Moral Imagination and
Systems Thinking
ABSTRACT Taking the lead from Susan Wolf's
and Linda Emanuel's work on systems thinking,
and developing ideas from Moberg's, Seabright's and
my work on mental models and moral imagination,
in this paper I shall argue that what is often
missing in management decision-making is a systems
approach. Systems thinking requires conceiving of
management dilemmas as arising from within a
system with interdependent elements, subsystems,
and networks of relationships and patterns of inter-
action. Taking a systems approach and coupUng
it with moral imagination, now engaged on the
organizational and systemic as well as individual
levels of decision-making, I shall conclude, is a
methodology that encourages managers and com-
panies to think more imaginatively and to engage in
integrating moral decision-making into ordinary
business decisions. More importantly this sort of
thinking is a means to circumvent what often appear
to be intractable problems created by systemic
constraints for which no individual appears to be
responsible.
Patricia H. Werhane is the Peter and Adeline Ruffin
Professor of Business Ethics and Co-Director of the
Olsson Center for Applied Ethics in the Darden School
at the University of Virginia. Professor Werhane has
pttblished numerous articles and is the author or editor
of fifteen hooks including Moral Imagination and
Managerial Decision-Making, and Organization
Ethics for Health Care (with E. Spencer, A. Mills
and M.Rorty) both with Oxford University Press. She
is also founder and former Editor-in-Chief of Business
Ethics Quarterly, the journal of the Society for Business
Ethics.
Jourtiai of Business Ethics 3 8 : 3 3 - 4 2 , 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
Patricia H. Werhane
Taking the lead from Susan Wolf's and Linda
Emanuel's work on systems thinking, and devel-
oping ideas from Moberg's, Seabright's and my
work on mental models and moral imagination,
in this paper I shall argue that what is often
missing in management decision-making is a
systems approach. Systems thinking requires con-
ceiving of management dilemmas as arising from
within a system with interdependent elements,
subsystems, and networks of relationships and
patterns of interaction. Taking a systems approach
and coupling it with moral imagination, now
engaged on the organizational and systemic as
well as individual levels of decision-making, I
shall conclude, is a methodology that encour-
ages managers and companies to think more
imaginatively and to engage in integrating moral
decision-making into ordinary business decisions.
More importantly this sort of thinking is a means
to circumvent what often appear to be intractable
problems created by systemic constraints for
which no individual appears to be responsible.
Moral imagination
In a recent article, Dennis Moberg and Mark
Seabright defme moral imagination as "a rea-
soning process thought to counter the organiza-
tional factors that corrupt ethical judgment"
{Moberg and Seabright, 2000, p. 845). In an
earlier work I defmed moral imagination as "the
ability in particular circumstances to discover and
evaluate possibilities not merely determined by
that circumstance, or limited by its operative
mental models, or merely framed by a set of rules
or rule-governed concerns" (1999, p. 93).
I want to reiterate what I argued at length
34 Patricia H. Werhane
elsewhere (Werhane, 1999), that moral imagina-
tion is by and large an afFecdve facihtating process
that influences, but is not identical to, reasoning,
even moral reasoning. Moral judgments require
cognitive reasoning processes and a measure of
impartiality that are not merely imaginative.
Moral imagination helps one to disengage from
a particular process, evaluate that and the
mindsets which it incorporates, and think more
creatively within the constraints of what is
morally possible. Witbout moral imagination one
nught remain mired in a particular situation, but
without moral reasoning one could slip into
moral fantasy (Werhane, 1999, p. 111).
How does moral imagination function? On
the individual level, being morally imaginative
includes:
• Seif-reflection about oneself and one's situ-
ation.
• Disengaging from and becoming aware of
one's situation, understanding the mental
model or script dominating that situation,
and envisioning possible moral conflicts or
dilemmas that might arise in that context or
as outcomes of the dominating scheme.
• Moral imagination entails the ability to
imagine new possibilities. These possibili-
ties include those that are not context-
dependent and that might involve another
mental model.
