IDEAS home Printed from https://ideas.repec.org/a/bla/jomstd/v58y2021i3p887-901.html

The Future of the Corporation and the Economics of Purpose

Author

Listed:
  • Colin Mayer

Abstract

This article examines the economic underpinnings of the concept of corporate purpose, which has gained increasing attention from business academics, practitioners and policymakers. It argues that there are fundamental reasons for reconceptualizing the purpose of business in the future which derive from the changing nature of business and the market failures to which it gives rise. It suggests that regulation is proving increasingly inadequate at correcting market failures, and the traditional separation between economic efficiency and distribution that underpins policy formulation is untenable. Instead, the article sets out how appropriately defined notions of corporate purpose can help to promote not only better social outcomes but also enhanced functioning of firms and markets. It describes a set of principles that provide a comprehensive framework for reforming business around credible commitments to corporate purpose. The reformulation of the corporation has profound implications for the macroeconomic performance of economies as well as the microeconomics of firms and markets.

Suggested Citation

  • Colin Mayer, 2021. "The Future of the Corporation and the Economics of Purpose," Journal of Management Studies, Wiley Blackwell, vol. 58(3), pages 887-901, May.
    • Handle: RePEc:bla:jomstd:v:58:y:2021:i:3:p:887-901
    DOI: 10.1111/joms.12660
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joms.12660
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joms.12660?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John C. Coffee Jr, 2017. "Preserving the corporate superego in a time of stress: an essay on ethics and economics," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(2), pages 221-256.
    2. Rebecca Henderson & Eric Van den Steen, 2015. "Why Do Firms Have "Purpose"? The Firm's Role as a Carrier of Identity and Reputation," American Economic Review, American Economic Association, vol. 105(5), pages 326-330, May.
    3. Donal PALCIC & Eoin REEVES & Matti SIEMIATYCKI, 2019. "Performance: The Missing ‘P’ In Ppp Research?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(2), pages 221-226, June.
    4. Bishop, Matthew & Kay, John & Mayer, Colin (ed.), 1994. "Privatization and Economic Performance," OUP Catalogue, Oxford University Press, number 9780198773443.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sumit K. Majumdar, 2008. "Why Privatize? The Decline of Public Ownership in India and its Impact on Industrial Performance," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 9(2), pages 293-336, September.
    2. Alvaro Lleo & Miquel Bastons & Carlos Rey & Fernando Ruiz-Perez, 2021. "Purpose Implementation: Conceptualization and Measurement," Sustainability, MDPI, vol. 13(4), pages 1-19, February.
    3. Tiziana Keller, 1999. "Reviews," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 20(3), pages 483-486, August.
    4. Ina Ganguli & Marieke Huysentruyt & Chloé Le Coq, 2021. "How Do Nascent Social Entrepreneurs Respond to Rewards? A Field Experiment on Motivations in a Grant Competition," Management Science, INFORMS, vol. 67(10), pages 6294-6316, October.
    5. Valasek, Justin, 2018. "Dynamic reform of public institutions: A model of motivated agents and collective reputation," Journal of Public Economics, Elsevier, vol. 168(C), pages 94-108.
    6. Sun-Moon Jung & Jae Yong Shin, 2022. "Social Performance Incentives in Mission-Driven Firms," Management Science, INFORMS, vol. 68(10), pages 7631-7657, October.
    7. Andrew Powell, 1996. "Sobre la reestructuración, regulación y competencia en el sector de servicios públicos: experiencia del Reino Unido y sus implicaciones para América Latina," Research Department Publications 4039, Inter-American Development Bank, Research Department.
    8. A. Goldstein, 1996. "Privatizations and corporate governance in France," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 49(199), pages 455-488.
    9. Anjan V. Thakor, 2023. "Finance research: What are the new frontiers?," The Financial Review, Eastern Finance Association, vol. 58(3), pages 453-462, August.
    10. Andrea Goldstein, 1996. "Privatisations et contrôle des entreprises en France," Revue Économique, Programme National Persée, vol. 47(6), pages 1309-1332.
    11. Sebastian Hauptmeier & Martin Heipertz & Ludger Schuknecht, 2007. "Expenditure Reform in Industrialised Countries: A Case-Study Approach," Fiscal Studies, Institute for Fiscal Studies, vol. 28(3), pages 293-342, September.
    12. Guillaume Gueguen & Claudia Senik, 2023. "Adopting telework: The causal impact of working from home on subjective well‐being," British Journal of Industrial Relations, London School of Economics, vol. 61(4), pages 832-868, December.
    13. Giorgio Mion & Cristian R. Loza Adaui, 2020. "Understanding the purpose of benefit corporations: an empirical study on the Italian case," International Journal of Corporate Social Responsibility, Springer, vol. 5(1), pages 1-15, December.
    14. Luis Ferney Moreno Castillo & William Iván Gallo Aponte & Vivian Cristina Lima López Valle, 2021. "Tecnología, Administración pública y regulación," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1309.
    15. Burbano, Vanessa & Padilla, Nicolas & Meier, Stephan, 2020. "Gender Differences in Preferences for Meaning at Work," IZA Discussion Papers 13053, IZA Network @ LISER.
    16. Mu-Jeung Yang, 2021. "The interdependence imperative: business strategy, complementarities, and economic policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(2), pages 392-415.
    17. Costa, Ericka & Leopizzi, Rossella & Venturelli, Andrea, 2025. "“Purpose and profit”: Economia Aziendale as a paradigm of sustainable business," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 101(C).
    18. Guangrong Dai & E. Susanne Blazek & Signe M. Spencer, 2020. "They who Have a “Why†to Live for: Purpose Facilitates Positive Employment Experience," Proceedings of the 17th International RAIS Conference, June 1-2, 2020 001geb, Research Association for Interdisciplinary Studies.
    19. van Mierlo, J.G.A., 1995. "The quest for public management reform : theory and practice in the case of The Netherlands 1970-1995," Research Memorandum 015, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    20. Lea Cassar & Stephan Meier, 2017. "Intentions for Doing Good Matter for Doing Well: The (Negative) Signaling Value of Prosocial Incentives," NBER Working Papers 24109, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jomstd:v:58:y:2021:i:3:p:887-901. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.