The problem of the firm is purpose.
Starting a book with a statement like ‘the problem of the firm is purpose’ could be the height of banality. And banality would certainly be the case were this yet another entry in the pop-management genre arguing that an inspiring statement of mission or vision is key to motivating employees and producing corporate success. Or were it pointing to the need for strategic managers to articulate purpose in just the right tone to navigate numerous stakeholder demands. Or were it merely a justification for the sudden pervasiveness of corporate ‘Chief Purpose Officers.’1 Or if it represented the belief that companies need a moral touchstone to prevent irresponsible action or atone for past sins. In any of those cases, the statement would simply repeat well-worn, and increasingly uninteresting, tropes about contemporary corporations. Banal to be sure.
Yet I’d suggest there’s something more stimulating and provocative in that opening line than might appear at first blush. This book argues that purpose tells us more about corporations than any other concept. Purpose is implicated in every element of being, and becoming, a firm: how it structures its operations, establishes boundaries, develops products, selects markets, appeals to (and defends itself from) publics, and how it comes to be considered an ‘it’ in the first place. Purpose is thus a problem – a question, a challenge, a premise, a puzzle, a charge – that demands attention across the many practices that make a corporation.
But purpose has also become the ground upon which battles over corporations’ existence, effects, and legitimacy are waged, particularly in the public eye (Patriotta, 2021).2 One camp in the battles is marked by an adherence to the shareholder value maximization (SVM) thesis: the assertion that firms exist to produce wealth for their shareholders (and are assumed to be required to do so by Western corporate law). Belief in SVM is accompanied by a belief that the pursuit of shareholder returns3 generates better governance practices and organizational success than would be possible without it (Lazonick & O’Sullivan, 2000; Bhagat & Hubbard, 2022). An opposing camp asserts that firms must serve the interests of
Following Milton Friedman (1970), those in the first camp declare that any imperative beyond increasing profits is both detrimental for firms and exceeds what managers have been trained to do, whereas many in the second camp hold that working toward ‘pro-social’ purposes like environmental, social, and governance (ESG) goals should – nay, must – become a widespread corporate obligation.4 Another way of saying this is to note that between the two camps there exists a conceptual gulf in the unit of analysis, where some understand ‘corporate purpose’ to refer to a characteristic or feature of individual firms, whereas others see purpose as a claim about the power of the corporation as an encompassing social institution (Ocasio et al, 2023a). This book provides a tool to understand the struggles over corporate purpose that occurs in that gulf.
Purpose in the for-profit firm captures the essence of an organization’s existence by explaining what value it seeks to create for its stakeholders. In doing so, purpose provides a clear definition of the firm’s intent, creates the ability for stakeholders to identify with, and be inspired by, the firm’s mission, vision, and values, and establishes actionable pathways and an aspirational outcome for the firm’s actions. (p 1847; emphasis in original)
George et al, in other words, attempt to negotiate the divide between the two camps: between purpose as a guide to profitable practice versus purpose
The battle these last few paragraphs illustrate is simultaneously general and specific. The sides disagree about the role of the corporation in producing ‘the good society’ while also making claims on the direction a given company should follow. In other words – and this much may be obvious – arguments about corporate purpose are contests for control over the identity and trajectory of the firm. They’re about the interests written into the corporation’s very being and becoming. In this sense, the battles call upon authority, with its attention to claiming legitimacy in shaping (or authoring) firms’ decisional practices. Making claims to legitimacy in shaping decision-making is more a matter of contending for legitimate influence than of the imposition of will associated with conventional conceptions of power.
In other words, purpose and influence go hand in hand. But, as I’ll argue in the chapters to follow, the way firms’ strategic managers, as well as our theories of the firm, think about purpose provides an illusion of control that blinds them (blinds both the theories and the managers, that is) to the forces of desire shaping authority in corporate practice.
What’s the problem here?
If ‘the problem of the firm is purpose,’ what’s the issue with writers like George et al and their attempts to transcend the two-camp issue? First, as noted, talk of purpose often references only a corporation’s reason for existence. By then turning to stakeholders’ interpretations of claims regarding existence, such models of purpose tend to look outward, largely ignoring the everyday operations – what I framed as ‘every element of being, and becoming, a firm’ – that are essential to understanding the complexity of corporations’ practices and the authority flowing through them. Second, as Herbert Simon (1964) noted six decades ago, talking about organizations as having or possessing purposes involves a reification, an unreflective attribution of agency to a collective. When writers treat purpose as an existential question
As is probably obvious, I see these assumptions – that purpose is an outward-facing claim regarding existence, that organizations are entities built from persons and their interests, that purpose is a straightforward ordering device, and that firms possess a single purpose – as highly dubious when it comes to complex organizations. Each is interested in what purpose does for organizations – what goods it brings – without examining what firms are and become when they organize in the pursuit of purpose. This is the problem created by the question of purpose: attempts to answer it, to transcend the two-camp binary thinking upon which it’s based, are accompanied by simplistic models of organizations and organizing practices. Those simplified models impinge upon the imagination we can bring to bear on the problems corporations encounter (as well as the problems they create).
Carrying forth this line of thinking, the astute reader may have noticed that the opening phrase was not ‘the firm’s problem is its purpose.’ Framing the problem this way would entreat firms (again, typically rendered as uninterrogated entities) and their managers to find a single purpose, understood as a noun, that fuels their action and satisfies their stakeholders. Instead, in proposing that ‘the problem of the firm is purpose,’ I’m suggesting something both more abstract and more interesting: that the central issue around which organizing occurs is the notion of purpose, and purpose cannot be considered a simple noun. And I’ll argue that this condition has become more acute under late capitalism.
