Institutions and Ethics: Emory Shows Us How It’s (Not) Done

It would be hard to invent a better (or should I say worse) example of how institutional forces stifle ethical behavior than the reports on how Emory University has been reporting false admissions statistics for years. The university on Friday revealed the findings of its own three-month investigation:

The investigation revealed that both the University’s Office of Admission serving Emory College, and the University’s Office of Institutional Research, annually reported admitted students’ SAT/ACT scores to external surveys as enrolled student scores, since at least the year 2000. This had the effect of overstating Emory’s reported test scores. The report found that class rankings were also overstated, although the methodology used to produce the data was not clear.

And as the education industry site Inside Higher Ed reports, the misreporting was systemic and widely known within the university:

“We gleaned from the little we know that in these offices were a number of individuals who respected the lines of authority who were told by supervisors ‘This is the way we did it,’” said Provost Earl Lewis on a conference call with reporters. “That was noted and they went on with day-to-day business.” …. the practice spanned the tenures of at least two admissions deans and also involved the university’s director of institutional research. Staff members in those offices were also aware that the practice was taking place.

This is classic behavior in ethically challenged organizations: people in charge telling suspicious underlings that they shouldn’t worry their pretty little heads about actions they think don’t smell right because that’s how we do things around here. For its part Emory now seems fairly contrite, to judge by the university president’s public statement last week:

As an institution that challenges itself, in the words of our vision statement, to be “ethically engaged,” Emory has not been well served by representatives of the university in this history of misreporting. I am deeply disappointed.

Of course, contrite is one thing, and forthcoming is another. You might think that an institution renewing its dedication to being “ethically engaged” would have some mention of this scandal and a link to the university’s response on its home page. You’d be wrong.

The Ethics (and Pronunciation) of Badminton

The Olympics badmintongate affair is not only the biggest scandal of the London games so far, it’s also the most prominent scandal of any kind in recent memory involving a word that is so universally mispronounced. (Or at least I think it is … Does anyone really pronounce that middle “n” as you are supposed to and not say “badmitton”?) Of course, one person’s scandal is another’s golden opportunity, as we learn from those crafty Canadians who are making the most of the mass disqualification of top players for throwing matches in order to garner more favorable matchups in a subsequent round. That opportunity, alas, turned out to be less fecund for the Australians, who won’t move on in badminton but could medal in the rollercoaster competition.

Putting aside the “human drama of athletic competition” (remember that one?) aspect, what are the ethics involved in badmintongate? In a round robin tournament that is not single elimination, a competitor plays on even after losing, and in some formats (like Olympic badminton), match-ups in later rounds are configured based on outcomes in earlier rounds. So when upsets occur, a team may find itself with a more felicitous path to glory by strategically gaming its outcomes (a euphemism for “losing on purpose”) in earlier rounds to face the opponent you’d prefer to face in the ensuing round. This is what the athletes in question did, drawing boos from crowds (yes apparently there are people who will pay to watch the birdie) and expulsions from their sport’s governing federation. Did they engage in bad behavior, or are they being punished simply for being strategic?

From the spectators’ perspective, the athletes clearly did screw the pooch. If you are going to engage in an activity for which actual people pay actual money to see you try to win a match, you are obliged to try to win a match or else not participate at all. If the rules allow a forfeit without losing place in the tournament, the right move for someone who wants to throw a match is to just say “we choose to not play” and accept the loss. By playing and intentionally losing, you rob the audience of what they paid for, and you waste their time in doing so.

And what if the rules don’t allow a forfeit (that is, forfeiting a match ends your participation in the tournament)? What then? One option is to address the audience, explaining that we want to pass on this match and accept our place in the loser’s bracket, but because we are required to play it out we are going to lose intentionally, and we will endeavor to do so as quickly as possible; meanwhile feel free to use this opportunity to hit the concession stands or otherwise spend time practing your pronounciation of “badminton.”

But there’s a problem: With these athletes expelled, we now know that the sport won’t allow this kind of gaming, and presumably they would feel the same if it involved the alternative methods I have proposed (the deliberate time-saving forfeit or the civilized address to the spectators about one’s intentions). But let’s not be too hard on the competitors and their coaches, who were just doing what the system here — the tournament format — incentivizes them to do if winning a medal is the goal. Their actions did treat the audience badly, yes, so we cannot say their actions did no harm. Even so, the real problem is the system itself, which these athletes didn’t design. Most sports reward strategy along with skill, athleticism, and stamina, and we now know that Olympic badminton is no exception.

