Purpose as the End, Not the Means: From a Theory of Purpose-Dominant Firms to the Dutch Model

Abstract

The Netherlands has quietly become one of the world's most consequential laboratories for reimagining business. It hosts a remarkable concentration of firms deliberately structured to subordinate profit to purpose — Tony's Chocolonely handing its cocoa network to competitors, Dopper working to end the market for its own product, Triodos Bank locking every share inside a mission-guarding foundation and many more — firms that not only survive but often thrive. Prevailing theories of the firm either mischaracterize them as cleverly profit-seeking (long-run "win-win" strategies) or bracket them as exceptions. This talk presents two connected projects on these topics. The first, a paper in revision at Academy of Management Review develops a theory of purpose-dominant firms — a distinct organizational form whose superordinate end is societal and that treats economic viability as a constraint to satisfy, not an objective to maximize — and the arrangements that make this ordering durable; I am looking forward to feedback on the revision in process. The second, a general-audience book in progress, Wealth From Limits, asks what firm-level theory cannot answer: what societal structures, culture and policy does it take to make such firms ordinary? The Netherlands offers in part a unique living answer, and I will preview its themes to invite your feedback and recommendations of Dutch organizations to study and people to interview while I am based in Amsterdam this fall.