1 P a g e A System Approach to Implementing Business.docx

1 | P a g e
A System Approach to Implementing Business Ethics in
the Corporate Workplace
Clifton Clarke
Department
of Finance and Business Management, Brooklyn College, City
University of New York
[email protected]
Abstract
The current vitriolic discourse over the financial scandals
implicating Wall Street and its satellite institutions
dictates a fresh look at strategies intended to eradicate or
prevent unethical practices in business activities.
The spate of recently published unethical behavior among
business executives in the United States confirms,
unequivocally, that past and current strategies have failed. This
paper reviews and evaluates the impact of
some of these strategies. It found that the strategies focus on
legislation, written corporate codes of ethics and
assorted activities in business schools. It found that these
strategies are largely isolated and missed the fact
that unethical business conduct is systemic, reflecting the
ethical lapses of two systems: a public system
(consisting of governmental bodies, business schools, and the
general citizenry) and a corporate system
(consisting of boards of directors, executives, managers and
employees). It found that there is a significant

gap between the rhetoric of corporate executives and their
attention to unethical conduct in the workplace. It
concludes that isolated legislative actions, apathetic business
schools’ policies, complacent and complicit
corporate boards, contribute to the failure. It also concludes
that, the implementation of business ethics in the
workplace requires a transformation of attitude within and
between these systems and posits that a system
approach is the only strategy that can successfully transform
these systems and that business schools are
uniquely capable of leading this transformation.
Keywords
Ethics, corporate workplace, transformation, culture, business
schools, legislations
Introduction
Hearings held by a subcommittee of the Banking and Finance
Committee of the United States Senate on
certain practices of financial institutions, particularly those
practices that might have contributed to the
economic collapse in 2008, revealed the disconnect
between the public’s and corporations’ perceptions of
ethical conduct (Hauser 2010). Several of the questions posed
to the Chief Executive Officer, and the
Executive Director of Structure Products Group Trading of
Goldman Sachs Group, Inc., focused on the
company’s ethics. For example, the senators wanted to know
whether it was ethical for the company to sell
investments that its own trading team knew were
“worthless”. In their defense, this and other questionable
practices were an integral part of their company’s business
model. Similarly, Morganton (2011), of the New
York Times reported that the former Chief Executive Officer of

Countrywide Financial, then the largest
mortgage lender in the United States, knowingly developed and
sold questionable loans. He reported that “E-
Mails and other documents supplied to regulators in the
Security and Exchange Commission’s ( S.E.C.’s) case
against Mr. Mozilo showed him discussing the company’s
lending practices and describing some of its loans
as ‘toxic’ and ‘poison’. Nevertheless, the company kept
selling the types of loans Mr. Mozilo was
denigrating”. For Mr. Mozilo the benefits of his action
outweigh the cost, noting that “Countrywide was
helping to breakdown the racial and economic barriers to
homeownership. This approach went a long way to
mailto:[email protected]
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avoiding a serious social problem down the line” (Protests
2011). From the perspectives of these executives
their actions were well within the boundaries of the free market
system, a view rejected by the general public
who saw the market ideology defense as a ruse to obfuscate
their unethical, if not illegal practices. The
public’s position is consistent with that of Gras (1939),
who argues that exploitation is an abuse of the
capitalist system and is not inherent in the system itself. The
contradictions alluded to are symptomatic of the
discord between normative and practical ethics. It is not
surprising that the conduct in question has resurrected
the age-old debate over ethics, and in particular, business ethics
and the role of business schools.
Context and Definitions

