MBAs Scared Straight

In an attempt to “keep it real,” business schools have taken a novel approach to teaching ethics by hiring white-collar felons to tell their stories in the classroom. Jane Porter’s recent article in explores the phenomenon as she profiles Walter A. Pavlo Jr, who, by the time he was 40, had an MBA from Mercer University, worked as a manager at MCI, concocted a $6 million money laundering scheme, served a two-year sentence in federal prison, and was divorced, unemployed, and living with his parents.

Now that’s a spectacular plunge from glory.

These days, business school professors pay Pavlo in the neighborhood of $2,500 to speak to their students about corporate crime. B-schools rushed to create courses dealing with ethics and corporate morality in the wake of the Enron-era scandals, and BW reports that recently some, including New York University, the University of California at Berkeley, and Purdue, have made the conversation less academic by inviting those with practical experience into the classroom.

Pavlo, who was released from jail in 2003, is one of the busiest convicted felons on the B-school speaking circuit. “Here’s a real person telling students what happened to his life. I don’t think there is any substitute for that,” says Linda K. Trevino, a professor of organizational behavior and ethics at Penn State Smeal College of Business, where Pavlo has appeared several times. He doesn’t just speak at universities, though; companies and conferences also pay to witness the transformation of someone who has learned the error of their ways.

Not everyone thinks it’s a good idea to pay ex-cons to share their stories, BW has found. “I’m disturbed that so many professors seem to be willing to invite Pavlo and other convicted felons into the classroom without verifying that the stories are true,” says John C. Knapp, director of the Center for Ethics & Corporate Responsibility at Georgia State University. “Paying the ex-cons is rewarding them for committing a crime.”

Using a PowerPoint presentation, Pavlo confesses how the chance to make easy money seduced him. “All you need to know to cook the books you learn in your first semester of accounting,” Pavlo tells the students. Except that he got caught by his manager before a year was out, the article reveals. “Thinking about the pressures of the workplace, particularly in a not-so-great economy, you see what people might be capable of,” says Wayne Shyy, a student who heard Pavlo at Purdue.

What do BW readers think about using ex-cons as case studies? Here’s a sampling of their reactions:

And how else is Walt supposed to feed himself and his family? Is this not the best use of his experience? If you want to make a point with students, there is no better way to do so. Talk about “scared straight.” If you meet Walt and/or read his book, you don’t need to do much verification on his history. -Rich

I’ve heard Walter Pavlo speak of his experiences in my ethics class. He isn’t perfect and no one is, he is trying to make the best of his situation and we can all learn from his mistake. He provides a service and he should be compensated for it.–Simond

Too bad they don’t pay $2500 to honest people who never embezzled a penny to tell students that they shouldn’t be crooks. –In Colorado

If we are serious about reducing or stomping out this kind of corruption then we need to focus more on rewarding employees for the good things they do. Our system is the problem.–Michelle


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