On Friday, March 30th, Cardinal Turkson, the president of Pontifical Council for Justice and Peace, presented a reflection at the Uniapac Congress in Lyon, France on the "Vocation of a Business Leader." The document grew out of a seminar sponsored by the John A. Ryan Institute at the University of St. Thomas and the Pontifical Council for Justice and Peace, held in February 2011, called "The Logic of Gift and the Meaning of Business." Here we offer an executive summary of that reflection:

When businesses and market economies function properly and focus on serving the common good, they contribute greatly to the material and even the spiritual well-being of society. Recent experience, however, has also demonstrated the harm caused by the failings of businesses and markets. The transformative developments of our era—globalisation, communications technologies, and financialisation—produce problems alongside their benefits: inequality, economic dislocation, information overload, financial instability and many other pressures leading away from serving the common good. Business leaders who are guided by ethical social principles, lived through virtues and illuminated for Christians by the Gospel, can, nonetheless, succeed and contribute to the common good.

Obstacles to serving the common good come in many forms—lack of rule of law, corruption, tendencies towards greed, poor stewardship of resources—but the most significant for a business leader on a personal level is leading a “divided” life. This split between faith and daily business practice can lead to imbalances and misplaced devotion to worldly success. The alternative path of faith-based “servant leadership” provides business leaders with a larger perspective and helps to balance the demands of the business world with those of ethical social principles, illumined for Christians by the Gospel. This is explored through three stages: seeing, judging, and acting, even though it is clear that these three aspects are deeply interconnected.

SEEING the challenges and opportunities in the world of business is complicated by factors both good and evil, including four major “signs of the times” impacting business. Globalisation has brought efficiency and extraordinary new opportunities to businesses, but the downsides include greater inequality, economic dislocation, cultural homogeneity, and the inability of governments to properly regulate capital flows. Communications Technology has enabled connectivity, new solutions and products, and lower costs, but the new velocity also brings information overload and rushed decision-making. Financialisation of business worldwide has intensified tendencies to commoditise the goals of work and to emphasise wealth maximisation and short-term gains at the expense of working for the common good. The broader Cultural Changes of our era have led to increased individualism, more family breakdowns, and utilitarian preoccupations with self and “what is good for me”. As a result we might have more private goods but are lacking significantly in common goods. Business leaders increasingly focus on maximising wealth, employees develop attitudes of entitlement, and consumers demand instant gratification at the lowest possible price. As values have become relative and rights more important than duties, the goal of serving the common good is often lost.

JUDGING: Good business decisions are those rooted in principles at the foundational level, such as respect for human dignity and service to the common good, and a vision of a business as a community of persons. Principles on the practical level keep the business leader focused on:

  • producing goods and services that meet genuine human needs while taking responsibility for the social and environmental costs of production, of the supply chain and distribution chain (serving the common good, and watching for opportunities to serve the poor);
  • organising productive and meaningful work recognising the human dignity of employees and their right and duty to flourish in their work, (“work is for man” rather than “man for work”) and
  • structuring workplaces with subsidiarity that designs, equips and trusts employees to do their best work; and using resources wisely to create both profit and well-being, to produce sustainable wealth and to distribute it justly (a just wage for employees, just prices for customers and suppliers, just taxes for the community, and just returns for owners).

ACTING: Business leaders can put aspiration into practice when they pursue their vocation, motivated by much more than financial success. When they integrate the gifts of the spiritual life, the virtues and ethical social principles into their life and work, they may overcome the divided life, and receive the grace to foster the integral development of all business stakeholders. The Church calls upon the business leader to receive—humbly acknowledging what God has done for him or her—and to give—entering into communion with others to make the world a better place. Practical wisdom informs his or her approach to business and strengthens the business leader to respond to the world’s challenges not with fear or cynicism, but with the virtues of faith, hope, and love. This document aims to encourage and inspire leaders and other stakeholders in businesses to see the challenges and opportunities in their work; to judge them according to ethical social principles, illumined for Christians by the Gospel; and to act as leaders who serve God.