So for me, on balance, expelling these competitors seems like overkill. Scold them mercilessly, and perhaps impose some sanctions that suspend them for a bit in competitions after the Olympics. Give the fans who attended their money back for that session, because they are the ones harmed, but let the tournament proceed with its best (and also apparently cleverest) players still in the frame. And then change the format for next time, which the sport’s governing body is already pondering.

One sportswriter summed up the ethics of badmintongate in this way: “If they’re keeping score, you play to win.” But do you play to win the battle? Or the war?

A version of this post appears on the Nashville Scene‘s Pith in the Wind blog.

Board Stiff

Amid the new round of very bad press that Penn State University is enduring with the release of the damning Freeh report, we encounter an all-too familiar story: a governing board asleep at the switch. Writing in the Chronicle of Higher Education, former Penn State administrator Donald Heller distills the indictment:

Sometimes good people make bad decisions. But this situation goes well beyond that tired observation. The Freeh report is nothing less than an indictment of malfeasance on the part of the leadership of the university, including the Board of Trustees. The board is portrayed as providing inadequate oversight of the administration, being overly deferential to the president and his decisions of what to bring before the board, and unwilling or unable to ask the difficult questions necessary to ensure that the university, its reputation, its assets, and the broader community were protected.

We are seeing here in a university setting something found all too frequently in the corporate world: an inclination on the part of board members to cede unchecked power and discretion to the executives whose actions they are supposed to be overseeing. Chief executives all too often have too big a role in selecting board members, who then reward them with not just undeserved loyalty but also casual oversight, which breeds boards that turn out to be lax when time of crisis requires their serious watchdoggery. The inevitable end result is a board under fire for not doing the job it should have been doing all along. This is not just a sad story, but also an old and recurring one.

A version of this post appears on the Nashville Scene‘s Pith in the Wind blog.

False Dichotomy of the Week

It comes in an otherwise worthwhile piece of analysis and commentary on corporate corruption by Eduardo Porter in today’s New York Times business section:

Company executives are paid to maximize profits, not to behave ethically.

They are, of course, paid to do both. (And some other things as well.) As is everyone else.

Moral Capitalism?

Under the headline “Can’t a Capitalist Be Moral?,” U. of Chicago business school professor Luigi Zingales writes at that firms are unable to create better market systems, so it is left to business schools to “lead the effort to impose some minimal norms for business – norms that discourage behavior that is purely opportunistic even if highly profitable.” Zingales goes on to suggest that b-schools engage in more overt disapproval of actions that compromise healthy markets in the long run:

Asking business schools to stigmatize all behavior that does not maximize welfare would be absurd. They shouldn’t be expected to shame or criticize a company for using the market power that it has legitimately acquired … [or] … for taking advantage of the tax loopholes present in the system ….There is a difference, however, between taking advantage of existing tax loopholes and lobbying aggressively to have those tax loopholes created or expanded. What about marketing policies targeted to prey on addiction or to induce young customers to smoke? Is making money the only metric we should reward and admire in business leaders?

Zingales is making a reasonable although hardly original observation about the teaching role of business schools in relation to the purpose of the firm and a given market. Where he ends up is with a strikingly minimalist assessment of b-school ethics classes (I teach one of those animals at Vanderbilt) that locates them in two piles:

Some classes simply illustrate ethical dilemmas without taking a position on what people are expected or not expected to do. It is as if students were presented with the pros and cons of racial segregation, leaving them to decide which side they wanted to take. Other classes hide behind corporate social responsibility, saying that social obligations rest on firms, not individuals

Teaching an ethics class to people in their late twenties with professional experience (the prototypical MBA student at well-regarded b-schools) is not appropriately framed as an attempt to make students “more ethical” by telling them what to do and not do in specific situations. Instead, and what Zingales misses in his simplistic caricature, a reasonable goal for an ethics course involves giving students tools (analytical, lexical, and contemplative) that improve their abilities to recognize and decipher the moral content in situations and to generate options that are rooted in ways of thinking about that content.

Sure, I want my students going forward to make more ethical decisions as managers and executives, but I want them to do so because they recognize the presence of an ethical dimension to some particular context, and can draw on informed notions of moral reasoning to work their way through the situation. This we can and do teach in business schools, some of us anyway.