• Moral imagination further requires that one
evaluate from a moral point of view both
the original context and its dominating
mental models and the new possibilities one
has envisioned (Werhane, 1999).
Notice that this analysis focuses on the indi-
vidual decision-maker, and in our writings,
Moberg, Seabright and myself have focused
primarily on individuals and individual moral
judgments. But, I shall now suggest, this is an
oversight. Moral imagination is not merely a
fimction of the individual imagination. Rather,
moral imagination operates on organizational and
systemic levels as well, again as a facilitative
mechanism that may encourage sounder moral
thinking and moral judgment. It is these latter
phases that we have neglected in previous work.
Some intractable problems
Let me begin by enumerating a series of
problems, moral problems, that occur on the
organizational or systemic level, problems that
appear either to be no one's fault, or are not
solvable given the structure of the system in
question. The South Afi-ican national electric
company, Hskom, got its start when electricity
was first invented, and indeed, Johannesburg was
the first city in the world to be electrified.
Because of the value of electric power in the
South African diamond mines, Eskom was able
to develop as the most powerful and profitable
power company in Africa. But Eskom existed as
a government-owned enterprise, and until
recently was governed by strict apartheid laws.
As a result, rural South Africa, which is mostly
black and poor, was never electrified. The South
African system of apartheid coupled with a pre-
vailing mindset that power companies must be
economically viable (and thus not go into geo-
graphical areas where their return on investment
might be negative) prevented the expansion of
electricity throughout the ricbest country in
Africa (Cunningham, 1999).
A second example comes from Bangladesh.
The Bangladesh Bank (the national government-
owned bank of Bangladesh) controls the inflow
of money into that country and, until recently,
the kinds of loans available to Bangladeshi.
Taking a lead from sound Western financial
education and advice from the International
Monetary Fund and the World Bank," the
Bangladesh Bank lends money only to those who
have good credit ratings, property, capital, or
otber collateral, or other demonstrated assurances
that the loan will either be paid back or can be
collected in some fashion. All of this seems
sensible to the Western mind. However, because
most of the population of Bangladesh has no
money, no ability to borrow any money, nor
any form of recognizable property or other
collateral, loans are available only to the wealthy.
The population is too large and the country is
too poor to instigate a welfare system. So the
poor and the poorest of the poor remain so,
because of financial systemic requirements of the
system.
 Moral Imagination and Systems Thinking
In an unpublished but exciting paper, Henk
van Luijk argues that these problems are struc-
tural or systemic problems not created by, nor,
by imphcation, solvable by an individual ethical
actor even with the tools of moral or fmancial
reasoning or even with the help of individual
moral imagination. Thus a more systemic
approach must be used to frame these issues. In
what follows I shall develop van Luijk's thesis. 1
want to argue, that these are not irresolvable
problems, but the resolution has to take place
through the tool of systems thinking, and a more
systemic approach to moral imagination. StiU, I
will conclude, there remains a critical role for the
ethical actor and individual moral decision-
making without which change would not take
place at all.
Systems and systems thinking
A system is " . . . a set or arrangement of things so
related or connected as to form a unity or organic
whole . . ." (Neufeldt, 1997, p. 1359), "assemblages
of interactions within an organization or between
organizations" (Emanuel, 2000, p. 152) and/or "a
complex of interacting components together with
the relationships among them that permit the iden-
tification of a boundary-maintaining entity or
process (Laszio and Krippner, 1998, p. 51).
What is characteristic of all types of systems is
that any phenomenon or set of phenomena that
are defmed as a system has properties or charac-
teristics that are lost or at best, obscured, when
the system is broken up into components. For
example, in studying organizations, if one focuses
simply on its organizational structure, or merely
on its mission statement, or only on its employees
or managers, one loses the interconnections and
interrelationships that characterize that system or
subsystem. In studying organizations one cannot
forget that they are embedded in a political
economy or economies that affect their opera-
tions and well-being. The kinds of systems we
are concentrating on in this paper have another
characteristic. Each type of system or subsystem
is purposive or goal-oriented. Organizations and
institutions have goals that are usually reflected
in their mission statements or other statements of
35
purpose. Other systems such as political
economies are ascribed goals based on their con-
stitutions, laws, public statements, or habits of
behavior.
