It is uncontroversial for strategy scholars that culture matters for both strategy formulation and execution. Yet, the diversity of approaches and concepts for thinking about culture can prove daunting for operationalizing this insight. We introduce the concept of a “code”—a fuzzy mapping between two distinct sets of cognitive constructs—as a fundamental construct to study culture. The concept of a code, and the distinction between using a code versus expectations about the code others use, can be applied to study many different elements of culture both in terms of theorizing about them with precision and for empirical applications. Furthermore, we argue that a code-based perspective on culture is particularly useful from the normative, design-oriented stance that is characteristic of strategy. Using an example of creating stakeholder alignment around the problem of sustainability, a first-order challenge for business and society today, we show that the perspectives of culture as shared values and culture as a toolkit point to different interventions that are each likely to work under different conditions.
{"title":"Decoding Culture: Tools for Behavioral Strategists","authors":"Özgecan Koçak, P. Puranam","doi":"10.1287/stsc.2022.0008","DOIUrl":"https://doi.org/10.1287/stsc.2022.0008","url":null,"abstract":"It is uncontroversial for strategy scholars that culture matters for both strategy formulation and execution. Yet, the diversity of approaches and concepts for thinking about culture can prove daunting for operationalizing this insight. We introduce the concept of a “code”—a fuzzy mapping between two distinct sets of cognitive constructs—as a fundamental construct to study culture. The concept of a code, and the distinction between using a code versus expectations about the code others use, can be applied to study many different elements of culture both in terms of theorizing about them with precision and for empirical applications. Furthermore, we argue that a code-based perspective on culture is particularly useful from the normative, design-oriented stance that is characteristic of strategy. Using an example of creating stakeholder alignment around the problem of sustainability, a first-order challenge for business and society today, we show that the perspectives of culture as shared values and culture as a toolkit point to different interventions that are each likely to work under different conditions.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49192488","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.
{"title":"Making Sense of Corporate Purpose","authors":"W. Ocasio, Matthew S. Kraatz, D. Chandler","doi":"10.1287/stsc.2023.0054","DOIUrl":"https://doi.org/10.1287/stsc.2023.0054","url":null,"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. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48054546","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Firms can choose to make investments while retaining the option to terminate them prior to completion. This flexibility can mitigate uncertainty about the investment that is present at the time of its initial funding. However, this flexibility can also detrimentally alter actions within the firm that are necessary for the investment’s success, such as whether scarce firm resources are allocated to the investment. This paper develops a set of hypotheses which predicts flexibility may not improve investment performance when the investment generates limited early-stage learning and requires certain types of resources. These hypotheses are empirically tested in a data set of new U.S. television programs, comparing programs that receive commitment in the form of a straight-to-series order with programs that are flexibly developed through a piloting process. This paper contributes to the literatures on innovation, entrepreneurship and real options by identifying which investment types will benefit most from flexibility. Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.2021.0095 .
{"title":"Which Types of Investments Benefit from Retaining the Flexibility to Terminate?","authors":"Ankur Chavda","doi":"10.1287/stsc.2021.0095","DOIUrl":"https://doi.org/10.1287/stsc.2021.0095","url":null,"abstract":"Firms can choose to make investments while retaining the option to terminate them prior to completion. This flexibility can mitigate uncertainty about the investment that is present at the time of its initial funding. However, this flexibility can also detrimentally alter actions within the firm that are necessary for the investment’s success, such as whether scarce firm resources are allocated to the investment. This paper develops a set of hypotheses which predicts flexibility may not improve investment performance when the investment generates limited early-stage learning and requires certain types of resources. These hypotheses are empirically tested in a data set of new U.S. television programs, comparing programs that receive commitment in the form of a straight-to-series order with programs that are flexibly developed through a piloting process. This paper contributes to the literatures on innovation, entrepreneurship and real options by identifying which investment types will benefit most from flexibility. Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.2021.0095 .","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44227069","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Firms can choose to make investments while retaining the option to terminate them prior to completion. This flexibility can mitigate uncertainty about the investment that is present at the time of its initial funding. However, this flexibility can also detrimentally alter actions within the firm that are necessary for the investment’s success, such as whether scarce firm resources are allocated to the investment. This paper develops a set of hypotheses which predicts flexibility may not improve investment performance when the investment generates limited early-stage learning and requires certain types of resources. These hypotheses are empirically tested in a data set of new U.S. television programs, comparing programs that receive commitment in the form of a straight-to-series order with programs that are flexibly developed through a piloting process. This paper contributes to the literatures on innovation, entrepreneurship and real options by identifying which investment types will benefit most from flexibility. Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.21.0095 .
