Self-selection and socialisation effects of business and legal studies

Tim Rosengart,Christian Nitzl,Bernhard Hirsch

doi:10.1007/s11573-020-00973-3

Tim Rosengart, Christian Nitzl + Show 1 more

Open Access

https://doi.org/10.1007/s11573-020-00973-3

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Abstract

To explore the effect of business and legal studies on the resolution of trade-offs between efficiency considerations and fairness concerns, we distributed a survey with three decision cases to freshman and senior business and law students. Our results show that business students, in direct comparison with subjects who study law, make decisions more in accordance with economic theory. Studying business administration leads to decisions that are based more on efficiency criteria, while legal education appears to lead individuals making decisions that are more based on social criteria. Our findings reveal the impact of self-selection and socialization effects on decision making. For business ethics education, this result matters because moral decision making can be influenced during studies.

Highlights

Since the turn of the century, several accounting scandals (e.g., WorldCom, Enron), financial fraud offences (e.g., Bernard Madoff), and banking scandals have caused severe consequences for companies, business sectors, and societies at large (Gibson et al 2016)
Hummel et al (2018) argued that “[t]heories and ideas taught in economics and business education are claimed to engender moral misbehavior among some managers because these theories mainly focus on the primacy of profit maximization and typically neglect the ethical and moral dimensions of decision making” (p. 560)
According to the previous discussion, it is more than likely that personal values have an impact on significantly different decision making behaviour between freshmen law students and freshmen business students which was found with regard to the “market case” and the “profit case” but not in the context of the “allocation case”

Summary

Introduction

Since the turn of the century, several accounting scandals (e.g., WorldCom, Enron), financial fraud offences (e.g., Bernard Madoff), and banking scandals (e.g., the LIBOR and FX market manipulation) have caused severe consequences for companies, business sectors, and societies at large (Gibson et al 2016). Regarding business students’ choices in the two Kahneman et al (1986a, b) studies, their economic decision making appears to become more efficient over the course of their education, providing evidence of a socialization effect. Literature distinguishes between self-selection (Frey et al 1993) and an education effect (Haucap and Just 2010; Wang et al 2011) during academic education We analyse both effects in our research setting, the latter is relevant for the discussion on “whether economics and business education itself has an impact on students’ moral concepts and behaviour and is relevant for the discussion regarding responsible management education”

Business and law education at universities

Conceptual framework and hypotheses

Socialization during legal and business studies

Data and methodology

Results

Discussion and conclusions