People (i.e., individuals) have goals; collectivities of people do not.
(Cyert and March Reference Cyert and March1963, 26)
Few discussions of organization theory manage to get along without introducing some concept of “organizational goal.”
(Simon Reference Simon1964, 2)
Organizations having goals is most often taken as a self-evident, definitional part of what makes an organization (Aldrich Reference Aldrich1979; March and Simon Reference March, Simon, March and Herbert1993; Parsons Reference Parsons1960; Schein Reference Schein1965; Stinchcombe Reference Stinchcombe and March1965). Simultaneously, microstructural approaches to organizations (Cohen et al. Reference Cohen, March and Olsen1972; March and Simon Reference March and Simon1958; Puranam Reference Puranam2018) that rely on methodological individualism (Arrow Reference Arrow1994; Felin and Foss Reference Felin and Foss2004) are skeptical of attributing goals to the organization as a whole. This presents a fundamental microfoundational problem (Linder and Foss Reference Linder and Foss2018, 39): “Since only individuals can truly have goals, what sense can we make of goals that are placed at the organizational level?” Furthermore, how can we explain the normative power that organizational goals seemingly have over how organizational members ought to act? Building on research on social ontology (List and Pettit Reference List and Pettit2013; Martela Reference Martela2023; Searle Reference Searle2010; Tuomela Reference Tuomela2013), the present article aims to explain the existence and normative power of organizational goals and how they emerge from the shared beliefs of the organizational members, giving rise to ontologically subjective but epistemologically independent goals that guide and explain the behavior of the members. While much of business ethics debates what the purpose of the organization should be (e.g., Hsieh Reference Hsieh2015; Freeman and Phillips Reference Freeman and Phillips2002) and what normative implications group agency has (e.g., Mota and Morrison Reference Mota and Morrison2025; Rönnegard Reference Rönnegard2024), the present article aims to explain how such a purpose exists in the first place and how it is able to align the actions of organizational members to the degree of giving rise to group agency.
Social ontology has increasingly been applied to organizational research, for example, to examine how entrepreneurial opportunities exist (McBride and Wuebker Reference McBride and Wuebker2022), what the status of alternative currencies is (Larue et al. Reference Larue, Meyer, Hudon and Sandberg2022), and what the constituting elements are through which firms and corporations are created (Chassagnon Reference Chassagnon2014; Lawson Reference Lawson2015; Martins Reference Martins2018b). However, to my knowledge, no previous work has examined organizational goals from a social ontology point of view (except a brief commentary by Martela Reference Martela2023 that lacked a discussion of deontic powers at play). Overall, the present work highlights a central dilemma that methodological individualism and microstructural approaches to organizations suffer from: Talking about organizational goals while not being able to explain how such collective goals exist and move people to act. To respond to this dilemma, I use social ontology to explain 1) how such goals exist; 2) how they gain their normative status and move people to act; 3) how the deontic powers within the organization ensure that members are either inspired, obliged, or channeled to align their actions with the organizational goal; and 4) how this alignment gives rise to the organization exhibiting group agency, making it morally responsible for its actions.
THE MICROSTRUCTURAL CHALLENGE: HOW TO ACCOUNT FOR THE EXISTENCE OF ORGANIZATIONAL GOALS?
March and Simon (Reference March, Simon, March and Herbert1993, 2) famously defined organizations “as systems of coordinated action among individuals and groups whose preferences, information, interests or knowledge differ.” Organizations come into existence when (1) multiple independent agents (2) come to have a shared goal (3) that they pursue through coordinated action (March and Simon Reference March and Simon1958; Puranam et al. Reference Puranam, Alexy and Reitzig2014; Schein Reference Schein1965; Scott Reference Scott1981). Seeing organizations as “assemblages of interacting human beings” (March and Simon Reference March and Simon1958, 4), constituted by a number of independent agents who all have their own interests and points of view (Puranam et al. Reference Puranam, Alexy and Reitzig2014; Schein Reference Schein1965; Scott Reference Scott1981; Stinchcombe Reference Stinchcombe and March1965) presents a microstructural approach to organizations and organizing (Puranam Reference Puranam2018), where the focus is not on the macrostructural problems the organization as a whole faces when adapting to the environment, but rather on the problems that a system of separate agents needs to solve “to exist as an organization” (Puranam et al. Reference Puranam, Alexy and Reitzig2014, 175). It is part of a broader microfoundational movement in organization theory that seeks to understand various macro-level phenomena, such as firm performance, capabilities, or strategy, by identifying how they emerge through the interaction of lower-level actors, typically individual agents (Barney and Felin Reference Barney and Felin2013; Felin et al. Reference Felin, Foss and Ployhart2015; Foss and Lindenberg Reference Foss and Lindenberg2013; Linder and Foss Reference Linder and Foss2018). However, while much effort has been put into understanding how incentivizing, division of labor, and alignment of effort enable coordinated goal pursuit (e.g., Burton and Obel Reference Burton and Obel1984; Raveendran et al. Reference Raveendran, Puranam and Warglien2022; Tonellato et al. Reference Tonellato, Tasselli, Conaldi, Lerner and Lomi2024), the question of how organizational goals themselves emerge has received much less attention (Linder and Foss Reference Linder and Foss2018).
The challenge for microstructural approaches is that they seem to assume that there is an organizational goal towards which members are expected to make a contribution. Simultaneously, they warn against “reifying the organization” into a “superindividual entity” having goals of its own (Simon Reference Simon1964, 2), as “only individuals can truly have goals” (Linder and Foss Reference Linder and Foss2018, 39). Accordingly, the postulation of organizational goals and intentions has been typically avoided in such approaches (Cyert and March Reference Cyert and March1963; Simon Reference Simon1964) as this would lead to seemingly intractable problems with how such collective phenomena can exist and whether they can have any downward causal force. Thus, it has been preferable to stick to a focus on the “individuals and their social interactions” (Barney and Felin Reference Barney and Felin2013, 139), without making any postulates about organizations as such having goals. Microstructural approaches thus struggle with the question of how we can “identify some concept of organization’s goals that is consistent with the apparent denial of their existence” (Cyert and March Reference Cyert and March1963, 26).
The Nature and Necessity of Organizational Goals
With organizational goals, I refer to shared ideas about what the organization should aim for and try to accomplish (Kotlar et al. Reference Kotlar, De Massis, Wright and Frattini2018). They are thus conceptions of desired ends that the organizational activities intend to realize (Scott Reference Scott1981). Mission, vision, purpose, company objectives, and strategic targets are all examples of organizational goals, as all in their own way provide a conceptualization of what direction the organization should take (Linder and Foss Reference Linder and Foss2018). Thus, I use “organizational goals” as an umbrella term to refer to all types of shared beliefs among the decision-makers of the organization about the desired direction of the organization. Lacking a unified direction and a common goal, the contributions of individual agents would be reactive to their local situations, not aggregating towards any common direction. Organizational goals “define a direction, integrate lower-level goals and efforts, influence behavioral standards,” and provide a direction for other coordination efforts within the organization (Linder and Foss Reference Linder and Foss2018, 39). Without shared goals, the synergies emerging from shared goal pursuit are diminished, the ability to innovate and explore new goal-serving directions withers, and the organization disintegrates into a collection of separate agents each pursuing their own interests. Clarity about the organization-level goals is thus necessary for the individual agents to be able to integrate their efforts whenever they make independent choices about what to do. Furthermore, the organizational decision-makers need shared goals in order to make rational choices—without organizational goals, the organizational decision-making would have no ground for making choices, as they would lack any justification to choose one option over another.