As this book will show, corporate purpose can be passion and raison d’être, but it can also be a vague evocation, a branding endeavour, a lingering question, a site of struggle, or a cudgel brandished to force compliance. What purpose is depends on how it’s deployed in practice. Asking ‘what corporations
And then, as mentioned a few paragraphs ago, I’ll take one further step: I’ll show that battles over purpose are really contests for control. Because our corporate practices typically afford strategic managers the capacity to articulate the firm’s purpose, they believe their decisions control the firm. The image of management underlying such a stance is often one of shrewdly guiding the firm across the choppy waters it encounters, with corporate purpose (as frequently embodied by strategic managers) serving as its rudder. I argue that such a metaphor is illusory. It may even be a dangerous delusion: not only is decidability about the firm’s trajectory contested terrain, but forces well beyond the control of the strategic manager participate in the very constitution of the firm and its purpose. Consequently, the very strategic action designed to control the firm via purpose may have sharply ironic – what I’ll call dis/organizational – consequences.
As the chapters to follow show, far from a simple justification for existence and action, a richer vision of purpose problematizes conceptual foundations: it disrupts what we consider firms to be (taking up ontological problems) and argues that we need new tools for sensemaking (epistemological problems). It implies a radical revision of what we consider ‘the firm’ to be. The first step in that re-imagining is to understand, richly, the multiplicity of purpose.
The question of multiplicity
The issue implied in both the battle between the two competing camps and attempts to transcend it, along with my claim that purpose exceeds strategic managers’ efforts to control it, is the neglect of multiplicity. When most people think of corporate purpose – when they ask, ‘what do corporations want?’ – they generally respond in the singular. As mentioned in the preceding section, firms are typically understood as integrated entities possessing a single overriding goal. Though there may be sub-goals, such secondary objectives should fall neatly in line with the aim of driving profit through a particular line of activity in an integrated and clearly bounded entity recognized as a corporation.6
Foxes pursue many ends at the same time and see the world in all its complexity. They are ‘scattered or diffused, moving on many levels,’
says Berlin, never integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle that guides everything. … For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance. (p 91)
This, of course, is a false dilemma. Pursuing multiple aims need not be ‘scattered’ or ineffective, nor is a single fully shared aim a necessity for practice. Nor is it the case that articulating a single overriding vision will generate unanimity across the disparate practices that comprise a firm. Hedgehogs, those laser-focused strategists, may well miss the numerous ways their firms exist beyond the production function (see Drucker, 1946). And in typical corporate governance conversations that invoke the two camps mentioned, shareholders (incidentally, not all firms have a share-based ownership model) tend to be portrayed as motivated only by wealth – a depiction that runs counter to the recognition that their values are as complex as any other person’s7 (Thompson & Davis, 1997; Brennan, 2006). Corporate purposes therefore can, and perhaps must, serve many masters – especially because those masters themselves contain multitudes.
It is not enough, however, to see those many masters as summoning purposes in the plural. This book will go further and argue that purpose is always multiple: purpose is many things, assumes different forms, accomplishes myriad goals, addresses varied values, and is the unstable result of numerous influences – all at once. This multiplicity is the same for firms; in fact, separating firm and purpose on this count may be impossible. This book, and the theory it advances, starts by interrogating the assumptions of a singular logic for purpose. What if corporations, even when they’re made to signal uniformity because of the expectations of stakeholders or a market (shaped, incidentally, by the likes of Collins), are fundamentally many things at once? What if we give up on the notion of a single strategic direction, a unitary purpose?
Using these questions as a point of departure, this book makes another move to challenge a taken-for-granted element of the battles over purpose – the one brought up in the critique of the George et al (2023) reviewed earlier. It poses a simple, perhaps even naïve, question: what are these things we call corporations that they might be said to possess a purpose? And what if the organizations to which we attach purposes aren’t merely aggregations of individuals and their interests, but are far more complex, disorderly, protean – and thus more interesting – than we’ve been led to believe? What if the organizations we treat as ‘things’ are also many things at once?
When we’re talking about the Catholic Church in this context we refer to a number of things. The Catholic Church refers to, at times, the hierarchy, the church authorities. It, at times, refers to the laity, everyone who is baptized Catholic and receives the sacraments and is confirmed to the church. And then at times, it refers to the internal logic, the tradition, the rules of the Catholic Church. It takes all of those things to constitute it. (Bruni & Douthat, 2020)
As one considers how and when the church gets deployed in social practice, why it appears, who or what represents it, and to whom the representations happen, one could certainly add many more facets to what Bruenig counts as ‘the Catholic church,’ including when ‘it’ becomes bound up in political battles, reproduction debates, sexual abuse scandals, intergroup and ethnic violence, family heritage, or spiritual visions. The point is that any singular response to the question put to Bruenig would fail to address the multiplicity of its manifestations.
