Purpose-Driven Companies and Sustainability

33 Pages Posted: 18 Feb 2021 Last revised: 1 Jun 2021

Date Written: February 16, 2021

Abstract

Corporate purpose and business sustainability appear to be intrinsically related ideas, and yet there is little research on the nature of this relationship. The chapter begins with a discussion of purpose and two parallel treatments of the topic. The “corporate purpose” treatment, rooted in early 20th century institutionalism, views purpose as a (or, possibly, the) primary differentiator of firms over markets. The “purpose of the corporation” treatment, rooted in a near century-long debate in law and finance on the role of corporations in society, considers purpose as the appropriate objective for corporations. At the confluence of these two treatments lies important implications for the firm: how purpose is determined, how it influences behavior at both the organizational and employee level, and the associated role of leadership. The chapter then considers how these implications intersect with business sustainability. I suggest mechanisms by which purpose and sustainability might be mutually reinforcing, and the conditions under which this might occur. Each of the sections of this chapter concludes with topics for future research.

Keywords: Corporate purpose, sustainability, ESG

Suggested Citation

Gartenberg, Claudine Madras, Purpose-Driven Companies and Sustainability (February 16, 2021). Available at SSRN: https://ssrn.com/abstract=3786823 or http://dx.doi.org/10.2139/ssrn.3786823

Claudine Madras Gartenberg (Contact Author)

Wharton School, University of Penn ( email )

2035 Steinberg-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104
United States
2158987755 (Phone)

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