Organizational goals are thus sufficiently shared beliefs among organizational decision-makers about the goals of the organization. There are no separately existing organizational goals beyond these beliefs, but the goals come into existence through enough members believing in them and through these goals guiding the actions and choices of the organizational members. In here, it is good to acknowledge that any real-life organization will rarely have 100 percent agreement among all decision-makers about its goals. In the microstructural approach, being an organization comes in degrees. Organization as an entity describes successful enough organizing as a process (Puranam et al. Reference Puranam, Alexy and Reitzig2014; Weick Reference Weick1979). Instead of a clear-cut dichotomy between organization and nonorganization, a group of people is always more or less organized, has more or less shared goals, and thus is more or less organization-like. As Scott (Reference Scott1981, 20) puts it, “it is the combination of relatively high goal specificity and relatively high formalization that distinguishes organizations from other types of collectivities.”
In an ideal case, the organization has a clear, well-articulated, and unambiguous mission that all organizational members know and believe in; in other cases, the goals of the organization can be more ambiguous and plural (Rainey and Jung Reference Rainey and Jung2015), sometimes in conflict with each other (Gaba and Greve Reference Gaba and Greve2019). There are (at least) two ways the organizational goal can be ambiguous, which we could call plurality and vagueness. First, plurality means that there can be different views about the goal, such that two groups within the organization both have clear views about the goal, but the views are different. The ambiguity thus comes from contested views about what the goal should be. Second, vagueness means that while there might not be disagreement about the goal, everyone might have an equally vague idea about what the goal actually is, as the goal can also be emergent, organic, and not so explicitly stated (Mintzberg and Waters Reference Mintzberg and Waters1985). The practical effect of both types of ambiguity is roughly similar: The goal is not able to give clear guidance and align the actions of organizational members as well as an unambiguous goal would, although in one case (plurality) the lack of alignment is mainly felt between the two groups, in the other case (vagueness) the lack of alignment leads all members to deviate in different ways from one clear direction, as nobody knows exactly what that clear direction would be.
In practice, no real-life organization has a fully unambiguous goal, so the clarity of the organizational goal is always a matter of degree. However, too large discrepancies and disagreements about organizational goals among the decision-makers of the organization will make the organization inefficient and dysfunctional, as the actions of individual agents would pull the organization in different directions, while the internal political struggles about the direction of the organization would paralyze the decision-making. The organizational goals can thus be more or less crystallized, more or less shared, and more or less explicit—but achieving at least a certain degree of clarity and sharedness of these goals is necessary for an organization to exist and be able to operate.
Who Decides Organizational Goals and Who Needs to Believe in Them?
It is important to notice that the generation of organizational goals is not a democratic process where each organizational member’s opinion counts equally. The chief executive officer (CEO) of a company, compared to the ordinary employees, is assigned many rights and responsibilities regarding determining the overall direction of the organization. Given this recognized role of the CEO as the spokesperson for the company, their making a public announcement about the company’s goals is typically counted as a binding statement about what the company is pursuing by both external stakeholders and by company employees (Ludwig Reference Ludwig2014).
In principle, we could divide organizational members into two groups: Decision-makers and role-fulfillers. Decision-makers have the power to influence the organizational goals, while role-fulfillers don’t—they are merely required to fulfill the roles assigned to them by the decision-makers. The decision-makers need to be aware of those goals, as they have much discretionary power and, thus, when making a decision, need to know the shared goals in order to be able to serve them. The role-fulfillers don’t have to agree on or even know the shared goals. If their role has been designed (by the decision-makers) to contribute to the overall goal, they come to functionally contribute to the goals by fulfilling their own role, even without awareness of those goals.
In the traditional bureaucratic model, the administration of the organization is entrusted to the top management, who, equipped with “a special technical expertise” (p. 958), can rationally govern the organization to achieve its purpose (Weber Reference Weber, Roth, Wittich and Fischoff1978). The top management thus decides the organizational goals, and the rest of the organization acts as an instrument for those at the top to accomplish the goals they set for the organization. Everyone else just needs to obey the commands coming from above to fulfill their own role that has been designed to contribute to overall goal achievement. In such an idealized bureaucratic organization, an individual employee is “a small cog in a ceaselessly moving mechanism which prescribes to him an essentially fixed route of march” (Weber Reference Weber, Roth, Wittich and Fischoff1978, 988).
Such a fully bureaucratic organization could be contrasted with highly decentralized, self-managing organizations with an aversion to hierarchy (Klapper and Reitzig Reference Klapper and Reitzig2018; Lee and Edmondson Reference Lee and Edmondson2017; Martela Reference Martela2019). Such organizations have experimented with more inclusive and open models for setting goals and strategies for themselves, involving employees and even external stakeholders in various stages of the process (Hautz et al. Reference Hautz, Seidl and Whittington2017; Whittington et al. Reference Whittington, Cailluet and Yakis-Douglas2011). Deciding and redesigning the organizational goals might follow some collectively agreed procedure involving collective deliberation, voting, and other means of aggregating the opinion of the group. For example, Wikipedia created an editable “Strategy Wiki,” and saw some 3,000 users make at least one edit to it when it attempted to construct a new strategy for itself (Dobusch et al. Reference Dobusch, Dobusch and Müller-Seitz2019). In such cases, the clear-cut distinction between decision-makers and role-fulfillers disappears, as every member has some degree of power to influence organizational goals. In such highly decentralized organizations, individual employees can also make significant decisions without having to get the approval of top management—and thus knowledge of the shared goals becomes an important integration mechanism, as without such awareness, they can’t make decisions that would contribute to the shared goals.
In general, the more decision-making power is decentralized and autonomy given to the employees, the more crucial it becomes for the employees to have awareness of the overall goals, so that they can coordinate their efforts to contribute to these goals. Roughly speaking, the more power an employee has to make independent decisions, the more they need awareness of the overall goals to be able to contribute to them. Thus, in principle, decision-makers need to be aware of the shared goal, while role-fulfillers need not. In modern, more decentralized organizations, this line is more blurred, leading to an increased need to make all organizational members aware of the shared goal.