If we can’t determine unambiguously what the Catholic church is, what hope would we have of knowing what it wants? Responses to questions such as ‘what does the Catholic church want?’ or ‘what is the Catholic church’s purpose?’ thus necessarily imply multiplicity. ‘It’ wants many things, contrasting things, paradoxical things, things that shift across time and context. The task of figuring out what the church wants has been at the core of conflict within and around the church, in the myriad of practices in which ‘the Catholic church’ is invoked, for a couple of millennia. And Bruenig’s attention to constitution is important, for it urges us to reject the presumption of entitativity already mentioned, and instead, to ask how those elements are stitched together in the accomplishment of something recognizable as the church – and also how the seams created by the stitching may challenge its smooth practice. (More on that in Chapter 3.)
Thinking of firms and purposes in this register means understanding them as ontologically multiple (Mol, 2002). Considering only corporate purpose for the time being, multiplicity is neither about options for alternative views, nor is it the expressions of the varied perspectives individuals bring to bear on what the corporation should do. Instead, ontological multiplicity is about how ‘things’ materialize differently – how they come into existence and find recognition – as they are implicated in different activities marked by ‘assemblages’ of objects, people, and discourses (Ehrnström-Fuentes & Böhm, 2023).
That’s the complexity this book takes up. Be warned: it’ll get messy. But also, I hope, provocative.
The stakes
This talk of ontological multiplicity could lead one to think that this book will be yet another esoteric academic exploration of a corporate commonplace – the latest iteration of the tired academic exercise of showing what we thought was real and stable isn’t really so solid once we understand how it’s constructed. Acknowledging that possibility, the urgent question is this: what are the stakes here – why should anyone care about battles over purpose? And why would we need a new conception of the firm to support it?
One answer is that the consequences of the battle mentioned, between advocates of shareholder primacy and stakeholder obligation, are crucial for our shared social future. No book can hope to put the two-camp debate to rest, but a perspective with which to grasp its consequences for firms can offer a useful tool to organization studies scholarship. In other words, understanding what commercial firms want, and how they want, is crucial for diagnosing contemporary social ills and steering toward better futures. Corporations – and not merely large and easily identifiable multinational corporations – are among the most influential actors on the planet. Probably the most influential.8 When encountering any site of influence, it’s essential to be able to explain, and perhaps even predict, its action. To do so, we must know what it wants. And only when we can grasp what (and how) corporations want can we ask the more pointed and pressing question: what’s worth wanting in the first place?
Second is that if purpose is multiple, then there can be no single correct or canonical answer to what a given corporation wants. If its wants aren’t
But we should be under no illusions that the matter is as simple as this. If we put the question to a firm’s chief executive, board of directors, or shareholders, we’d be unlikely to get a unitary answer beyond platitudes about profit or some recounting of a mission statement. But if we broadened out to other stakeholders like employees, customers, or members of communities surrounding the firm’s operations, we’d likely hear an array of contrasting versions of purpose, not all of them aligned with the first set of voices. If purpose is contested terrain, the interesting and important questions arise when these groups come into contact, and potential conflict, around the path(s) to pursue. Efforts to shape organizational trajectories via assertions of purpose are crucial to understanding the trajectories firms pursue.
A third answer to the question of stakes – the ‘so what’ question – is that we cannot reconceptualize firms, cannot add richness to the presumption of entitativity, without knowing the character of problems that purpose presents. Complex organizations want in ways that cannot be reduced to the desires of individuals; their wanting exceeds persons’ abilities to influence their trajectories. Corporations are more than simply tools to carry humans’ yearnings; comprehending their practices requires that we attend to a much wider array of forces brought together in complex practices of organizing.
In the organization studies literature, steering an organization toward its purpose is typically understood as a managerial problem. Capable leaders, often trained at our best business schools, comprehend the economic realities, production trends, and models of human motivation to enable firms to accomplish their aims. Those business schools, however, frame ‘the firm’ as a coherent entity, a substance that has an obvious existence and unquestioned boundaries. And ‘its’ singular purpose, in turn, is generally understood as an outgrowth of the ‘nature’ of a business enterprise that must respond to seemingly objective realities and trends (Mayer, 2021). It is certainly not wrong to see the problem of purpose and associated models of firms as the realm of management, especially given the history of the corporate form, but the baggage associated with doing so limits our collective conceptual gaze and re-inscribes the battle discussed previously.
In other words, as Morrison and Mota (2023) argue in another recent model of organizational purpose, our vocabulary regarding purpose is limited
The chapters that follow outline how the problem of purpose is a communicative concern, but not in the sense most think about communication. In bringing together thinking on organizational communication, new materialist theorizing, strategic management, and authority, the book presents a substantial re-imagining of the firm, which both situates it firmly within late capitalism and presents a novel vision of these prominent organizational forms.
Illustrating purpose multiplicity
To activate that reconceptualization, I offer two relatively brief cases of firms struggling with the emergence of corporate purpose in the face of multiplicity. Let’s begin this at the beginning.
The British East India Company
When thinking about firms, ‘the beginning’ is often represented by the British East India Company (BEIC), generally understood as the world’s first multinational corporation.9 Starting its life on the last day of 1600 with a charter granted by Queen Elizabeth – this was back when states and monarchs granted charters to support specific remits desirable to the polity – what became known as ‘John Company’ presents a captivating tale for its mix of commerce, colonialism, and empire.
