The Purpose of Business in a Post-Pandemic World

The Austrian Science Fund (FWF)

In this project, we investigate why businesses exist. We examine what their purpose is. Traditionally, companies have been providing jobs and paying taxes, and they have equally been generating profits. However, the COVID- 19 pandemic has demonstrated that society requires more than corporate success, and that businesses need to give back to society. In addition, the grand societal challenges of our time including the climate crisis or increasing inequalities support this tendency. We know little though about the purpose of companies, which is why in this project we empirically explore the purpose of business in a broad way. Based on a large sample of traditional companies with classical profit orientation, we seek to understand how corporations define their purpose. In so doing, we are interested in two key aspects. First, we examine to what extent the purpose of business actually aligns mostly with traditional profit-maximization goals and to what extent businesses might adopt a perspective on purpose as a more encompassing mission. Here, we scrutinize whether corporate purpose beyond profits is in fact reflected in business models and how companies work or whether they express it merely in the form of Corporate Social Responsibility (CSR) activities. Second, we analyze why companies adopt a certain purpose and which factors explain a companys mission, considering aspects such as corporate structuring, corporate governance and leadership, industry affiliation, and several other facets. We believe that this project provides the foundation for future research into the relationships between business and society, and how companies might respond to requests for assuming new roles in a post-pandemic world. Practicing managers may find the project helpful for orientation purposes, to map their companies missions against our findings, and to potentially develop new business models with more contemporary notions of purpose.