Methodological Individualism and the Taboo Against Organizational-Level Intentions and Goals
Given its microfoundational commitments, the microstructural approach builds on methodological individualism, which is an ontological commitment where only individual human beings and their interactions are taken as real, with any supposedly collective-level phenomena reduced to and explained at the level of the individuals (Felin and Foss Reference Felin and Foss2004; Hodgson Reference Hodgson2007). In essence, methodological individualism involves two theses (Epstein Reference Epstein2015; Lukes Reference Lukes1968): Ontological individualism, according to which social facts are exhaustively built up and determined by facts about individual humans and their interaction, and explanatory individualism, according to which “social phenomena are to be explained solely in terms of facts about individuals” (Lukes Reference Lukes1968, 120), which is often associated with projects to provide microfoundations for social phenomena (Epstein Reference Epstein2009). Especially prominent in economics (Arrow Reference Arrow1994; Hodgson Reference Hodgson2007), with powerful philosophical defenders (Hayek Reference Hayek1948; Popper Reference Popper1945), methodological individualism features as an often unstated basic premise in many types of organizational research as well (Barnard Reference Barnard1968; Felin and Foss Reference Felin and Foss2004; March and Simon Reference March and Simon1958). While goals and intentions can be attributed to individuals, the received view has been that the organization as such can not have goals or other types of intentions, as it is, in the final analysis, just an aggregation of individuals, who are the true sources of any goal-oriented pursuits. Since “only individuals can truly have goals” (Linder and Foss Reference Linder and Foss2018, 39) and “the firm is not an individual” (Jensen and Meckling Reference Jensen and Meckling1976, 311), there exists a “micro-macro divide” (Aguinis et al. Reference Aguinis, Boyd, Pierce and Short2011; Eckardt et al. Reference Eckardt, Crocker and Ahn2019) between methodological individualism, which aims to explain everything at the level of individuals and the dynamics of their interaction, and methodological collectivism, which operates as if organizations would be agentic entities pursuing certain goals in their environments.
However, while microstructural approaches seemingly deny the existence of organizational-level goals, they quite often seem to operate from the assumption that there are “system-level goals” that “may not be identical to the goals of the constituent agents” (Puranam et al. Reference Puranam, Alexy and Reitzig2014, 163–64). Herein lies the paradox: It is difficult to carry microstructural investigations into organizations without appealing to organizational goals—but it is also “difficult to introduce the concept of organizational goal without reifying the organization” (Simon Reference Simon1964, 1). This paradox calls for an explanation of how organizational-level goals can exist within a microstructural approach committed to methodological individualism, where only individuals can have intentional states. I see that the denial of the existence of organizational goals in microstructural accounts stems from a lack of microstructural explanation for how they could exist, which is exactly what the present work aims to offer.
SOCIAL ONTOLOGY: EXPLAINING THE EXISTENCE OF ORGANIZATIONAL-LEVEL GOALS
We have now established that organizations tend to set goals for themselves, and these goals function as central coordination mechanisms that integrate the efforts of organizational members—especially those members with more decision-making power. The crucial question is whether it is possible to account for the existence of such organizational-level goals, given a microstructural (or more broadly a microfoundational) approach, where the focus is on individuals and the aggregation of their actions.
I believe this is possible through utilizing the understanding provided by the social ontology of organizations (Chassagnon Reference Chassagnon2014; Lawson Reference Lawson2012; List and Pettit Reference List and Pettit2013; Martins Reference Martins2018b). This philosophical inquiry aims to identify the basic building blocks of human social reality, which refers to all phenomena whose existence depends on human beliefs and interaction, such as money, universities, marriages, job contracts, and Fridays (Lawson Reference Lawson2015; Searle Reference Searle2010; Tuomela Reference Tuomela2013). While there are many theorists and competing theories of social ontology (e.g., Bratman Reference Bratman2014; Gilbert Reference Gilbert2013; Lawson Reference Lawson2016; Epstein Reference Epstein2015; Ludwig Reference Ludwig2014), in my analysis, I mainly follow the “standard model” (Guala Reference Guala2007; McBride and Wuebker Reference McBride and Wuebker2022) in social ontology that sees collective beliefs and collective deontic powers as the basic building blocks of various social phenomena, including organizations (Tuomela Reference Tuomela2013; Searle Reference Searle1995).Footnote 1
Taking a social ontology perspective of organizational goals starts with acknowledging that such system-level goals are, ultimately, social facts (Berger and Luckmann Reference Berger and Luckmann1966; Searle Reference Searle1995): They emerge when individual members of the organization believe in their existence and/or act in line with them (I provide a glossary of key terms of social ontology in Table 1). Social facts are possible because of human capability for collective intentionality—having beliefs, goals, and rules that one believes one is sharing with others (Martins Reference Martins2018a; Searle Reference Searle2010). Intentions as such are mental states of individuals that are directed at something, such as aiming to do something. In other words, intentions are reasons for acting, thus answering why a certain agent is doing something (Anscombe Reference Anscombe1957). However, besides things that I intend to do, there are things that I believe we intend to do. When others similarly believe that this is something we intend to do, this becomes a shared social fact in our community. Such social facts can be created through declarative speech acts, where a certain person generates a new social fact by making a public statement. A priest declaring a couple husband and wife creates a new social fact, the marriage. Similarly, when the founder gets a stamp of approval for the Articles of Incorporation from a person authorized by the right governmental department, a new entity comes into existence—the corporation. Suddenly, the founder can open bank accounts and enter into contracts in the name of the fictional entity that came into existence through the declarative act (Gordon and McBride Reference Gordon, McBride, Fayolle, Ramoglou, Karatas-Ozkan and Routledge2018). Similarly, the founder can declare the goals their corporation ought to pursue. As Searle (Reference Searle2010, 89) puts it, “we have a capacity to create a reality by representing it as existing.”
Glossary of the Key Terms and Building Blocks of Social Ontology
Such collective intentionality is a basic building block of our institutional reality, including organizations, money, marriages, and laws. Just as banknotes of money have value only as long as we collectively believe that others will acknowledge their value—without this shared belief, they are just finely designed pieces of paper—organizational goals exist through our shared belief in their existence. “By postulating a purpose to an organization, by talking about it with each other, and by behaving guided by that purpose, humans come to act as if the purpose would exist” (Martela Reference Martela2023, 364). The fact that individuals believe in a shared goal and act in accordance with this belief in no way violates methodological individualism: We are dealing with individual-level beliefs and intentions, even though the given individuals come to postulate something they believe they collectively believe. In the spirit of ordinary language philosophy (Ramoglou and McMullen Reference Ramoglou and McMullen2024), we are thus not examining organizational goals as independently existing “things,” but rather focus on what difference in practice does believing in them and talking about them make.
When individual members of the organization constantly talk about the shared goals with each other, behave as if guided by that goal, and justify their actions by appealing to that goal, this constant communication about the shared goals creates widely shared belief in that shared goal, where actors not only believe in the goal themselves but crucially also believe that others believe in it too (List and Pettit Reference List and Pettit2013; Tuomela Reference Tuomela2013). The organization having shared goals is thus “an intersubjectively upheld postulate that is reified through organizational members and other stakeholders believing in it and acting as if it were true” (Martela Reference Martela2023, 364)—a kind of shared fiction that the individuals “make into being” by behaving guided by their belief in the shared goal.
