Lessons to be learned from oldest multinational company in the world - The Catholic Church

By analyzing the recent events involving the resignation of Pope Benedict XVI and the choice of new pope Francisco, it was evident that the institution 'Catholic Church' behaves like a genuine multinational company. The way that the Catholic church managed its business to elect a new pope and respond to scandals, has recently been analyzed in articles such as those written by Marcus Fisher for Fast Company, by bloggers Shumpeter to The Economist magazine, the journal of the Wharton EUniversity - Leadership and Change, etc.

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When I told my father that I wanted to be graduated in International Business, he suggested me to learn more about the Catholic Church, "You’d better know how the oldest and most well succeeded international institution runs its business" he said.

If the Catholic Church were a company it would be a multibillion-dollar empire, with annual revenues of US $ 182 Bi, with 1.200 billion customers, 1 million employees and offices in 179 countries worldwide.

It is important to mention that it is not my intention to offend Christian Catholics regarding their to faith, but to evaluate the institution's administrative model and encourage learning precious lessons from this institution, which has been teaching us a lot in the last 2000 years (no other company has such a structure and historical background).

Here I highlight the top lessons I learned during an interesting work that began in the late 90's and it took me to walk through the gates on the vatican museum visits, as well as other internal rooms, and provides important tools to assess how administrative institution of the Catholic Church sees its new challenges in the pontificate of Pope Francisco:

1 – The name –

 The term "catholic". The combination "the Catholic Church" (he katholike ekklesia) is found for the first time in a letter of St. Ignatius to the Smyrnaeans, written about the year 110AD is derived from the Greek word καθολικός (katholikos) meaning "universal", comes from the Greek phrase καθόλου (katholou), meaning "in general" and όλος meaning "whole".

The brand name is the foundation for all other marketing efforts. Is the very first experience of your brand in customer’s mind, it is the verbal introduction of the company to them. A good brand name should:

A – Engage the customers emotionally;

B – Identifying what sort of product or service the company is offering;

C – Differentiate it from competition;

D – Customers should remember it;

The name ‘Catholic’ is perfect and sounds like it had been created by a modern ad agency for today’s globalization culture.

2 - Organizational chart –

The government of the Vatican is an Ecclesiastical sacerdotal absolute elective theocracy, in which the head of the Catholic Church, the Pope, exercises ex officio (by virtue of holding position) supreme legislative, executive, and judicial power over the State of the Vatican City (an entity distinct from the Holy See), a rare case of non-hereditary monarchy. 

The Cardinals gathered in the College of Cardinals, are the advisers and closest collaborators of the Pope, the bishops and the overwhelming majority. Incidentally, the Pope is elected on a lifetime basis (the abdication is rare because had not happened since the Middle Ages) by the College of Cardinals. But nevertheless, the Pope granted in the past highlighted presbyters (eg theologians) places a member of the College, after going by the voting age, since they "distinguish in faith, morals and piety."

After about 2000 years of "trial and error" Catholic Church has the following Organizational Structure:

The Pope is elected in the Conclave, composed of all the cardinal electors (now limited to all the cardinals below the age of 80), after the death or resignation of the previous Pope.

0 - The Pope – Francis - born Jorge Mario Bergoglio - elected on 13 March 2013

The Pope holds the single most important position in the Roman Catholic Church and is its supreme leader. According to Catholic belief, each Pope is successor to Saint Peter, who received the keys to heaven from Christ himself and became the first Pope. The Pope holds numerous titles, including Bishop of Rome, Vicar of Christ, and Primate of Italy. His powers and influence are vast, and each Pope is closely scrutinized by the international community;

1 The Secretariat of State - Tarcisio Bertone (15 September 2006 – present) – the Carmelengo  - presides over the Holy See, usually known as the "Vatican", Secretariat of State, which is the oldest and most important dicastery of the Roman Curia;

