Management Papers
Document Type
Working Paper
Date of this Version
6-30-2016
Publication Source
Columbia Business School Research Paper No. 16-69
Abstract
We construct a measure of corporate purpose within a sample of US companies based on approximately 500,000 survey responses of worker perceptions about their employers. We find that this measure of purpose is not related to financial performance. However, high purpose firms come in two forms: firms that are characterized by high camaraderie between workers and firms that are characterized by high clarity from management. We document that firms exhibiting both high purpose and clarity have systematically higher future accounting and stock market performance, even after controlling for current performance, and that this relation is driven by the perceptions of middle management and professional staff rather than senior executives, hourly or commissioned workers. Taken together, these results suggest that firms with employees that maintain strong beliefs in the meaning of their work experience better performance.
Keywords
corporate purpose, performance, employee engagement, work meaning
Recommended Citation
Gartenberg, C. M., Prat, A., & Serafeim, G. (2016). Corporate Purpose and Financial Performance. Columbia Business School Research Paper No. 16-69, Retrieved from https://repository.upenn.edu/mgmt_papers/274
Date Posted: 19 February 2018