Previous | Next

January 1978 · Vol. 7 No. 1 · pp. 26–34 

Ethics, the Businessman, and the Church

Dennis L. Langhofer


Watergate, the milk bribery scandals, international payoffs, political graft, and other incidents reported in the papers daily have brought the morality of corporate activities to the fore during the last few years. Each of us recognizes the impropriety of these acts, but there are more insidious acts perpetrated by business organizations which must also be addressed. That many Christian businessmen also participate in these activities raises the question of Christians in business and of “Christian business.”

In fact, there are few, if any, stated differences between secular business and those identified as Christian. Each may operate from the same, relatively clear, moral base. Since most organizations are oriented towards long-term objectives, while fostering short term results, they generally do not trespass upon the rights of the public. But, still, there are different ethical levels.

This means that operational guidelines may be ranked in an order and organizations may then choose the level to which they will subscribe (see Figure 1). The lower the level the more probably is it that short run profits will occur, because here there is total freedom to do whatever is most profitable, even using up persons until they are no longer of value and then discarding them. Because goals become more long-term as one moves toward the top, administration becomes progressively more difficult. This is because the demands of each level below must be complied with as well. However, if and when a lower level conflicts with a higher level (and they often will), the higher level should always prevail. {27}

Progression of Operating Principles

  1. Spiritual-Ethical Integrity

    Long range goals

    “And just as you want men to treat you treat them in the same way” (Luke 6:31).

    “But woe to you Pharisees! For you pay tithe of mint and rue and every kind of garden herb, and yet disgrace justice and the love of God . . .” (Luke 11:42).

    “I also do my best to maintain a blameless conscience both before God and before men” (Acts 24:16b).

    “But we have renounced the things hidden because of shame, not walking in craftiness or adulterating the Word of God, but by the manifestation of truth commending ourselves to every man’s conscience in the sight of God” (2 Cor. 4:2).

    “We wronged no one, we corrupted no one, we took advantage of no one” (2 Cor. 7:2b).

    All quotes are from the New American Standard Bible.

  2. Ethical Law

    A legalistic interpretation of ethical principles.

  3. Social Integrity

    Spirit of the written law. Not causing actions that would result in prohibitions.

  4. Letter of the Law

    The minimal amount required to stay within written law.

  5. Rational Egoism

    Whatever is expedient. Short range maximization.

Note! Technology is a separate issue, not involved above.


Large, well-established corporations (excluding non-profit), tend to focus on level 2, while some aspire to level 3. This is probably appropriate, for the corporate structure would seem to forbid it aspiring to higher levels. Although corporations receive legal recognition as a person, the law provides for limited liability to owners of corporations. And rarely does an individual or a family own an even moderately sized corporation. This means that corporations are managed by {28} professionals who must satisfy stockholders who have no personal interest in the business beyond their demand that returns be in excess of what can be made by investing in other options (bonds, certificates, land, etc.).

Since a serious determinant of value of stock is the price to earnings ratio, the firm is always trying to earn as high a profit as possible to keep the ratio up while paying dividends to stockholders and still keeping a reserve for operations, expansion, and new equipment. As Peter Drucker points out, this leads to a misuse of the profit motive which contributes to the general dissatisfaction of the public (Drucker, p. 373). Of course, firms must make a profit, though the reasons why are not communicated effectively to the public. Suffice it to say that most profits are justified when weighed against their corporate requirements. The more public firms become in disclosure, the less burdensome will these profit reports become.

The same corporate structure that makes high profit the primary measure of success does, however, make it possible to pay good wages and to treat employees rationally and objectively. Two other benefits provided by the large corporations are security and training. Security is important since it gives an individual enough stability to allow risk in other areas (house buying, investments, leisure pursuits, and even the freedom for more church involvement). Training, although done for selfish reasons, is crucial to personal development (estimates are that a person will ordinarily have to totally retrain three to four times during a normal work life). On the other hand, these benefits may induce persons to stay with an employer longer than is socially desirable. Drucker (p. 372) calls them “Golden Fetters.”

To reiterate, the corporate operational guidelines are oriented toward level two or level three; yet they do provide necessary and tangible benefits even though the moral basis for their operating principles do not rise above “law” and “profits.” There is nothing about these structures or their philosophy of operation that would qualify as patently Christian. The discussion of a Christian perspective for business ethics must focus on sole proprietorships and partnerships.