2 The Congregations

2.1 The Congregation for the Doctrine of the Faith

2.2 The Congregation for the Oriental Churches

2.3 The Congregation for Divine Worship and the Discipline of the Sacraments

2.4 The Congregation for the Causes of Saints

2.5 The Congregation for the Evangelization of Peoples

2.6 The Sacred Congregation for the Clergy

2.7 The Congregation for Institutes of Consecrated Life and Societies of Apostolic Life

2.8 The Congregation for Catholic Education (in Seminaries and Institutes of Study)

2.9 The Congregation for Bishops

3 The Tribunals

3.1 The Apostolic Penitentiary

3.2 The Supreme Tribunal of the Apostolic Signatura

3.3 The Tribunal of the Rota Romana

4 The Pontifical Councils

4.1 The Pontifical Council for the Laity

4.2 The Pontifical Council for Promoting Christian Unity

4.3 The Pontifical Council for the Family

4.4 The Pontifical Council for Justice and Peace

4.5 The Pontifical Council Cor Unum

4.6 The Pontifical Council for the Pastoral Care of Migrants and Itinerants

4.7 The Pontifical Council for the Pastoral Care of Health Care Workers

4.8 The Pontifical Council for Legislative Texts

4.9 The Pontifical Council for Interreligious Dialogue

4.10 The Pontifical Council for Culture

4.11 The Pontifical Council for Social Communications

4.12 The Pontifical Council for Promoting the New Evangelization

5 The Synod of Bishops

6 The Offices

6.1 The Apostolic Camera

6.2 The Administration of the Patrimony of the Apostolic See

6.3 The Prefecture for the Economic Affairs of the Holy See

7 The Pontifical Commissions

7.1 The Pontifical Commission for the Cultural Heritage of the Church

7.2 The Pontifical Commission "Ecclesia Dei"

7.3 The Pontifical Commission for Sacred Archaeology

7.4 The Pontifical Biblical Commission

7.5 The International Theological Commission

7.6 Interdicasterial Commissions

7.7 The Pontifical Commission for Latin America

8 The Swiss Guard

9 The Labour Office of the Apostolic See

10 The Pontifical Academies

10.1 The Pontifical Academy Cultorum Martyrum

10.2 The Pontifical Ecclesistical Academy

10.3 The Pontifical Academy for Life

10.4 The Pontifical Academy of Sciences

10.5 The Pontifical Academy of Social Sciences

The 3 Tier Hierarchy Of The Roman Catholic Church:

Various national sizes: 
There are no national positions of power in the Catholic church, only Bishops within a country, who are equal to all other bishops in the world.

World – 1Pope – 2946 Bishops working with 2946 diocese territories – 219,583 priests working within 219,583 Parishes (local churches);

Canada – 1Pope – 72 Bishops working with 72 diocese territories – 5717 priests working within 5716 Parishes;

Toronto Canada - 1Pope – 1 Bishop working with 1 diocese territory – 223 priests working within 223 Parishes;

Hamilton Canada - 1Pope – 1Bishop working with 1 diocese territory – 121priests working within 121 Parishes;

A - Notice there are only three levels of control: World head, Diocese head, Local church.

B - All dots on graphic below are local churches with differing levels of authority.

C - The one Blue dot (where the Pope preaches every Sunday) is the local church of St. John Lateran Basilica that is the only local church in the world to have all three levels of authority: World head, diocese head, Local parish

D - The black dots are local churches (always called "Cathedrals" which is Latin for "chair,") that have bishops as their preacher every Sunday. There are 2946 of these Cathedrals (local churches) in the Catholic church presently. There is only one bishop for each of these "diocese head" mother churches (Cathedrals). Each Bishop is located at a simple local church (Cathedral) that controls other local churches (parishes) within its geographic territory. You will notice that even the local church of St. John Lateran Basilica (Rome diocese) is over other local churches in exactly the same way.

E - The Red Dots are local churches headed by mere priests. There are 219,583 of these local churches in the Catholic church presently. A group of these local churches bound together under the headship of a single diocese Bishop.

F - To find out how many actual local churches there are in the Catholic church today you must add the number of Parishes (219,583) and the number of Diocese churches (2946) plus St. John Lateran Basilica (1). So the math is: 219,583 + 2946 + 1 = 222,530. That means that a Roman catholic can attend any one of 222,530 local churches in the world. But every Roman Catholic could chose to attend a Parish where a priest preaches every Sunday or where a Bishop preaches every Sunday or where the Pope preaches every Sunday.

G - In this way, you can see that the Roman Catholic church is simple groupings of local churches with three different levels of authority.

Apostles organized the church – in the years 30-606 AD: The gradual historical Development of the Papal and Patriarchal Systems of Centralized Church Government away from the organization found in the Bible.

Nomenclature describing the office of an elder:

A - Presbiter – comes from presbýteros (πρεσβύτερος), "elder." – emphasis on Experience;

B – Bishop – comes from (επίσκοπος), oversight

C - Pastor (Sheppard) – comes from (Ποιμήν), metaphoric term (tending flocks) – Protection;

The church we read about in the Bible was organized in a very simple way. A general pattern was to have 2 or more qualified men overseeing each local congregation or church. These men could be referred to as the "eldership". Each man must meet several high qualifications, which the Bible lists in two passages. Elders are the spiritual leaders of a congregation. They also watch out for the souls of the members like a shepherd.

