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A number of firms seeking to formulate a socially aware “purpose” for their businesses ended up with preachy purpose statements – such as, “To do good” – or self-regarding policy slogans. Other firms seeking to articulate a strategic defining purpose have crafted mission statements that delineate what business they want to be in but fail to address how their statement relates to most decision making.

As firms increasingly find these alternatives unhelpful and unrewarding in practice, some have realized that a declared purpose, no matter how eloquent, cannot serve as a universal strategic guide nor have significant operational impact unless...

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