<form name="aspnetForm" method="post" action="corporate-purpose-and-financial-performance?item=corporate-purpose-and-financial-performance" id="aspnetForm">
<input type="hidden" name="MSOWebPartPage_PostbackSource" id="MSOWebPartPage_PostbackSource" value="" />
<input type="hidden" name="MSOTlPn_SelectedWpId" id="MSOTlPn_SelectedWpId" value="" />
<input type="hidden" name="MSOTlPn_View" id="MSOTlPn_View" value="0" />
<input type="hidden" name="MSOTlPn_ShowSettings" id="MSOTlPn_ShowSettings" value="False" />
<input type="hidden" name="MSOGallery_SelectedLibrary" id="MSOGallery_SelectedLibrary" value="" />
<input type="hidden" name="MSOGallery_FilterString" id="MSOGallery_FilterString" value="" />
<input type="hidden" name="MSOTlPn_Button" id="MSOTlPn_Button" value="none" />
<input type="hidden" name="__REQUESTDIGEST" id="__REQUESTDIGEST" value="noDigest" />
<input type="hidden" name="MSOSPWebPartManager_DisplayModeName" id="MSOSPWebPartManager_DisplayModeName" value="Browse" />
<input type="hidden" name="MSOSPWebPartManager_ExitingDesignMode" id="MSOSPWebPartManager_ExitingDesignMode" value="false" />
<input type="hidden" name="MSOWebPartPage_Shared" id="MSOWebPartPage_Shared" value="" />
<input type="hidden" name="MSOLayout_LayoutChanges" id="MSOLayout_LayoutChanges" value="" />
<input type="hidden" name="MSOLayout_InDesignMode" id="MSOLayout_InDesignMode" value="" />
<input type="hidden" name="MSOSPWebPartManager_OldDisplayModeName" id="MSOSPWebPartManager_OldDisplayModeName" value="Browse" />
<input type="hidden" name="MSOSPWebPartManager_StartWebPartEditingName" id="MSOSPWebPartManager_StartWebPartEditingName" value="false" />
<input type="hidden" name="MSOSPWebPartManager_EndWebPartEditing" id="MSOSPWebPartManager_EndWebPartEditing" value="false" />
<input type="hidden" name="__VIEWSTATE" id="__VIEWSTATE" value="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" />

<script type="text/javascript">
//<![CDATA[
var MSOWebPartPageFormName = 'aspnetForm';
var g_presenceEnabled = true;var _fV4UI=true;var _spPageContextInfo = {webServerRelativeUrl: "\u002f", webLanguage: 1033, currentLanguage: 1033, webUIVersion:4,pageListId:"{229a3fa1-d23f-4194-af04-83f712f16168}",pageItemId:24, alertsEnabled:true, siteServerRelativeUrl: "\u002f", allowSilverlightPrompt:'True'};//]]>
</script>
<script type="text/javascript" src="/_layouts/1033/init.js?rev=mdjxRHK1V7KZ%2BuOTcNNcmQ%3D%3D"></script>
<script src="/WebResource.axd?d=KzYTxvKcuTEp7j51joTea5GVr92AuJ4SL5aQ9QUnLuUrG7rTi8YCbgNYedMwdv6fDwv5Ou7X64HliGCav7hiwmuBylh2hjGhv6JU0lkokc63lAPUBD0MIaMGwGty9ueA82idlgs7ktVQj8-X5TCDW8nNPkA1&t=636767462854137053" type="text/javascript"></script>
<script type="text/javascript">
//<![CDATA[
var dlc_fvsi = {"DefaultViews":[],"ViewUrls":[],"WebUrl":"\/"};//]]>
</script>

<script type="text/javascript">
//<![CDATA[
function _spNavigateHierarchy(nodeDiv, dataSourceId, dataPath, url, listInContext, type) {
    CoreInvoke('ProcessDefaultNavigateHierarchy', nodeDiv, dataSourceId, dataPath, url, listInContext, type, document.forms.aspnetForm, "", "\u002fitem\u002fcorporate-purpose-and-financial-performance");

