The Promises and Perils of Corporate Purpose

Sarah Kaplan ()
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Sarah Kaplan: Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada

Strategy Science, 2023, vol. 8, issue 2, 288-301

Abstract: Corporate purpose is taking off as a concept within both the corporate world and management academia. Despite many bold pronouncements by companies about pursuing purpose and not just profits, evidence suggests that these are often decoupled from real action on social and environmental issues. In this essay, I grapple with a number of questions that arise for scholars and practitioners given the state of the field. Is the lack of progress intentional such that corporate purpose is just a power grab for firms to protect their influence and profits? Is making the business case for corporate purpose just part of this power grab? Stepping back, what is corporate purpose anyway? Additionally, how does it relate to trade-offs across stakeholders? Who counts as a stakeholder? How can we account for value distribution along with value creation? How can we conceptualize the firm if we take purpose seriously? What would it mean to decenter the firm (and center the stakeholders) in the practice of corporate purpose? What governance structures are needed to enact corporate purpose? Additionally, what are the implications for a new model of decentered leadership? There are not a lot of answers yet, but this review of recent research in the domain spots many excellent clues and paths for future progress.

Keywords: corporate strategy; governance and control; market failures; nonmarket strategies; organizational form; sustainability; theory of the firm (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:288-301

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