If we’re to understand the impact of corporations on collective life, we need to answer what seems like a straightforward question: What’s the purpose of a corporation? Put that question to most people and you’re likely to get a pretty simple answer: corporations exist to maximise profits, and those profits generate wealth for their owners and managers. Full stop. A corporation that professes otherwise is just creating a smokescreen.
The rise of purpose-driven branding
Interestingly, over the past couple of decades, a broader sense of ‘corporate purpose’ has become de rigueur in corporations’ self-portrayals. The notion of purpose now expresses a desire to pursue noble morality, one that melds aspirational principles with profits. Consider statements like the following:
- Coca-Cola: Refresh the world. Make a difference.
- Ford: We are here for one purpose, to help build a better world, where every person is free to move and pursue their dreams.
- Mondelēz International: We empower people to snack right.
- Booz Allen: We empower people – our colleagues, our clients, our communities – to change the world.
- Newmont: To create value and improve lives through sustainable and responsible mining.
- Phillip Morris International: To deliver a smoke-free future.
- Starbucks: As it has been from the beginning, our purpose goes far beyond profit. We believe in the pursuit of doing good.
When we see statements like these, full of vague ‘God terms’ and ambiguous ambitions, our smokescreen cynicism should kick in: they certainly look like attempts to distract from corporate profit-generating activity. Even though, since the dawn of the corporate form, there have been internal and external pressures on corporations’ operations that create pressures for principles alongside profits, critics contend that managers’ perceived legal obligations to shareholders ensure that they’ll always defer to moneymaking.
Many activists, scholars, community members, and employees of corporations would like to imagine alternatives to the smokescreen. They want to help corporations work for principles and profits simultaneously. But to do so, they need to reframe both purpose and the authority that creates it.
A multiplicity of purposes – hidden in plain sight
That reframing would start by thinking of purpose not as whatever those vague statements are trying to project, but as what corporations actually enact in their everyday practices. If we really examined the wide variety of activities that make up a corporation, we’d quickly realise that, despite all those statements portraying purpose as singular, every firm really has multiple purposes. Across their numerous practices, they’re pursuing many aims at once, and those aims aren’t always easy to align. Think about the research university: what is its purpose? Is it pursuing ‘truth’, developing marketable scientific discoveries, providing students with a liberal education, fostering emancipation, promoting superior management and problem solving in society, encouraging scientifically vital basic research, delivering vocationally trained human resources to employers, helping address grand challenges, cultivating artistic expression, generating a profitable sporting enterprise (at least in the US), serving experiences to young people who seek independence from parents, or supporting the careers of staff and faculty?
Of course, it’s all of these – and it’s as true for corporations as it is for universities.
The key question is how that multiplicity is handled. In What Do Corporations Want?: Communicative Capitalism, Corporate Purpose, and a New Theory of the Firm, I explore that question both theoretically and through three detailed case studies. One illustrative example is about a high-tech startup accelerator (or incubator) that ran startup teams through a 12-week programme designed to make them viable enterprises. That design revolved around ‘branding’ the fledgling firms in a way that would attract venture capital investment: the accelerator valued financing above all else. The logic was that attracting investment in the early stages would later lead to getting acquired by a larger company (and not incidentally because the accelerator held an equity stake in its startups; it’d mean a big payoff).
Who gets to decide? Authority as practice
This is, in essence, a question of authority: Who or what gets to ‘author’ the identity and trajectory of the corporation, even one in its very early stages? Who or what determines the decisions a company takes?
When most people define authority, they envision an individual person, someone who occupies an important role or possesses relevant expertise. But in more abstract terms, authority is about the expectations that push decisions, including decisions about purpose(s) – in one direction or another, along with the resources behind that influence. And if it’s about expectations that influence decisions, that means it comes not from inside the heads of individuals, but from the practices we all engage in. It’s those practices that make the organisation what it is – and what it’ll become.
In the accelerator, there was no single individual forcing entrepreneurs to make profit the only metric of success. Across all the advice, feedback, training, mentorship and storytelling the accelerator provided to the startups, the branding was clear: privilege profitability at every decision point; if you’re able to demonstrate the promise of profit, you’ll attract venture capital investment. Through the many communication episodes making up its programme, the accelerator’s branding logic emerged: a focus on profit was made as participants were doing the work designed by the accelerator. And when its startups were branded, the accelerator could project that brand to investors and influencers in the local entrepreneurship scene.
What’s interesting is that entrepreneurs gradually realised that the accelerator’s narrow branding constrained their developing enterprises. They both needed and wanted wild (even impractical) ideas, technical competence, a desire to dethrone the ‘big boys’ in their fields, collaborative competence with an array of partners, and a demonstrable commitment to positive social/environmental change – in one way or another, they realised that all these were part of the work of becoming entrepreneurial. But those aims didn’t fit well with the exclusive push for profit. Entrepreneurs, in other words, saw the importance of multiplicity and were uneasy with the accelerator’s model of authority.
Organised dissonance: Embracing productive tensions
How might companies, including those startups, benefit from multiplicity without fragmenting the organisation? Put simply, we need a different model of authority. We could embrace the notion of organised dissonance, which involves recognising that the multiple purposes serve contrasting values; if, as David Stark and colleagues argue, companies can keep several purposes in play, the resulting clashes can produce new (and often unexpected) combinations of resources. Nontraditional organisational forms can make this more likely, like radically decentralised structures, social purpose and benefit corporations (as well as cooperative and codetermination arrangements), as can efforts to engage in intra-organisational dialogues that ask people to imagine together ‘what else – what more – could we become?’
Reconfiguring authority around purpose multiplicity does not, of course, guarantee that a company will find balance in its pursuit of principles and profits, nor that it’ll help produce a better world. But recognising that many purposes are circulating in our organisations should lead us to understand how the exercise of authority either suppresses or utilises that multiplicity. It should also lead us to recognise that authority is something we all participate in making – and therefore that we can make it differently. The more we reflect on how we can push authority to acknowledge multiplicity, the less likely that the profit motive eclipses the many other purposes animating corporations.
Timothy Kuhn is a Professor in the Department of Communication at the University of Colorado, Boulder.
What Do Corporations Want? by Timothy Kuhnis available on Bristol University Press for £79.99 here.
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