The Power of Purposeful Business

Edmans, A (2023) The Power of Purposeful Business. In: Rethinking Economics Starting from the Commons. Contributions to Economics . Springer International Publishing, pp. 81-90. ISBN 9783031233234 (In Press)

Abstract

Purpose is the corporate buzzword of today, with politicians, the public, and even shareholders calling on businesses to serve wider society. But purpose is also controversial, because companies have a responsibility to deliver returns to investors. These objections are based on a fixed-pie mindset, that serving stakeholders is at the expense of shareholders. This article discusses the power of purpose in growing the pie, creating value for both investors and society—as a result, purpose has a business and financial case, not just a moral and ethical case. It discusses how companies can put purpose into practice, including in difficult times such as a pandemic, and how citizens can play their part in their role as employees and customers.