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Journal of Business Ethics (2006) 64: 213229 Springer 2006
DOI 10.1007/s10551-005-8503-5Case Studies of Ethics Scandals:Effects on Ethical Perceptionsof Finance StudentsJulie A. B. Cagle
Melissa S. BaucusABSTRACT. Ethics instructors often use cases to helpstudents understand ethics within a corporate context, butwe need to know more about the impact a case-basedpedagogy has on students ability to make ethical decisions. We used a pre- and post-test methodology to assessthe effect of using cases to teach ethics in a finance course.We also wanted to determine whether recent corporateethics scandals might have impacted students perceptionsof the importance and prevalence of ethics in business, sowe used in-depth case studies of several of the majorscandals (e.g., Enron, Tyco, Adelphia). Our results aresomewhat surprising since studying ethics scandals positively impacts students ethical decision making and theirperceptions of the ethics of businesspeople.KEY WORDS: Case pedagogy, case studies, corporatemisconduct, ethics, ethics across the curriculum, ethicsscandals, ethics training, teaching ethicsInstructors educating business students have confronted the key issue of whether ethics instruction,when integrated into accounting, marketing,finance, production and other business courses,impacts students ethical decision making. Management, marketing and accounting instructors havewritten extensively about issues associated withteaching ethics; however, Finance journals andtextbooks have been relatively silent on this topic,with the exception of Irvines (1987) The Ethics ofInvesting (Hess and Norman, 2004: 42). Whilelittle is known about the impact of ethics instructionin any business discipline, this is probably more sofor the field of finance.1The question of the effect of teaching ethics infinance has become more critical as business schoolsshift from a stand-alone business and society courseto integrating ethics into courses across the entirebusiness curriculum. In the 1980s, nearly half of allAACSB accredited business schools offered a specialcourse in business ethics (George, 1987), but manyschools dropped their course or made it an electivewhen the AACSB revised its standards. Numerousbusiness schools have attempted to integrate ethicsacross the curriculum with each business courseaddressing ethical issues within the particular discipline. This shift has generated a debate about whether ethics can be taught effectively within particulardisciplines such as in a finance course or whetherit needs to be addressed in a stand-alone course inorder to positively impact students ethical perceptions and decision making. Since many businessDr. Julie Cagle, associate professor of finance at Xavier University, teaches primarily corporate finance to undergraduateand MBA students. She...