Fundamental Elements of Corporate Purpose: Managing Performance in Changing Environments
Keywords:
Performance management systems, Corporate purpose, Micro-foundations, Social situations, Societal development, Dynamic environments, Case studyAbstract
This article examines the micro-foundations of corporate purpose, which is defined as the lasting rationale for a corporations existence in connection to society. Despite the widespread recognition of corporate purpose, its practical application by managers at the operational level continues to offer challenges, particularly in dynamic contexts. Utilizing a field study of a prominent Italian food industry group and relevant literature on the micro foundations of institutions, we investigate the function of a performance management system in facilitating corporate purpose within particular managerial contexts as the organization adapts to external environmental pressures. We illustrate that managers can employ the PMS as a suite of tools and techniques to integrate corporate purpose at the micro-level into actions, decisions, and concrete artifacts that collectively constitute a social context. In this context, the PMS allows managers to recognize chances to implement different aspects of corporate purpose through interactions, consistently refining its significance while ensuring coherence with overarching global development goals
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