The Soul of Business: Creation, Personal Development, and Profit

(published in the Houston Business Journal's "Book of Values & Ethics")

Many questions have been raised lately about how employers can do a better job of communicating a sense of ethics to their employees. The answer is deceptively simple: no company can successfully communicate a system of ethics to anyone unless it has such a system already in place.

In the quest for ethics in business, it is helpful to begin by re-examining what the role of business is in society as a whole. In my doctoral dissertation, "The Morality of Profit in Light of Catholic Social Teaching," I focused on three inter-related questions: (1) What is the nature of a business? (2) What is the vocation of a businessperson? (3) What is the role of profit in business?

What is business?
A simple definition is that a business aims to produce goods and services at a price that provides the best economic results for all stakeholders involved.

Is that all business is? As a former stock broker on Wall Street who became a Catholic priest, I look at business both through the eyes of someone who's been there and through the eyes of someone with a transcendent view. When you get right down to it, a business is a community of persons — that is, the employers and employees who form the company.

This community of persons has two main goals: creating, and earning profit. Creating is the primary goal and is achieved in two ways: objectively and subjectively. Creating is achieved objectively in the goods and services the business produces. Creating is achieved subjectively in the personal development of the people in the business. A business must pursue the goal of creating on both the objective and subjective levels if it is to function in an ethical manner.

What is the vocation of the businessperson?
Many in business simply think of their purpose as making money. Yet, employers sense a responsibility to others beyond themselves and their company's economic success. They are responsible to their employees, their clients or consumers, their stakeholders, their communities, and to the earth.

An employer's responsibilities to his or her employees is critical. The dignity of one human person has greater value than any product or business. Each employee has a right to a decent wage, a comfortable retirement, and adequate job protection. A company can be thriving financially, but if its employees are being exploited, it is not truly a successful business.

The primary role of the employer is to provide people with meaningful work. This vision of leadership will create a different dynamic than one that is chiefly profit-driven. An employer is ethical in the treatment of his or her employees only if the following three criteria are met: (1) the employee develops as a person; (2) the employee is able to support his or her family, both financially and in having adequate time to spend with them; and (3) the employee has the opportunity to serve his or her community. If even one of these criteria is not met, it is likely that the subjective dimension of the creative goal (personal development) has been undermined.

Companies' responsibilities toward their consumers include honesty and fair treatment. Examples of irresponsible behavior toward consumers include failing to warn them of the harmful effects of certain products like tobacco, or marketing products to inappropriate audiences, such as liquor to minors. Companies have ecological responsibilities toward the earth, and toward the community at large. They cannot exploit natural resources or endangered species in their quest for material gain.

What is the role of profit in business?
Profit is the secondary aim of business, but must be subordinated to both the objective and subjective dimensions of the creative aim: the creation of goods and services, and the personal development of employees. To satisfy the objective dimension of creating, businesses must ask themselves when deciding whether to create a new product or how to market it, if this product will actually contribute to the common good, before merely looking at the potential profits. This sort of attitude will result in honest, responsible marketing. To satisfy the subjective dimension of creating, employers have a duty to ensure that their employees feel that their work is contributing to the success of the business and that they are participating in the financial returns.

If economic forces become absolutes and business is strictly profit-driven, then the production and consumption of goods become society's primary value, not subject to any other transcendent value. Ignoring the ethical and transcendent dimensions of work weakens business and weakens society as a whole. Human beings can too easily be seen as mere consumers of goods or as commodities to be used to make more profit, when they should be viewed as persons who are valuable in themselves.

The morality of profit does not depend on the amount earned, but rather on if the profit is earned while respecting the two dimensions of the creative aim of business. The maximization of profit at the expense of true service and personal development ends up separating the two ends of business, separating the creative aim from the profit-making aim.

Companies that only seek the bottom line tend to rise fast and fall even faster. Heavy emphasis on profit alone, without reference to creativity or quality or employee well-being, lends itself to misleading accounting practices that make the company look good on paper, but only on paper. This is a strong temptation in a corporate culture that puts so much emphasis on short-term results, shown by quarterly earnings, rather than on a long-term vision for the company. The pressure to produce high earnings in the short term can be at the expense of long-term stability.

The Need for Vision.
This theoretical basis is the starting vision for an ethical company. Yet, some companies do not even have this. There is a great need for the formation of forums or institutes in which business leaders can study the practical applications of ethical theory and make it policy. Interface between business leaders, institutions of higher learning, and faith communities would provide a valuable dialogue on this topic.

There is very little common ethical ground taught in today's business schools. Business leaders must formulate some basic, common sense ethical principles that can be universally held and applied. Most importantly, they must from the beginning place a higher value on the personal development of their employees and on the quality of their goods and services. With these goals firmly in place, a company will have an ethical foundation that precludes profit-driven temptations to falsify earnings, exploit employees, or market inappropriate products. Any business' greatest asset is its people and its greatest gift is the opportunity it creates for meaningful work.