The advocacy for the integration of ethics into business and
accounting education dates back many years. An
editorial in the Journal of Accountancy posited that “Ethics
should be a subject of study for every accounting
student” (Journal of Accountancy 1953, p. 293). The
American Accounting Association’s Committee on
Future Structure, Content and Scope of Accounting Education
recommended inter alia that accounting
education should provide students with the knowledge to
“appreciate ethical standards and conduct” (The
Bedford Committee 1986, p. 179). The National Commission
on Fraudulent Financial Reporting calls for
changes in accounting education to “. . . include ethics
discussions in every accounting course” (The
Treadway Commission 1987, p. 83). Derek C. Bok, former
president of Harvard University urged the
Harvard Business School to introduce ethics into their MBA
curriculum (Bok 1983). In 1982, The Wall Street
Journal reported on the proliferation of fraudulent and
questionable financial reporting practices (Morris
1982). Recently, the highly publicized cases of fraudulent
activities associated with the securities market and
financial accounting reporting and practices ( Bernard Madoff,
Enron Corporation, The Galleon Group,
Primary Global Research, Arthur Andersen, WorldCom) to name
a few, has fueled a chorus of demand for
ethical conduct from individuals in business. As the public
looks for remedies to this seemingly corporate
cancer the question as to the role of corporate boards in
stemming these behaviors in the workplace and the
role business schools in molding the character of their graduates
grows louder and more pervasive. But the
precise actions expected from businesses and business schools
have been evasive.

Philosophers and politicians have struggled with the concept of
ethics for centuries with conflicting
conclusions on how to define and implement it. Theodore
Roosevelt (1858-1919), 26th President of the United
State is reported to have said “To educate a man in mind
and not in morals is to educate a menace to society”
(Roosevelt, n.d.) It is interesting to note that this was said in a
period of U.S. history that is known for
‘political discrimination’, ‘economic exploitation’ and
‘social segregation’. And despite their campaign for a
just and moral society, Plato and Aristotle concurred that
slavery was necessary for the success of their society
(Taeusch 1931). Likewise the literature is saturated with
debates and discussions on the need to improve
ethics in business. Although there is a consensus that ethics
should be at the core of business transactions,
there are chasms among the myriad of interpretations and
applications. The inconsistencies alluded to above
reflect the challenge to wed general or normative ethics and
situational or practical ethics. Critical questions
such as what is ethics, are there two ethics (business and
personal), what role the extant culture plays in
decision-making, and what role can business schools effectively
play in implementing ethics in the workplace,
have not been sufficiently answered.
A generally accepted definition of ethics is that it is the study
of what is good and bad, right and wrong, just
and unjust. Others such as Kohlberg described it as moral
judgment and argued that “the exercise of moral
judgment is a cognitive process” (Reimer et. al. 1983, p. 3).
According to Cavanagh “ethics is a system of
moral principles and the methods for applying them; ethics thus
provides tools to make moral judgments. It
encompasses the language, concepts, and models that
enable an individual to effect moral decisions”

(Cavanagh 1984, p. 137). De George (1987) defines ethics as
the study of morality and immorality. Kaviya
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(2011) offers this explanation “ethics is the discipline
dealing with that which is good and bad and with moral
duty and obligation. Business ethics is concerned with the
behavior of a businessman in doing a business and .
. . developed by the passage of time and custom. Custom
differs from one business to another”. Ethics, for
some executives, has more nuances. It is casuistry, a cost-
benefit calculation based on whether their behavior
accrues benefits to their shareholders (Drucker 1983). This view
point is consistent with the utilitarian theory
of ethics (Bentham 1789) and (Mill 1863). Obviously, civil
rights (Locke 1690) and justice (Aristotle 1953)
are not factors in their decision set. These normative concepts
are easily understood. The challenge is to
implement them in tangible ways, that is, to construct strategies
which promote business creativity and
innovation, while simultaneously protect all stakeholders.
The interpretation and therefore implementation of ethical
principles are further complicated by social
concerns. Since ethics involves the interaction among people, it
functions in a social system, whether that
system is the general society or the workplace or both. A social
system undergirds culture, which may be
defined as the values and ideology that influence decision-
making. Values determine the basis on which
choices are made. An ideology is comprised of the integrated
values in a social system. It provides purpose,

