Students encouraged to consider ethical dimensions of business decisions

Dennis Gioia, the Robert and Judith Klein Professor of Management and chair of the Department of Management and Organization at the Penn State Smeal College of Business, visited with a class of undergraduates last month to discuss an ethical challenge that helped shape his career and the American auto industry.

In the early 1970s, reports began to surface at the Ford Motor Company that its new model, the Ford Pinto, could explode upon rear impact. It wasn’t until 1978, after nearly 30 deaths, that the vehicle was finally recalled. Prior to the recall, Gioia worked as the company’s recall coordinator and was initially in charge of handling the Pinto case.

“I invited Dr. Gioia to meet with my class because I wanted the students to have a first-hand look at the kind of difficult decisions that they may be faced with in the workplace, even just a few years after they graduate from college,” said Jennifer Eury, instructor in management and organization and director of honor and integrity for Smeal.

She continued, “In class, we talk a lot about how understanding our values and thinking about them in the context of ethical decision-making can help us face ethical dilemmas like this one.”

Gioia led the students in a frank discussion about the circumstances surrounding the Pinto case. Though it seems like it should have been an easy decision in hindsight, he explained to the students that situations in a real-world work environment are much more complicated.

“At the time, I never actually saw the case as having an ethical dimension,” he told the students. Instead, he explained, the case did not fit the normal decision-making criteria for initiating a recall.

He encouraged students not to make the same mistake; instead, he wanted the students to always see business decisions as having a potential ethical component.

“An ethical dilemma is defined by the collision of competing values. Resolving these dilemmas is never simple,” said Gioia. “When I talk to students about this case, I want them to understand the complexity of the decisions they will have to make on the job.”

Gioia stressed how crucial it is for students to develop a core set of values early in their career and to prepare to have courage when faced with even the most subtle of challenges to those values.

In addition to his corporate experience with Ford Motor Company, Gioia also has worked as an engineer for Boeing Aerospace at Cape Kennedy during the Apollo/Saturn lunar program. He joined the Smeal faculty in 1979 and currently teaches in the Penn State Smeal MBA Program and the Smeal Executive MBA Program. His research focuses on cognitive processes in organizations, change processes, corporate recalls, and organizational identity, image and reputation.

Eury’s class -- Business, Ethics and Society -- is an upper-level class devoted to developing students’ ability to understand and manage ethical conduct and social responsibility in business organizations. Students learn how to think about and manage their own ethical conduct, the conduct of the people who will work for them, and the social responsibility of the organization. The course, required for all management majors, was developed by Distinguished Professor of Organizational Behavior and Ethics Linda Trevino, who also co-authored the textbook used in the class.