The Catholic challenge to business leaders

Managing for Society

Manila Times

March 7 & 14, 2011

WHAT is the Catholic perspective on business? What is the special role of business leaders from this perspective? These questions were tackled by business practitioners and educators in a symposium organized by the Pontifical Council of Justice and Peace (Vatican City), the John Ryan Institute for Catholic Social Thought of the University of St. Thomas (USA), and Ecophilos Foundation (Switzerland). Held on February 24 to 26, 2011 in Rome, the gathering provoked thoughtful discussions on the challenges posed by Pope Benedict XVI in his 2009 social encyclical Caritas in Veritate (Charity in Truth).

Social encyclicals are open letters written by various popes since 1891 to encourage everyone to help solve persistent problems of social injustice present in modern economies. The most visible sign of this social injustice is the poverty that eats into the dignity of many workers and their families, even as the economies of countries have grown by leaps and bounds. In his encyclical, Pope Benedict XVI exhorts everyone: “The great challenge before us . . . is to demonstrate, in thinking and behavior . . . that in commercial relationships the principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within the normal economic activity.”

As a participant in the symposium, I found the ideas and discussions both inspiring and embarrassing, given the Philippine situation. Our country is a painful paradox for any Catholic who takes the Church’s fundamental teachings seriously. Eighty percent (80 percent) of our people are Catholic and yet 30 percent (based on the latest Family Income and Expenditure Survey) still desperately struggle to make ends meet. Most of our business and political leaders are Catholics and we have experienced non-stop economic growth for the last decade, peaking at 7.3 percent in 2010. Yet, the gap in income between the richest and the poorest families continues to increase. Our country should be a Catholic powerhouse; instead, it is a social justice nightmare.

What principles can guide Catholic business leaders in addressing social injustice? What practices can they pursue? The pontiff essentially suggests that business activities should not be limited to transactions and exchanges within an impersonal market. In the first place, many persons have little to exchange, which is why the rich get richer and the poor get poorer. Instead, he suggests that caring for others in a brotherly way, especially for the least well-off, will enable business activities to promote the dignity and development of all.

Those familiar with social entrepreneurship will easily grasp what the pope means. Visionary business leaders including Reese Fernandez of Rags2Riches and Elizabeth Lee of Universal Motors Corp. have shown how a sense of solidarity for the poor can spur creative business models that can create and share prosperity at the same time. But given the gravity of our country’s poverty problem, we cannot wait for the inspired kindness of a handful of Fernandez’s and Lee’s. We need a Catholic call to arms for all business leaders of good will; a movement that will spur the current crop of managers to chop poverty down to size.

A paper presented during the symposium by Robert Kennedy, Michael Naughton, and André Habisch (KNH) entitled Catholic Social Principles for Business Professionals and Business Educators seems to fit the bill. They proposed to distill in a few pages, for the busy but discerning business person, what half a dozen popes have explained over more than a century. They hope to convince business leaders to see a special vocation in their role as heads of firms.

KNH give useful guiding principles for the Catholic vocation in business. Catholic business practitioners who want to achieve consistency between their faith and their business practices will find much to think about in the paper. Non-Catholics who believe that business should serve the common good will find the paper useful as well.

KNH explain the overall purpose of business as addressing “real human needs.” Guided by this purpose, they identify three broad objectives to be served by business. Let’s look briefly at each one and reflect about how each is achieved in contemporary Philippine business practice.

The Priority of the Worker. The first objective is to organize good and productive work. KNH explain: “…work must be designed for the capacities and qualities of human beings, not requiring that persons adapt to the work as if they were machines. Good work gives scope for the intelligence and freedom of workers, its context promotes social relationships and real collaboration, and it does not diminish the health and physical well-being of the worker.” Let’s look at the jobs that businesses have been creating. For example, how do call center and BPO jobs measure up? How are managers ensuring that these are intelligent and healthy jobs?

The Posture of Service. The second objective is to address genuine human needs through the production of goods and services. The KNH clarify that “needs … ought to be contrasted with mere wants, which call forth things that satisfy a desire but contribute nothing to human well-being and may even … attack it.” A look at the billboards along EDSA gives an idea of what businesses offer. From fast foods to credit cards. From condominiums to cosmetic surgery. How do these products and services meet genuine human needs? How do managers guard against products and services that are actually harmful to people?

The Creation and Distribution of Wealth and Prosperity. The third objective is to use resources to create and to share wealth and prosperity. They elaborate: “While profitability is the first indicator of organizational health, it is neither the only one, nor the most important measure by which business should be judged. Profit is necessary to sustain a business; however, once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty.” Since our economy has been growing for the last decade, as much as 7% last year, how are businesses sharing the prosperity? Are poor employees being uplifted? Or are current business strategies actually making poverty worse and more permanent?

Business leaders who take the Catholic challenge seriously are encouraged to think carefully about their business practices. Are they providing work suited for the personal growth and productivity of human persons? Are they providing products and services that fulfill genuine human needs? Are they enabling the creation and spread of prosperity? If business leaders can answer “yes” to these questions, then they would have contributed to the common good.