directions and identity to that system. Thus an ideology
determines goals, strategies and reputation of a
system. The implication is that ethics is communicated through
social systems. The ideologies and strategies
that government, corporations and business schools employ to
combat unethical business conduct and their
results are evaluated against this backdrop.
Government and Ethics
The solutions for unethical business conduct have evaded both
federal and states governments for decades.
The origin of governments’ involvement in business ethics can
be traced to the Sherman Anti-trust Law of
1890 (Taeusch 1931). The objective of that and subsequent laws
is to prevent or to deter unethical conduct
“through strengthening systems and controls, and promoting
transparency, accountability and informed
citizenry” (Chene 2010). The central features of major federal
legislation discussed in this section illustrate
the extent of governments’ anti-fraud interventions. These
legislative actions may be divided into two
categories; those designed to protect consumers on the one hand
and investors on the other. The Sherman
Anti-trust Act of 1890, and the Clayton Act of 1914, are among
the first set of consumer protection
legislations (Taeusch 1931). The former aims to prevent
restraint of interstate and foreign trade while the later
prohibits price discrimination in contracts and other agreements
that restrict competition. The Foreign Corrupt
Practices Act (FCPA) of 1977 and revised in 1988 has anti-
bribery prohibitions and accounting and record-
keeping requirements (Gaetti 1997). The anti-bribery
prohibitions “make it illegal for U.S. persons to bribe a
foreign government official for the purpose of obtaining or
retaining business” (Gaetti 1997). The record-

keeping provisions require publicly traded companies in
the U.S. “to devise and maintain an accounting
system which tightly controls and accurately records all
dispositions of company assets” (Gaetti 1997). The
Credit Card Accountability Responsibility and Disclosure Act
of 2009 (the Credit Card Act) prohibits
predatory practices in the credit card industry and confirms
certain consumer rights (Detweiler 2009). The
Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 was enacted to protect both consumers
and investors. It, among other things, regulates transactions in
products such as home mortgages, car loans,
credit cards and certain derivatives. The oversight of these
legislations is distributed among a maze of
governmental agencies which oftentimes have overlapping
objectives and contrary enforcement practices.
The securities markets are subject to the oversight of the
Securities and Exchange Commission (SEC). The
purpose of the SEC is to protect investors and maintain
market integrity. The online publication “How the
SEC Protects Investors, Maintains Market Integrity” discusses
the main legislations in pursuit of this
objective. The Securities Act of 1933 requires publicly traded
companies to register their securities and
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accurately disclose financial and other information that
will influence investors’ decisions. It also prohibits
deceit, misrepresentations, and other fraud in the sale of
securities. The Securities Exchange Act of 1934
regulates companies and individuals engaged in the sale and

exchange of securities. It also authorizes the SEC
to require periodic reporting of information by companies with
publicly traded securities. The Investment
Company Act of 1940 regulates the organization of companies
engaged primarily in investing and trading in
securities offered to the investing public. The Investment
Advisers Act of 1940 and amended 1996, with
certain exceptions, requires investment advisers to register with
the SEC and comply with rules designed to
protect investors. Finally, the Sarbanes-Oxley Act of 2002, was
enacted in response to the Enron, WorldCom
and other similarly high profile scandals. It, among other
things, mandated several reforms to guard against
corporate and accounting fraud. Since 1991 the enforcement
strategies have been augmented by the federal
sentencing guidelines designed to encourage ethical conduct in
the workplace (Desio 2004). Despite these
strategies by government, unethical business conducts continues
in various forms. The strategies employed by
corporations have produced no better results.
Corporate Culture and Ethics
The origin of unethical business practices is unknown. However
there are events in history which indicate that
it is not a recent phenomenon. These events demonstrate that
unethical behavior is not a victimless activity.
Unfortunately, it usually takes egregious incidents to expose the
injury it inflicts on individuals and society.
One of the earliest reported incidents is in the Holy Bible
(Mathew 21: 12), where it is reported that Jesus in a
rage directed mainly at the moneychangers (bankers), drove the
merchants and moneychangers out of the
temple (Scripture Backdrops). The moneychangers were
notorious for charging pilgrims exorbitant foreign
exchange rates and fees (Scripture Backdrops). Taeusch (1931)

