The corporate scandals of this past year suggest "system failure" in the ordinary mechanisms of corporate governance and oversight. While there are many reasons for these scandals, such as the failure of individual character, corporations must take a long, hard look at how they define their purpose. Is the maximization of shareholder wealth or the balancing of stakeholder interests enough to nurture trustworthy practitioners, foster equitable policies and inspire a corporate ethic to serve the common good and not just the particular goods of individuals?
If we shake our heads at the actions of officers, directors or auditors at Tyco, Enron or WorldCom, if we ask, "What could they have been thinking?" we should be prepared to answer the question, "What should they have been thinking?" The essays collected in Rethinking the Purpose of Business pursue that question.
In this volume, a select group of management theorists, theologians, legal scholars, economists and ethicists jointly examine the reigning shareholder and stakeholder theories of the firm. The authors' inquiries speak to one another and to the question, "Are our corporate practices rational, human and practicable?" They share a respect for the constructive power of markets, but share also a respect for the ligaments of community-personal virtues and common goods that are stressed in the Catholic social tradition. Their arguments marry organizational, managerial, and legal theory to philosophical and theological accounts of practical rationality.