Why Nothing Will Change Until We Think Differently
Is the way Americans think about ethics—and even ethics codes themselves—the real problem?
Personal and professional experiences have allowed me to explore that question in detail. I’ve met and spoken to people associated with shocking financial scandals. Doing so has given me a perspective that I never would have imagined. It has made me think that everything we’re doing to protect ourselves from these scandals may actually be making us less safe than ever.
Does Our Educational Approach to Ethics Perpetuate the Problem?
During my research, auditors, fraud professionals and college business professors overwhelmingly reported that current professional judgment and ethics training at both the college and continuing professional education levels is failing. Can this be tied to the methods we use in education?
Chinese children are educated using contextual learning while American children focus on standardized testing and memorization. The Chinese focus on context and process, while Americans focus on subject and outcome (passing a standardized test). Neuro-imaging studies have shown that Chinese and American children use different parts of their brain to do math. Chinese children have historically used an abacus as part of their instruction, visually understanding mathematical relationships and concepts. American children are frequently taught math using mnemonics and memorization. Memorizing multiplication tables is an example.
Contextual learning is valuable, even for tasks that seem fit for rote memorization, such as learning multiplication tables. By integrating context, learning takes shape and meaning. You can better teach a child that 4×4=16 by relating the problem to the real world. One example would be asking a student who likes cars how many tires would be needed for four race cars that have four tires each. The child not only memorizes the tables, but learns what multiplication actually does, helping them understand the thinking processes to solve related problems. By teaching context, learning becomes an extension of the child’s natural curiosity and desire to figure out how things work.
Teaching to the Test
In our universities, corporations, and professional associations-we learn business and ethics using the same standardized methods. Most ethics courses are taught based on codes of ethics and are designed so that students pass professional licensing tests such as the CPA exam. Recent studies examining ethics education have found that the context in which an ethical dilemma is considered is critical. Students learning codified rules of ethics are not able to flexibly transfer their ethics knowledge into different contexts. When students learn about ethical dilemmas in the context of codification, they then view all problems through the lens of codified ethical principles. We perpetuate this further by answering corporate scandals with more regulation. Rules are necessary, but they cause problems if we rely on them as our primary source of judgment.
The problem with rules is that they narrow our scope, make us act in our own self interest, and undermine the ethical decision-making process. They cause us to ignore context and make us less aware of other people and more aware of compliance with the rules. In an experiment, MBA students were asked to consider whether they would limit toxic emissions. When they were told the agreement was voluntary, most (55%) viewed the decision as an ethical choice while fewer (45%) viewed it as a business or economic decision. However, when students were told there would be even small sanctions for non-compliance, their views changed dramatically, with those viewing the choice as an ethical decision dropping below 20% and increasing those viewing it as business (economic) decision to about 80%. Accordingly, studies examining financial reporting in U.S. corporations have found that standards have become so rules based and precise that CFOs focus more on meeting the letter of the law instead of the spirit and underlying principles. These studies show that CFOs of U.S. companies are actually less likely to engage in aggressive financial reporting when subjected to more principles-based and less precise standards.
Rules Dumb Down Decision Making
It appears likely that our over-focus on codification and standardization of rules is “dumbing down” the American population. Rules and attributional judgments play to our weakness because they simplify problem solving; they only invoke thinking of the minimum standards, and do not inspire empathy or sophisticated thinking patterns. With overwhelming evidence that codification obstructs moral processing, education and professional judgment must move towards contextual thinking processes that spur imagination and broaden our viewpoint by considering a wide array of conflicting perspectives.
Ironically, countless hours of research into traits and characteristics led me to understand that I was predisposed to look for the wrong thing all along. As I have discussed these findings with cohorts in the industry and implored them to integrate the information into their consulting work with corporations, I was quickly reminded of my naiveté of the power behind perpetuating the old and structured belief system. Consulting with companies on how to meet industry and regulatory standards in its codified format is itself a prosperous industry. As I was told by one friend in the industry, talk that doesn’t support the codes and standards equates to “fighting words.”
My words may be fighting words, but when it comes to fraud in America, nothing will change until we learn to think differently about why it happens in the first place.