaviors, the automobile industry also provides a rich context wherein the instructor has numerous incidents to quote from and make the session interesting (Jeff 2015). A live incident, such as the VW Dieselgate, allows discussion on events that are not only contemporary but also attract the attention of the new generation. The scandal is constantly in the news with fresh updates with investors demanding a fresh probe into the incident in 2016 (Brunsden and Campbell 2016). These updates not only help keep the participants’ interest alive in session but also contextualize theoretical debates to real world settings.

Adopting the ILC pedagogy in the context of VW Dieselgate allows the instructor to contextualize the traditional shareholder–stakeholder debate across multiple groups, such as car purchasers, interest groups, regulators, and national governments. Shareholders in VW lost nearly a third of their market value since the emissions test cheating scandal broke out (Reuters 2015). At the same time, in the US alone, VW entered into a settlement of over $15 billion, which provided for buying back or potentially fixing over a half million of VW’s diesel polluting cars, payment of civil penalties under unfair competition law, reimbursement of costs of investigation and litigations, and provide grants to government agencies to study technology to detect the so-called defeat devices (Reuters 2016). The German government and people suffered a loss of face as questions were raised on the superiority of German engineering, which had been established over a century (Ewing et al. 2015). In class, the theoretical concepts of an ethical person at the individual and organizational levels can be introduced to participants through role play at different hierarchical levels and across various business functions.

VW Dieselgate and Content Domain

There is increasing evidence that adoption of cheating strategies to demonstrate compliance with emission norms is not an isolated ethical transgression (Beene 2015; Schmitt 2016). The automobile industry is notorious for such frauds, with the evidence lying in millions of recalls each year and numerous high-profile cases. The incident can be analyzed along the perspectives of strategy, human resources, and ethics compliance systems. For instance, taking a strategic perspective, one can examine the ethical implications of the aggressive goal set by Volkswagen’s CEO Martin Winterkorn in 2008, to rise to the top of the automobile industry in a decade—a feat that the company achieved three years short of a decade, only a couple of months before the VW Dieselgate (Hakim et al. 2015; Muller 2013; Trudell and Horie 2015). Even in 2008, some critics had considered this call as delusional.

Ethics literature often questions the unreasonable demands put on the organization by its leadership, as inconceivable goals have been argued to cause ethical breakdowns, putting it on a slippery slope. It is argued that setting of unreasonably high standards creates an environment that fosters unethical decisions by creating intense pressure on middle managers to not only transmit good news but also protect their corporations, superiors, and themselves in the process.

Another debatable strategic decision by VW management is the plan to achieve rapid growth by following an organic growth path (i.e., setting up its own plants globally) in contrast to the accepted practices of adopting inorganic growth strategies (i.e., relying on acquisitions and alliances). A management participant should also worry about why whistleblowers did not emerge from inside VW. There is increasing evidence that the subject software code and its function was in full knowledge of the VW technical team, and was even flagged as a concern by its engine controls supplier (BBC 2015).

Taking a human resource view, the case provides a rich context for a discussion around the ethical implications of organizational cultures. The company (VW) is known to have an authoritative culture where one is not expected to question the boss, and it is believed that this organizational culture could have prevented whistleblowers from internally raising their voice against the cheating (Lydia 2015). Interestingly, while making bold marketing claims of meeting the US emission norms, VW was raising a voice against the tightening of the European emission standards as per the US levels (Neate 2015). This paradox can be discussed by exploring the organizational structures that allowed VW, the poster boy of Europe, to argue against the adoption of emission standards that it had supposedly already surpassed (Volkswagen Group 2015).

Numerous decisions taken in the functional domains were highly interdependent and successful in propping VW as a global leader. An exploration of this would provide a breadth perspective. For instance, VW had made numerous claims of self-regulation on morality issues and also argued in favor of a reduction in government regulations (Neate 2015). Rhodes (2016) discussed the key role played by USEPA and other third-party non-regulatory bodies (such as the Institute of Climate Change) in exposing VW to emphasize the need for recognizing “democratic business ethics”—a situation wherein the civil society holds corporations responsible for their actions even at the cost of disrupting corporate sovereignty. This could potentially redirect power from the centers of organized wealth and capital back to society (Thiruvengadam 2015). Hence, the case allows the instructor to take both a breadth and a depth perspective and also integrate them while discussing business ethics issues.