opined that business ethics emerged at the
peak of the westward migration. He asserts that “from this
time on, excess social, political, and economic
energies could no longer expend themselves on a virgin
territory, but reacted more and more upon established
human communities. It is in such reflective situations that
ethical considerations arise; and so they arose in our
economic life, first in the form of labor disturbances and
agrarian readjustments, and later in the sharper
conflicts of business competition” (Taeusch 1931, p. 53).
De George (1987) and Gras (1939) suggested that
attention to ethics in business has its origins in religious values;
the expectation that one should be concerned
about the wellbeing of others.
While there may be a universal expectation of corporations to
do what is good, right and just, the question
remains as to what is good or bad, right or wrong, just or unjust
in business. Drucker and others have
expressed skepticism of the very idea of a business ethics. He
asked, “. . . if there is indeed something that one
could call business ethics and could take seriously, what
could it be?” (Drucker 1993, p.195). There are two
main theories of business ethics. One is the theory of moral
unity which holds that business actions can be
judged by the general ethical standards of society (Steiner and
Steiner, 1985). This point of view is consistent
with those of moralists such as F. H. Bradley (Ethical Studies,
1876), Edmond Cahn (The Moral Decision,
1955) and Aristotle (Ethics, 1953). But moralists do allow
for unethical behavior in “extenuating” and
“aggravating” circumstances based on social and cultural
mores. For example, they accept that a poor widow
who stole bread to feed her starving children should receive
clemency. In Nicomachean Ethics, Aristotle
suggests that unethical behavior caused by ignorance and

incapacity to perform an action should be excused.
As Gras (1939) observed, “Unhappy lies the head of the
moralist, for he must try to fit parts that do not
match” (Gras, 1939, p. 315).
Another school of thought, the amoral theory, argues that
business activity is amoral and so decisions should
be based solely on considerations of economic self-interest
(Steiner & Steiner 1985). This economic theory
and its contaminant business practices flourished in the nascent
period of capitalism under the doctrine of
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Social Darwinism (survival of the fittest) and laissez-faire
economics. This doctrine underpins the philosophy
of Adam Smith (1904) and others who believe that the common
good is best achieved by individual pursuit of
their self-interest. This line of thinking is the central tenet of
corporations’ practices. The financial crisis of the
U.S. in the 1930’s and the subsequent intervention of the
federal government in the economy (the New Deal)
at least modified the scope of business autonomy and thereby
the behavior of individuals in business. The
resurrection of the doctrine of ‘survival of the fittest’ saw
a resurgence of business practices that are obviously
not good, not right and not just. Some of the purveyors of these
practices have been prosecuted. Others such
as those associated with certain practices related to subprime
mortgages and credit swaps and the subsequent
collapse of the housing market are being investigated. Both the
moral and amoral theories have some validity.
Groups of all kinds need a set of principles that guide the

behavior of their members. But individuals must
have the space to create and innovate and to benefit from the
fruits of their action.
Ultimately, ethics is practiced by individuals, and so it cannot
be evaluated in a vacuum. The challenge
individuals face is how to apply general principles of ethics in
the context of the situation that confront them.
A survey conducted by Merchant (1987) suggests the following
reasons for the spate of fraudulent and
questionable financial reporting experienced then and which
seem appropriate now:
1. Incentives and other inducements: rewarded by the 3P’s
– Pay, Promotion and Praise. They become
ends.
Managerial performance is measured in terms of results.
Results are which justify means. “The
means-ends ethics” is often associated with the Italian
political philosopher Niccolo Machiavelli. In
the Prince he wrote that worthwhile ends justify efficient
means, that when ends are of overriding
importance or virtue, unscrupulous means may be employed to
reach them.
2. Temptations:
The ineffectiveness or nonexistence of corporate controls
to detect managers’ deceptive practices
3. Lack of moral guidance and leadership from top management.
Merchant (1987) concluded that corporations could resolve
these problems by using strong penalties for
violations, by using realistic performance targets, and by

deemphasizing short-term goals. The implementation
of these suggestions may serve as deterrents for some
employees, but they missed the salient point and that is,
unethical behavior is system induced and nurtured. A system
will produce the best product it is designed to
produce, the saying goes. Corporate systems are designed to
produce profits, first and foremost. If ethical
behavior generates profits, businesses will provide incentives
and rewards to employees who adhere to ethical
standards.
A study of businesspeople by Baumhart shows that most believe
a code of ethics would help them clarify their
own standards and decisions (Baumhart, 1961). In essence,
business executives are not against the concept of
ethics and a large majority has developed written codes of
conduct for their own firms. The struggle between
normative and practical interpretation of ethics is a challenge
for business executives in a viciously
competitive world. They need successful models, that is, proven
practices and processes that produce
measurable outcomes. Ethics, as a discipline, lacks these
attributes and therefore it does not offer the
confidence executives need to plan. Planning is about the
future. The future is a dark place and no executive
will enter there without some protection. It was probably in
recognition of this vagueness that Blumenthal,
former chair of Burroughs Corporation and Bendix, and
secretary of the United States Treasury, proposed the
establishment of a national code of business ethics among Chief
Executive Officers (Blumenthal 1975). It
was in the same vein that The Caterpillar Tractor Company
developed and distributed its own code of conduct