{"title":"Which Types of Investments Benefit from Retaining the Flexibility to Terminate?","authors":"Ankur Chavda","doi":"10.1287/stsc.21.0095","DOIUrl":"https://doi.org/10.1287/stsc.21.0095","url":null,"abstract":"Firms can choose to make investments while retaining the option to terminate them prior to completion. This flexibility can mitigate uncertainty about the investment that is present at the time of its initial funding. However, this flexibility can also detrimentally alter actions within the firm that are necessary for the investment’s success, such as whether scarce firm resources are allocated to the investment. This paper develops a set of hypotheses which predicts flexibility may not improve investment performance when the investment generates limited early-stage learning and requires certain types of resources. These hypotheses are empirically tested in a data set of new U.S. television programs, comparing programs that receive commitment in the form of a straight-to-series order with programs that are flexibly developed through a piloting process. This paper contributes to the literatures on innovation, entrepreneurship and real options by identifying which investment types will benefit most from flexibility. Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.21.0095 .","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135493548","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Editorial: Special Issue on Corporate Purpose","authors":"Todd R. Zenger","doi":"10.1287/stsc.2023.0199","DOIUrl":"https://doi.org/10.1287/stsc.2023.0199","url":null,"abstract":"","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":"1 1","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41422947","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Corporate purpose has become a central part of doing business as usual and in the social movement to involve corporations in solving complex societal and environmental challenges. In this essay, I first deconstruct what corporate purpose means from a sociological perspective, and I submit that it is important to identify to whom that purpose is targeted. Second, I seek to make the point that corporate purpose is not universal in that there is not a one-rule-fits-all template on how to develop corporate purpose. I draw on comparative corporate governance, stakeholder management, and institutional theory arguments to illustrate how corporate purpose means different things in different societies and that the departure point of the emanation of corporate purpose varies across countries. This differential meaning is explained in part by the institutional setting as well as very different societal expectations of corporations. Finally, building on insights from existing corporate governance research, I argue that stakeholder engagement can be a useful tool toward effectively deploying corporate purpose. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.
{"title":"Corporate Purpose in Comparative Perspective: The Role of Governance","authors":"Ruth V. Aguilera","doi":"10.1287/stsc.2023.0198","DOIUrl":"https://doi.org/10.1287/stsc.2023.0198","url":null,"abstract":"Corporate purpose has become a central part of doing business as usual and in the social movement to involve corporations in solving complex societal and environmental challenges. In this essay, I first deconstruct what corporate purpose means from a sociological perspective, and I submit that it is important to identify to whom that purpose is targeted. Second, I seek to make the point that corporate purpose is not universal in that there is not a one-rule-fits-all template on how to develop corporate purpose. I draw on comparative corporate governance, stakeholder management, and institutional theory arguments to illustrate how corporate purpose means different things in different societies and that the departure point of the emanation of corporate purpose varies across countries. This differential meaning is explained in part by the institutional setting as well as very different societal expectations of corporations. Finally, building on insights from existing corporate governance research, I argue that stakeholder engagement can be a useful tool toward effectively deploying corporate purpose. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45332878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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. History: This paper has been accepted by Matt Kraatz for the Strategy Science Special Issue on Corporate Purpose. Funding: The Michael Lee-Chin Institute for Corporate Citizenship at the Rotman School of Management, University of Toronto provided financial support for the author’s research in this domain.