Historically, the opposite was thought to be true of the small businessman. According to the Protestant Ethic, hard work and the will of God would determine success (Weber, p. 177). In fact, success itself was held to be a demonstration of God’s direction. Moreover, since the firm and the owner are indistinguishable, the ideals of the owner would seem to be directly transferable to his firm.

However, economics dictates that success must occur for the firm {29} and the individual before the fruits of that success can be passed along. We may grant that spiritual values will alter decisions to some degree, and we all can name exceptions, but in general economics will be the dominant factor as long as a firm is struggling. The beginning business has little “surplus” assets that can be directed to meet the needs of individuals, for the needs of the firm itself are dominant. Here firms tend to pay employees considerable below industry wages and to keep employees as transitory as possible, creating no real personal commitment. Firms which identify as Christian and wish employees to develop commitment to the firm often try to convince the employees that they are doing “Christian service” (Johnson, p. 72). Fortunately I believe this is in the process of changing as more employers are committing themselves to their workers. But, in any case, partnerships and sole-proprietorships tend to be authoritarian in operation.

As the founder works (often one-hundred or more hours a week) and sacrifices (himself and even family, friends, church) he may build an organization that will endure. The financial struggles can be severe and some fail. After a business is started, there is usually a shaking-out period of three to five years. During this period nine out of ten businesses that fail to do so because of management deficiencies (Rudelius, p. 431).

After the business has acquired enough money to be relatively sure of continued success, it normally progresses to a second stage in which it tries to achieve a measure of success relative to competitors (see Figure 2). At this stage the share of the market becomes increasingly important. Following success at this second stage a business may become “Christian”; that is, it may move to higher levels of ethics because there is now no imminent danger of failure.

In other words, organizations have stages of development just as people do from childhood to the age of retirement and beyond (Woodward, 1965). And there is a hierarchy of needs for the individual. As developed by Maslow, the assumption is that each level has to be satisfied to some degree before proceeding to the next level. Also it is assumed that each person is dealing primarily with a particular need level at any one time (see Figure 3). The same need-level can be correlated with the stages of development of a typical small business (see Figure 2). {30}


Click for larger view
Note: The organizational hierarchy will tend to dominate.
The individual’s ethical level will correlate with the organization’s.


Unfortunately, both success and failure tend to alienate the businessman from the church. Failure usually occurs in the first years (Figure 2, level 1 or 2), but it may occur later. An entrepreneur can rarely make the transition required to delegate work to professionals as the firm grows and becomes a public corporation. The very essence of a small business is the genius and drive of the entrepreneur. Few owners have the wisdom to know when they have reached the level where they are no longer capable of running the total operation. This is the second crisis faced by small business. There is as much or more chance of failure (or loss of total control) at this stage as there is in the first two stages of the organizational hierarchy of needs.


Source: Robbins, pp. 304-305

But where is the brotherhood when there have been reverses or even bankruptcy? While bankruptcy has been held in very low esteem in the church, even here inconsistencies occur. It is forgivable to go bankrupt because of a large injury judgment, but not because of {32} reverses in the business or markets. But are not both caused by errors of judgment?

Historically, success has also decreased the church involvement of the businessman. It is still true that successful small businessmen are more prone to engage in peripheral quasi-church activities than in direct church involvement, especially when a relatively secure level of retirement has been achieved. (Again, as always, exceptions occur. The most notable exception is farming, and about 30% of the Mennonite Brethren are farmers. By virtue of a stable church and social setting, farmers are less prone to one set of problems, but are more susceptible to others.)

But, on the whole, outlets in the church which would utilize the energy and initiative of the businessman while meeting basic needs for power, status, or achievement (McClelland, 1953; 1970, p. 29) are almost nonexistent. Businessmen have had to exercise their “gifts” in making money—some of which may be used in the church.

Though it may be true that the alienation of the businessman from his church is largely self-imposed, there would seem to be some justification for the feeling of isolation from the church which Calvin Redekop discovered among Mennonite Brethren businessmen (Redekop, 1975).

Not only does the church lose much from the alienation of the businessman, it is also true that the businessman loses the help and guidance he needs from the church. In fact, the effect of the church is negligible. Even in the area of employee relations, where the church could have a profound effect, provided a significant level of communication could be achieved, the church is silent. Businesses do not go to the church for mediation of labor problems, to establish wage levels, to ask for help in problem areas of questionable business practices, or even to check before one business sues the other over non-performance. Furthermore, the church (it is thought) will alienate businessmen if it does get involved—and business donations are what balances the church budget.