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to its managers worldwide (Caterpillar 1974). These proposals
were widely accepted as evidenced by the
growth in the number of firms that subsequently created ethics
committees within their boards of directors
(Cavanagh 1984).
The number of firms with written codes conduct has
grown since the 1970’s. Kerin, et al (2007), estimated
that “80 percent of United States companies have some
sort of ethics code and one of every five large
companies has corporate ethics officers “(Kerin et al. 2007,
p. 84). However, the actions of some companies
could have been driven by the plethora damaging disclosures of
unethical and illegal acts in which of some of
the largest American firms engaged during the 1970’s (Ross
1980). Such conduct was not confined to
activities in the United States. According to Clinard & Yeager
(1980), many corporations were implicated in
the practice of paying bribes to foreign officials. The growth in
corporate ethics programs might also be
motivated by the 1991 Federal Sentencing Guidelines for
Organizations (Joseph 2003). It provides for a
significant financial incentive to corporations who implement
these guidelines. Programs that follow the
sentencing guidelines may receive a reduction of up to 95
percent in Federal Government fines (Desio 2004).
Regardless of the reasons companies develop codes of conduct;
the evidence shows that their strategies are not
succeeding. As recent as April 2010 the U.S. Justice Department
and the Security and Exchange Commission
were investigating whether Hewlett Packard Company
executives paid millions of dollars (US) in bribery
money between 2004 and 2006 to the Prosecutor General of

Russia to win a large contract to supply computer
equipment throughout Russia (Crawford 2010). More recently,
Tyson Foods settled bribery charges with the
Justice Department (Neuman 2011). Surprisingly, or maybe
not, there is no evidence that the executives of
the accused accompanies have ever conceded that their conduct
was unethical.
Although these practices are reprehensible, they do not confirm
that business executives are necessarily
unethical. Their priority is to maximize the wealth of their
shareholders in a highly competitive environment.
This requires them to make assumptions about the future based
on tested and proven models. Ethics is an
amorphous concept and is often discussed in normative rather
than practical terms. For a short time ethics was
synonymous with social responsibility a concept embraced by
business executives. However, it can also be
morphed into self-justification. Wright, quoting a former
corporate executive wrote “the system of American
business often produces wrong, immoral and irresponsible
decisions, even though the personal morality of the
people running the business is often above reproach”
(Wright 1979, p. 61). This comment can be summed up
with this piece of cynicism: “An ambassador is an honest
man, lying abroad for the good of his country”
(Wotton, n.d.). The case of the CEO of Galleon Group
exemplifies this conundrum. The prosecution accused
him of knowing “tomorrows business news and traded on
it” but his lawyer countered that he obtained
information through “shoe-leather research, diligence and
hard work” (Lattman 2011). Bridgeport Education,
an online education company, is another example of normative
versus practical ethics. The company obtains
86 percent of its revenue from the federal government. Its
dropout rate ranges from 63 to 84 percent

depending on the degree program and they paid little attention
to job placement, a crucial promise to students.
And, of their per student cost, $700 went to instruction, $2,700
went to recruiting and $1,500 went to profit.
Their justification for this perceived abuse of students was that
they provide education at a lower cost to
taxpayers than public colleges (Lewin 2011).
Despite the heightened awareness, there is no noticeable impact
on corporate unethical practices. A possible
reason is an absence of leadership on this issue among business
executives. Leadership is reflected in the
perceived message from top management and not necessarily in
a written code of conduct. The ethical tone set
by top executives should be the doctrine of the workplace, that
is, every employee should be indoctrinated in
those values. The positive effects of indoctrination will
outweigh any negative concerns. A review of surveys
conducted by the Ethics Resource Center (ERC) revealed a
persistently significant gap between executives’
rhetoric and their actions. The 2007 National Business Ethics
Survey (NBES) survey shows that only one in
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four companies has a well implemented ethics compliance
program. Although The 2009 NBES survey found
that an ethical culture in the workplace is highly regarded and
that there is awareness among executives that
financial fraud or other misconduct can be discovered before the
damage shows up in financial reporting if
there is an ethical culture in the workplace, unethical conduct
persists in corporations. In the executive

