A theory of organizational purpose

Journal article

This article presents a theory of organizational purpose that is normatively neutral and, hence, can be deployed to study firms without prejudging their role in society. The argument employs two philosophical concepts: intentionality and speech acts. The first is used to conceptualize the corporate mind, which is a set of long-lived beliefs about the world-as-it-is and intentions about the world-as-it-will-be that drives organizational activity. Corporate minds allow for complex and valuable forms of social cooperation and, hence, the article argues that the purpose of any organization is to sustain a corporate mind. Five core attributes enable organizations to fulfil this purpose: those are authorization, property rights, the ability to contract, the capacity to deliberate, and conversability. Conversability allows organizations to perform speech acts: that is, to make statements about the corporate mind that are referred to in this article as meta-contractual avowals. The article provides a value-neutral account of corporate governance as the set of devices that ensures the consistency of an organization’s corporate mind, meta-contractual avowals, and authorized actions. This theory sheds light upon the structure of purpose discourse and the relationship between different theories of the firm.

Authors: Morrison, AD; Mota, R

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Academy of Management
• Journal: Academy of Management Review
• Volume: 48
• Issue: 2
• Pages: 203–219
• Publication date: 2021-09-28
• Acceptance date: 2021-09-20
• DOI: 10.5465/amr.2019.0307
• EISSN: 1930-3807
• ISSN: 0363-7425
• Language: English
• Keywords: FFR