Neither motivation nor statement: A praxis view of the corporate purpose

“Those who ‘know’ but do not act simply do not yet know.”—Wang Yangming (1472-1529)

It’s a desirable wish that firms keep creating solutions for unsettled social needs without causing more social problems. This wish is covered under many organizational and strategic theories. The most recent wave of thought championing this wish is termed “corporate purpose”(Brosch, 2023), growing rapidly in the number of publications over the last five years. The topic of corporate purpose starts with a criticism of the ideology of shareholder primacy (Bartlett & Ghoshal, 1994; Goranova & Ryan, 2022), i.e., firms exist to maximize shareholder value, and is growing with a variety of conceptual experiments on what a firm’s purpose is, such as collective intention (Morrison & Mota, 2023), moral imagination (Rindova & Martins, 2023), prosocial values (Brosch, 2023), the catalyst of social change (Besharov & Mitzinneck, 2023), etc. There are also rising suspicions about the value of this thesis because the problem of inauthenticity is prevalent, i.e., firms can talk the talk but not walk the walk (Davis, 2021; Kaplan, 2023; Westphal, 2023).

However, there is a missing piece in the current landscape of the corporate purpose literature. When it comes to how purpose manifests in practice, most research refers to motivations shared by individual members or prosocial statements written in the reports (two exceptions are Morrison and Mota (2023) and Rindova and Martins (2023). They coverd the ideas that purposes manifest in organizational structure and strategy making respectively). Yet, neither motivation nor statement is a pragmatic concept to understand corporate purpose. In other words, motivations are thoughts and statements are words, but neither of them has a necessary link to the deeds of the firm. This missing piece of acts leaves the current concept of corporate purpose defenseless to the problem of inauthenticity: If a purpose is not manifested in the organization’s practice, does it still matter whether the purpose is genuine or not? Is there any difference between a purpose that is never acted upon and a purpose that never existed?  The persistence of the inauthenticity problem deprives the practical relevance of the corporate purpose thesis. As a result, the fast-growing favor for the topic of corporate purpose will also disappear fast, and the same old problem persists through CSR and ESG movements will again outrun CP (i.e., corporate purpose) and perhaps more good-intentioned acronyms to come.

This paper aims to add pragmatic value to the concept of corporate purpose by combining the fruits of the research on organizational structure and shaping strategy. Instead of regarding the concept and execution of the purpose as separatable parts, I suggest that the purpose of a firm should be further researched as praxis. Praxis is an on-going interplay between thoughts and actions, with the commitment to serve others and search for truth (Smith, 1999). The interplay is ubiquitous: as we plan what to achieve, we adjust how we achieve it, and as we consider our approach, our goals may shift. The current literature has examined the “thoughts”, i.e., the inside-out moral imaginations and intentions and the outside-in social and environmental goals (Almandoz, 2023), but not much on the “actions” and the interplay between them. The research on organizational structure and shaping strategy can provide complementary insights from the organizational structure design and strategy making under uncertainty respectively. Future research opportunities will also be discussed.