Virtual Morality

High-profile accounting and ethics scandals like those affecting Wirecard and Volkswagen underline the enormous costs of failing to cultivate ethical organizational cultures. Researchers supported by the CPA Centre for Public Policy and Innovation in Accounting at Brock University have discovered that in teaching business ethics, using VR case studies outperforms text and video formats by giving learners a more accurate insight into how they would respond to real ethical dilemmas in the workplace.

Advancing education: Preparing students and practitioners for reality by using virtual reality
By Robert Steinbauer and Anh Mai To, supported by the CPA Centre for Public Policy and Innovation in Accounting at Brock University
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Key take aways from the paper

  1. Unethical behaviour has substantial costs to organizations.
  2. VR case studies beat text and video in predicting real-world behaviour.
  3. VR makes decision-making more difficult, emotional and real.

Ethical failures in business are well known to be costly. Volkswagen estimated that cheating diesel emissions tests cost it €31.3 billion, while LinkedIn has found 39% of employees would quit a company rather than behave unethically. To reduce these costs, it follows that organizations wanting to cultivate high ethical standards should choose the most effective modes of instruction. But what methods work best?

Researchers Robert Steinbauer and Anh Mai To, supported by the CPA Centre for Public Policy and Innovation in Accounting, tackled this question during the Covid-19 crisis, which has brought renewed attention to digital teaching methods.

By exposing three groups of students to a similar case study in text, video and VR formats, they discovered that VR has unique advantages in teaching business ethics.

The researchers adapted the well-known Ford Pinto case study into a more modern scenario where, in the context of an ethical or unethical organizational culture, participants were asked to decide whether to fix a dangerous car defect for a cost of $200 million or leave the model as-is, incurring 180 deaths and another 180 burn injuries.

Those engaging with the VR version of the case, rather than video or text, found the decision to fix the car or leave it alone more difficult but reported applying less effort in making it. Surveys of the participants suggested that the VR case was more emotionally engaging and put people under more pressure that made the decision more effortful. In comparison, existing literature shows decision-making about text-based cases is reflective and dispassionate, but less likely to be perceived as difficult or overwhelming.

The study found that participants’ response to the VR scenario is likely to be the best guide to what they would do if facing a similar dilemma and culture in real life—outperforming the video and text versions of the scenarios.

The results show that VR could be an especially effective tool for organizations and educators in giving people a space where they can learn, through experimentation, about how to voice their values effectively when asked to engage in unethical conduct.

But, a lack of existing VR case studies for teaching business ethics is one of the biggest obstacles to greater use of the format. Steinbauer and To encourage organizations and educators in business and professional ethics to explore the possibilities of VR by reaching out to developers, teaming up with friends and colleagues, and getting involved in creating new VR case studies. In doing so, they will make their courses stand out amid a crowded field of online offerings while contributing to the promotion of ethical organizational cultures and behaviour.