Academy and Studying in Germany

Business ethics is a field of research and teaching older than the recent financial and economic crisis. In view of the crisis, interest in business ethics in Germany has never been greater than it is today.

“We’re a totally mixed group”, says Jonas Gebauer of the local Munich group of the Student Network for Ethics in Economics Education and Practice (sneep). “At our meetings there are theologians, sociologists, business and political economists.” And the interest is constantly growing. Since the beginning of 2008 the number of local groups has nearly doubled; there are now more than thirty. According to Gebauer, many business students “have finally noticed that the market can’t do everything”.

Evidently this impression has spread round the globe since last autumn. For example, in 2009 graduates of the world-famous Harvard Business School took for the first time an oath “to exercise their profession in an ethical manner” – that is, not with the aim of ostensible short-term success and fast bonuses. In Germany there is a similar trend.

Trust, fairness and justice

In fact, business and scholarship have given increasing attention to the question about ethics in business life for a good 20 years. Characteristic of this has been the introduction of codes of ethics or conduct in businesses and the key phrase “corporate social responsibility” – for instance, with respect to environmental destruction, child labor and ethnic discrimination.

In view of the present financial crisis, internationally renowned economic researchers such as Bonn Nobel laureate Reinhard Selten have reminded us of indispensable basic virtues such as trust, fairness and justice. Against the same backdrop, the German University Association, the professional representation of university professors and lecturers, has also warned “Those who do not wish to be mere technocrats must provide students within the bachelor program with subject-specific offerings that intensively treat ethical questions”.

“Ethics and economics are two sides of the same coin”

Today in the academic Society for Social Policy, founded in 1890, more than fifty university teachers form the study group “Economics and Ethics”. Pacemakers for the systematic study of business ethics in Germany are Karl Homann and Peter Ulrich. The sixty-six year-old Homann studied philosophy, theology and political economics. He taught at the private University of Witten/Herdecke, the Catholic University of Eichstätt and finally, until 2008, philosophy and economics at the University of Munich. Ulrich, born in 1948, received his habilitation at the University of Witten/Herdecke with an interdisciplinary work on The Fundamental Problems of Economic Philosophy (Grundprobleme der Wirtschaftsphilosophie). Since 1987 he has been Professor for Business Ethics at the internationally renowned University of St. Gallen in Switzerland.

Homann and Ulrich hold that economics must serve society – not the reverse. According to Homann, “ethics and economics should be seen as two sides of the same coin – not as mutually exclusive alternatives but as twin sisters”. Ulrich defines the relation somewhat more abstractly: “Business ethics is part of political ethics; hence of the embedding of the market in a well-ordered society of a free people”. That had always been the basic idea of European philosophy, from Aristotle to Adam Smith. Since then, however, the economic sciences have assumed a separate existence as “autonomous” disciplines with their own inherent logic. From this point of view, their renewed ethical integration into society constitutes an about-face that has not yet been completely accepted in the professional world.

Distorted perspectives

“By using one-sided concepts, economists have given their students a distorted perspective on economic reality”, criticizes André Habisch, Professor for Christian Social Ethics and Social Policy at the University of Eichstätt. An example of this is “the basic idea of the individualist whose exclusive concern is to obtain the greatest advantage.”

“Experimental economic research” conducted by the Bonn EconLab, for instance, offers contrary evidence. It has shown the “restricted rationality” of human action: for example, with empirical tests showing that job-seekers prefer to reject a job offer than accept an hourly wage which is felt to be decidedly unfair. In the Master of Ethical Management (MEM) program, the theologian and economist Habisch combines empirical studies with moral ideals. The main object of the program for managers is to teach interpersonal dealings in teamwork and personal responsibility despite extraneous constraints. In this way the MEM sees itself as a deliberate alternative to the conventional Master of Business Administration (MBA).

Germany’s first Ethics Center

The University of Jena, historically associated with humanist thinkers such as Schiller, Goethe and Hegel, is now the site of the first Ethics Center in Germany. The work of the Center feeds into all subjects. Under the directorship of philosopher and political scientist Nikolaus Knoepfler, the Center concerns itself with ethical standards not only in business but also in medicine and the neighboring biosciences, in technology and in competitive sport. Its aim is to ensure that all our activities remain within a framework which, in Ulrich’s words, “serves life”.