The purpose effect: connecting hearts, minds and management

Purpose If purpose represents an organization’s reason for being, it should have significant implications for everyone involved, from top executives and leadership teams to employees and external stakeholders. Yet, how purpose connects the critical human and institutional components of an organization remains insufficiently addressed in the literature. The aim of the current text is to advance a circular model of organizational purpose focused on internal stakeholders, namely employees, managers, and leaders. Design/methodology/approach At the corporate level, purpose is typically conceptualized as an organizational attribute, akin to vision, mission, and values. This anthropomorphic framing is useful because it helps scientists and managers understand what purpose is, where it originates, and why it matters. However, attributing individual-level characteristics to an organization has limitations when explaining how purpose is created and how it is intended to influence employees and managers. The current text advances a conceptual model aimed at addressing these limitations. Findings The text first integrates individual purpose with organizational purpose, arguing that the closer the fit between the two, the greater the likelihood that the organization will generate value. It then introduces a cycle that connects organizational actors in the design and implementation of corporate purpose. This circular model seeks to enhance alignment between the purpose of the company’s founders and/or top management team and the individual purposes of employees and other stakeholders. Originality/value As rapid technological change and shifts in the world of work create new complexities for individuals, companies, and society, organizational purpose is emerging as a critical theme; this text contends that a well-defined purpose can offer meaning and direction to all stakeholders, from employees to top management.