Rudy agreed with Anita that the CSR movement is running out of steam.  He put it this way:  CSR is losing its internal and external validity.   Many firms are using CSR as a varnish to send signals to markets for labor, products, and finance.  The signals are too noisy to be valuable.

Rudy sees the field as coalescing around the idea of Corporate Purpose.   Practitioners need guidance from us, he thinks.  There are two prevailing approaches to purpose that are relevant.

1.      The Purpose of the Corporation in Society.   The conversation in this area takes us back to square one – i.e., to times such as after the 1929 crash and the Glass Stegall Act.   There is a profound questioning that is occurring regarding the corporation as an economic agent.

2.      Corporate Purpose as a Source of Competitiveness.  This second area, which is only now emerging, is exciting for Rudy.  He sees the potential in thinking about corporate purpose as a guiding light in the achievement of competitive advantage.

Rudy amplified his description of the second of these two points by describing how corporate purpose, when deeply integrated into the firm, can promote the achievement of competitive advantage through two mechanisms:   stakeholder management and resilience.  He described how hyperperforming firms such as AI leaders may not be as resilient as others because they are not as deeply grounded on human relationships.   This is a researchable question, he argued:  Do firms with deeply embedded relationships do better?

Rudy conjectured that Purpose could provide us with a different language for deep engagement between the firm and its stakeholders.  He saw the possibility of pervasive sources of advantage, and ecological niches that are bigger than historically.   I think what this means is that companies run by decision-makers who are constantly mindful of Purpose may find a broader reception than those that seek transactions that are immediately profitable but less driven by long-term stakeholder benefits.

We then turned to changes in the ways in which companies are perceived in society.  The shareholder capitalism that has dominated corporate culture over the past 40 years may persist but other forms are also likely to emerge.   Alternative forms in which human collaboration is celebrated are likely to be more important.   For these companies, shareholder value maximization is not the goal.   Rudy envisioned that traditional and alternative forms may each be successful in different areas.

In the future, Rudy sees greater volatility.  He believes that average performance will not be as relevant as the durability/resilience of the immediate eco-system of stakeholders that allow the firm to operate.   Corporate social responsibility becomes the fabric that knits together stakeholders.   He also considered that the tech giants are becoming so big that it is difficult to see how they could pivot to this new conceptualization.  Imagine instead sectors such as insurance and education that are faced with competitive threats from AI and elsewhere.  How do organizations in these sectors succeed?  Through investing for resilience through turbulence.   Consider holdup in the classical Williamsonian sense where tech companies raise their prices in a bid to gain a return on our dependency.    How do these kinds of companies fare against more humane, supportive and long-term players that take care of stakeholders more fully?

I asked Rudy about a recent paper in which he and his coauthors framed three types of purpose (see the Resources section for a link).   These are statements, experiences, and decision-making.   Statements of purpose do not bring much value.  Experiences of purpose may drive some engagement, including the reduction of errors.   But decision-making is exciting virgin terrain.   Very few papers explore how companies use purpose to deal with tradeoffs in the ways that stakeholders in their experiences of interaction with the firm.   He described how the embedding of purpose in decision-making can reduce volatility and enhance reliability.

I concluded our conversation by asking Rudy what makes him optimistic.   He talked about the value of integrating into our theories of management ideas from other fields.  He talked about provoking ourselves to think much more clearly about ideas such as shareholder dualcy in responsibility for property and propriety.   He believes that the field of Strategic Management is on the verge of creating constructs that will enable us to see the world differently using ideas from Sociology, Anthropology, and especially Biology.   We are at the dawn of new tools, concepts and perceptions.