Walk into any corporate boardroom and you’ll hear the same debate: How should we organize our management team to achieve multiple, often competing objectives? Should each manager own a single, clear goal—the CMO drives customer satisfaction, the COO focuses on efficiency, the CTO champions innovation? Or should all managers be collectively accountable for the entire portfolio of objectives?
This question has become increasingly urgent as stakeholder expectations multiply. Companies must now deliver not just financial returns but also environmental progress, social impact, and technological advancement. The conventional wisdom, rooted in decades of management theory, suggests specialization is key, giving each manager one clear objective to avoid cognitive overload and conflicting priorities. Yet, some of today’s most successful companies—from Best Buy’s remarkable turnaround to multinational giants like Veolia—seem to thrive by doing exactly the opposite.
Our new study published in the Strategic Management Journal addresses this fundamental question, investigating when organizations benefit from having all managers pursue multiple objectives collectively—what the researchers term the “common purpose advantage.”
The research we conducted tackles the critical choice between dividing objectives or uniting around them. “What motivated us was seeing firms increasingly pursue multiple organizational objectives yet struggling to decide how to allocate these objectives across their managers,” explains Munro-Clark, co-author of the study and a doctoral candidate at HEC Paris. “While conventional wisdom suggests managers should focus on single objectives to avoid cognitive overload, we wondered if there might be conditions where collective pursuit of all objectives actually creates superior performance.”
To find out, we developed a computational model representing firms with multiple managers overseeing various units. They compared firm performance under two systems: “objective myopia,” where each manager focused on just one objective, and “common purpose,” where all managers pursued the full set. The model allowed front-line units to search for improvements while managers could share better practices with one another across the organization.
The findings reveal important nuances. First, the researchers confirmed that without practice sharing between managers, objective myopia is indeed superior—there is actually a common purpose disadvantage. However, when managers actively share practices, a common purpose advantage can emerge, but only under specific conditions. We note that the key is “moderate strategic diversity.” When managers’ units start with different strategies, practice sharing generates sufficiently valuable distant search to offset the additional complexity incurred during local search.
This advantage is not universal, however. It relies on having a sufficient number of managers who start with distinctly different strategies. With too few managers, or when units are already doing things too similarly, there isn’t enough strategic variation to make practice sharing valuable. The environment matters, too; while a common purpose boosts performance in stable or moderately turbulent settings, the study finds that in highly turbulent environments, the advantage disappears. In such cases, the rapid convergence on similar practices limits the firm’s ability to adapt to severe shocks. Additionally, the scope of the firm’s purpose is a critical constraint.
In this study, we identified a clear threshold regarding the total number of organizational objectives: the advantage manifests when the firm pursues fewer than five objectives in total. Beyond this point, the complexity of comparing performance across too many dimensions overwhelms the benefits. Finally, the relationship between objectives is key. The common purpose advantage peaks when objectives are moderate.
R. Durand is the Joly Family Professor in Purposeful Leadership at HEC Paris and Harry Munro-Clark a PhD student in the Strategy department and Purpose Research Center at HEC Paris.