Overall, organizational goals are entangled in a broader web of social facts, within which organizational life takes place. The CEO’s ability to make declarations about the organization’s goals, the manager’s power to punish or fire an employee for engaging in actions clearly violating the organizational goals, the state authority’s ability to punish the company if its purpose is violating the state laws—all of these powers exist because people collectively believe in their existence. In particular, many institutional facts within the organization are backed up by the legislature of the state—and thus also enforced by the state. If organizational members end up fighting over whether certain institutional facts are true and the law is on one side, then that side can summon the courts, the police forces, and other state institutions to enforce their interpretation. For example, let’s say that the bus drivers of a public transportation company would suddenly decide that instead of driving fixed routes, they start driving wherever they want, thus clearly violating the stated goals of the company. They would receive warnings and sanctions, followed quickly by firings of disobedient staff, and—if things escalated—police forcibly removing them from the company premises to be replaced by staff willing to fulfill the state-mandated goals of the organization. The goals of the public transportation company are thus not dependent only on the intentions of the organizational members but on the intentions of the members of the state institutions that oversee the organization.
Besides normative expectations deriving from the laws and the state institutions upholding those laws, also other stakeholders can exercise coercive pressure for the organization to have certain types of goals, including investors, customers, professionals within the firm, or even mimetic pressures to adopt the same practices as competitors (DiMaggio and Powell Reference DiMaggio and Powell1983)—such as increased pressures by both investors and customers for companies to adopt corporate social responsibility-related goals (e.g., Helmig et al. Reference Helmig, Spraul and Ingenhoff2016). Life in an organization means being surrounded by a web of mutually reinforcing social facts that, to a large degree, determine who can do what and who has the authority over whom. For officially registered organizations like companies, many of these social facts derive their legitimacy from a shared belief in the power of state institutions to enforce certain social facts. Thus, organizational goals gain their importance not only from a direct belief in them, but from beliefs in various institutional roles that give certain people duties to pursue those goals and certain people powers to determine and make declarations about those goals.
When organizational members believe in a shared goal, this belief becomes a key explanatory factor in understanding why they behave as they do. We can explain a certain individual agent’s decision by noting that the agent thought the chosen option would advance the shared purpose that the agent believes in. The individual agent’s belief in a shared goal thus explains their behavior, and the shared belief in a shared goal among organizational members explains their collective behavior. Accordingly, postulating the existence of a shared goal increases our ability to understand and predict what individuals within the organizations do, thus making these purposes functionally real and causally efficacious. Note that organizational goals still don’t have an objective existence, independent of individual beliefs about such goals and individual patterns of behavior directed at such goals (Tuomela Reference Tuomela2013). Ontologically, they are subjective, being emergent and dependent on the interactions of the individual organizational members.Footnote 2 However, they are epistemologically independent and real as attributing goals to the organization-level, explaining behavior as if there were such system-level goals, is usually the most economical way of explaining much of the behavior of individual agents within the organization (List and Pettit Reference List and Pettit2013; Martela Reference Martela2023) thus allowing us to gain a predictive understanding that is “unavailable in practice—even the most idealized practice—on the basis of observing individual agents alone” (List and Pettit Reference List and Pettit2013, 76). In our best and most predictive theories of the microstructural phenomena within organizations, organizational-level goals thus play a key explanatory role in helping us to understand the behavior of individual agents.
This explanatory power in our most predictive theories makes organizational goals “real” in the pragmatist sense, where all beliefs are in the final analysis future-oriented “rules for action” that are true as much as they help us sort out our experiences and “get into satisfactory relations with other parts of our experience” (James Reference James1991, 23, 28). In pragmatist epistemology, increased knowledge is not about getting the correct “representation of reality in cognition” but is rather about an “increase of the power to act in relation to an environment” (Joas Reference Joas1993, 21). “Functionally real” and “real” are the same thing for a pragmatist (Martela Reference Martela2015). Thus the modest claim that organizations behave as if they would have goals, and individuals within these organizations behave as if they would be guided by organizational-level goals is all that is needed to claim that organizational goals are as real as any other fact about the organization, such as the social fact that there are “organizations” or that there exist a person who is a “CEO” for a certain organization. In many situations, postulating that such organization-level goals exist is the most efficient way to explain and predict the behavior of the organization as such, and much of the behavior of the individual members of the organization. Postulating purposes and goals to an organization thus has clear advantages of “descriptive and explanatory parsimony” (List and Pettit Reference List and Pettit2013, vii), even if such goals would ultimately exist only as shared individual beliefs about such goals.
DEONTIC POWERS IN THE CONSTRUCTION OF ORGANIZATIONAL GOALS
Thus far, we have provided an explanation for how organizational goals exist. However, it is one thing to know organizational goals and another thing to be moved by them. To understand why organizational goals matter, we thus need to understand how they influence people to act in accordance with them. This necessitates an analysis of power within organizations. Besides collective beliefs, a second key building block of social ontology is collective deontic powers (McBride and Wuebker Reference McBride and Wuebker2022; Searle Reference Searle2010). Deontics refer to collectively recognized normative rules and guidelines about what particular individuals can do, must do, and can’t do. Positive deontics refers to the rights, authorizations, and permissions that allow certain individuals to do certain things (such as the CEO’s right to declare what the strategic goals of the organization ought to be), while negative deontics refer to the duties, obligations, and commitments that restrict what the individual can do (such as the division leader’s duty to ensure their decisions adhere to the goals declared by the CEO) (Gordon and McBride Reference Gordon, McBride, Fayolle, Ramoglou, Karatas-Ozkan and Routledge2018). Deontics are thus shared normative beliefs about permissible and impermissible behavior; what each person within the organization ought to be doing. Mission statements, codes of conduct, contractual responsibilities, and other institutionally embedded norms, which can involve both formal and informal elements, form the ethical infrastructure (Weaver et al. Reference Weaver, Trevino and Cochran1999; Tenbrunsel et al. Reference Tenbrunsel, Smith-Crowe and Umphress2003) of the organization, functioning as signposts that provide direction and norms for how organizational members ought to behave. From the point of view of deontics and “ethical infrastructure as it is perceived by organizational members” (Martin et al. Reference Martin, Kish-Gephart and Detert2014, 300), organizational goals are the targets that the various organizational members see that they collectively have both a duty and a right to pursue. They thus function as institutional signposts or reference points that individuals can refer to when evaluating each other’s behavior, thus normatively directing their behavior. The normative power of such goals comes from the collective belief in their normative power and from people’s willingness to uphold them through rewards, sanctions, and punishments.
