Are Corporations Really Moving Toward Humanistic Management? An Attempt to Measure Their Progress

The contemporary dialog surrounding social and environmental crises has strengthened the call for a reconsideration of the capitalist economic system, prompting a reimagining of businesses’ societal roles. This chapter explores the shifting terrain of corporate purpose as a driving force for positive societal change, challenging the traditional shareholder primacy doctrine. After examining influential theoretical frameworks shaping the discourse on corporate purpose, this research unveils the results of an empirical investigation inspired by the 2019 American Business Roundtable’s (BRT) statement on corporate purpose, where numerous prominent American CEOs advocated for a shift toward a stakeholder-oriented approach. In our exercise, the authors employ semantic and cognitive linguistic analyses to measure the coherence between the language in the BRT statement and the content of sustainability reports. This approach aims to offer insights into the alignment or divergence between corporate declarations and actual practices concerning corporate purpose. Empirical findings reveal that corporations emphasizing their purpose in sustainability reports using language resembling that of the BRT statement tend to demonstrate lower implementation scores. Conversely, implementors lean toward using language in sustainability reports that diverges from the BRT statement. These findings suggest a potential disconnection between stated purpose and actual implementation in companies emphasizing corporate purpose in their reports. The study research contributes theoretical insights by exploring how corporations can incorporate purpose-driven practices to promote sustainable growth and societal well-being. It underscores the potential for businesses to play a pivotal role in reshaping the economic landscape and advocates for ongoing research in humanistic management models.