Operationalizing stakeholder theory and prioritizing ethics in MBA programs: The utility of a trust approach

AuthorS. Duane Hansen,David Noack,James H. Davis,Matthew Mouritsen
Published date01 December 2019
Date01 December 2019
Bus Soc Rev. 2019;124:523–541.
DOI: 10.1111/basr.12190
Operationalizing stakeholder theory and
prioritizing ethics in MBA programs: The utility of
a trust approach
S. DuaneHansen1
James H.Davis3
© 2019 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc., 350 Main Street, Malden,
MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.
1Department of Business Administration
& Marketing, Goddard School of Business
& Economics, Weber State University,
Ogden, UT, USA
2School of Accounting & Taxation,
Goddard School of Business & Economics,
Weber State University, Ogden, UT, USA
3Department of Marketing & Strategy,
Huntsman School of Business, Utah State
University, Logan, UT, USA
S. Duane Hansen, Department of Business
Administration & Marketing, Goddard
School of Business & Economics, Weber
State University, 3848 Harrison Blvd.,
Ogden, UT 84408, USA.
Email: sdhphd@gmail.com
At a time when some are questioning the relevancy of busi-
ness education in general, others are now asking whether
MBA programs should be blamed for society’s declining
trust in business and the numerous corporate ethical failures
of recent decades. Whether the full blame lies with busi-
ness schools or not, MBA instructors are actively seeking
more effective ways to help students adopt more practical
and ethical managerial paradigms. Because trust theory is
simple and robust and outlines the basic mental processes
that drive economic exchange while simultaneously prior-
itizing ethical behavior, in this article, we argue that it is dis-
tinctively suited to operationalize stakeholder theory in the
classroom, providing MBA students with both a principled
and a practical foundation or thematic platform for their
MBA coursework and subsequent careers. We also discuss
potential challenges and limitations and provide recommen-
dations for future research.
business education, business ethics, corporate social responsibility, master
of business administration degree, stakeholder, trust, trustworthiness
Integrity without knowledge is weak and useless, and knowledge without integrity is
dangerous and dreadful.
Samuel Johnson
Ethics, MBA programs, and the stakeholder approach
Over the last few decades, some have suggested that MBA programs are losing touch with the day-
to-day realities of managerial work (see Starkey & Madan, 2001). Incessant media coverage of the
numerous corporate ethical debacles of recent years has intensified criticism and raised additional
questions about whether practical ethics training is a necessary part of managerial training in MBA
programs (Khurana & Nohria, 2008; Trevino & Nelson, 2014). Whether or not the full blame for the
corporate ethics problem lies with MBA programs (Bassiry & Jones, 1993; Epstein, 2000; Volckmann,
2013), business school accrediting bodies, administrators, scholars, and instructors are all proactively
taking action to find ways to ensure that MBA students receive the kind of practical, ethical training
they need for their managerial careers.
Both AACSB and EQUIS business school accrediting bodies agree that ethical training should
form the foundation of modern business education, and both now require this to be part of the
MBA programs they accredit (see Inamdar & Roldan, 2013; Phillips, 2004). Indeed, MBA pro-
gram administrators are offering (or requiring) CSR/ethics-related courses at rapidly increasing
rates. The availability of ethics-related coursework in MBA programs increased 500% from 1988
to 2007 (Christensen, Peirce, Hartman, Hoffman, & Carrier, 2007) and even more rapidly since
2007. In their 2017 Data Guide, AACSB reported that from 2011 to 2015, programs in Business
Ethics grew more rapidly than programs in all other business fields/subjects. Scholarly interest in
and demand for ethics-related research is also skyrocketing, augmenting coverage of ethics-related
topics in business journals in general, and significantly strengthening the scholarly impact of jour-
nals that focus on Business Ethics, for example, from 2008 to 2009 the RG Journal Impact factor
for Business and Society Review, one of the most prominent Business Ethics journals, increased by
over 200%.
As business professors have sought better ways to provide their students with practical training that
effectively helps them avoid the pitfalls of unethical decision-making, some consensus has developed
around integrating ethics/CSR-related topics throughout MBA core coursework with repetition and
reinforcement as a fundamental pedagogical strategy (see Evans, Trevino, & Weaver, 2006; Rasche,
Gilbert, & Schedel, 2013). How this ought to be accomplished, however, remains a matter of ongoing
scholarly discussion. Scholars agree that an exclusive focus on shareholder wealth maximization is
one of the principal problems with MBA education today (e.g., Giacalone & Promislo, 2013; Jones
& Felps, 2013; Preble, 2005). Whether intentional or not, this paradigm risks encouraging future
managers to focus on maximizing shareholder wealth as their primary, if not sole, objective. And, as
history confirms, this often translates into sidelining ethical/CSR considerations and either ignoring
other stakeholders or treating them as a “means” to the all-important "end" objective of shareholder
wealth (Friedman, 1997; Jacobs, 2009; Smith, 2003).
In response to the deficiencies of the short-term shareholder profitability paradigm, consensus has
been building in support of a “stakeholder” paradigm as a more appropriate, sustainable, and ethical

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