Traditionally, the church has used businessmen (owners and managers) in managing the affairs of the church through the board of trustees. The tendency of such trustees is to make decisions from their own frame of reference. Hence, the church may even reflect the basic values that are operative within the individual business operations. If there is a free and open exchange of views, we may assume that the highest level operative within the individual businesses would tend to dominate.

But this failure to accept real responsibility for each other is self-defeating. {33} It may be granted that pastors are usually not business experts, but there are persons in churches who are capable of giving good advice. The expression of a common cause between business and the church begins too late if it waits until businesses reach the ethical stance of levels 4 or 5 (see Figure 1). If mutual concern does not begin at the inception of the business and carry through, a business will always be in conflict with the church, and the ignoring of these real conflicts must lead to the sense of isolation.

Can this mutuality be accomplished? Not without a drastic reformation of values. And yet, something like this is happening on the secular level with social audits which communicate to society the goals of business organizations and the resulting impact on society of its goals (Haimann, pp. 434-435).


The question remains: What is the basis for business ethics? A Christian would adopt the value position of the church. This position leads directly to the biblical source of ethical and spiritual principles. The one characteristic that seems to be most frequently pointed to is integrity. Other virtues are diligence, fidelity, honesty, and industry. Vices include breach of trust, dishonesty, extortion, fraud, unjust gain, and slothfulness.

Even these traits or characteristics, though all-inclusive, do not really tell one how to operate a business. Some group or someone must still judge whether any given action or motive is appropriate. At present the prevailing mode seems to be that each person is to judge for himself. Some are poor judges and some do very well. This individualism leads to a great deal of moral confusion.

Resolution of the ethical dilemma rests first in a total commitment to God with a great deal of daily contact with Him. To this must be added a strong fellowship within the body of Christ so that one can talk openly and honestly with one or more representatives of the church about one’s personal and business dealings. There should also be some who are expert enough to monitor and guide activities of the firm, if asked for help. If the businessman also has the faith that he is doing right, the certainty that his product and/or service is not questionable, the willingness to accept risk and hard work and to seek knowledge through education and experience, then the result should be a business that operates at the highest levels of Figure 1.

None of us would like to see the decline of a Christian witness in the business world. Great strides have been made in technology applications, personnel policies, and management skills which permit a much improved working environment. Very little progress has so far {34} occurred in the relationships of small business to society and to the church. This is a challenge for all of us who are members of the body of Christ.


  • Arrow, Kenneth J. The Limits of Organizations. New York: W.W. Norton, 1974.
  • Cavanagh, Gerald F. American Business Values in Transition. New Jersey: Prentice-Hall, 1976.
  • Clark, John W., S.J. Religion and the Moral Standards of American Businessmen. Ohio: South-Western Publishing, 1966.
  • Drucker, Peter F. Management: Tasks—Responsibilities—Practices. New York: Harper & Row, 1973.
  • Ellul, Jacques. The Technological Society. New York: Vintage Books, 1964.
  • Haimann, Theo. and Scott, William G. Management in the Modern Organization. 2nd ed. Mass.: Houghton Mifflin, 1974.
  • Johnson, James. The Nine to Five Complex or the Christian Organization Man. Michigan: Zondervan, 1972.
  • Kranzber, Melvin and Gies, Joseph. By the Sweat of Thy Brow. New York: G.P. Putnam’s Sons, 1975.
  • McClelland, David C. The Achievement Motive. New York: Appleton-Century-Croft, 1953.
  • McClelland, David D. “The Two Faces of Power,” Journal of International Affairs, Vol. 24, No. 1 (1970).
  • Rudelius, William, Erickson, W. Bruce, and Bakula, William J., Jr. An Introduction to Contemporary Business. New York: Harcourt Brace Jovanovich, 1973.
  • Redekop, Calvin. Business/Labor Study Report. Unpublished Report sponsored by the Showalter Foundation, 1975.
  • Weber, Max. The Protestant Ethic and the Spirit of Capitalism. New York: Charles Scribner’s Sons, 1958.
  • Woodward, Joan. Industrial Organizations. London: Oxford University Press, 1965.
Dennis Langhofer is Chairman of the Business Administration Department at Pacific College, Fresno, California.

Previous | Next