The goal-orientation of any system accounts
for its normative dimensions. As has been argued
extensively elsewhere, organizations as well as
individuals have purposes and goals that carry
with them moral obligations, and we hold orga-
nizations and institutions, as well as individuals,
morally accountable (Werhane, 1985; French,
1979). While it is less transparent that systems are
moral agents of some sort, it is true that the
structure, interrelationships, and goals of a par-
ticular system produce outcomes that have nor-
mative consequences. An alteration of a particular
system or parts of that system will often produce
different kinds of outcomes. As networks of rela-
tionships between individuals, groups, and insti-
tutions systems are relationships between people.
For example, the end of apartheid changed South
Africa and, as a result, as we shall see, changed
Eskom as well. Thus how the system is con-
strued, how it operates, affects and is affected by
individuals. The character and operations of a
particular system or set of systems affects those
of us who come in contact with the system,
whether we are individuals, the community, pro-
fessionals, managers, companies, or government
agencies. Thus moral responsibihty is incurred by
the nature and characteristics of the system in
question (Emanuel, 2000). For example, we
blame Eskom as well as the South African
apartheid system for the paucity of electricity in
rural South Africa, even though we cannot
pinpoint all the individuals involved in devel-
oping and maintaining that system. We blame the
pohtical economists and banks in Bangladeshi
government for the country's endemic poverty
even though it appears to be no one set of
individuals we can single out, given what is
taken to be sound the fmancial philosophy such
that apparently there is "nothing they can do
about it."
Systemic arrangements and organization
networks create roles and role responsibilities,
rights, and opportunities that affect individuals
and individual activities and performance. What
is less obvious is that one can take a single
 36 Patricia H. Werhane
organization or a single individual functioning
within that organization or system and apply dif-
ferent systems matrices to that organization with
differing outcomes. What subsystems and indi-
viduals functioning within these systems focus on
and the ways values and stakeholders are priori-
tized affects the goals, procedures, and outcomes
of the system or subsystem in question. On every
level, the way we frame the goals, the procedures
and what networks we take into account makes
a difference in what we discover and what we
neglect. These framing mechanisms will turn out
to be important normative influences of systems
and systems thinking, as we shall illustrate later
in the paper in describing the Grameen Bank of
Bangladesh.
Systems thinking
A truly systemic view thus considers how . . . [a
phenomenon] . . . operates in a system with certain
characteristics. The system involves interactions
extending over time, a complex set of interrelated
decision points, an array of actors with conflicting
interests, . . . and a number of feedback loops.
. . . Progress in analyzing [ethical issues] . . . can
only be made with a full understanding of the
systemic issues (Wolf, 1999. p. 144).
In the examples with which 1 began this paper,
each of the situations revealed a complex
network of relationships imbedded in a complex
set of systems and subsystems. To deal with
ethical issues in these cases either from an indi-
vidual or even from an organizational perspec-
tive, often belies what is really at issue and thus
ignores a number of elements that are related to
the issue in question. To evaluate a system (and
thus begin to change it) requires what the orga-
nizational and scientific hterature call "systems
thinking" or a systems approach.
What do we mean by "systems thinking" or
a "systems approach?" Systems thinking has dif-
ferent definitions, depending on the discipline.