summary of the 2000 NBES survey, the Ethics Resource
Center reports that “one in eight employees feel
pressure to compromise their organizations’ ethics
standard.” According to the 2005 NBES survey, ethical
misconduct returned to the pre-Enron levels during 2005, and,
as was in 2000 survey, one in eight employees
experience some form retaliation for reporting misconduct.
More recently, the 2009 NBES survey reported an
increase in retaliation against those who reported misconduct in
the workplace. Studies conducted by Bolt-
Lee, Farber & Moehrle (2011) , of among other things,
whistleblowing in corporations found similar pattern of
retribution against auditors and employees. They found that the
auditors who reported findings of fraud were
not rewarded. However there was an “approximately 50%
probability that the whistleblowing auditor would
lose the account of the company involved in the
irregularity”, and “82% of named whistleblowers alleged
they were either fired, forced to quit or demoted after blowing
the whistle” (Bolt-Lee, Farber & Moehrle 2011,
p. 38). The 2009 NBES Supplemental Research Briefs found
that “Actions – and Perceptions – of top
managers drive the ethical culture of the company and
have a significant impact on outcomes” (NBES 2009,
p. 8). Such impact includes the prevention of the kinds of
workplace behavior that can put a business at risk.
The 2009 NBES survey also found that “in a weaker
ethical culture, employees observe more misconduct”
(NBES 2009, p. 16). These findings raise questions about the
commitment of corporate executives to
implementing ethics in the workplace. Any positive response
from corporate executives may be driven
primarily by mitigating factors against punishment rather than
concerns about social responsibility. Clearly,
corporate culture or what Sonenshein characterized as thick or
organization moralities (Sonenshein 2005), is

the primary determinant of the degree of ethical behavior in the
workplace.
Corporations are living organisms. They have culture,
leadership and emotion. They experience desperation,
depression, denial, hope, and fear (Foster & Kaplan 2001). Most
of all they have mental models. These are
“the core concepts of the corporation, the beliefs and
assumptions, the cause-and-effect relationships, the
guidelines for interpreting language and signals, the stories
repeated within the corporate walls” (Foster &
Kaplan 2001, p. 18). Corporate systems are built on mental
models, some of which have produced less than
virtuous results. Mental models are invisible, implicit, yet real,
enduring and omnipresent. It develops and
nurtures interrelationships and interdependence. The workplace
is an ecosystem and as with other ecosystems
adaptation is imperative for the survival of its members and the
system itself. System thinking is pervasive,
that is, the view that an organization is effected by what
happens to the parts. It encourages cohesiveness,
positively or negatively, among employees. Senge defines
system thinking as “the discipline that integrates the
disciplines (personal mastery, mental models, building shared
vision, team learning), fusing them into a
coherent body of theory and practice” (Senge 1990, p. 12).
A corporation is also a learning organization “a
place where people are continually discovering how they
create reality and how to change it” (Senge 1990, p.
13). People in the workplace slide between two realities,
namely, personal culture and the culture of the
workplace. The decisions they make may be based on moral or
amoral principles. It depends on the corporate
culture and by extension, corporate boards.
Corporate boards of directors have a crucial role in the quest to

