Continuing the theme of business as a means to promote the common good and assist the poor and disadvantaged, DePaul University Professors O’Brien and Paeth argued that business ethics require firms to not only seek profits, but also to act on a duty of care to their employees and communities. They noted that without profits, firms would fail, but contended that ethics grounded in religion precludes profits from being viewed as the ONLY corporate goal.
One example of such a business is TOMS, which, according to its website, http://www.toms.com, is “in business to help improve lives. With every product you purchase, TOMS will help a person in need” and “also advance health, education and economic opportunity for children and their communities around the world.” Another example is the nongovernmental organization, One Acre Fund, a growing social enterprise in Kenya, Rwanda, Burundi, and Tanzania that is implementing a new way of helping farm families to achieve their full potential through asset-based financing and a flexible repayment schedule that is working for 180,000 smallholder farmers. Instead of cash, One Acre Fund lends the assets that farmers need for success. By buying through One Acre Fund, farmers are able to avoid the potential pitfalls associated with local sellers, such as poor quality or fraudulent inputs and high prices. The One Acre Fund organization sources materials from large suppliers, negotiates bulk rates, and imposes rigorous quality control standards. One Acre Fund stresses humble service, integrity, and hard work, and sees self-sufficient farmers as the solution to poverty and hunger.
While businesses need revenue in order to survive, noted O’Brien and Paeth, the professors challenged the traditional business model as one that need not always generate revenues, maximize profits, or make rich people richer. Rather, they advocated using commercial activity as an “efficient way to organize goodness,” a concept in alignment with Pope Francis’s Exhortation. Pointing out certain problems inherent in the exclusive focus on profits and in creating value for shareholders, notably, a tendency for selfishness, the professors reminded the audience that Adam Smith’s “invisible hand” describes the self-regulating behavior of the marketplace in which profits can be maximized without the need for government intervention, which, in turn, benefits society, even if these profit-seeking ambitious derive from no benevolent intentions whatsoever. However, according to Smith, the maximization of one’s own gain is not necessarily an endorsement of selfishness, but a means to achieve the common good, because the “invisible hand” – what Smith believed to be the providential hand of God maintaining the stability of the markets — is the best guide for the economy. In short, business as a moral enterprise acknowledges the unique gift of humanity, seeks justice and the common good in our relationships, forges bonds of solidarity, and attends to the needs of the ignored and abandoned and to those of the non-human realm as well. In short, business as a moral enterprise acknowledges the unique gift of humanity, seeks justice and the common good in our relationships, forges bonds of solidarity, and attends to the needs of the ignored and abandoned and to those of the non-human realm as well. Importantly, Paeth and O’Brien pointed out that this “business-as-mission” model works best in the context of closely held companies that attract like-minded investors. The model is less prevalent in publically traded companies, where the predominant common interest is profit making, rather than seeking to aid specific groups or the common good.