For our purposes systems thinking presupposes
that most of our thinking, experiencing, prac-
tices and institutions are interrelated and inter-
connected. Almost everything we can experience
or think about is in a network of interrelation-
ships such that each element of a particular set
of interrelationships affects the other components
of that set and the system itself, and almost no
phenomenon can be studied in isolation from all
relationships with at least some other phenom-
enon. Systems thinking, then, involves two kinds
of analysis. In a systems approach, "concentra-
tion is on the analysis and design of the whole,
as distinct from . . . the components or parts
. . ." (Ramos, 1969, pp. 11-12). Systems thinking
requires conceiving of the system as a whole
with interdependent elements, subsystems, and
networks of relationships and patterns of inter-
action. Studying a particular component of a
system or a particular relationship is valuable only
if one recognizes that that study is an abstrac-
tion from a more systemic consideration.
Secondly, few systems are merely linear and
few are closed systems that are not constantly in
dynamic processes of changing and reinventing
themselves. Therefore, systems thinking involves
multiple-perspective analyses of any subject
matter, because "the fundamental notion of
interconnectedness or nonseparabihty, forms the
basis of what has come to be known as the
Systems Approach, . . . every problem humans
face is complicated[and] must be perceived as
such" (Mitroff and Linstone, 1993, p. 95). So
each system or subsystem, because it is complex
and entails a multitude of various individual,
empirical, social, and political relationships, needs
to be analyzed from multiple perspectives.
Mitroff and Linstone argue that any phenom-
enon, subsystem or system needs to be analyzed
from what they call a Multiple Perspective
method. Such a method postulates that any phe-
nomenon, organization, or system or problems
arising for or within that phenomenon of system
should be dealt with from least three perspec-
tives, each of which involves different world
views where each challenges the others in
dynamic exchanges of questions and ideas.
Mitroff and Linstone suggest that in business,
economic, and public policy contexts one needs
to look at problems from a technical, or fact-
fmding point of view, from a organizational or
social relationships perspective, and from an
individual perspective, ranking problems, per-
spectives and alternate solutions, and evaluating
 Moral Imagination and Systems Thinking
the problem and its possible resolution from these
multiple perspectives (Mitroff and Linstone,
1993, Chapter 6). A multiple perspectives
approach also takes into account the fact that
each of us individually, or as groups, organiza-
tions, or systems creates and frames the world
through a series of mental models, each of which.
by itself, is incomplete. While it is probably never
possible to take account all the networks of rela-
tionships involved in a particular system, and
surely never so given these systems interact over
time, a multiple perspectives approach forces us
to think more broadly, and to look at particular
systems or problems from different points of view.
This is crucial in trying to avoid problems such
as Bangladesh's, because each perspective usually
"reveals insights . . . that are not obtainable in
principle from others" (MitrofF and Linstone,
1993, p. 98). It is also invaluable in trying to
understand other points of view, even if, even-
tually one disagrees or agrees to disagree. A
Multiple Perspectives approach is essential if, for
example, one is able to develop new thinking
about banking in poor countries or electrifica-
tion where the return on investment may be
negative.
A multiple perspectives approach
In examining ethical issues in systems, subsys-
tems, and organizations, a Multiple Perspectives
approach requires developing an overlapping set
of two grids, the elements of which I shall ini-
tially label descriptive and normative. We shall
see, however, that these are provisional labels,
because the two elements overlap considerably.
The first, a descriptive or "technical"
approach, includes the following. First one
describes the system in question from a socio-
logical point of view. Included in the description
are networks of interrelationships between indi-
viduals, groups, organizations, and systems, and
the number, nature, and scope of subsystems in
the system.
Second, one outlines the boundaries and
boundary-creating activities so that it is clear
what is not included in the system. Stakeholder
theory is useful in this context. By enumerating
37
the various stakeholders involved in or affected
by the system, their interrelationships and
accountabilities one can get clearer on the
networks of interrelationships entailed in a par-
ticular system and who or what has been left out
of previous calculations (See Werhane, 2001).
However, this is problematic Different stake-
holders will outline the boundary conditions dif-
ferently because of the way each prioritizes
stakeholders. For example, a Western-trained
Bangladeshi banker will calculate loans to the
poor differently than, say, someone working for
an NGO. This illustrates how prioritization of
stakeholders and values (including economic
values) affects the perception of boundary con-
ditions and affects decision-making. But it also
illustrates that a reevaluation of that prioritiza-
tion may shed light on new ways to think about
fairly traditional problems.
