ABSTRACT
This chapter examines what is corporate purpose and if one exists, what are the factors that contribute to the distinctive features of an organization's purpose. It considers what corporate purpose is and what its major characteristics are. Experts and practitioners agree that formulating and crafting the purpose is the primary task or function of top management. One major characteristic of corporate purpose is that it embodies the ultimate priority (objective) of the organization. The direction of major decisions and corporate activities can be analyzed to interpret the true purpose of the organization. Three factors have major influence on corporate purpose: the needs of the firm's strategic stakeholders, the contextual environment in which the firm operates, and the cultural beliefs and values of the organization. Strategically managed organizations act purposefully. The chapter ends by presenting a model that ties the formation of corporate purpose to objectives, to decisions, and ultimately to organizational performance.
