Making Sense of Corporate Purpose

William Ocasio (), Matthew Kraatz () and David Chandler ()
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William Ocasio: Gies College of Business, University of Illinois Urbana-Champaign, Urbana, Illinois 61801
Matthew Kraatz: Gies College of Business, University of Illinois Urbana-Champaign, Urbana, Illinois 61801
David Chandler: Management, University of Colorado, Denver, Colorado 80204

Strategy Science, 2023, vol. 8, issue 2, 123-138

Abstract: Both the societal purpose of the corporation and an individual corporation’s sense of purpose have been subject to increased attention by business elites and academics alike. This special issue presents diverse viewpoints on these two distinct yet interrelated topics. In this introduction, we present the various contributions and build on their insights to develop our independent sensemaking of what corporate purpose entails. Thus, we define corporate purpose, at both the organizational and societal levels, as an institutionalized ideal, a historical, value-based aspiration guiding strategic decision making and practices. We interpret the current societal movement on corporate purpose as one rejecting the logic of shareholder capitalism and proposing sustainable capitalism in its place: an ideal for corporate purpose based on sustainable prosperity for society and its population. At the organizational level, corporate purpose can thus be articulated as a distinctive and meaningful intent to enhance the lives of people. We identify four strategic issues to consider in reconstituting a corporation’s purpose: corporate governance, strategic leadership, stakeholder engagement, and implementation. We conclude by highlighting the centrality of purpose to corporate strategy, an emphasis that was present in the field during its origins but one that got displaced under a logic of shareholder primacy.

Keywords: corporate purpose; corporate strategy; corporations; institutional logics; institutions; relational contracts; shareholder primacy; stakeholder theory; strategic leadership; strategy formulation; strategy implementation; sustainable capitalism; values (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:8:y:2023:i:2:p:123-138

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