From a social ontology perspective, organizations have been described as placeholders for a set of deontic relationships between individuals—each employee is entangled in a complex web of socially constructed legal requirements, formal internal rules, informal norms, cultural conventions, and shared beliefs about how to behave in various situations that determine what each individual can, must, and can’t do (Chassagnon Reference Chassagnon2014; Martins Reference Martins2018b; Searle Reference Searle2010). Individuals within an organization occupy various positions and roles, with each position coming with its own goals, rights, and duties (Mota and Morrison Reference Mota and Morrison2024). Giving a role to an employee is, in essence, about giving them a bundle of deontic powers. A technician ought to help when the customer’s product is broken, having the right to make certain purchase decisions about equipment and spare parts using company money, while having the responsibility to ensure that the things they fix actually work. A division leader has the responsibility to ensure that the division they lead makes a profit while having a wide-ranging set of rights to make various strategic decisions on behalf of the company that may involve millions of dollars provided that they fulfill their duty to report to the CEO and board of directors as well as adhering to various legal obligations as regards, for example, book-keeping. Organizational roles are generated through constitutive rules. The role “marketing director” does not exist independently but is something that is generated through declaring first that such a role exists, and then declaring that a certain person occupies that role. By giving an individual a role, one is, in essence, giving them a normative function, something they ought to do, alongside certain specific rights and duties they need to fulfill this function. As is the case for other socially constructed parts of the organization, institutional roles and the associated deontic powers exist because organizational members believe in their existence. If employees cease to believe in the CEO’s deontic powers (such as the ability to hire, fire, reward, and punish employees), the given CEO loses their power to command the employees—this could happen, for example, in a situation where everyone except the CEO already knows that the owner is going to fire them soon.
Three Ways to Align Action in Organizations: Inspire, Oblige, or Channel
Given this understanding of deontic powers within organizations, I argue that the organization can move people to act in accordance with the socially constructed goals through three different ways: inspire, oblige, or channel. First, the knowledge of organizational goals might inspire individual employees such that they find the goals strongly motivating and something they truly want to pursue. Here, the employee’s private goals come to be aligned with organizational goals. This is thus a form of internalization where the “agents adopt the interests, or even possibly the identity, of the community of which they are a part” (Checkel Reference Checkel2005, 804). They find the organizational goals valuable and attractive and thus are privately motivated to help the organization reach those goals. For example, a mission-driven organization tends to attract employees drawn toward the shared mission. Similarly, organizations that depend on voluntary work, such as Wikipedia, depend on contributors finding the shared goals valuable and motivating.
Second, the organizational goals can oblige the employees to engage in activities that serve the organizational goals. Here, through signing an employee contract with the organization and being assigned to a certain role, the employees commit to certain duties that provide them with what Searle (Reference Searle2010) calls “desire-independent reasons for action.” The formal and informal shared beliefs and deontic duties and rights lead to the “institutionalization of the individuals” (Chassagnon Reference Chassagnon2014, 204), where their activities in their organizational role are expected to align with the overall culture of the organization. Employees may have their private goals, but in their organizational roles they “become their roles” in the sense of having to behave in accordance with the goals and expectations related to that role, even if they are in tension with their private goals and values (Mota and Morrison Reference Mota and Morrison2024). This represents a type of internalization where the employees learn to behave according to “what is socially accepted,” given the role they are in, “irrespective of whether they like the role or agree with it” (Checkel Reference Checkel2005, 804). Serving the organizational goals is one key duty of organizational members, especially those at the higher levels of organizational hierarchy, where the employees typically have more discretion in deciding what they pursue. Other members expect them to serve the goals, and they are rewarded for doing so while being punished by disapproval, resentment, verbal warnings, or being fired when failing to serve the goals. In more severe cases, such as a top manager utilizing their vast rights to serve some private goals that clearly deviate from organizational goals, they can be sued in court. No matter what they privately value, in their organizational role, they thus have a duty to serve the organizational goals.
Third, an employee might be channeled to contribute to organizational goals without even knowing what those goals are. Here, the organizational goals “may not be goals at all from the point of view of those further down” (Gross Reference Gross1969, 278), who might not have any awareness, interest, or sympathy for the organizational goals. Nevertheless, the employee is assigned to a certain role that involves certain tasks, rights, and duties, and their actions within the organization are guided by certain patterns of social interaction and organizational structures (Frega Reference Frega2018). Such “sets of constraints, imposed by the organizational role” (Simon Reference Simon1964, 1) ensure that by fulfilling their local role, the employees come to contribute to the organizational goal, even when they do not know what it is. A “hired hand” might come in and perform certain actions in exchange for compensation, such as delivering a package to someone, without having to know what the overall organization aims to do. Still, when their tasks and duties have been designed to serve the organizational goals, by fulfilling their local role and its contractual relations (Jensen and Meckling Reference Jensen and Meckling1976), the employees come to serve those goals.
A stereotypical organization could have top managers inspired by the organizational goals and middle managers obliged by the same goals, both attempting to ensure that the rights, duties, and tasks of individual employees are designed so that their actions are channeled to contribute to the organizational goals. More realistically, most organizational members are likely moved by all three reasons, albeit to a different degree. The employees inspired by the shared goals know that even in the non-inspired moments, they still have certain duties. And the employees who are “only in it for the money” might still take some pride in being able to do their small part towards the shared goals. No matter the specific mixture of these three dimensions, the organizational members’ contribution to the shared goals—a defining feature of organizations as discussed—is ensured through a combination of inspiration, obligation, and channeling. The organization having a certain goal doesn’t necessitate that the majority of organizational members directly share or value this goal—their efforts to engage in activities furthering this goal can be ensured through other means, such as properly designed reward and control mechanisms. Puranam (Reference Puranam, Alexy and Reitzig2014, 163) saw that what makes an organization is that members’ “efforts are expected to make a contribution” toward the organizational goals, but this condition can be equally fulfilled through inspiration, obligation, and channeling. What counts is that most of the activities of organizational members come to serve those goals. Overall, through various socially constructed deontic powers attached to their roles, organizational members are assigned to serve the organizational goals either directly—by having an explicit duty to serve them—or indirectly, by having role-based duties, the fulfillment of which comes to contribute to organizational goals without the individual having to be aware of those goals.
IS AN ORGANIZATION A GROUP AGENT MORALLY RESPONSIBLE FOR ITS GOALS?
Having established that individual behavior within an organization is best explained by postulating organizational-level goals that the individuals pursue, it becomes relevant to ask whether organizational members pursuing this shared goal can be seen as a group agent. Thus, the article started from individual agency, and ends with examining whether such individual agents can together exhibit collective agency. Agency means a capacity to act, implying a capacity to make choices and take action to realize one’s choices. To be an agent implies that the given entity has “representational states, motivational states, and a capacity to process them and to act on their basis” (List and Pettit Reference List and Pettit2013, 20). Intentional states are often divided into two fundamental types: mind-to-world direction of fit, where the agent aims to ensure that one’s beliefs about the world fit with how the world is, and world-to-mind direction of fit, where the agent aims to influence the world through one’s own actions to make the situation fit better one’s aspirations (Anscombe Reference Anscombe1957; Searle Reference Searle1995). Agentic behavior in the world thus requires both awareness about the world itself and goal-directed actions. An agentic system, be it an organization or an organism, “has goals that it seeks to realize through its actions, keeping track of relevant changes in the environment. That is, [it] acts for the satisfaction of its goals according to its representation of the environment” (List and Pettit Reference List and Pettit2013, 12).
