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Anne Auer
Kelley School of Business

George Vlahakis
University Communications

Last modified: Tuesday, December 7, 2010

Major gift to Kelley School supports innovative approach to teaching and assessing ethical reasoning

Dec. 7, 2010

BLOOMINGTON, Ind. -- As a result of an anonymous $250,000 gift, Indiana University's Kelley School of Business will have the support to develop a proprietary teaching and assessment tool that will enhance how faculty teach and measure the development of students' ethical judgment.

The Ethics Simulation Tool, an accompanying symposium and instructional materials will be major features of the Kelley Undergraduate Program's comprehensive redesign that students will begin to see in 2012 and be fully implemented by 2013.

"The assessment of progress in students' ethical reasoning is one of the most significant challenges facing business educators today," said Kelley School Dean Dan Smith. "The Kelley School has always placed great emphasis on developing students' ethical reasoning skills. The new ethics simulation will significantly advance the school in this important area. No other top 20 business school is engaged in such an innovative approach to teaching and evaluating ethical reasoning. We are looking forward to being recognized as a leader in this area.

"The Ethics Simulation Tool and the Ethics Assessment Symposium will help achieve that goal and, in the process, advance the quality of graduates produced by today's top business schools," Smith added.

Once it is in place within the curriculum, Smith said the school intends to share the program with deans of other business schools and likely will organize a national conference to do so.

Everyone in Kelley's 5,000-student undergraduate program will go through the eight-week simulation. Students will not be able to graduate without learning about the likely ethical dilemmas they will face throughout their careers and how to effectively reason their way through them.

R. Thomas Lenz, chair of the Kelley Undergraduate Program and the Glaubinger Professor of Business Administration, said recent scandals have led to a heightened awareness for preparing students to encounter various "moral hazards" which are not always obvious.

"No one comes up to you and asks, 'would you like to commit fraud today?' It all comes in a very subtle way, so we want students to be able to look at situations and spot the moral hazard if it is there," Lenz said.

Experiential learning has become an increasing feature of the undergraduate program at Kelley, and realistic simulations that involve engaging, immersive technology will be a key component of the Ethics Simulation Tool.

Instead of approaching ethics from a philosophical or religious point of view -- about what constitutes moral behavior -- the new initiative will be grounded in business settings similar to what students might encounter after graduation.

Likely scenarios could include bribes or payoffs on overseas contracts but will also deal with the more prevalent and subtle gray areas related to financial reporting that can lead to misrepresentation of a company's performance.

"We think ethics is best taught experientially," Lenz said. "You have to get dirty with it and sort of grind it out and see it and make mistakes and correct yourself. We think that will enhance their ability to spot and resolve issues."

Students also will be taught conceptual frameworks which can be used to reason and think critically in order to find solutions -- both acceptable and defensible -- to resolve ethical dilemmas, he said.

Because cultural norms also vary, the new initiative will teach students about differences in what is and isn't considered ethical in other countries. Nearly a fifth of this year's incoming class came from outside the United States and many graduates likely will be involved in an international assignment early into their careers.

While the program will be housed within the school's Department of Business Law and Ethics, students also will continue to encounter the topic within courses on accounting, marketing, supply chain management, general management and other topics.

Students' abilities to spot problems and resolve them will be assessed. "If they don't do well, there will be remediation until they get it right," Lenz said. "Our intent is to certify that students have received a rigorous and through exposure to business ethics and how to resolve ethical issues in business organizations."