You can download the full document at the University of St. Thomas Web site.

Tm Reidy

 

Comments

Anne O'Brien | 4/4/2012 - 11:19pm
The first line of the executive summary is simply not true:
''When businesses and market economies function properly and focus on serving the common good, they contribute greatly to the material and even the spiritual well-being of society.''
When a business functions properly, it often does not serve the common good. Hasn't the suffering throughout the world over the last three years shown this starkly?

When will we be honest, when will we not be naive, not bless the very institutions that hurt people?

When will we face the task in front of us- which is building a fair economy? Part of doing this is appreciating the work of Catholic Social Teaching and the doctrines of distributism, based on building cooperative enterprises, and devolving government decision making power to as local a level as is practical.

On the international year of the cooperative, I would like to see the church affirm its heritage in Spain and Poland and other places where cooperatism almost became a society-wide phenomenon. After all, Mondragon, the largest coop in the world, was started by a priest.

J Cosgrove | 4/5/2012 - 12:01pm
Anne OB,

To get a different point of view  that what you expressed, I think you should read


''The Mind and the Market: Capitalism in Western Thought''  It is by Jerry Muller who teaches at Catholic University and is an outstanding history of the intellectural thought that has been the basis of the market and capitalism in the last 300 years.  It covers both the pros and cons of a market oriented system.

and


''Bourgeois Dignity: Why Economics Can't Explain the Modern World'' It is by Deirdre McCloskey and is summation of just what has happened in the last 200 years economically.  The world has made incredible advances in wealth, education, health, recreation, personal freedom and independence etc.  Just about any aspect of human activity has made hugh strides. Look around you and see the modern world and how much it is different from a 100 years ago.  In the 1920's only about half the country had electricity.  When Calvin Coolidge was notified that he was now president after Harding had died on a trip out west, he was on his farm with no electricity.  A Western Union messenger had to come to give him a telegram to tell him he was now president of the United States.

Here is a free excerpt from her Deirdre McCloskey's book which talks about the progress in recent times.


http://www.deirdremccloskey.com/weblog/2009/07/07/the-tide-of-innovation-1700-present/2/

And to show you just how capitalism has made the world wealthier and healthier see the following video:

http://www.gapminder.org/videos/hans-rosling-on-cnn-us-in-a-converging-world/


The capitalism sytem developed in Western Europe in the 18th and 19th century is helping to eradicate hunger in most of the world and also educating them.  Yes, business can accomplish amazing things as long as the competition is allowed to work its way.  It has to be regulated somewhat but too much regulation actually slows down progress for the poor.


Also your understanding of the financial crisis may be at odds with what really happened.  If you want to understand where it all originated, look to the federal government and their housing policies.  The best book to understand this aspect of the crisis is ''Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon'' by Gretchen Morgenson.  The financial crisis had its origin in the early 90's when the requirements for home buying changed dramatically.  It reached is craziest in the 2004-2006 period but the seeds were sown long before then.


And by the way I think the Mondragon project is great but it is not the only way one should proceed.
Anne O'Brien | 4/5/2012 - 8:16am
Here is a short for a film about worker-run cooperatives that will be released mid year: http://www.yesmagazine.org/new-economy/cooperatives-put-people-and-democracy-to-work
Susan Brandon | 4/4/2012 - 2:06am
My rather incoherent reference to corporations has to do with ALEC. Google it, or read Paul Krugman. Better yet, read this whole report and talk it up!
Susan Brandon | 4/4/2012 - 1:59am
This is so important, and should be widely discussed. The whole document is well worth reading. It's the antidote and medicine to the current political corporate climate (and consider in light of the corporate think tank prepackaged bills we're hearing about, really scary industrial takeover of government.). Thank you, Pontifical Council!