Linked to the boundary conditions and stake-
holder prioritization are the accountability rela-
tionships between each stakeholder and element
of the system in question. It is tempting to
conceive those dyadically, as Figure 1 illustrates.
And from an organizational approach a dyadic
description of accountability may be adequate.
But organizations are parts of more complex
systems, and these relationships are much more
overlapping and interlocking. See Figure 2 for
a partial graphic depiction of some of these.
More importantly, being clear about these rela-
tionships, and how each individual and each
element of the system are or should be account-
able to each other helps to clarify where deci-
sions go wrong.
Finally, one needs to determine what goals or
purposes the system has, or what goals it should
have, and how these are prioritized, since the
goals a system has will affect its structure and
interrelationships. These prioritized goals then
become the evaluative elements overlaid on the
descriptive grid.
The descriptive grid imports normative/eval-
uative components in evaluating the shortcom-
ings of the boundary perceptions, accountability
relationships, and goal prioritization. But there
are other elements a normative dimension intro-
duces as well. From the normative perspective,
one investigates how a particular configuration of
38 Patricia H. Werhane

Customers:
Primary Managers &
Employers:
^^Stakeholders
Primary
Stakeholders

Investors &
Shareholders:
Trimary Stakeholders

Community)

Figure 1. Standard stakeholder "map".

Figure 2. Stakeholder networks.

 Moral Imagination and Systems Thinking
a system or subsystem affects individuals, in the
Eskom instance, power delivery to the rural poor,
community and pubhc well-being, and micro
issues such as customer access, shareholder inter-
ests, and political constraints. One evaluates the
boundary creating processes, to be clear about
what is left out, as well as accountability rela-
tionships, as we illustrated earlier. Then one eval-
uates both by prioritizing the goals of the system
and indeed, by evaluating those goals (including
the professional, organizational, economic and
political norms) implicit in the system.
Systems thinking, boundary conditions,
and moral imagination
We have left underdetermined what we mean by
"boundary conditions' and how they are limiting.
One way in which they are limiting is because
of the operative mental models or mindsets of
any particular system, organization, or subsystem.
Although the term is not always clearly defined,
•'mental model" connotes the idea that human
beings have mental representations, cognitive
frames, or mental pictures of their experiences,
representations that model the stimuli or data
with which they are interacting, and these are
firameworks that set up parameters though which
experience or a certain set of experiences, is
organized or filtered (Senge, 1990, Chapter 10;
Gorman, 1992, Gentner and Whitley, 1997, pp.
210-211; Werhane, 1999).
Mental models might be hypothetical con-
structs of the experience in question or scien-
tific theories, they might be schema which firame
the experience, through which individuals
process information, conduct experiments, and
formulate theories. Mental models function as
selective mechanisms and filters for deahng with
experience. In focusing, framing, organizing, and
ordering what we experience, mental models
bracket and leave out data, and emotional and
motivational foci taint or color experience.
Nevertheless, because schema we employ are
socially learned and altered through rehgion,
socialization, culture, educational upbringing,
and other experiences, they are shared ways of
perceiving, organizing, and learning.
39
Because of the variety and diversity of mental
models, none is complete, and "there are
multiple possible framings of any given situation"
(Johnson, 1993, 1999). By that we mean that
each of us can frame any situation, event, or phe-
nomenon in more than one way, and that same
phenomenon can also be socially constructed in
a variety of ways. It will turn out that the way
one frames a situation is critical to its outcome,
because "[t]he are . . . different moral conse-
quences depending on the way we frame the
situation" (Johnson, 1993; Werhane, 1999,
2000).