What was the company’s purpose? The BEIC’s original aim, at least as articulated by a small group of wealthy London merchants and adventurers who wrote its charter, was to satisfy (and foster, and thus profit from) England’s appetite for goods from afar. Over its history, however, that purpose shifted as the BEIC became a colossus, engaging in half the world’s international trade in the 18th and 19th centuries (Farrington, 2002). It overtook the market first entered by the Dutch East India Company, founded in 1602, which was the first to disrupt the trade in spices then controlled by Portugal. But when it began, the BEIC’s original remit was the Indian subcontinent and surrounding regions, where representatives traded for the spices, tea, sugar, pepper, textiles, and other commodities for which Britons
Knowing England’s longstanding penchant for conquest, it should come as no surprise that the BEIC embodied the moral quandaries associated with British imperialism. As its trade grew in India, the company gradually allowed executives on the ground to engage in private trading alongside the company’s business. The ability to control local trading practices and simultaneously bend them to the executive’s personal benefit generated impressive wealth for high-level employees stationed abroad, but ‘became one of a series of cancers that gnawed at the Company’s ethical fibre’ (Robins, 2012, p 86). The tension between employee self-interest and the good of the collective was not unique to the world’s first real joint stock company, but made the drive for domination over local economies a personal mission that became embedded in the company’s routine operations. A second purpose thus emerged as a companion to the purpose articulated in its charter.
One of the company’s other cancers, and another source of purpose multiplicity, was its opium trade. Although British consumers became enamored with the Chinese goods like tea, silk, and porcelain made available via the BEIC, Chinese authorities had little interest in British goods. Those authorities went so far as to restrict European trading locations to a single port. Yet the BEIC found a lever in opium, which consumers addictively demanded but which was unquestionably outlawed in China. The company’s experience with corruption served the BEIC well, however: produced in India under a monopoly the BEIC won in 1773 (a monopoly that earned the company a tremendous profit margin well into the 1830s), the company smuggled opium to private traders in Canton, where local officials were bribed to ignore the cargo. Chinese authorities sought to extinguish the smuggling, but the British military started an all-out war with China to open the country to traders like the BEIC. John Company eventually extricated itself from the opium trade, but whether this was the result of its leaders’ moral conscience or powerful opium competitors is not clear (Blake, 1999). What is well known, however, is the tremendous toll opium addiction took on China (Zheng, 2003) and the enormous benefit the opium trade had on the company’s coffers (Robins, 2012). In the wake of two opium wars in the 1800s, England only outlawed its trade in 1907.
Returning to the profiteering of local BEIC authorities stationed in India, London executives at one point attempted to extinguish the practice. But after the 1757 Battle of Plassey (Palashi), where the company’s own quasi-military forces (which at one point outnumbered the British military) took control of Bengal, there was no stopping the company’s incursion. The BEIC’s shareholders in England, when polled by governor-general (CEO) Robert Clive, agreed that the battle was essential for the company’s continued existence. Because the company’s existence, and the colonization that became
This depiction provides a very small part of a very complicated story, one with immense implications for the foundations of modern capitalism – not to mention for the lives colonized by the BEIC’s commercial and military forces. Unfolding over nearly three centuries, the BEIC lived far longer than anyone with a 21st-century vantage point could expect. The issue at the core of this tale is not one of longevity, however, but dis/order. Specifically, why did a company with ambitions to cultivate commerce and culture – a company that had access to all the resources needed to match its ambitions – find it so difficult to control the practices in which it engaged? Its managerial employees seemed similar to one another in background and aspiration, its financial and military capacities were vast, its partners and competitors were clear; why then did such disorder and accretion of purpose ensue?
One possibility lies in the internal processes of the firm. A key source of the BEIC’s influence was its unique financial structure. This is generally regarded as the first joint stock ownership company offering limited liability. The purchase of shares in the company provided the capital necessary to fund the company’s excursions, and when boats and men failed to return, when the citizenry of India revolted, and when the company’s fortunes reversed, the owners of BEIC stock were only on the hook for the prices of the shares they purchased. This financial arrangement provided the company with an allied purpose in providing returns to investors. It also gave the BEIC an easily identifiable decisional doctrine to guide its trajectory. Because the shares were available on London financial markets as commodities that could be bought and sold, shareholders began to pressure the company’s decision-makers to engage in practices that increased the value of those shares. In due course, the company took as one of its purposes the ensuring of shareholders’ long-term financial returns. Although it’s hardly startling from a 21st-century vantage point, that the first company owned by a broad set of changing shareholders experienced competitions over authority – that shareholders’ claims to property were translated into assertions of control over the firm’s purpose – was rather surprising to observers at the time.
Although the BEIC case is fascinating, one could reasonably argue that it is in no way representative of contemporary firms. So let’s consider a case that’s a bit more current in both time and topic. This one is the South African mining company Anglo American, the largest private sector employer on the African continent and the third largest mining company in the world (it operates in 65 countries across six continents). The company was founded in Johannesburg in 1917 but moved its headquarters to London in 1999 after a merger. Dinah Rajak’s (2011) book In Good Company offers a compelling account of how the firm’s corporate social responsibility (CSR) initiatives allowed it to accumulate and exercise power because those programs drew on a relatively new logic of authority in the socioeconomic milieu. Rajak notes that trans-national corporations like this ‘require constant renewal, need constantly to be remade, seeking not just new sources of legitimacy but new sources of power, new avenues of practice in order to sustain and expand their operations’ (p 17). Offering an ability to shift its claims of purpose, CSR provided those sources of legitimacy and power.
