Purpose orientation: An emerging theory transforming business for a better world

Why are leaders rethinking their fundamental profit orientation and charting paths to broader strategies with societal goals based on “purpose”? More fundamentally, what exactly is purpose, and how does purpose evolve in organizations? The concept of organizational purpose is fragmented in research and fuzzy in practice. Many organizations also assign a narrow and questionable role for marketing to advance purpose, which masks the evolving nature of marketing. In this research, we leverage a theories-in-use approach to develop an emerging theory of purpose orientation. Interviews with business leaders and archival data reveal the “what,” “why,” and “how” of four mental models leaders adopt at the intersection of business and society, along with corresponding roles for marketing. The elements of purpose map onto leaders’ existential questions to define purpose orientation as a unified organizational logic (why we exist), identity (who we are), and strategy (what we do) for creating transcendent value for stakeholders. We find that purpose orientation is best achieved with a combined inside-out + outside-in approach that extends the prevailing paradigm of market orientation. We also provide insight into drivers of purpose orientation, the pathways through which orientations evolve, and a framework for developing purpose-oriented strategy.