Mental models, as Peter Senge carefully
reminds us (Senge, 1990), function on the orga-
nizational and systemic levels as well as in indi-
vidual cognition. So often we are trapped within
an organizational culture that creates mental
habits that function as boundary conditions, pre-
cluding creative thinking. Similarly a political
economy can be trapped in its vision of itself and
the world in ways that preclude change on this
more systemic level. The Western finance
mindset that precludes lending to the poor func-
tions to block such exchanges in Bangladesh.
Thus moral imagination, the ability to get out
of these models and traps, is critical at all levels.
To change or break out of a particular mindset
requires, as Moberg, Seabright, and I have
argued, a well-functioning moral imagination.
But how do we do all of that while at the same
time taking into account situational peculiarities,
social context, and the system in which we are
embedded? How do we act in a morally reason-
able manner and trigger moral imagination?
Mitroff and Linstone emphasize that systems
thinking requires individual as well as systemic
input. But, importantly for this paper, how does
moral imagination work on the organizational
and systemic levels?
A good example of this process in practice is
the work of Eskom. This company was an all-
white managed company that thrived during
apartheid in South Africa, while providing little
power service to the nonwhite community or in
the rural homeland areas. It did nothing illegal,
and indeed, upheld the apartheid laws of South
Africa, which, along with its preoccupation with
profitability, created its boundary conditions. Yet
40 Patricia H. Werhane
even before the end of apartheid, the compatiy
began to evaluate itself and its practices. It
became aware of itself as an all-white company
with a narrow view of what its service commit-
ments were to a country made up of a largely
nonwhite population. That is, it stepped back
from its traditions and practices, it reevaluated
itself and its mission, and it began to develop a
new mental model of what it should be as a
national power company in a country where the
majority of the population was nonwhite, rural,
and poor. Finding a weakness in the system,
Eskom began training nonwhites for supervisory
positions (an activity that was against the law
at that time), because the South African
Government, in fact, did not enforce this
practice. Eskom revised its mission to include
the goal of national electrification. It began to
experiment with various ways to begin providing
electricity throughout the whole country, and it
explored ways to make power economicaUy avail-
able to the rural poor and to those who had no
conception of the value of electricity. Despite a
number of setbacks, Eskom's goal is to electrify
all of South Africa, and then to move north to
Namibia. As a result, Eskom today is the fifth
largest electric utility in the world; it has con-
tinued to be economically successful in its tradi-
tional service sector so that it can further
experiment with ways to provide service rural
South African communities and develop the
expansion of power in other even poorer African
nations as well, tn this case, it is difficult, at best,
to pinpoint every individual involved in initiating
this change. But one can surely conclude that
Eskom changed its own mindsets, and challenged
the weaknesses in the South African apartheid
philosophy, a challenge that helped it to be one
of the catalysts for pohtical reform. This required
a great deal of moral courage and moral imagi-
nation to step out of an entrenched system and
work toward constructive change.
In theoretical terms, moral imagination
involves a systemic multiple perspectives
approach. This includes the following.
• Concentration on the network of relation-
ships and patterns of interaction, rather than
on individual components of particular rela-
tionships, spelling out the networks of rela-
tionships from different perspectives.
• A multi-perspective analysis
• Understanding the various perspectives of
the manager, the citizen, the firm, com-
munity, state, law, tradition, background
institutions, history, and other networks of
relationships.
• Taking an evaluative perspective, asking,
o Who are the stakeholders we have not
prioritized?
o What values are at stake?
o Which take priority, or should take
priority?
o What are the practical constraints and
which ones can be circumvented?
• Pro-active leadership both within the
system and in initiating structural change.
In this process one needs to describe the system
and its networks of interrelationships to grasp the
interconnected of the system. One needs to
investigate what is not included in the system (its
boundaries and boundary-creating activities) and
what mindsets are predominant, asking, who are
the stakeholders (individuals, associations, orga-
nizations, networks, agencies) and what are
the core values of each set of stakeholders.