In the 1990s, corporations encountered a new force influencing their operations, one grounded in the second camp on purpose mentioned previously. In no small part a response to the dominance of Friedman-esque beliefs in the preeminence of profit, a new moral code of global corporate citizenship emerged, where firms were understood to have ‘conscience, culture, DNA, and even heart’ (Rajak, 2011, p 36). Logics of a competitive marketplace were still pervasive but began to be accompanied by claims that morality is at the centre of firms’ existence – a claim of an overarching purpose. Rajak terms this ‘responsible competitiveness,’ a hybrid that retains the supremacy of marketplace logics while asserting that what counts as ‘“value” can be broadened to include sustainability and social welfare, so making social responsibility itself subject to competitive rigours of the market’ (p 10). These hybrid logics of CSR were articulated at first globally, by entities like the UN Global Compact, CSR conferences, a network of NGOs, and (to a lesser extent) governments. If corporations were to be moral citizens, they needed to embrace this conception of value and show how their work addressed pressing social problems like global poverty and health disparities.
Such a model of corporate responsibility was taken up enthusiastically by Anglo American in both its pronouncements and its practices. Unsurprisingly, however, CSR was complicated for a large multinational in extractive industries. To illustrate, Rajak relates the company’s HIV/AIDS initiatives, noting that HIV prevalence was higher (20–25 per cent of the workforce) in mining than other industries, in part because of the vulnerability of the large number of impoverished migrant workers. In the context of a lack
One way the company controlled the distribution of the HIV/AIDS treatments was to set up, at a large platinum mine in Rustenburg, South Africa, compounds with dormitories designed to prevent the miners – almost exclusively men – from engaging in risky sexual behaviour in the informal settlements surrounding the mine. (Although company housing has been common in many settings, this was new for Anglo American.) The company encouraged workers, even those with families, to live in these dormitories and to reject the informal settlements beyond the fences enclosing the company’s property. Workers living in the dormitories enjoyed regular health monitoring and maintenance; ‘unclean’ and threatening outsiders (such as prostitutes) could also be kept at bay. HIV was, accordingly, portrayed as a threat existing beyond the firm’s boundaries, one the company’s managers worked to keep outside. The CSR work of HIV/AIDS prevention involved, then, interesting boundary work: the miners’ health was claimed as Anglo American’s responsibility, and boundary enforcement protected the productive capacity of these resources.
Initiatives like this allowed Anglo American to portray itself as a champion of public health and human rights in locations where those CSR logics were promulgated. Rajak noted that its ‘narratives present the company as an engine of growth and industry, an agent of empowerment, and midwife of democracy. … CSR past and present is thus mobilised to create a history which purifies the past and reinvents the company’ (p 67). As a mining firm rooted in South Africa, Anglo American’s present could not be divorced from its colonial past and its founding in apartheid. CSR aids in purifying the firm, proffering a penance for past sins. Rajak’s implication, then, is that this foray into CSR may have been mere ‘purpose-washing.’
Another example Rajak provides on this theme is that the company developed ‘Empowerment Deals’ in response to the post-apartheid government’s edict to generate increased market share for Black-owned-and-managed companies. This initiative won the company political capital in South Africa, though it was likely associated with corrupt governmental rent-seeking behaviour that capitalizes on firms’ CSR activities exposed by Bayart (2000) and documented, in Tanzania, by Nilsson (2023). Interestingly, Anglo American’s portrayal of these deals downplayed their origins as governmental mandates; the firm framed them instead as evidence that
Perhaps obviously, CSR and empowerment were not explicit parts of the firm’s purpose at its founding. At the time of this writing, the company’s publicly stated purpose is ‘re-imagining mining to improve people’s lives’ (https://www.angloamerican.com/about-us/our-purpose), yet Rajak notes that no evidence of such a pro-social mission was present before that 1990s CSR turn. One can thus question, as Rajak does, the sincerity of the firm’s commitment, especially given the need to navigate a complex set of financial and regulatory institutions. But doing so would require that we be able to ascertain the real purpose and, thus, to be able to identify precisely where sincerity resides. Were we to embark on such an effort to definitively locate corporate purpose, we would also want to acknowledge that CSR initiatives unfold in fits and starts over time, and what begin as ‘empty’ promises and tentative commitments can gain purchase later (Christensen et al, 2013). And if we reject simple assertions about organizational essences, we might see firms like Anglo American as exhibiting, and inhabiting, multiple purposes, multiple ways in which the company might be taken to be ‘sincere.’ Corporate wanting is, in other words, multiple, shifting, and not easily determinable. Perhaps a better wanting question in this case, then, could be this: what attachments matter when a firm expresses a desire to be a ‘good company’?
CSR thus provides [trans-national corporations] with a platform to forge alliances with diverse actors in the development arena (including many who previously would have possessed divergent agendas and conflicting ideologies), enabling them to incorporate social challenges and counter-hegemonic voices, and pave the way for development to be reframed according to their interests. (p 62)
The discourse of responsible competitiveness and its injunction for firms to address both local and global problems enabled the extension of Anglo American’s boundaries, though these extensions were not always the intentional choices of the company’s strategic management. Expansion
The lessons of the cases and the question of authority
The BEIC and Anglo American cases illustrate something important about corporate purpose. As suggested, purpose is neither unitary nor monolithic; it is ontologically multiple. Purpose is multiple in the sense that it takes different forms, manifests differently in different practices, and depends on the position of those relating to it at a given moment in a flow of activity. The purpose of these companies surely felt very different to the colonized Indians and the dormitory-dwelling miners than it did to shareholders, British royalty, South African government representatives, or CSR advocates. These groups would have provided sharply contrasting interpretations of what the corporation wanted. And the shifting aims to which each of those groups put these firms also shaped the meanings they made of them. Purpose was multiple, too, in its incarnations: it appeared in formal charters, in pronouncements that responded to new social expectations, on the bodies of those representing it and subject to it, and in practices that evinced priorities not always reflected in declarations from the firms’ leaders.
