The Promises and Perils of Corporate Purpose

Rotman School of Management Working Paper No. 4397276

Kaplan, Sarah (2023), The Promises and Perils of Corporate Purpose, Strategy Science, Forthcoming

33 Pages Posted: 3 Apr 2023

See all articles by Sarah Kaplan

Sarah Kaplan

University of Toronto - Rotman School of Management

Date Written: February 3, 2023

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? And, stepping back, what is corporate purpose anyway? And, 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 de-center the firm (and center the stakeholders) in the practice of corporate purpose? What governance structures are needed to enact corporate purpose? And, what are the implications for a new model of de-centered 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 governance, corporate purpose, stakeholders, corporate social responsibility, theory of the firm, trade-offs

JEL Classification: M10, L2

Suggested Citation

Kaplan, Sarah, The Promises and Perils of Corporate Purpose (February 3, 2023). Rotman School of Management Working Paper No. 4397276, Kaplan, Sarah (2023), The Promises and Perils of Corporate Purpose, Strategy Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4397276 or http://dx.doi.org/10.2139/ssrn.4397276

Sarah Kaplan (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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