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Most of my American students used to believe in the information provided by companies and the government. Only recently have they begun to question it. Other People's Ethics Georges Enderle Arthur and Mary O'Neil Professor of International Business Ethics Mendoza College of Business University of Notre Dame Notre Dame, Indiana Many years ago, when I was a research fellow at the Universi- ty of St. Gallen in Switzerland, I took a business ethics trip to the U.S. When I returned to Switzerland, I told a colleague that in the U.S., ethics had become a serious subject in busi- ness schools, supported by textbooks, case studies, journals, endowed chairs, and an active professional association. He replied, "Of course, the Americans need business ethics!" Some years later, when I lived in the U.S., I took an ap- pointment teaching business ethics in Shanghai. When I de- scribed my experiences to an American colleague, his quick answer was, "Of course, the Chinese need business ethics." These kinds of reactions reflect a widespread, though rarely articulated, assumption that the level of morality in a foreign country must be lower than the morality level at home. Consequently, people in other countries need ethics much more than we do in our own country. Having spent many years teaching business ethics in China and the U.S., I have reached the conclusion that we all need ethics training. A colleague, a student, and I developed a case study about the corporate responsibilities of a Chinese state-owned enter- prise (SOE) that needed to downsize to increase efficiency. Although my MBA students in Shanghai clearly understood the need for improving productivity—two-thirds of them had worked in SOEs themselves—they were extremely reluc- tant to lay off workers. Instead, they tried to restructure the organization, set up relatively autonomous operation units, and keep the workers on the books. My American MBA stu- dents, however, were much quicker to fire people. How can we understand this difference? Chinese students were aware of the harsh consequences of layoffs because there was no established safety net that could support jobless people. Certainly, the SOEs were no longer the organizations that used to provide not only work and the "iron rice bowl," but also social services such as kindergarten, hospitals, and support for the elderly. In the course of China's economic reform, SOEs had transformed into more economic organi- zations exposed to increasing competition. But a sense of community still remained, influenced by Confucian and socialist ethics. This attitude did not permit the tough and cold-hearted downsizing sometimes practiced by Western countries with more individualistic cultures and better established social security systems. As a part of discussing the responsibilities of companies in society, I had both my Chinese and U.S. students read Milton Friedman's famous article, "The Social Responsibility of Business Is to Increase Its Profit" (1970). I then had them write a fictitious letter to him, expressing their agreement or disagreement with his view. American students, particularly af- ter the Enron scandal, had difficulty accepting Friedman's ex- clusive focus on profit, even though Friedman maintains that such profit-making must abide by the "rules of the game" in business. They still expected companies to take on leadership roles, especially in terms of environmental responsibility. In contrast, a surprisingly high number of Chinese stu- dents—though not a majority—liked Friedman's call for sep- arating business and government. They believed government was still interfering too much with business. On the other hand, they were willing to have government take a strong position in some areas, such as environmental protection. An unforgettable experience was teaching business ethics in Shanghai during the SARS epidemic in spring 2003. Stu- dents and faculty realized how much we depend on a healthy environment for the most basic function of our lives. We also needed the government to inform us about the health risk in a comprehensive and timely fashion. This real-life lesson reflected our class readings about Amartya Sen's capability approach, which requires "transparency guarantees" so indi- viduals can make informed decisions. Students in China ex- pected transparency guarantees from their government and were suspicious of the ways information was being provided. By contrast, most of my American students used to be- lieve in the information provided by companies and the government. Only recently have they begun to question it, disturbed by the recent accounting scandals and the govern- ment's misinformation about the war in Iraq. As a result, teaching students to discern truthful and reliable informa- tion has become a major responsibility in business education, be it in China or in the West. We may ask, "Where is the greatest need for truth in busi- ness? What country needs to focus on business ethics?" I be- lieve none of us can point anywhere else. All of us have plenty of work to do at home. BizEd SEPTEMBER/OCTOBER 2006 25