Further, in these cases, purpose was not merely the product of human minds. The allure of Indian and Chinese goods, the concealing of valuable metals and gemstones under layers of barely penetrable earth, the addictive quality of opium and tea, generations of oppression of nonwhite bodies, and the menace of a deadly virus summoned corporate wanting. Purpose, as the reason(s) for these firms’ existence, shifted over time in response to the pursuit of profit, the establishment of boundaries, and the modes of internal operation (including the influence of obstinate shareholders, CSR demands, and unruly bodies and material artifacts). And at least in the case of the BEIC, the spiraling of its purposes beyond any simple control led to the firm’s eventual expiration.
Ascertaining a firm’s purpose – what a corporation wants – is not, therefore, like the fable of the blind men and the elephant, where we are to conclude that each man’s limited access to sensorial data could be triangulated were there only a formula (or a person) to bring the observations together. Such a stance would assert that the purpose of the BEIC and Anglo American could be discovered if we could only get all the human sensemakers in a room and find some common ground across them. Ontological multiplicity argues, in
Accordingly, statements of purpose purporting to characterize ‘the’ firm, those claiming that it’s possible to identify the one real reason a firm exists, are political stories told for partisan aims. One important aim, when purpose is defined by those claiming to speak on behalf of the firm as a whole, is the coordination of activity under a single banner (a form of the aforementioned managerial control). But another can be to solidify the relations of authority that privilege some parties over others in practices that invoke ‘the’ corporation – where capital flows more to some locations than others. Yet there is no a priori reason to believe that the story of purpose is only the one told by strategic managers, since an aim underlying counter-narratives can also be to marshal forces for a movement to challenge corporate influence toward social change. How purpose becomes known – how it is operationalized – is thus a hermeneutic matter that involves ‘reading’ the practices associated with a given corporation and ascertaining what it ‘wants’ and where it’s going. But no single reading can ever be true. If strategic managers endeavour to control the being and becoming of the firm by articulating a unitary corporate purpose, they are very likely to meet substantial disappointment. The BEIC and Anglo American cases show a myriad of forces beyond human actors and the multiplicity of materializations of purpose, which suggest that achieving managerial control over corporate identity and trajectory may be at best an illusion.
Another way of saying this is to hold that what the BEIC and Anglo American wanted was never singular – but neither were the practices that became identified as the entities ‘The British East India Company’ and ‘Anglo American.’ Wanting was always a product of the practices and decisions falling under the mantle of ‘the’ firm. Those practices and decisions were embedded in actors’ reflexive understandings of the firm, selections of insides and outsides, and models of control over operations (and the bodies involved). These elements thus speak to the notion of authority.
In the typical Weberian rendering of authority, the concept is attached to a person with a position, knowledge, or magnetism; in the reinterpretation by Follett and Barnard, attention turned to the power of messages to convey orders in the context of an agreeable relationship between leaders and followers. What the cases reveal is that the trajectories of purpose, and thus of these firms, were guided by (a) conceptions of value, here calculated in the register of capital accumulation, and (b) visions of property, both in terms of their assertions of control over elements of the world (including persons) and their beliefs about what can be taken to be ‘proper’ organizational objectives.
Why a theory of the firm? The stakes, take 2
This book is aimed primarily at scholars of organizations, those who identify with the field called organization studies (OS).11 This is a broad and interdisciplinary field; despite a few isolated efforts (such as Pirson et al, 2022) it has kept an arms-length distance from theories of the firm. Those theories develop answers to four key questions: why firms exist, how they operate internally, where their boundaries lie, and how they secure profitability (or competitive advantage) in the market. Theories pursuing these issues tend to be dominated by OS’s distant cousins in the fields of strategic management and managerial economics. Indeed, Davis and De Witt (2021) acknowledge the divide between the fields, suggesting that organization theorists are interested in why firms exhibit the forms and behaviours they do, whereas strategic management and economics scholars more narrowly attempt to tie particular features of the firm to its economic performance. Consequently, classics of the OS field are ignored in most theories of the firm, and strategic management and economics thinking has made little inroads on the questions regarding the dynamics and impacts of organizing asked by OS scholars. Because strategic management’s explanations for firm performance generally point to either industry categories or firm-specific configurations of resources, theories of the firm generally sidestep attention to the practices that (re)establish firms’ existence while also disregarding disputes around performance assessment.
As I note in Chapter 2, theories of the firm weren’t intended for OS scholars, particularly not those with a critical bent. They were first imagined by economists, the sort whose models of organization strip away the fascinating complexity of organizing. They were then taken up by strategic management thinkers and legal scholars, many of whom were strongly influenced by economic modes of reasoning. Across these visions of the firm, a particular sort of theory took root: the sort that sees the world as patterned by forces beyond our control, one where the role of theory is to articulate generalizable claims about the relationships between inputs and outputs. These are normative theories, the sort populated by should statements and straightforward ‘if-then’ reasoning aimed at seemingly unambiguous performance outcomes. They’re useful when the aim is advancing unequivocal assertions about firm ownership and governance or about how to adjudicate different groups’ claims on the firm’s assets.