A diocese is a geographical area with a bunch of churches in it. Run by a bishop. And they all basically raise their own money, through collections, and are responsible for their own budget.

Because each diocese makes most of its own business decisions, "the church is missing out on purchasing power, procurement, economy of scale:

A - Christ is the head of every local church. There is no human head of the church.

B - The Bible is the only written creed for each local church, rather than a man-made written creed.

C - Each local church is autonomous and self-governing. No outside interference from others.

D - No organizational tie between local churches.

E - No organization larger than local churches.

F - The Bible uses Elder, Presbyter, Overseer, Bishop, Shepherd, Pastor interchangeably and they all refer to a single office in the church.

G - Local churches appoint their own plurality of elders using 1 Timothy 3, and Titus 1 as guidelines for the qualifications.

H - Elders have authority only over the members of the local church, not members from outside congregations.

3 – The Logo –

On the eve of the Battle Of The Milvian Bridge, Constantine had a dream in which he saw a cross in the sky, and perhaps the Greek letters chi and rho (the first two letters of Christos) with it. Constantine then either saw or heard the words “by this sign you shall conquer.”

Pope Innocent IV (1243-1254) is probably the first who displayed personal arms, but the first of whom a contemporary coat of arms survives is Pope Boniface VIII (1294-1303).

Up to today Chi Rho reminds us of the Catholic Church, why:

Has a strong, balanced image with no little extras that clutter its look;

Is distinctive and bold in design, making it easy to see at a glance;

The Absence of text makes it understandable all over the world;

Has graphic imagery that looks appropriate for business proposal;

It works well with the company name;

Communicates the business clearly; and

Looks good in black and white, as well as in color.

4 - Learn how to use the media of your time –

Rather than railing against the press, as many public figures do, the popes used the media to deliver his message.

During Middle Ages Popes were generals. That hank position was the most effective way to address people at that time.

Pope watching TV in the papal apartment - Apostolic Palace of the Vatican

Pius XI was the first Pope to utilise the power of modern communications technology in evangelising the wider world. He established Vatican Radio in 1931,

Pope John Paul II became pope in 1978; the same year instant global television first became available, and he was the Pope most popular of all time in History.

Pope Benedict tweeted for the first time on December 12, 2012, and despite relative inactivity on the medium quickly reached 2.5 million followers.

5 – Keeping Trade Secrets Safe –

A trade secret can be used in any business or product. It can be used to make a product, or it can be a part of marketing and sales methods. Many companies have their own zealously guarded customer lists, and these are considered trade secrets. The trade secret is information that is not available to the public. The best way to keep trade secrets secret is to limit the amount of people who know about them.

Ancient edition about Inquisition and the entrance of The Vatican Secret Archive

Although Coca Cola claims to have a secret ingredient, the drink is regularly consumed by millions of people. The secret ingredient would have to have passed numerous safety and health tests before being deemed safe for consumption. Although Coca Cola has a trade secret, there are certain people who do not work at Coca Cola who know what this secret is.

The Vatican Secret Archives (Latin: Archivum Secretum Apostolicum Vaticanum), located in Vatican City, is the central repository for all of the acts promulgated by the Holy See. The Pope, having primal incumbency until death or resignation, owns the archives until the next appointed Papal successor. The archives also contain the state papers, correspondence, papal account books, and many other documents which the church has accumulated over the centuries. In the 17th century, under the orders of Pope Paul V, the Secret Archives were separated from the Vatican Library, where scholars had some very limited access to them, and remained absolutely closed to outsiders until 1881, when Pope Leo XIII opened them to researchers, more than a thousand of whom now examine its documents each year.

Ancient edition of Dialogo di Galileo, History of Cathars' persecutions, and other scientific publications where hidden at  The Vatican Secret Archive

The Vatican Secret Archives have been estimated to contain 52 miles (84 km) of shelving, and there are 35,000 volumes in the selective catalogue alone. "Indexes must be consulted in the Index Room and replaced in their original location. Publication of the indexes, in part or as a whole, is forbidden." The Archives support their own photographic and conservation studios.

6 –The importance of building a good Board of Directors –  

During the Conclave, the Cardinals are in a small room sealed off from the outside world. It is a micro community making a decision that will have a macro impact.

The role of a board of directors has evolved over the years: Instead of the old smoke-filled conference room gathering of the CEO's family members, smart companies now treat their boards like a council of elders whose knowledge base can help set the tone for big-picture decision making.

Boards are really at their best when they're providing guidance and leadership and insight at a higher level.

