CUA Teaches Business Ethics
Goal Is to Transform Modern Workplace
WASHINGTON — Famous U.S. economist Milton Friedman once remarked that the only social responsibility of business "is to increase its profits."
But the School of Business at The Catholic University of America is challenging that economic philosophy with the social teachings of the Church and is forming new captains of free enterprise to realize that the business of business is ultimately serving the needs of people.
CUA’s School of Business and Economics is challenging businesses large and small in the 21st-century economy to anchor their business practices in the Catholic Church’s social teachings. Late last month, the school’s dean, Andrew Abela, along with co-editor and professor of moral theology Joseph Capizzi, unveiled the new Catechism for Business, a handbook for businesspeople who want to know the Church’s social doctrine and their obligations to work for a just society.
Abela told the Register in an interview that the whole purpose of Catechism for Business and the School of Business is "to combat this notion that business is amoral."
"Human beings — we’re moral beings," Abela said. He explained that business has "huge scope" to develop free solutions to take care of workers and the economic needs of society, especially those at the margins needing inclusion. But when business neglects its obligations to take care of society and show solidarity for society, it leads to more government regulation and interference, such as the Affordable Care Act.
"If businesses aren’t striving to care for society, then government feels like it has to do it," he explained.
"Our grand goal is transformation of the way business is done in this country and worldwide," Abela said, "so that it is pursued in the service of others, so that Christians in particular can live out their vocations fully in the world of business and not see it as something where you check your faith at the door when you step into the workplace."
The CUA School of Business and Economics was created in January 2013, when the existing business program was expanded to integrate a focus on morality and ethics into all of its classes; and, already, it is leaving its mark on current students and graduates in the one-year master’s in business analysis (MSBA) program.
"We really do go in depth into the ethics of every single aspect of our program," said Matthew Patella, a student who expects to graduate from the MSBA program in May before entering into a business career. He said the social teachings of the Church set the program apart, as "every single class has an ethics component," whether the class is marketing or accounting.
In accounting, he said, they don’t discuss that "cooking the books" is wrong simply because it is against the law, but, even more importantly, because those unethical practices negatively "affect your employees and the other people around you."
Patella said the same ethically grounded approach is taken in finance and management as well.
In addition to the integrated ethics, he said what also set apart the School of Business for him was that the "professors have 130 years’ combined [business] experience, rather than being just academics. They actually went out there and worked [at major Fortune 500 companies]. … They’re still consultants for major corporations."
Samantha Donohue had an undergraduate degree in theology from Ave Maria University and graduated from the MSBA program in 2013. Donohue, who has just taken a job with the Heritage Foundation, said she went to work for a year at Amtrak, working for their email-marketing department, where the "person-centered approach" she learned from the CUA program made a difference.
"It sells better," she said of the approach. The marketing emails she wrote, which treated customers as people with needs and concerns rather than just consumers, showed a greater positive response and higher open rates than other approaches primarily aimed at getting people to buy tickets.
"I understood that the customer was a person," and people’s "needs must really be addressed, rather than how much I really want them to come and ride on my train," she said. "That was what I brought into Amtrak."
William Bowman, a Catholic businessman with 28 years of experience as a president and CEO of major companies, is an adviser to the CUA School of Business. He has a mission to show people that the Church’s social teachings are good for business, not simply because they are true, but also because he has seen it for himself.
Bowman said that when he was CEO of U.S. Inspect in Chantilly, Va., the largest U.S. home and commercial building inspection company, he faced the challenge of addressing close to $1 million losses per year from sloppy building inspections. The Harvard business school graduate, however, decided to buck the conventional wisdom he received, and he used the Church’s social teachings as a guide to build a program based on five top virtues most important to their customers.
"We said the whole company will go through two phases: first, to study the virtue and, second, to practice it," he said. "Because if there isn’t that phase of practice, nothing happens."
They created booklets around each virtue, such as diligence, with stories and artwork, showed cases of how people lived that virtue and urged employees to practice them in their professional and home life. After several months covering one virtue, employees would move onto learning about the next one.
The program had unexpected benefits, as the inspectors got together during the phase on diligence and rewrote how they were going to do inspections in line with the virtue.
"That million-dollar bleed that we had from sloppy inspections within two years was down to $150,000," he said. "So we were saving $850,000 a year, just by living that virtue of diligence."
Turnover also was cut in half in the same time period, saving the company the cost of having to train replacement employees. It costs U.S. Inspect $50,000 to train a new employee, so by reducing annual turnover from 30 to 15 workers a year, Bowman says it saved the company a further $750,000.
Bowman now heads the consulting group CatholicCEO, which, according to its website, "is dedicated to exploring ways to improve the practices of businesses guided by the teachings of the Catholic Church."
Bucking the conventional wisdom for business practices in line with the Church’s social teaching has paid off for other successful corporations too, Bowman said. Nucor Steel tied salaries to automatic pay decreases and increases (with higher-ups taking a bigger percentage cut) so they could keep workers on the line, instead of firing them during an economic downturn. The upside: Nucor was ready to go when the economy bounced back, able to provide orders when other steel companies were trying to retrain workers.
Hobby Lobby, he said, also pays its workers well above minimum wage and provides them health-care plans, as it competes with Michael’s.
"If you do the right thing, you’re going to benefit financially," Bowman said.
He said he’s excited about Catechism for Business, and he said the book has made it "that much easier" to get the Church’s social teachings into the hands of businessmen.
Many businesses in America are in the position of transforming how they do business today.
"There are lots of small businesses where you don’t have to go through a board of directors and get shot down," he said. "You can go straight to the owners and say, ‘Hey, there’s another way.’"
- April 20-May 3, 2014