Organizations, as compared to humans, lack an internal sense of consciousness and do not experience phenomenal sensations like pain, joy, desire, or shame.Footnote 3 However, this does not preclude the possibility of organizations being agentic, as they can derive their intentional states from the shared beliefs of their members. While humans are conscious agents, organizations can be functional agents, where the shared beliefs and goals of the human agents make them behave as if the organization as a whole had goals, desires, and beliefs (Tuomela Reference Tuomela2013). While ontologically only humans have true intentional states, functionally the organization comes to behave as if it has intentional states through enough humans believing in these group-level intentional states, giving rise to a “functional group agent” (Tuomela Reference Tuomela2013), which provides the most cost-effective way of explaining how the organization behaves in its environment. Thus, while an organization lacks consciousness, from the point of view of the organizational members and those interacting with the organization, it can behave as if it has goals and beliefs, making the organization have functional intentional states and functional agency when member activities are sufficiently aligned toward a shared direction.
Equipped with this understanding of agency, we can make the following slightly provocative claim: An organization, to come into existence, must become agentic; the members of the organization must find a way of acting coherently enough so that their actions come to realize shared goals according to their shared representation of the environment. The criteria for what makes a group of people an organization—(1) multiple independent agents (2) having shared goals (3) that they pursue through coordinated action—are in fact criteria for what allows a group of people to exercise collective agency: The more coordinated their actions are towards a shared direction, the more they collectively act as one unified agent. An organization, in the final analysis, is thus a group of individuals that have accomplished a degree of collective agency through sharing a goal and coordinating their activities to pursue that goal. This also means that “organizationality” and group agency come in degrees: There is no clear-cut line separating organizations from non-organizations. Instead, when the goal is sufficiently shared and when the activities of the members are sufficiently coordinated, we can call a group of people an organization—and we can identify their activities as exhibiting group agency. Having organizational goals is thus an accomplishment, and never perfect. Organizational goals are “the result of continued bargaining and stabilization processes among relevant parties within the firm” (Kotlar et al. Reference Kotlar, De Massis, Wright and Frattini2018, 4) that, when successful, produce a group agent capable of goal pursuit.
This has direct implications for discussions on the moral status and moral agency of organizations, as “any discussion of corporate responsibility necessarily involves an understanding of who the responsible agent is” (Mota and Morrison Reference Mota and Morrison2025, 12). While some see organizations as mere aggregations of individuals with any moral responsibility targeted only at those individuals (e.g., Velasquez Reference Velasquez1983; Rönnegard Reference Rönnegard2024), others see that organizations as such have intentions and agency, and thus can be held morally responsible for their acts (e.g., French Reference French1979; Phillips Reference Phillips1992). Indeed, the question of whether corporations can be held morally responsible for their actions has been called “one of the most important questions of business ethics” (Morrison et al. Reference Morrison, Mota and Wilhelm2022, 324). To be held responsible, according to List and Pettit (Reference List and Pettit2013, 155), an agent needs to 1) face a morally significant choice, 2) have judgmental capacity to deliberate about the moral implications of the options, and 3) have control over the choice made. It is relatively self-evident that organizations face morally relevant choices, but as regards judgmental capacity and ability to make choices, the present social ontology account suggests that organizations are capable of doing them as well, through their internal decision-making structures—what French (Reference French1979) calls the Corporation’s Internal Decision Structure—through which the organization deliberates and makes its choices. The internal deontic structure of the organization ensures that a decision made by the CEO, a board of directors, or other body with proper internal decision-making authority comes to stand as the organization’s decision—and comes to explain subsequent behavior by the organization and its members. People with relevant deontic powers deliberating, making choices, and setting goals on behalf of the organization counts as the organization as such deliberating, making choices, and setting goals—because the result is the same, the organization as a whole steering in a certain direction.
Thus, following the social ontological approach we have been building in this article, it is not merely individuals making choices and having goals but the organization as such that can make collective choices and set collective goals for itself. From the point of view of the present account, an organization can thus be held morally responsible for the goals it sets for itself.Footnote 4 As a real-life example, the Supreme Court in Finland ordered the dissolution of a neo-Nazi organization because its objectives “were in violation of the foundations of a democratic society” (Helsinki Times 2020), thus, in effect, holding the organization morally responsible not only for its actions but for having unlawful goals.
DISCUSSION
In the present article, I have attempted to resolve the paradox around how organizations consisting of separate agents (Cyert and March Reference Cyert and March1963; Puranam Reference Puranam2018; Simon Reference Simon1957) can nevertheless have shared organizational-level goals in a way that is consistent with “the apparent denial of their existence” (Cyert and March Reference Cyert and March1963, 26). When enough individual agents believe in the existence of a shared goal—and believe that others believe in it too—their interactions and behaviors are guided by this belief. This gives rise to a group agency, where the organizational members together pursue the shared goal, making postulating organizational goals indispensable in our attempts to explain both how the organization as a whole acts and how individuals within the organization behave. A group of agents becomes an organization by having sufficiently shared goals that each individual agent is sufficiently contributing to through sufficient coordination of efforts. Neither the coordination nor the sharedness of the goal is ever perfect, but when there is enough pursuing of the same direction, the individual agents become together an organization—with pursuing a shared goal being a key definitional feature of being an organization.
Theoretical Contributions
Through carving out a place for organizational-level goals within microstructural approaches (Cohen et al. Reference Cohen, March and Olsen1972; March and Simon Reference March and Simon1958; Puranam Reference Puranam2018), the present work helps to resolve a long-standing paradox in microstructural approaches, where the existence of organizational-level goals is denied yet still often presumed (Cyert and March Reference Cyert and March1963; Simon Reference Simon1964). By building on research in social ontology (Gilbert Reference Gilbert2013; Searle Reference Searle2010; Tuomela Reference Tuomela2013), the present article argues that organizational goals are ontologically dependent on individual agents believing in them, and thus compatible with ontological individualism. Such organizational-level goals emerge when enough individual agents believe in their existence and together uphold a web of deontic norms that push people to contribute to them through their actions. Organizational goals are thus in principle “reduceable (or reduced) to some aggregation of the lower-level goals of the various stakeholders” (Linder and Foss Reference Linder and Foss2018, 40) as required by a microfoundational approach to such goals. At the same time, the shared goals themselves feature in our most predictive theories about how individual agents behave in organizations, thus operating as epistemologically independent and indispensable explanatory mechanisms for individual behavior. While not ontologically objective, as their existence is ontologically dependent on individual beliefs and behavior, they are real in an epistemological and pragmatic sense, as we need to postulate them to explain and predict individual behavior within organizations.
