The Business World

Books reviewed:

Business for the Common Good by Scott Rae and Kenman Wong

Firm Commitment by Colin Mayer

Managing as if Faith Mattered by Helen Alford and Michael Naughton

Quaker Capitalism by Richard Turnbull

The Shareholder Value Myth by Lynn Stout

Tides of Life by Bill Pollard

Who Cares Wins by David Jones

Why Business Matters to God by Jeff Van Duzer

 

The purpose of business:

We have to date reviewed six books that directly consider business purpose: Firm Commitment by Colin Mayer, The Shareholder Value Myth by Lynn Stout, Business for the Common Good by Scott Rae and Kenman Wong, Why Business Matters to God by Jeff Van Duzer, Managing as if Faith Mattered by Helen Alford and Michael Naughton and Tides of Life by Bill Pollard. All are worth reading. None is long or difficult to read and none assumes prior specialist economic or other knowledge or education.

All of the books consider the modern orthodox view that the basic purpose of public companies is to maximize shareholder value. All consider it to be wrong and suggest that it needs to be abandoned. However, the reasoning that leads their authors to this conclusion varies, as do their positive suggestions. The specific business issues focussed on in the various books also differ, although there is a considerable amount of overlap between them.

Firm Commitment and The Shareholder Value Myth are recent publications (published 2013 and 2012, respectively), the former focusing on the UK (the only one of the six books to do so) and the latter on the USA. They come from a secular perspective and those interested in business purpose may find it helpful to consider where the secular debate has got to before moving on to consider specifically Christian contributions to the subject. However, neither book is as good at formulating ideas as it is at undermining other people’s ideas.

Business for the Common Good and Why Business Matters to God are also recent publications (published 2011 and 2010, respectively). They come from an Evangelical Protestant starting point. In contrast with the secular books, they provide a clearly argued opinion as to the true purpose of business. Both are very readable and Christians of all persuasions should find them a good starting point. Those who are not Christian might also find them illuminating: although the many Biblical quotations in Why Business Matters to God may put some readers off, Prabhu Guptara’s comment in his endorsement of Business for the Common Good is applicable to both books: “Nothing in this book prevents it enriching the lives of Hindus such as myself – or, as far as I can see, those of Buddhists, Muslims, agnostics or atheists!”.

Managing as if Faith Mattered is an older book (published 2001). It addresses some of the same issues from the perspective of Catholic Social Thought and, as its title implies, ranges widely into management issues generally. Non-Catholics (and even Catholics who are not familiar with Catholic Social Thought) may prefer to start elsewhere, since the book is heavy going in places. However, it adds a useful additional perspective to the other books and, as would be expected, is carefully argued and builds on previous thinking. Further analysis is provided by “Rethinking the Purpose of Business” (Cortright and Naughton Ed.), which we have not reviewed but which comprises a series of essays on the purpose of business from a Catholic perspective.

Tides of Life (published 2014) is very different from the other books. It comprises the reflections of a Christian who has spent his life in business (including managing a Fortune 500 company). It is perhaps best to read this either immediately before or immediately after Why Business Matters to God (which Bill Pollard, the author of Tides of Life, describes as a “must read for those who are seeking to glorify God as they do business”). Readers who prefer to start considering a subject by sharing personal stories and experiences should start with Tides of Life; readers who want to have a theoretical framework before plunging into the practicalities should start with Why Business Matters to God.

It is impossible to say that one of these books is “the best”. Readers who only have time to read one of them should probably plump for Business for the Common Good, since it presents a clear and coherent vision of business purpose in a manner that should be accessible to all serious readers. However, those who want to think seriously about business purpose should read several of the books – and then move on to others that we have not (yet) reviewed.

 

Relationships and business values:

We have reviewed two other books which, although not directly concerned with the overarching issue of business purpose, none-the-less have much to say that his relevant to this issue and which consider related issues.

The first is Who Cares Wins by David Jones, the former CEO of Havas, the global advertising agency (published 2011). It considers the link between social media and socially responsible business. Its basic thesis is revealed in the title and, although some may doubt whether this is always true, no-one can doubt the basic practicability of the points made in the book. It is also helpful to consider ethical issues in the harsh light of modern communications and mass markets.

The second book is Quaker Capitalism by Richard Turnbull, the director of the Centre for Enterprise, Markets and Ethics (published 2014). This considers the Quaker businesses that played a significant role in 19th Century British business (including businesses such as Lloyds Bank, Barclays Bank, Cadbury, Rowntree, Fry, Friends Life, Clarks and others). Their world was very different from that which exists today but their approach to business should provide a challenge to some of today’s unexamined assumptions.

These books are worth reading not least in order to ensure that the debate about business purpose and ethics is firmly grounded in practical reality.