Additionally one needs to outline the core values
of the system and speculate as to what these
should be. Finally one should think about
whether and which organizations or individuals
within the system might be capable and willing
to risk challenging bits of the system that are the
most vulnerable or amenable to change. In this
set of processes moral imagination and systems
thinking encourage networked systems analyses
that are engaged and critical, creative and eval-
uative, and values grounded and encourage
constructive change within a network of
relationships.
Individual responsibility
There is one more consideration, that of indi-
vidual responsibility, the responsibilities of politi-
cians, professionals, managers, and of individual
citizens. A systems approach should not be
 Moral Imagination and Systems Thinking
confused with some form of abdication of indi-
vidual responsibility. As individuals we are not
merely the sum of, or identified with, these rela-
tionships and roles, we can evaluate and change
our relationships, roles, and role obligations, and
we are thus responsible for them. That is, each
of us is at once byproducts of, characters in, and
authors of, our own experiences. So each of us
is responsible for examining, evaluating, cri-
tiquing and fmding means to change organiza-
tions and systems in which we find ourselves.
All of this sounds much too idealistic and
impossible, in fact, to achieve, and it belies the
existence of sometimes-impossible systems con-
straints. So let me conclude with a counterex-
ample, the Grameen Bank of Bangladesh. The
Granieen Bank of Bangladesh has operated
in that country since 1976. A Bangladeshi,
Muhammad Yunus, a U.S. trained economist and
former employee of Bangladesh Bank is its
founder. Yunus was struck with the realization
that his country received a great deal of foreign
aid; yet most of his people remained in abject
poverty. He and his students discovered that part
of the problem, in a country with high unem-
ployment and little opportunity for job creation,
was the inability of those without capital and
property to borrow enough money to develop
even micro entrepreneurial enterprises and thus
work themselves out of poverty. Except for loans
available at up to 200% interest from fairly ques-
tionable sources, there were no resources avail-
able for the poor. So with the permission of the
Bangladesh Bank Yunus started the Grameen
Bank with the philosophy of lending money only
to those without capital or property, the exact
inverse of what he had learned in school Today
the Grameen Bank serves over 40,000 villages,
the Bank has over 2 million member/borrowers,
97% of whom are women. It lends about $40 to
$60 million a month, and its rate of loan loss is
under 2%. The Bank has subsequently expanded
into other industries, developed cell phone
service in rural communities, and is planning
training and job development in the new
economy of wireless networking and internet
services in a number of rural communities.
Almost 1/2 of the Grameen members are now
economically above the poverty line, infant
41
mortality rates have been drastically reduced, and
37% of children of Grameen members complete
primary education. In this process, Yunus has
revolted against both traditional banking practices
and the systemic subjugation of women in his
country. This was enormously risky both finan-
cially and morally; yet he has succeeded and set
a model that is now being copied in at least
65 other underdeveloped countries around the
world (Bornstein, 1996 and personal conversa-
tions with Mohammad Yunus).
To conclude, systems thinking is essential if
we are to understand, evaluate, and institute
structural, organization, and individual change.
Nevertheless, despite the importance of systems
thinking and systems analysis, and this is the final
point of the paper, no organization, system or
subsystem is, or need be thought of, as a closed
static system in which change is impossible to
achieve. Organizations, institutions, and pohtical
economies are dynamic, and revisable phe-
nomena, created and changed by individuals or
groups of individuals. But until we comprehend
the complexity of the systemic interrelationships
within and across systems we cannot successfully
evaluate the system or subsystem in question and
begin to make changes that are critical if we are
to make moral progress. This paper is an initia-
tion of that set of thinking processes.
Notes
' This paper has benefited from the work of Dennis
Moberg, Mark Seabright, Linda Emanuel, and Susan
Wolf. An version of the Systems Thinking section will
appear in Norman Bowie, ed., A Guide to Business
Ethics. Blackwells, 2001.
^ This philosophy has changed over the past 3 years.
The World Bank now funds micro lending projects
in many of the poorest countries in the world.
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University of Vir^^inia,
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E-mail: phw2m@virginia.edu