eradicate unethical business practices. The
boards of directors are the official management of corporations.
It is at this level that the ideology and
message regarding ethical standards should emanate as do all
other policies and strategies of the corporation.
According to Gras (1939), “Business ethics is the reservoir
of clear water which may be drawn upon to build
the codes of industry. It is a lake upon which the individual
firm can sail its ship into the harbor of Good
Policy” (Gras 1939, p.310). Although investors sometimes
chided directors for the under-performance of their
corporation, they usually escape punishment for the unethical
behavior of their executives. This breeds
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complacency and contempt for ethical issues. The SEC’s
suit against the directors of DHB Industries might
represent a change in this practice. The SEC accused three ex-
board members of DHB Industries of “willful
blindness”, alleging that they turned a blind eye while the
company sold defective armor to the military and
law enforcement agencies (Norris 2011). This action was
welcome by investors and members of the legal and
enforcement communities, but a more proactive approach might
have avoided the suffering meted out to the
victims of this alleged fraud. The SEC’s charges signals
that board members must become proactive on
matters of ethics because they may be held accountable for the
malfeasances of their executives. Business
schools have the ability and capacity to assist corporate
executives with their ethical challenges.

Business Schools and Ethics
The role of business schools in the moral development of their
graduates is not settled. It is reasonable to
assume that most, if not all students, have some notion of what
is good and bad, right and wrong, just and
unjust in the abstract. The purpose of business schools is to
provide their graduates with among other skills,
critical thinking. Teaching is a process which results in the
voluntary modification of the behavior or thought
of others. In so doing it should produce critical thinkers. “Good
teachers produce skeptics who ask their own
questions and find their own answers” (Ackoff & Addison
2007, p. xi). Ethics is a diffused discipline and by
extension business ethics is an undefined body of knowledge.
Therefore, the application of ethics is invariably
the product of critical thinking, which is influenced by the
environment in which the decision is being made.
Subjectivity often trumps objectivity in crucial circumstances,
therefore a set of rules must be available for
reference at all times. The workplace is highly competitive and
corporate culture, directly or indirectly,
provides the weapons used in this combative environment. It is
where the feedback loop of performance and
reward is established, evaluated and controlled. Against this
backdrop, business schools should not be
expected to teach their graduates to unilaterally disarm. This
could lead to career suicide. As Machiavelli
observed, “it is not reasonable to suppose . . . that any
unarmed man will remain safe among armed servants”
(Buskirk 1974, p. 40). Business schools can and should create
awareness. But such knowledge is impotent or
at best a blunt instrument in an unethical culture.
Business schools provide ethics education through various
means. In addition to course materials they have

encouraged ethical behavior among their graduates through
honor societies and other means. Professor Nitin
Nohria (who became Dean of Harvard Business School in May
2010), has been actively promoting business
ethics for more than two decades. He has been leading the
crusade to adopt an MBA Oath. The Oath is a
voluntary pledge for graduating and current MBAs to
“create value responsibly and ethically.” MBA students,
graduates and advisors representing over 250 business schools
worldwide, the Aspen Institute and the
Economic Forum are participating in this Oath (The MBA
Oath). There is nothing new about professional
and organizational Oaths. The Hippocratic Oath,
Thunderbird’s Oath of Honor and the Columbia Business
School’s Honor Code are notable examples. These activities
are necessary but are obviously insufficient to
prevent unethical behavior by their graduates. Therefore,
business schools must become more innovative if
they are to remain credible in the quest for solutions to this
scourge.
Conclusion
The need for a more ethical workplace is no longer debated. It
is also a demonstrable fact that there is a
colossal failure of the current strategies employed to control
unethical conduct in the workplace. Laws have
been enacted, codes have been written, oaths have been taken
and pledges have been made but they all fell
short of their objectives. The federal government has tacitly
admitted the failure of the legislative approach by
its resorting to a cooperative posture through the sentencing
guidelines developed by the United States
Sentencing Commission. One is not sure of the extent to which
a business school can influence the ethical

Page | 9
behavior of their graduates but they can help corporations. One
of the main reasons the strategies fail is that
there is a lack of meaningful collaboration among business
schools and corporate boards. The justification for
their collaboration is self-evident. Firstly, there is a natural link
between the two institutions, the responsibility
to protect the public interest. Secondly, there is a need to bridge
the divide between normative ethics as taught
by business schools and the ethical challenges that confront
corporations. This presents a unique opportunity
for business schools to take a leading role in ameliorating this
intractable problem. Business schools can
begin to demonstrate their commitment to developing ethical
corporate workplaces by establishing direct
contact with corporate boards and by hiring faculty who are
business ethicists and avail their services to
corporations. These are faculty who appreciate the concerns of
business executives, understand how
corporations work, and are dedicated to protecting the interest
of the public.
Corporate boards of directors can reciprocate by appointing a
member whose sole responsibility is to develop,
monitor and enforce ethical standards in the workplace. This
member would be required as a matter of
corporate policy to establish consultative relationships with
ethics faculty at business schools. Parenthetically,
the new posture of the SEC might encourage this direction. The
relationship will facilitate the flow of ideas
and best practices between business schools and corporations. It
will also intersect the application of

