Chapter 5: The Purpose of Business from a Catholic Social Teaching Perspective

Different proposals on the purpose of the firm include maximizing shareholder value, creating value for all stakeholders, creating shared value, and optimizing collective value. In contrast, Catholic social teaching (CST) suggests that the purpose of a business firm is being a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society. Profits are important but they are only instrumental for higher ends. This chapter discusses the CST view on the purpose of the firm, and how it differs from the other approaches mentioned.