7 – How to manage the public personality –

Public figures have handlers. So does the Pope. His every movement is tracked and choreographed. So too should his social media activity. His daily engagements are purposeful with a desired outcome.

8 – How to deal with crisis –

The worst crisis ever lived by the Catholic Church has started on September 20, 1870. Rome and what was left of the Papal States were annexed to the Kingdom of Italy as a result of King Victor Emmanuel II Italy’s ‘processo di unificazione italiana’.

Vatican was without revenues for almost 60 years.

The crisis ended in 1929 when it was  established as an independent state in  by the Lateran Treaty, signed by Cardinal Secretary of State Pietro Gasparri, on behalf of Pope Pius XI and by Prime Minister and Head of Government Benito Mussolini on behalf of King Victor Emmanuel III. At that time Vatican received 92 million dollars as indemnity for the loss of sovereignty and territory (today’s value 1,1 billion dollars).

Pope does not use computer, all 'oficios'  are brought into folders by his two private secretaries in the papal office - folder with documents to be signed 'Alla Firma di sua Santita'

Nowadays, Pope Francisco most pressing task will be to deal with the sex scandals - He needs to punish errant employees rather than protecting them or shuffling them about. The best companies are quick to “proactively outplace” wrongdoers. Second, he will need to treat his reputation as his most precious asset by drawing up clear rules on ethical behavior, insisting staff adhere to them and conducting aggressive public-relations campaigns.

a. Don't delay. But do think before you act.

Many times, the crisis is either not as big as you first imagined or clears itself up on its own;

b. Find perspective.

When something goes wrong, your emotions can easily take control. Your fears often get compounded in your head and the worst-case scenarios start to play out in your head. Try to avoid that. After you've acted on the problem, it's time to gain perspective. That, well, is easier said than done;

c. Get ready now for the next crisis.

Prepare in advance for various outcomes to an event and have the best people on the team so when the inevitable happens, you can respond with actions and not emotions;

9 – Make sure to adopt measures according to the reality of the time you are living in –

The great example was the modification of older Julian calendar, admirably close to the actual length of the year, but deemed as not perfect. They came to the conclusion that in 1582, Caesar’s calendar had drifted full 10 days off course.

The Vernal Equinox (when Sun enters Aries constellation) of 1582 AD happened on March 11^th , at that very day the sun cast the light in a specific mark in a room, and it was not supposed to happen the same phenomena the next year, at the same date and time because Earth takes exactly 365,2425 days to revolve around the Sun.  At Julian calendar the year was wrongly estimated in 365,25 days.

In 1582, Pope Gregory XIII ordered the advancement of the calendar by 10 days and introduced a new corrective device to curb further error: century years such as 1700 or 1800 would no longer be counted as leap years, unless they were divisible by 400 (like 1600 or 2000).

In 1580 the Bolognese architect Ottaviano Mascherino who also built the Apostolic Palace, built the Vatican Tower of Winds, with the so-called ‘Meridian Hall’, originally designed to create a loggia for measure the accuracy of Gregorian calendar.

‘Meridian Hall’ at Vatican tower of the winds - precisely at midday of Vernal Equinox the sun light hits the mark on the ground.

At noon on the spring equinox, sunlight passes through a small hole in the south wall to project precisely onto a mark on marble meridian floor, indicating the exact time of Vernal Equinox.

This system is undeniably effective, and is still in official use. In the Gregorian calendar year differs from the solar year by only 26 seconds—accurate enough, since this only adds up to one day's difference every 3,323 years.

More recently, with the imposition of new rules designed to ensure transparency and accountability in Vatican financial affairs, the Prefecture for Economic Affairs began to recover “its original spirit,” the cardinal said. The office now supervises all the economic affairs of the Vatican, and works to ensure that the business of the Holy See is conducted honestly and efficiently.

Cardinal Bertone said that in addition to promoting transparency, the Vatican is also working to reduce spending, since the global economic downturn has caused a decline in the revenues available to support the work of the Church.

Without systemic accounting and disclosure, there is enough doubt these days about how money is being managed that we don't whether the hungry are being fed, the naked are being clothed and those in need are getting health care and education," says Jim Post, a management professor at Boston University.

There is no standard financial reporting for church dioceses. This was a huge frustration: It's hard to figure out how to fix what's wrong with the church's business if you can't figure out what's going on with the money.

And as the Catholic Church has recently discovered, this lack of transparency can have much darker implications.

10 - Knowledgeable and skilled corporate finance –

The Revenue of the Catholic Church is not officially declared, but according to the article of 'The Economist' (August 17, 2012 by Hemant Mehta - 'The estimated costs of the Catholic Church'), Hemant Metha believes that expenditures reach an amount of $171.600 billions annually, and he also estimates that this amount corresponds to 10% of its total revenue of approximately 181.876 billion dollars/Year.