Scholars who hold complexity, uncertainty, and contradiction as key planks of the world; those who ask how rather than what questions; and those who ask theory to lead simultaneously to novel insight and creative action tend to find little of value in existing theories of the firm. Those scholars may know about the practical impact, even dominance, of theories of the firm in law, economics, and corporate governance, but then again these theories are involved in a game that doesn’t interest them. These are the scholars of organization found in many fields; though many of them are drawn to the study of corporations, the questions they ask tend to be about the social consequences underlying firms’ contemporary configurations and the consequences of organizing practices.
For these OS scholars, ignoring theories of the firm is a missed opportunity. As the preceding paragraph noted, theories of the firm form the contours of both corporate law and managerial responsibilities (Deakin, 2017); neglecting these vital influences on organizational practice leaves a significant gap in our conceptions of firms as complex and precarious organizations. For instance, the literature on firms as potential moral agents – a key set of issues for those in OS who study CSR, corporate power, and the like – hinges on what we conceive these collectives to be and the legitimacy of the purposes to which they’re put (Boatright, 1996; Rhee, 2008; Orts & Smith, 2017). Likewise, research on knowledge, learning, and innovation generally builds on conceptions of internal organizational practice, models of collective performance, and assumptions about boundaries that are driven by theories of the firm. And scholars throughout OS acknowledge that those in positions of authority draw boundaries and configure internal operations in ways that influence work practices and workers’ identity formation, privileging some interests over others.
My aim in this book is to reclaim the theory of the firm for the scholars who puzzle over the mysteries of organization – where ‘organization’ can be both noun and verb. We OS scholars are just as interested in the questions addressed by theories of the firm as are those in economics and strategic management, though we tend to approach them from rather different angles and tend to eschew simple normative claims. Those issues (again, why firms exist, how they operate internally, where their boundaries lie, and how they secure profitability) have long been core to organization theory, even if they’re not always stated in these terms. This book provides OS scholars the outline of a framework that can, over time, offer an alternative to the constrained view of existing theories of the firm. Offering perspectives on the four core
Strictly speaking, then, those who are curious about corporations qua organizations don’t need a theory of the firm. They can examine the four questions without any such theory. But a framework that ties those concerns together, one that provides a logic for thinking through firms’ complexities and differences, can help with articulating the value of their work for audiences outside their conventional domains. My hope is that such a framework can induce imagination in how we understand firms as ongoing communication practices, and that the unconventional connections it draws between purpose and authority produce new templates for examining commercial firms.
Preview of the book
Pragmatists would question the question in this book’s title. They’d assert that the meaning of this question, as is the case with all questions, is shaped by the objectives to which we put it. Like firms and their purposes, the meaning of the question ‘what do corporations want?’ is ontologically multiple. One could follow existing theories of the firm in articulating paths toward greater operational efficiency and effectiveness, replicating the claims of the administratively focused research that has a long tradition in the strategic management and economic arms of OS. This move is front and centre in thinking on corporate purpose, where the aim is to enumerate the (positively coded) outcomes a compelling purpose brings, such as infusing work with meaning, providing resources for public accountability, or clarifying strategic direction (Lee et al, 2023; Pratt & Hedden, 2023).
In contrast, I position the theory developed in this book as framing the question in critical terms. Existing theories of the firm are not known for being critical-theoretical tools. They’re an especially uncomfortable fit with critical projects that understand organizations as political systems and that see the task of scholarship as uncovering unjust exercises of power emanating from deep ideological structures (for overviews of this thinking, see Mumby, 1987 and Alvesson & Deetz, 2006). Yet if ‘critical’ is today less about ideology critique – a modernist discourse of suspicion that posits sedimented social structures as the source of injustice (Mumby, 1997) – than it is about communicative practice (Fournier & Grey, 2000; Del Fa & Vásquez, 2020); if it’s about denaturalizing and decolonizing the status quo with an anti-performative intent in an effort to generate heterotopic and productive alternatives, rather than merely critiquing unjustified exercises of power (Kuhn, 2021; Loacker, 2021); if it’s thus about the subtle shift from negative critiques of managerial power toward affirmative and imaginative engagement with alternative organizational futures that encode historical asymmetries in struggles over
A key argument of the book is that a relatively new development in the operation of capitalism – what I’ll call communicative capitalism – makes corporations want (that is, makes them pursue purpose) in ways that interfere with a demand for new ‘becomings’ (the awkward term is meant to signal multiplicity and emergence, as I’ll discuss more in Chapter 4). The central point of the book is that the forces of communicative capitalism advance conceptions of purpose that constrain the very aims from which those purposes emanate. A novel tool for imagination is required to enable alternative becomings – and such a tool can be found by understanding communication far differently than OS scholars typically do.
To pursue this argument, Chapter 1 overviews the dramatic shifts in the practices of capitalism that make it revolve around communication practices. I term these affect capture, platformization, and branding, and suggest that new logics of capital accumulation, new demands for purpose multiplicity, and new requisites for examinations of for-profit firms result from these transformations.
