Abstract
The debate on the purpose of the business corporation has been raging for more than a century. Inspired by capitalistic thinking, economists, corporate managers and investors have mostly maintained that the predominant goal for corporations is to maximize shareholder wealth. In contrast, society has argued that the corporation also has a social responsibility as a legal entity and community member.
The legal precedent set in 1919 with Dodge v. Ford Motor Co. is that “a business corporation is organized and carried on primarily for the profit of the stockholders”. The oft quoted argument of Milton Friedman (1970) that the social responsibility of business is to increase its profits, supports the materialistic philosophical purpose of business. This materialistic philosophy became the basis of finance textbooks, and the framework within which much management education is done.
More recently, we saw a shift toward a humanistic philosophical approach to the purpose of business. An announcement in August 2019 by the Business Roundtable organization stated that business was refocusing the purpose of the corporation away from the primacy of shareholder wealth maximization to a commitment to benefit all stakeholders – employees, customers, suppliers, shareholders, communities. This statement ignited a debate between the traditional materialistic approach and a humanistic approach with the latter aligning with the UN’s Sustainable Development Goals (SDGs).
Both these approaches avoid the Biblical reality and purpose of every human entity on earth. A study of the creation week shows that humanity, created in God’s image, is endowed with abilities and responsibilities to exercise dominion over a perfectly created but incomplete world. Humanity’s purpose, as expressed in the cultural commission, is to bring glory to God through the development and maintenance (Genesis 2:15) of the earth, its resources, and its living creatures.
Unfortunately, the entry of sin and the consequences of the fall had a negative impact on humanity’s motives and intellect resulting in developments that harm people and the environment. The fall also negatively impacted the four primary relationships humanity experienced at creation – relationships between God and humankind, with our individual self, with others, and with the rest of creation.
By God’s grace humanity is redeemed from sin through Jesus Christ and thereby reconciliation with all things can be achieved (Colossians 1:19-20). In addition, redeemed humanity is given an active role to fulfill by becoming active messengers/ambassadors of God (1 Corinthians 5:18-20) in reconciling the world with God. This new role is the gospel commission (Matthew 28:19-20).
Thus, fulfilling the cultural and gospel commissions within the context of the great command (Matthew 22:38) is the Biblical purpose of every human person and entity – government agencies, business firms, civic organizations, religious communities.
How are Christian business practitioners to fulfill in love the cultural and gospel commissions in a broken and sin-scarred world? Begin with the reframing of the mind (Romans 12:2) in viewing the business’ purpose in society, and the way it interacts with its stakeholders. Views of success, of customers, of employees, of ownership, of money and profits, and of ethics are discussed within the Biblical cultural and gospel commission framework.
Recommended Citation
Oberholster, Abraham Johannes
(2025)
"The Business of Business: A Biblical Approach to the Purpose of the Firm,"
The Journal of Biblical Foundations of Faith and Learning: Vol. 4:
Iss.
1, Article 5.
Available at:
https://knowledge.e.southern.edu/jbffl/vol4/iss1/5