normative and practical ethics. It is essential because ethical
questions usually arise at the margin. For
example, a discussion may occur on issues of disclosure; what
should be disclosed, to whom it should be
disclosed, and when it should be disclosed. Taken separately or
in any combination, the response to these
questions can have significant financial and public relations
consequences. The notion of corporations
obtaining external opinions is not new. They routinely seek the
advice of external professionals such as
lawyers. While corporate executives may be impaired by
parochial ideologies, independent business ethicists
would not be restrained by such handicaps, thus allowing for
better decisions.
Clearly, the engagement and cooperation between business
schools and corporate boards at a level that matters
can transform attitudes, policies and practices within the public
and private systems. The nature of the problem
requires coordinated solutions. And a system approach is the
only strategy that can provide these solutions.
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Copyright of Journal of Business Systems, Governance & Ethics
is the property of Victoria University,
Business & Law and its content may not be copied or emailed to
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EE233 Summer 2015 Department of Electrical Engineering

University of Washington
EE233 Homework 4
July 11, 2015
Due Date: July 20, 2015
HW4 Topics:
• Average Power
• Power Factor
• Maximum Power Transfer
• Complex Power
• RMS power and current
HW4 References:
• Textbook section 10.1 − 10.6
1. (Average Power) Find the average power absorbed by each
resistor and each source.
Hint: The circuit is in steady state, use superposition to solve
this problem.
+
−100V
1kΩ
1µF 1kΩ 0.2 cos 2000tA

2. (Power Factor) Find the power factor.
(a) A load consisting of a series connection of a 50Ω resistor
and a 10µF capacitor operating
at 60Hz.
10µF
50Ω
(b) A load that is capacitive and requires 40A RMS and 8kW at
220V RMS.
3. (Complex Power) Use the method of Complex Power to
compute the power factor if the
load is one consisting of 5kW load at a power factor of 0.85
leading connected in parallel
with a 10kW load at a power factor of 0.95 lagging.
EE233 Summer 2015 Department of Electrical Engineering
University of Washington
Z1 Z2I1 I2
4. (Average Power) Find the average power, reactive power,
complex power, and apparent
power absorbed by the load (resistor and capacitor in series) if
ig(t) = 50 cos 2000t mA.
ig 2mH 20nF
5kΩ
5. (Maximum Power) Let vg(t) = 100 cos (4000t) V.

vg
8mH
40Ω
5µF
ZL
b
a
(a) Compute the Thevenin equivalent circuit of terminals a − b.
(b) If we want to have maximum power, what is the load ZL.
(c) Compute the maximum average power delivered to the load.
Page 2
Exploring Ethics in the Workplace
For this Critical Thinking Assignment, read the article Clarke,
C. (2011). A System approach to implementing business ethics
in the corporate workplace. Journal of Business Systems,
Governance & Ethics, 6(2), 1-11.
You may also consider watching the video Ethics in the
Workplace by the Smith Business School and available
here: http://youtu.be/IFJvO0UtcFQ
After reading the Clark article (and possibly reviewing the
video), discuss how the company you work for (or if you are not
currently employed, use a past employer) addresses ethical
issues. Does the firm have a formal code of ethics? Are
employees assessed based on their ethical behavior? Further,
how does the firm handle violations in ethical behavior?

Requirements:
· Back up your response with research from at least 2-4
scholarly sources and, in addition, you may use the course
required readings.
· Your written paper should be 4-5 pages in length not counting
the title and reference pages, which you must include.
· Your paper must be formatted according to CSU-Global Guide
to Writing and APA Requirements.
· Review the grading rubric, which can be accessed from
Module folder, to understand how you will be graded on this
assignment. Reach out to your instructor if you have questions
about the assignment.

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