Second, as regards research on social ontology itself that has increasingly been applied to organizational reality (Chassagnon Reference Chassagnon2014; Lawson Reference Lawson2015; Martins Reference Martins2018b; McBride and Wuebker Reference McBride and Wuebker2022), the present work extends such analyses to focus on organizational goals, something that has not been previously properly examined. Furthermore, the present analysis contributes to research on the dynamics of deontic powers within organizations by offering a novel distinction according to which there are three ways through which organizational members’ actions can be aligned to contribute to the shared goals: being inspired, obliged, or channeled. This helps to explain how a collective can coordinate its efforts towards a single goal even without all members being aware of this goal, thus bringing more nuance to the question of how to integrate effort towards a shared direction. Through the distinction between three ways to align action, the present work thus comes to shed light on the complex microfoundational structures through which individual employees are administered roles with various deontic powers—targets, duties, responsibilities, rights—through which their individual efforts come to contribute to the shared goals. The present work argues that, while some members with more decision-making power are directly inspired or obliged to make decisions serving shared goals, other members don’t even have to know the shared goals, and still can be channeled to contribute to them by fulfilling their individual roles. Shared goals are thus a powerful explanatory mechanism for much agentic behavior within organizations (even acknowledging that the influence is often indirect, with decision-makers designing role-fulfillers’ responsibilities to be aligned with the shared goal). Thus, in various attempts to model, simulate, and predict the behavior of individual agents in organizational contexts (e.g., Colyvas and Maroulis Reference Colyvas and Maroulis2015; Raveendran et al. Reference Raveendran, Puranam and Warglien2022), postulating normative shared goals as one motivating factor can help these models to be more realistic and more predictive. The present conceptualizations thus aim to move forward also more general discussions of the social ontology of organizations and corporations by providing an explanation of how organizational goals exist, and how the deontic structures ensure that enough members contribute towards them.
Third, there has been much discussion about organizational agency, especially because such agency is important to establish if we want to attribute moral rights and responsibilities to organizations (French Reference French1979; Phillips Reference Phillips1992). I argue that if moral responsibility does not require consciousness (pace Rönnegard Reference Rönnegard2024) but an ability to deliberate on the moral implications of various choices and the ability to make choices (following List and Pettit Reference List and Pettit2013), then organizations can be seen as moral agents that can be held morally responsible for the goals they set for themselves. While others have argued that organizations can be seen as group agents (e.g., List and Pettit, Reference List and Pettit2013), the present work helps to explain how the organization is able to fulfill the conditions for group agency, especially through articulating the three ways to align action: inspiring, obliging, and channeling. More generally, a key question within business ethics considers what the purpose of the corporation should be (e.g., Hsieh Reference Hsieh2015; Freeman and Phillips Reference Freeman and Phillips2002; Jones and Felps Reference Jones and Felps2013). On a more meta-ethical level, the present article contributes to a recently emerged new focus on how such purposes exist in the first place (Morrison and Mota Reference Morrison and Mota2023) by offering a novel social ontological explanation.
Fourth, the micro-macro divide in organizational research has been described as “one of the most critical challenges faced by management scholars” (Aguinis et al. Reference Aguinis, Boyd, Pierce and Short2011, 395; Bamberger Reference Bamberger2008; Eckardt et al. Reference Eckardt, Crocker and Ahn2019), with macro-approaches taking organizational goals as given and micro-approaches aiming to operate without them. Thus, solving fundamental questions on “collective action” and how “collective intentions” are formed has been recognized as a key research gap for future research within the microfoundations movement (Felin et al. Reference Felin, Foss and Ployhart2015, 617). The present work aims to bridge this gap by using social ontology to explain how organizational goals can emerge even within the ontological assumptions of the microfoundational movement. Through this, the present work contributes to recent attempts to integrate organizational goals with their microfoundations (Kotlar et al. Reference Kotlar, De Massis, Wright and Frattini2018; Linder and Foss Reference Linder and Foss2018) by providing an ontological foundation for such integration—in essence answering the tricky ontological question of “where do organizational goals reside?” (Linder and Foss Reference Linder and Foss2018, 41).
Practical Implications
From a practical point of view, the present work makes explicit that organizations exist to enable the coordinated pursuit of shared goals, and thus the effectiveness and success of organizations are defined in terms of how well each member is able to contribute to those goals. This means that two key tasks of the manager are to define the organizational goals and to ensure that each member is contributing to those goals. First, if there is ambiguity, vagueness, or competing views about organizational goals, the members’ efforts are going to be poorly aligned and less coordinated towards a shared direction. Research has shown that issues of ambiguity and discrepancies in the goals of the organization can have implications for both employee motivation (Chun and Rainey Reference Chun and Rainey2005; Rainey and Jung Reference Rainey and Jung2015) and organizational performance (Smith et al. Reference Smith, Locke and Barry1990). Ensuring clarity of the shared goals is thus a key task of managers. Here, mission and vision statements and similar declarations can be utilized as ways of making the goal explicit and communicable, thus helping to clarify for all organizational members what the shared goal is.
Second, when organizational goals have been clarified, the manager needs to design the deontic architecture of the organization in a way that ensures everyone is contributing to the shared goals. Here, managers must decide on the specific mix of inspiration, obligation, and channeling that would be adequate to guide the efforts of various employee groups. Having the overall goal broadly shared by all organizational members can be an important coordination and motivational mechanism leading to more self-directed effort toward the shared goal and less need for costly monitoring (Gagné Reference Gagné2018; Lindenberg and Foss Reference Lindenberg and Foss2011). Ensuring that employees are inspired by the organizational goals is often the optimal way of ensuring contribution (Gagné Reference Gagné2018), but mere awareness of the goal can already help to mitigate suboptimal pursuit of local role-based goals at the expense of the organizational goals (Ketokivi and Castañer Reference Ketokivi and Castañer2004).
The fact that organizational goals are shared beliefs also reveals that, despite the apparent stability of organizational goals, if enough members simultaneously decided to think about them differently, the whole organization could transform its direction very quickly. One of the most dramatic real-life examples of a collapse of institutional facts was the speech Romanian dictator Nicolae Ceaușescu gave on December 21, 1989. This was an annual event broadcast live on national television and carefully scripted by the state to give an appearance of popular support, including strict orders to the crowd about when to applaud and when to sing. The collective belief in the power of the state to oppress any dissent had kept the dissatisfied citizens at bay, allowing Ceaușescu to declare the goals and rules of the state that everyone was obliged to follow. This time, however, the crowd began to chant unscripted and revolutionary comments back at the dictator. Visibly confused, Ceaușescu started to argue with the unseen hecklers, and the TV broadcast was eventually cut. The next day, Ceaușescu’s palace was stormed by an angry crowd. He tried to escape by helicopter, only to be executed four days after that fateful speech. Here, the collectively shared institutional facts that had steered Romanian lives for decades suddenly collapsed, the dictator lost his authority, and a revolution unfolded in a matter of days.
Individuals wanting to change the organizational direction thus need to understand that behind the apparent stability of the current direction are “just” collective beliefs. If they are able to figure out which parties have the most deontic powers as regards those goals, or which events have the most potential to alter those beliefs, a change of direction could be accomplished surprisingly fast, if they are able to convince enough people to simultaneously switch their allegiance towards this new direction.