Chapter 2 turns to existing theories of these for-profit firms, those that address the four questions posed earlier. Profiling what are called governance and competence approaches to theories of the firm, the chapter traces their varieties and assesses their adequacy for grasping the problems of purpose under communicative capitalism. (As one might imagine, it finds them lacking.)
Chapter 3 then develops a conceptual framework upon which an alternative may be built. It brings together theory that understands communication to be constitutive of organizations and organizing practices with theory drawing on new materialism(s) that portrays all practices as sociomaterial. It argues that the intersection of these bodies of thought connect at French philosopher Gilles Deleuze, whose work provides provocative images that induce the sort of imagination necessary to respond to the problem of corporate purpose.
In Chapter 4, I sketch out a distinctly Communicative Theory of the Firm (CTF) based on Chapter 3’s framework. (I know this is an awfully long way into a book for the key theoretical contribution to be found, but a good deal of preparatory material is needed before this crucial chapter.) The theory presented there both develops responses to the four theory of the firm questions and proposes a model for analysing firms’ wanting. In
Chapter 5 presents the case of a large airline’s attempt to develop (or reclaim) a dynamic customer service capability, but its practices of boundarying made the performance of that capability brittle. Chapter 6 concerns a high-tech startup accelerator that advanced a model of value based around branding for the fledgling ventures it nurtured, one that worked at cross purposes with the model of value the accelerator – as a startup firm itself – practiced. And Chapter 7 is about Certified Benefit CorporationsTM, a relatively new development in corporate form that attempts to meld people, planet, and profits in a model of corporate purpose. The form of binding fostered by the ‘B Corp’ platform, though advocating community responsibility, ironically carried the potential for what I call collective atomization as individual firms pursued their wants.
The final chapter, Chapter 8, concludes the book by reiterating the overall argument of the CTF (simplifying it via a set of bullet points) and suggesting possibilities for investigations led by it. Drawing upon the theme of ontological multiplicity and the associated problem of purpose, this closing chapter asserts that the theory developed in the pages between here and there presents a novel way to make sense of what (and how) corporations want – one that promises to bear fruit for analysts looking for the sort of critical intervention a communicative new materialism can provide.
Notes
A 2021 survey of 212 large companies, across several industries, by the consulting firm Deloitte found that 44 per cent had executive-level officers focused on the notion of purpose, including Chief Purpose and Chief Sustainability officers (Beery et al, 2022).
Mocsary (2016) sees the issue as recurrent: ‘Every few decades, there erupt political and academic debates over the proper nature and purpose of the corporation’ (p 1320).
Incidentally, firms rarely pursue (or even conceptualize) maximization per se; it’s much more frequently simply higher share prices that count as SVM.
A common move in this second camp, however, is a sort of hollow normativism, one that fails to follow the should claims of the ESG advocates with answers to the how questions that inevitably arise (see Greenfield, 2007). In this second camp, there is no shortage of calls for an overhaul of corporate practices and corporate law, but those calls are accompanied by precious little understanding of the complexities of corporations’ wanting.
In framing the question this way, there is the risk of attributing a typically human capability, wanting, to a nonhuman called the corporation, similar to the response that Talcott Parsons encountered when he asserted that social systems have specific needs and that they summon action that responds to them. Critics have argued that Parsons committed an inappropriate anthropomorphism – one that the question ‘what do corporations want’
In the case of the Chandlerian (1962) multidivisional firm, each sub-unit can have its own purpose, so long as it contributes to the larger firm’s performance and does not encroach on other units’ business; this stance merely aggregates those individual purposes.
For those who insist that firms are akin to persons, the lack of interrogation of the multiplicity of human individuals is stunning. Thinkers like Hacking (1995) and Rose (1999) clearly document that personality is a historical project of a range of discursive practices that, over the years, has engaged variously with the likelihood of multiplicity. Yet almost all scholars of organization, particularly those to be discussed in Chapter 2, ignore the possibility of multiplicity.
Davis (2016a, b, c) argues that an emphasis on corporations as powerful entities may increasingly be misguided, as technological developments and new modes of coordination make our existing conceptions of firms outdated. This future may come to pass, but it’s not here yet; corporations of all stripes and sizes continue to exert tremendous influence over our collective becomings.
We should be skeptical about attributing too much causal power to ‘firsts’ like the BEIC. In a 1971 lecture, Foucault, quoting Nietzsche, cautioned, ‘History also teaches how to laugh at the solemnities of the origin. The lofty origin is no more than “a metaphysical extension which arises from the belief that things are most precious and essential at the moment of birth”’ (1977, p 143). Origins are stories that enable the punctuation of streams of experience, but such punctuations often are the result of sectional interests. Importantly, some historians, like Magnuson (2022) see the origins occurring much earlier, dating as far back as the Roman empire.
In 2004, the BEIC was resurrected when the name ‘British East India Company’ was purchased and re-incorporated by two British and one Indian entrepreneur. It now consults other firms with sourcing and logistics challenges; on its website, the company outlines a purpose similar to the vision George et al (2023) urge, one that promises both profit and social responsibility – a set of claims that contrast with its predecessor of the same name.
I use this term as a catch-all to encompass many associated conglomerations of thought, some of which have designations associated with professional associations, including organization theory, organization and management theory, organizational behaviour, industrial and organizational psychology, and organizational communication. Understandably, nuance is lost in collapsing these loose affiliations, but the aim here is to address several lines of organization-oriented scholarship not accustomed to thinking in terms of theories of the firm – and then to articulate an alternative.
