August 21, 2023
“At PwC, (our purpose) is to build trust in society and solve important problems”, said one recruitment invitation. While another promised; “As one of our grads, you can expect to work on high-impact, meaningful and purpose-led projects”.
This is the wording used in invitations circulated this year by two of the so-called big four accounting firms to final year business students in Australia.
Each year graduate employers spruik their job opportunities to soon-to-graduate students in a competitive process that promises much for up to 5,000 successful candidates.
So how should final year students respond when all four prominent graduate recruiters are caught engaging in unethical business practices as revealed in the ongoing Senate inquiry examining consultants?
And how well have business schools prepared students to navigate such challenges?
What of the recent graduate recruits already working in these organisations, such as at PwC – will they be rounded up as part of those “we will be naming … who did anything wrong” or included in the 1,500 staff to be spun off into a new entity?
Problematic cultures exist in other sectors
The revelations about the big four resonate with the earlier scandals uncovered across the banking and finance sector in Australia, leading to the Prudential Inquiry into the Commonwealth Bank of Australia (2018) and Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2019).
The CBA inquiry identified “culture” as a key lever in addressing misconduct, demonstrated by a widespread sense of complacency from the top down; normalised bad behaviour, reactive rather than proactive responses to risk; favouring of consensus over constructive criticism and a lack of critical thinking.
Are such practices endemic to the whole industry and can announced measures such as divestment of some government business and a single set of standards deal with these issues? Or is this simply a rushed response to protect the financial interests of the firm?
What of the role of business schools, responsible for educating graduates who go on to lead financial institutions and consulting services? How well prepared are their graduates to navigate ethical challenges as they arise?
Business schools stand accused of perpetuating a corporate culture that prioritises maximising shareholder profit to the detriment of broader stakeholder concerns in their teaching.
In the fallout of the banking royal commission, we held a public forum to look at the role of business schools.
This was followed by a qualitative research project investigating the experiences of a cross section of students and graduates in navigating ethical challenges in their corporate internships and graduate roles.
Students find the theory doesn’t always match the practice
Based on a series of focus groups, exposure to normalised bad behaviour surfaced early in the experiences of student interns.
They reported a lack of preparedness for their early placements and inadequate supervision: “you just don’t have the knowledge to ask the right questions. The amount of responsibility I got … was too early.”
This meant many students did not feel they had the ability to be heard – carrying out important tasks without adequate guidance, while lacking the seniority to have concerns taken seriously. “Dodgy practices” became normalised, and students felt compromised.
Most felt university could better prepare them, with a more real-world approach to ethical issues: “at uni basically everything you do is black or white … so textbook compared to what it’s like in the industry.”
Recent graduates who had entered the workforce in the last five years took a pragmatic approach, with career aspirations front of mind. Having secured a graduate position for themselves, there was concern about “rocking the boat”. One reported: “It’s sometimes hard to raise something to a manager, not because of fear of getting punished, but more of like a respect factor”.
For longer-term graduates, questionable practices, weak HR, disinterested management, and the emotional cost of choosing to leave a workplace due to unethical practice were key themes: “So, the system isn’t set up where if people do the right thing they’ll be protected. Everything’s set up for the companies to protect their own interests.”
Business schools and recruiters need to change their approach
What emerged clearly from the data is the need to fix workplace culture, and greater accountability by both business schools in their teaching approaches and graduate recruiters in their supervision of intern and graduate programs.
The joint aim must be to equip students and graduates with “the agency to enact personal and social responsibility”.
As the big four accounting firms’ reputations continue to unravel, it’s essential they adopt ways to minimise the lack of trust in what they do and tackle the complex cultural underpinnings of organisational misconduct.
Business schools also have a role. They need to fix the disconnect between what is delivered in the curriculum and real-world experience.
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