Sunday, January 21, 2007

Acumen of Mormon Business

When the LDS Church was first founded, there wasn't any hint of a financial powerhouse in the making. If anything, the complete opposite seemed to be the case. Joseph Smith came from a farming family living on the edge of social, political, and capital existence. Although there were a few rich people who were converted, the majority of early members came from not much better than poverty. A hint of democracy and self-reliance was taught as theological probabilities, but the driving financial model was a form of communistic philanthropy. It failed whenever practiced and left tithing as the main economic structure.

For decades the financial situation was at best questionable. Most of the resources came from people's hard work more than money. Things came to a head during the "Great Polygamy Raids" that almost brought the LDS Church to ruins. It wasn't until soon after the 20th Century started that the Church and members alike were recognized as a financial success. Now, the rich business owner who started with almost nothing more than wits and an idea has become almost a cliche as well known as the so-called Jewish Banker. The web site Famous Mormons does seem to make this case when the list of Top Executive and Business names is the only one split alphabetically. It is not clear how accurate this is, or even if the stereotype identification is desirable.

At least one writer has decided to look closer at the business practices of a few successful top CEOs of some Mormon-run companies. What the author, Jeff Benedict, came up with in his book The Mormon Way of Doing Business was how religion played such a large part of how things were run. There is a book review of The Mormon Way at Dave's Mormon Inquiry that discusses the book's content. Although the ideas are refreshing, the relationship of business and faith is more questionable. The implication is that these people are model business executives because they follow the tenets of The Church of Jesus Christ of Latter-day Saints. It is sort of a Calvanist work ethic writ large.

Some attention has been paid to this book, and the LDS business style, by a few non-Mormon publications. Two of them include Hall of Fame Magazine's article written by the book author and Arizona Daily Star's look at the book, with both as a positive for Mormon/Business mixing. Such a simple relationship of following God and finding financial success is probably not as simple as it sounds. This is especially the case theologically, where prosperity doesn't always mean righteousness and poverty can sometimes be a spiritual blessing.

Capitalism is not evil. Money is not evil. At worst they are tools that can be used for good or evil. The question is how accurate is it to say that Mormons have a business ethic that can bring financial success? From just the descriptions about the book and the articles above, it seems much is missing from an accurate portrayal of the moneymaking abilities of Mormons who follow their religion. For the handful of reliable and well to do CEO's, both made and hired, there are uncounted numbers of faithful who don't succeed at business. Many of them struggle to make a living. From the perspective of the book that following religious precepts is the Mormon ethic of business, it is hard to say what to make of the many examples of those Mormons who are unethical in their practices. Still uncounted, the many Mormons who (to be honest don't follow the precepts of the leadership to live only according to what they have) get into heavy debt and end up bankrupt. Those written about in the book are probably good examples of people living their religion while in the world, but it is unclear if they are examples of good business models. Motivational material is always surface specific. A more comprehensive study would have to be done.


Anonymous said...

I've had this book in my wish list since it was released... time to pony up and buy it! What I find interesting is that it's not so much the "Mormon" way of doing business, as it is the "right" way to do business. Following similar principles (many of which Covey discusses in 7 Habits) will lead anybody to success. Keeping God's commandments certainly helps, too. :)

Eric Nielson said...

interesting stuff. I have not read the book or thought very deeply about the topic. Off the top of my head I might say there are many things within Mormon culture that would lead to personal success, or at least avoid personal failure.

- Less divorce. Divorce can be a financial nightmare for both parties. If one simply does not go through a divorce they will be a large step ahead at least on a personal level.

- Less debt. If one follows the general counsel of limiting debt they will often avoid large financial mistakes.

- a simple life. Mormon culture is a bit of a cheap-skate culture. Simple vacations, simple tastes, practical decisions.

I think most of what Mormon culture brings is a way that will help avoid making big mistakes, whichis half the battle.

Jettboy said...

eric, I can't help wondering about the heralded number of Utah bankruptcies and pyramid scams. Now, this is obviously a cultural rather than a religious phenom in that State. To do what it takes to get involved with either of those is going against teachings of the leadership of the Church and Scripture.

In other words, I am not completely sure I can agree with your final statement in practice. However, I think in theory you are probably correct. This book just seems one sided and self-congratulatory. Hmmm . . . I feel a blog topic coming on; humility in an exceptionalist community.

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