National City Police Chief Adolfo Gonzales, who teaches a ‘Democracy, Ethics and Leadership’ course at Chapman University, says without leadership ‘an organization won’t succeed.’ (photo/lambertphoto.com)

The words “ripped from the headlines” are usually associated with the “Law & Order” television shows..Actual stories also serve as lessons in business school ethics. Graduate school instruction ranges from specific courses to the incorporation of ethics lessons in each class in an MBA program. Some schools have established institutes that concentrate on ethics.

The importance of ethical leadership is illustrated by stories ranging from the downfall of former Rep. Randy “Duke” Cunningham to the controversy surrounding the firing of eight U.S. attorneys, says National City Police Chief Adolfo Gonzales. He teaches “Democracy, Ethics and Leadership,” a required graduate course at Chapman University.

Gonzales says for-profit businesses must weigh the bottom line against the concept of the greater good. He spoke to students about the positive actions of Jimbo’s Naturally employees who immediately removed potentially contaminated poultry from store shelves.

“Whether at the executive level or rank-and-file, everyone has a chance to do leadership,” says Gonzales. “Leadership is very important for for-profit and nonprofit” organizations. Without leadership, “an organization won’t succeed.”

Gonzales has taught the Chapman course for two years. He schedules speakers such as Daniel Del Castillo of the MAAC Project to discuss their practical experiences. He instructs students to write essays about leadership, publishing them in book form. He was compiling more than 80 essays in May.

Other recent events discussed in ethics courses include the melamine-contaminated pet food and the discovery that Duke University MBA students cheated on a take-home exam.

“The media provide us with no shortage of examples. I wish that weren’t true,” says Craig Barkacs, a professor in USD’s School of Business Administration. He is academic director of the university’s graduate global leadership program and co-directs the graduate executive leadership program. Barkacs’ courseload includes “Organizational Ethics,” “Law and Ethics in the Business Environment” and “International Business Law.”

Barkacs asks students to examine their values. Would they shred documents if a federal investigation was imminent? He notes that document shredding led to the collapse of Arthur Andersen while Martha Stewart was convicted for lying about a stock trade. “These are bright, successful people,” says Barkacs. He tells students that it is easy for intelligent people to rationalize. “Find a moral compass if you don’t have one and use it,” he advises them.

Classes in CSU San Marcos’ revised MBA program start in the fall with modifications that include a “Leadership and Business Ethics” course. Keith Butler, director of operations for the College of Business Administration, says another feature of the new MBA is that each class includes a one-unit individual project completed outside the classroom and based on one of four themes, including ethics.

At Alliant’s Marshall Goldsmith School of Management, ethics is the focus of several courses. The university’s basic ethics courses are “Business Values and Ethics” and “Business Values, Ethics and Societal Strategy.” Associate professor David Bainbridge says ethics is infused in many other courses, including “Workplace Ethics,” “Sustainable Management,” “Sustainable Operations and Production,” “Environmental Management Reporting” and “Triple Bottom Line Leadership.”

Bainbridge says “right” and “wrong” behavior may depend in part on culture, “but some behaviors are always wrong.” Cultural differences include attitudes about bribery. “It may be an essential part of business in many countries,” says Bainbridge. “At the same time it is illegal for an American company and most multinationals, depending on their home base.”

Before the Enron collapse in 2001, the University of Redlands offered an ethics and law course, says Keith Roberts, associate dean of the School of Business. In 2002, Congress passed the Sarbanes-Oxley Act, also known as the Public Company Accounting Reform and Investor Protection Act, prompting Redlands to split ethics into a separate course to “give it the focus that it deserves,” he says. The university requires an ethics course in all degree programs.

Curriculum is developed with assistance from the Banta Center for Business, Ethics and Society at Redlands. The center is named for David and Stephanie Banta, two Redlands alumni who donated funds to establish the center.

The center has two full-time ethics faculty. Other activities include an annual business panel and student recognition awards.

At SDSU, The Wall Street Journal and Fortune are required reading in associate professor Lori Verstegen Ryan’s ethics class. Students look for topical ethics stories during a two-week period. A student team distributes copies of the story to the class and writes a one-page essay about the article. Two days later, the students give a presentation about the topic and lead a class discussion on it.

Ryan is the director of SDSU’s Corporate Governance Institute, which was established in 1998 as an education and research center for the study and application of responsible corporate governance principles. Ryan, a researcher, says it takes several years before findings are published in journals and textbooks. SDSU students have the advantage of learning about research efforts “in the idea stage,” she says.

SDSU’s ethics courses are offered at the undergraduate and graduate levels. “Social Responsibility: Legal and Ethical Environment of Business” is required for the executive MBA (EMBA) degree. The executive program now includes a new corporate governance course that started in May. Ryan teaches managerial issues. Professor Paul Graf focuses on regulatory and legal matters.

Another new course, “Information Systems Security,” covers Sarbanes-Oxley and the Health Insurance Portability and Accountability Act (HIPAA) requirements and how to protect information systems. The class will be offered next spring.

At UCSD’s Rady School of Management, ethics is the focus of a specific course and a component of classes such as accounting, says JoAnne Starr, assistant dean of MBA programs. She says professor Uri Gneezy is piloting a course in business ethics during the spring quarter. The course focuses on values-based leadership. Starr says the goal is for students to “think critically about ethical problems.” Another new course concerns sustainable enterprise and environmental issues.

Point Loma Nazarene University faculty are asked to focus on ethics in each business class, says Bruce Schooling, dean of the Fermanian School of Business. The university is one of eight liberal arts colleges affiliated with the Church of the Nazarene, and Schooling says students enroll there because it is faith-based.

About 30 percent of the student body belongs to that church, and undergraduates are required to attend chapel three times a week. They may hear speakers address ethical issues such as a person’s obligation to the environment, says Schooling. The university’s spiritual development office includes an ethical dimension and students participate in activities with inner-city campuses. Ethics should be “in our DNA,” says Schooling.

The University of Phoenix MBA program used to include a “Personal and Professional Ethics” course. However, when the graduate curriculum was shortened, ethics became a theme integrated in other courses, says Michael Reilly, chair of the College of Business. Reilly taught the ethics course and says it may be offered as an optional class in the future.

“It’s not about teaching people to be more moral. It’s about using tools to manage morally challenging problems,” says Reilly. “An ethics course changes how you view the world. A finance course doesn’t.” Phoenix still schedules an ethics course for the master of management degree.

Courses offered by the Keller Graduate School of Management include “Legal, Ethical and Political Dimensions of Business,” says Madeleine Gervais, San Diego dean. She adds that DeVry undergraduate courses include “Legal and Ethical Issues” and the new “Ethical and Legal Issues in the Professions.” DeVry will offer “Principles of Ethics” in the fall.

“The courses that have legal dimensions are taught by attorneys,” says Gervais.

‘”Theories, Practices and Ethics of Leadership” is one of the 10 core MBA courses at National University. “Leaders need to be ethical,” says Wali Mondal, interim dean of the School of Business and Management. Other National University courses with discussions of ethical issues include “Economics for Managerial Decision Making” and “Legal, Ethical and Safety Issues in Human Resource Management.”