VW Dieselgate and Delivery Domain

This context for an ILC allows participants to immediately connect with the ethical context, when they are asked to identify the factors that they would account for when buying a new car. The answers can range from cost and high torque to fuel efficiency, eco-friendliness, and mileage, among others. Once the participants are connected and involved, the instructor has the opportunity to introduce theoretical concepts through lectures in more than one way. For instance, it would help close the loop by enabling participants to label their behavior, actions, and identification with the ideas that have been discussed in the ethics literature. It would lead to contextualization of their ideas to VW decision-making that led to the installation of the cheat software (Leah 2015).

The ILC pedagogy using VW Dieselgate allows for the use of a rich set of pedagogy tools: group role plays (stakeholder debate), individual role plays (wearing the CEO’s, middle managers, dealer’s, customer’s, or technician’s hat), lectures (ethical concepts), class exercises (evolving a functional and organizational strategy), scenario analysis (what if another firm is doing the same), and role play in negotiations (evolution of emission standards). The instructor has a variety of options to choose from and bring about active learning on the part of the participants. Other alternatives for assessing participants through class participation, reflective write-ups, and quality of debates also exist.

Experiences with an ILC

Preliminary experiences with the adoption of an ILC in an MBA ethics course have been encouraging.Footnote 6 The course was characterized by high level of participant involvement and meaningful debates. In their feedback, the participants appreciated the opportunity for independent research, enjoyed the role-playing exercises, and considered the real-world linkages of core theoretical concepts that the case brought out as the biggest takeaway. It was reassuring for the instructor to see the participants arrive at the substantive elements of theoretical debates, from the discussions on the live incident. The flexible nature of ILC pedagogy allowed the instructor to alternate across the individual-organization-society levels and, in the process, help the participants identify inter-linkages among them. The use of multiple delivery techniques led to an enriching learning experience for both, the instructor and the participants.Footnote 7

The instructor observed that the lack of prescribed reading material resulted in a high incentive for the inadequately prepared participants to mislead classroom discussions. This necessitated occasional steering of the discussions to prevent digressions from the context. The first-time implementation of innovative delivery techniques also presented challenges. For instance, in one of the sections, the number of stakeholders identified by the class was too large to be addressed in a single session. Furthermore, as an ILC requires changes to course structure, the transition would require adequate advanced planning and also garnering institutional support. However, flexibility of the ILC pedagogy encourages implementation of many permutations of the binaries, thereby enabling an adaptation that is amenable to institutional guidelines.

Conclusion

Ethical sensitization of business school participants has emerged as the cornerstone of management education. Correspondingly, ethics education has become an integral component of business school curriculum (Del Junco and de Perea 2008). However, there are concerns regarding the indifference of participants in an ethics class and the short-lived impact of ethics education. Disparate attempts at addressing these concerns have highlighted numerous components that influence the efficacy of a given pedagogy, without a comprehensive solution in sight.

Based on the review of articles in leading journals on ethics pedagogy research between 1991 and 2016, we develop a framework to categorize these components. The ACD framework comprises three distinctive domains—Approach, Content, and Delivery. Each of these domains is, in turn, characterized by a set of binary viewpoints: Approach as theory-laden and real-world connectedness, Content as breadth and depth, and Delivery as traditional and innovative. We recognize the possibility that other outlets publishing research on ethics pedagogy may have been overlooked in this process. However, we cautiously believe our exhaustive coverage of 408 articles leaves little scope for missing a key pedagogical discourse in business ethics education.

Our review finds that the bulk of the literature addresses the domains in a disjointed manner with a fragmented focus on the binaries within. Of course, a few articles highlight the need for comprehensiveness and some of these articles also develop alternative pedagogies. However, these pedagogies fall short of being integrative. This can be attributed to the partial overlap of theoretical motivation with pedagogy development, because of a missing intermediate step—a connective framework. The ACD framework helps in bridging this gap. We develop a contemporary pedagogy to implement this framework. The Integrative Live Case (ILC) pedagogy capitalizes on a carefully selected ethical live incident. Characterized by no retrospective bias in its outcome, temporal proximity to excite participants and touching the millennial pulse, an ILC is a modular pedagogy that flexibly integrates the different domains, consistent with the instructor’s academic training, information inflow on the incident, personal preferences, and institutional course requirements. This pedagogy is expected to enable participants to understand the relevance of business ethics in general, and improve their professional and moral reasoning in particular. To further emphasize the integrative aspects of the pedagogy, we present an instantiation to the current ethical incident of VW Dieselgate.

We are cognizant of the fact that there is a no “one size fits all” approach to overcome the current conundrums in business ethics pedagogy. Our proposal for the ILC pedagogy is a modest attempt in this direction. In addition, our key theoretical contribution is to conceptualize the ACD framework for analyzing business ethics pedagogies and serve as a template for instructors to design integrative pedagogies.