In an effort to stem massive debt accumulation, Prime Minister Mario Monti made a historic change on tax code to boost revenue: Since January 2013, the Roman Catholic Church is no longer exempt from property taxes in Italy.

Italy's Catholic Church has 110,000 properties, worth about 9bn Euros, the annual cost could be up to 720m Euros ($945m; £598m) according to municipal government bodies.

Many tax systems all over the world provide complete exemption from tax for recognized charitable organizations, such as the Catholic Church, but the decision taken by the Italian government should provoke questioning about the purpose and the validity of the exemption in several other countries.

The question about how much money the Catholic Church handles and what is the size of its assets has always intrigued everyone. The assertion that they have enough money to solve all of this planets woes, as well as feeding the hungry, educating the poor, clothing the naked...shoeing the unshod, etc. is matter of discussion.

Sistine Chapel alone was once estimated at US$ 800 mi, not to mention the priceless gifts received by queens and kings, St Peters Basilica treasuries, art of museums and Pope’s personal belongings.

One can’t sell Vatican, or its riches because the whole state is a UNESCO World Heritage Site, and it would be extremely difficult to evaluate and find buyers.

The Institute for the Works of Religion (Italian: Istituto per le Opere di Religione – IOR), commonly known as the Vatican Bank, is a privately held institute run by a CEO who reports directly to a committee of cardinals, and ultimately to the Pope. Since its assets are not considered property of the Holy See, it is not overseen by the Prefecture for the Economic Affairs of the Holy See, and it is listed in the Annuario Pontificio not under "Holy See" or "Vatican City State".

On the other hand, none of the 832 inhabitants of the Vatican pays tax have exorbitant wages or earn annual bonus. Vatican gains comes from the museum entrance tickets, euro coins, two small shops and issues of stamps.

11 - The power of a good formation - 

The formation process regardless of the orders, is often divided into five "stages"; observant/aspirant, postulant, novice, simply professed, and solemnly professed (or perpetual vows). The discernment process usually continues for about 5-8 years until solemn profession. 

A person is free to leave any time prior to solemn profession (It is important to note that although these external similarities exist, much still depends on the unique dynamic within each community, which is governed largely by its superior.

However, all orders bear common features that are the hallmark of religious life, such as; community prayer (primarily the Divine Office), community meals, labor/work, private prayer, meditation, study, and of course religious vows (typically the vows of the evangelical counsels; poverty, chastity, and obedience). 

 - Contemplative Orders  
"Contemplative orders" (such as Benedictines, Carmelites, Trappists, Carthusians, Cistercians, etc.) are those who primarily focus is inward conversion; to grow in union with Our Lord for the love of God and the salvation souls.

- Active Orders

"Active" orders (Franciscans, Dominicans, Jesuits, Missionaries of Charity, etc.) are those who tend to have more direct interaction with the world than contemplative orders. In addition to prayer, active orders may devote some of their "work" time to external apostolates (teaching, preaching, soup kitchens, missions, youth retreats, media apostolates, etc.).

Regarding to the content of these studies, it is estimated that there is a limit on what the church members should know. The more the student grows in their studies, the more he or she reaches additional discernment, and may have access to more exclusive literature. But only a few of the summit have access to prohibited material, studies that are very sensitive to the very foundations of the Catholic Church.


It is believed that to maintain the confidentiality of Vatican secrets documents, translation and study work is divided and delegated to the three most important active orders (Franciscans have 1/3, Dominicans the other 1/3, and the final1/3 to the Jesuits) this way the parties would have fragmented information and they could not compose the complete overview, only allowed the high cupola of the church.

The Future

Luiz Pagano - research on Catholic Church Management  - analogy to a multi national company management - International Business affairs 1998

Pope Francis will be the spiritual leader of the world's Catholics. He will also be leading a multibillion-dollar financial empire. And from a business perspective, the Catholic Church is struggling.

The work made by Catholics priests in Latin America, Asia and Africa, where growth in church membership is higher should continue. But if the church were a business, Holly See would just transfer part of existing workers to other locations of the world such as North America (In the U.S., Catholic church doesn't take advantage of its size), and some other rich countries.

I'm not trying to teach the Lord's Prayer to the vicar (in Portuguese ‘Não estou tentando ensinar o padre-nosso ao vigário’ – Idiomatic expression that has the same meaning of ‘I’m not trying to teach your grandmother to suck eggs’) but the lessons presented here should be taking into consideration if you try to understand  and manage a multi national company.