A theory of organizational purpose

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