{"title":"The Promises and Perils of Corporate Purpose","authors":"Sarah Kaplan","doi":"10.1287/stsc.2023.0187","DOIUrl":"https://doi.org/10.1287/stsc.2023.0187","url":null,"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. History: This paper has been accepted by Matt Kraatz for the Strategy Science Special Issue on Corporate Purpose. Funding: The Michael Lee-Chin Institute for Corporate Citizenship at the Rotman School of Management, University of Toronto provided financial support for the author’s research in this domain.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136177372","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose is undergoing a resurgence of interest across research and practice. Yet, we know little about how it relates to strategy and specifically, how strategic actions reinforce or undermine purpose in organizations. This study explores this question in the context of acquisitions. We examine 831 transactions using data from approximately 1.7 million employees to construct our measure of purpose. We find that, on average, employees’ sense of purpose drops after acquisitions. This drop is particularly pronounced among firms that undertake unique acquisitions: those involving unusual industry combinations. This relationship suggests a possible tension between strategic and motivational consequences of boundary changes. Firms may benefit strategically from these changes, particularly those that enable expansion into unique areas. These same actions, however, may also erode the purpose of the organization, with consequences for downstream performance. Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2023.0193 .
{"title":"Acquisitions and Corporate Purpose","authors":"Claudine Gartenberg, S. Yiu","doi":"10.1287/stsc.2023.0193","DOIUrl":"https://doi.org/10.1287/stsc.2023.0193","url":null,"abstract":"Purpose is undergoing a resurgence of interest across research and practice. Yet, we know little about how it relates to strategy and specifically, how strategic actions reinforce or undermine purpose in organizations. This study explores this question in the context of acquisitions. We examine 831 transactions using data from approximately 1.7 million employees to construct our measure of purpose. We find that, on average, employees’ sense of purpose drops after acquisitions. This drop is particularly pronounced among firms that undertake unique acquisitions: those involving unusual industry combinations. This relationship suggests a possible tension between strategic and motivational consequences of boundary changes. Firms may benefit strategically from these changes, particularly those that enable expansion into unique areas. These same actions, however, may also erode the purpose of the organization, with consequences for downstream performance. Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2023.0193 .","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-05-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46384350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is a growing interest in large companies pursuing a new purpose—changing their core reason for being from a singular focus on financial gain to a renewed responsibility to people and the planet alongside profit. Yet knowledge of how a large company can walk that purpose-talk is still in its infancy. In this essay, we zoom in on the development of new sustainable products that embody a renewed responsibility to people and the planet. We conceptualize sustainable product development in a large company as an instance of divergent change and explore: How can sustainable products develop inside a large company in the face of the intense resistance that such a divergent change is likely to trigger? Building on our qualitative study from 2010 to 2019 of four products in a large fast-moving consumer goods company, we unpack two key leadership practices: (1) relaxing metrics for a product team, which (structurally) enables experimenting with a sustainable product separate from the mainstream business, and (2) advocating with gatekeepers, which (discursively) enables anchoring a sustainable product within the mainstream business. Overall, our findings suggest that sustainable product development will not do much to transform a large company if sustainable products remain merely tolerated exceptions. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.