Limitations and Future Research
Given that organizations exist to pursue some shared goals or purposes, there must be a process through which the organizational members come to decide what goals and direction they should collectively pursue (Kotlar et al. Reference Kotlar, De Massis, Wright and Frattini2018). The present work has aimed to identify what are the necessary (social) ontological elements that need to be in place for social facts and deontic social rules to emerge. Recognizing these building blocks of shared direction can support many process-oriented empirical approaches, which examine the actual interactions between agents that produce the social facts and deontic rules as an outcome. For example, research on the Communicative Constitution of Organization (CCO) sees various organizational phenomena like rules, principles, and goals come into existence and transform through interconnected communication practices (Nathues et al. Reference Nathues, Endedijk and van Vuuren2023; Schoeneborn et al. Reference Schoeneborn, Kuhn and Kärreman2019; Vásquez et al. Reference Vásquez, Bencherki, Cooren and Sergi2018). Research into social-symbolic work, in turn, has analyzed the discursive, relational, and material dimensions of the efforts people engage in to construct organizational phenomena (Lawrence and Phillips Reference Lawrence and Phillips2019). Integrating the present social ontological approach with the process-oriented examinations of the discursive and communicative practices through which various organizational phenomena come to be constructed can shed light on the actual practice of producing organizational goals. The present work thus can give analytical tools and an ontological backbone for such empirical process-oriented analyses.
However, such integrative work needs to be careful in examining the compatibility of the ontological approaches, as the microstructural approach and social ontology tend to take individual agents for granted, while process ontological approaches tend to see processes as primary (see Pelly Reference Pelly2017; Whitehead Reference Whitehead1979). Such process ontological approaches are often aligned with relational ontology, where individuals are seen not as separate and atomistic but rather existing in a social context deeply intertwined and shaped by this context (Stout Reference Stout2012; Pelly and Boje Reference Pelly and Boje2020). In such a view, the individual is embedded in a situation “which is in such immediate relation to the individual that its forces can be reckoned with both as cause of and effect of his activity” (Follett Reference Follett1930, 109). Interpreted in this way, such a differentiated relational ontology is in alignment with the present social ontological view, which also emphasizes how deeply the shared norms influence the individual’s way of being in the world—even though the present account makes no assumptions about “a shared metaphysical source” (Pelly and Boje Reference Pelly and Boje2019, 30). Furthermore, in contrast to strong interpretations of process theory where the primacy of processes makes agents irrelevant, the present account starts with the assumption of there being separate agents that then come together, even if the agents have tendencies (such as a sensitivity to norms and a capability for collective intentionality) that help them to become deeply embedded in a shared social reality.
It must also be pointed out that organizations typically having shared goals as a central coordination mechanism does not preclude the existence of extreme cases where the goal is not shared. We can imagine an organization where the owner-CEO has carefully crafted each role to have certain duties and rights so that each member comes to contribute to the overall goal, while only the CEO is aware of that goal. Here, there would thus be one decision-maker in the organization, everyone else being mere role-fulfillers. An evil genius crafting a doomsday device could get independent contractors to fulfill one innocent-looking task each, so that nobody except him would know what they are building. Each individual would thus be channeled to contribute to the overall goal, without any idea what their individual actions are contributing to. In such an extreme case, the goal would still be “shared” among all the decision-makers of the organization, even if it, in this case, means that it is “shared” only by the one person in charge. In practice, however, such extreme cases are close to impossible, as in most cases there are several people in the organization with so much decision-making power that not knowing what they are aiming at would lead to serious inefficiencies as people would make “wrong” choices from the point of view of the overall goal, simply because they are not aware of that overall goal. The same is true of a situation where the evil genius would have deceived everyone else in the organization to believe the goal is X, while it is Y. There would be serious inefficiencies as people would come to make decisions that are detrimental for Y because they try to optimize X. Awareness of the shared goal is an important coordination mechanism, especially among those with more decision-making power, and thus lack of awareness of organizational goals or being deceived about them would seriously compromise the organization’s ability to efficiently pursue its goals.
Another illustrative extreme case would be a situation where two powerful factions within the organization have clearly different ideas about what the “true” organizational goal is. In ordinary cases, where there is a sufficiently shared belief in what the organizational goal is, an individual can be mistaken about the goal—if their belief is different from what others believe, then they are simply mistaken about what the goal is. In the case of two roughly equally powerful factions, there is no external and impartial “point from nowhere” that can unanimously rule that one group’s belief is right, the other group’s wrong. Instead, two truths about the organizational goal exist simultaneously and clash in practice when the two factions aim to steer the organization in different directions. This will naturally be a significant source of inefficiency for the organization as efforts contradict each other and much effort is wasted on internal battles, typically leading to either the collapse or division of the organization, or alternatively, one faction winning over the other, subsequently forcing the whole organization to follow what they believe the goal of the organization ought to be.
Finally, it is worth remembering the limited role that organizational goals have in explaining individual action within the organization. As noted, organizations are complex social webs where individual action is determined not only through belief in a shared goal but through various norms, role expectations, power relations, and other factors. We should thus not overestimate the explanatory power of organizational goals—many actions of the organizational members are explained by various other beliefs and deontic powers, with members only occasionally directly thinking about the organizational goal. In particular, mere role-fulfillers might not know the goal, might disagree with the goal, or might be mistaken about the goal, yet still come to contribute to it through fulfilling their individual role. Yet, even if limited, I see that shared belief in an organizational goal still has an important explanatory role, especially as regards the actions of those decision-makers who have significant power to determine what they themselves and what others ought to be doing in the organization. Among them, the shared goal is a key coordination mechanism that allows them to make choices that lead their efforts to be integrated and aimed towards the same direction. Thus, we should remember that shared belief in an organizational goal is just one of the mechanisms explaining the actions of organizational members, often overshadowed by other forces. Yet even in this limited role, it has a key function in explaining how the actions of decision-makers within the organization come to be aligned and contribute to a shared direction.
CONCLUSION
Organizations need goals to exist. Without having something collective to pursue, there would not be any reason for their existence, as the whole point of establishing organizations is to coordinate efforts towards an overarching goal that individuals could not accomplish separately. Thus, the existence of such a goal is ultimately “cashed out” in practice: Is the goal adequately clear and shared to be able to align organizational members’ efforts to ensure that they all sufficiently contribute to a shared direction? Too often, analyses of organizations have taken the existence of overarching goals as a given, focusing rather on the question of what makes the effective pursuit of such goals possible. What the present article has argued is that rather than take it as self-evident that organizations have goals, we should recognize this as a significant achievement of social construction. In fact, what makes humans exceptional in the animal kingdom is exactly our ability to have shared intentions, shared goals, and shared norms (Tomasello et al. Reference Tomasello, Carpenter, Call, Behne and Moll2005; Reference Tomasello, Melis, Tennie, Wyman and Herrmann2012; Tuomela Reference Tuomela2013). The human cognitive capabilities for shared intentions and mutually recognized deontic powers are thus the foundational cognitive building blocks for why humans can have organizations.
Frank Martela (frank.martela@aalto.fi) is an assistant professor at the Department of Industrial Engineering and Management at Aalto University, specialized in organizational design, human well-being and flourishing, and how organizations and institutions can unleash human potential. He holds PhDs in organizational research (2012 Aalto University) and practical philosophy (2019 University of Helsinki). Beyond his interdisciplinary academic work in psychology, philosophy, and organizational research, he has been interviewed by New York Times, CNN, and Le Monde, among others. His book A Wonderful Life: Insights on Finding a Meaningful Experience (HarperCollins, 2020) has been translated into twenty-nine languages.
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