{"title":"Walking the Purpose-Talk Inside a Large Company: Sustainable Product Development as an Instance of Divergent Change","authors":"M. Kimsey, Thijs Geradts, J. Battilana","doi":"10.1287/stsc.2023.0197","DOIUrl":"https://doi.org/10.1287/stsc.2023.0197","url":null,"abstract":"There is a growing interest in large companies pursuing a new purpose—changing their core reason for being from a singular focus on financial gain to a renewed responsibility to people and the planet alongside profit. Yet knowledge of how a large company can walk that purpose-talk is still in its infancy. In this essay, we zoom in on the development of new sustainable products that embody a renewed responsibility to people and the planet. We conceptualize sustainable product development in a large company as an instance of divergent change and explore: How can sustainable products develop inside a large company in the face of the intense resistance that such a divergent change is likely to trigger? Building on our qualitative study from 2010 to 2019 of four products in a large fast-moving consumer goods company, we unpack two key leadership practices: (1) relaxing metrics for a product team, which (structurally) enables experimenting with a sustainable product separate from the mainstream business, and (2) advocating with gatekeepers, which (discursively) enables anchoring a sustainable product within the mainstream business. Overall, our findings suggest that sustainable product development will not do much to transform a large company if sustainable products remain merely tolerated exceptions. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-05-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42153858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Broadening the organizational purpose of a firm beyond narrow short-term profit maximization may enhance long-term shareholder value. This result obtains when firms generate unpriced externalities and face difficulties in achieving ex ante incentive alignment with stakeholders through contract or have the ex post possibility of altering stakeholders’ perceptions through virtue signaling (i.e., cheap talk or greenwash). As each of these conditions is ubiquitous in practice, discussion of organizational purpose (beyond narrow short-term profit maximization to encompass stakeholder’s harmonious pursuit of a common higher goal or meaning) should shift from why management might pursue it to how managers obtain and maintain it as well as the value creation and distribution implications of doing so. Drawing on a value-based stakeholder theory of strategic management, I argue that attentiveness to the most salient issues of a firm’s most powerful stakeholders related to the attainment of this higher goal more closely aligns stakeholder and shareholder value in the long term, thereby building and sustaining relational contracts with stakeholders. A firm with strong relational contracts across its nexus of stakeholder relationships increases the likelihood of harmony among its stakeholders, including shareholders. An important challenge to realizing this outcome is that of measurement. As a result, research on organizational purpose should turn its attention from legal and moral foundations to empirical research on externalities, stakeholder opinions, and managers’ self-representations of their organization’s purpose. The availability of such data lowers the transaction costs associated with a nexus of relational contracts and enhances societal welfare. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.
{"title":"The Value of Organizational Purpose","authors":"Witold J. Henisz","doi":"10.1287/stsc.2023.0195","DOIUrl":"https://doi.org/10.1287/stsc.2023.0195","url":null,"abstract":"Broadening the organizational purpose of a firm beyond narrow short-term profit maximization may enhance long-term shareholder value. This result obtains when firms generate unpriced externalities and face difficulties in achieving ex ante incentive alignment with stakeholders through contract or have the ex post possibility of altering stakeholders’ perceptions through virtue signaling (i.e., cheap talk or greenwash). As each of these conditions is ubiquitous in practice, discussion of organizational purpose (beyond narrow short-term profit maximization to encompass stakeholder’s harmonious pursuit of a common higher goal or meaning) should shift from why management might pursue it to how managers obtain and maintain it as well as the value creation and distribution implications of doing so. Drawing on a value-based stakeholder theory of strategic management, I argue that attentiveness to the most salient issues of a firm’s most powerful stakeholders related to the attainment of this higher goal more closely aligns stakeholder and shareholder value in the long term, thereby building and sustaining relational contracts with stakeholders. A firm with strong relational contracts across its nexus of stakeholder relationships increases the likelihood of harmony among its stakeholders, including shareholders. An important challenge to realizing this outcome is that of measurement. As a result, research on organizational purpose should turn its attention from legal and moral foundations to empirical research on externalities, stakeholder opinions, and managers’ self-representations of their organization’s purpose. The availability of such data lowers the transaction costs associated with a nexus of relational contracts and enhances societal welfare. History: This paper has been accepted for the Strategy Science Special Issue on Corporate Purpose.","PeriodicalId":45295,"journal":{"name":"Strategy Science","volume":" ","pages":""},"PeriodicalIF":3.9,"publicationDate":"2023-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44720257","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：