}
//]]>
</script>
<input type="hidden" name="__VIEWSTATEGENERATOR" id="__VIEWSTATEGENERATOR" value="7BAFC84E" />
<script type="text/javascript">RegisterSod("sp.core.js", "\u002f_layouts\u002fsp.core.js?rev=7ByNlH\u00252BvcgRJg\u00252BRCctdC0w\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("sp.res.resx", "\u002f_layouts\u002fScriptResx.ashx?culture=en\u00252Dus\u0026name=SP\u00252ERes\u0026rev=b6\u00252FcRx1a6orhAQ\u00252FcF\u00252B0ytQ\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("sp.ui.dialog.js", "\u002f_layouts\u002fsp.ui.dialog.js?rev=Tpcmo1\u00252FSu6R0yewHowDl5g\u00253D\u00253D");RegisterSodDep("sp.ui.dialog.js", "sp.core.js");RegisterSodDep("sp.ui.dialog.js", "sp.res.resx");</script><script type="text/javascript">RegisterSod("core.js", "\u002f_layouts\u002f1033\u002fcore.js?rev=RiGU6\u00252FvAzNgOjxKFQLw9pw\u00253D\u00253D");</script>
<script type="text/javascript">
//<![CDATA[
var _spFormDigestRefreshInterval = 1440000;window.g_updateFormDigestPageLoaded = new Date(); window.g_updateFormDigestPageLoaded.setDate(window.g_updateFormDigestPageLoaded.getDate() -5);function loadMDN2() { EnsureScript('MDN.js', typeof(loadFilterFn), null); }
function loadMDN1() { ExecuteOrDelayUntilScriptLoaded(loadMDN2, 'sp.ribbon.js'); }
_spBodyOnLoadFunctionNames.push('loadMDN1');//]]>
</script>
<script type="text/javascript">RegisterSod("sp.runtime.js", "\u002f_layouts\u002fsp.runtime.js?rev=IGffcZfunndj0247nOxKVg\u00253D\u00253D");RegisterSodDep("sp.runtime.js", "sp.core.js");RegisterSodDep("sp.runtime.js", "sp.res.resx");</script><script type="text/javascript">RegisterSod("sp.js", "\u002f_layouts\u002fsp.js?rev=\u00252B4ZEyA892P3T0504qi0paw\u00253D\u00253D");RegisterSodDep("sp.js", "sp.core.js");RegisterSodDep("sp.js", "sp.runtime.js");RegisterSodDep("sp.js", "sp.ui.dialog.js");RegisterSodDep("sp.js", "sp.res.resx");</script><script type="text/javascript">RegisterSod("cui.js", "\u002f_layouts\u002fcui.js?rev=OOyJv78CADNBeet\u00252FvTvniQ\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("inplview", "\u002f_layouts\u002finplview.js?rev=WB6Gy8a027aeNCq7koVCUg\u00253D\u00253D");RegisterSodDep("inplview", "core.js");RegisterSodDep("inplview", "sp.js");</script><script type="text/javascript">RegisterSod("ribbon", "\u002f_layouts\u002fsp.ribbon.js?rev=F\u00252BUEJ66rbXzSvpf7nN69wQ\u00253D\u00253D");RegisterSodDep("ribbon", "core.js");RegisterSodDep("ribbon", "sp.core.js");RegisterSodDep("ribbon", "sp.js");RegisterSodDep("ribbon", "cui.js");RegisterSodDep("ribbon", "sp.res.resx");RegisterSodDep("ribbon", "sp.runtime.js");RegisterSodDep("ribbon", "inplview");</script><script type="text/javascript">RegisterSod("sp.ui.policy.resources.resx", "\u002f_layouts\u002fScriptResx.ashx?culture=en\u00252Dus\u0026name=SP\u00252EUI\u00252EPolicy\u00252EResources\u0026rev=YhBHGmUAGyJ3lAgSdE4V\u00252Fw\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("mdn.js", "\u002f_layouts\u002fmdn.js?rev=gwmFFJ2\u00252FfFacqXWAqG\u00252FqKg\u00253D\u00253D");RegisterSodDep("mdn.js", "sp.core.js");RegisterSodDep("mdn.js", "sp.runtime.js");RegisterSodDep("mdn.js", "sp.js");RegisterSodDep("mdn.js", "cui.js");RegisterSodDep("mdn.js", "ribbon");RegisterSodDep("mdn.js", "sp.ui.policy.resources.resx");</script>
<script type="text/javascript">
//<![CDATA[

function _spNavigateHierarchyEx(nodeDiv, dataSourceId, dataPath, url, listInContext, type, additionalQString) {
    SetAdditionalNavigateHierarchyQString(additionalQString);
    g_originalSPNavigateFunc(nodeDiv, dataSourceId, dataPath, url, listInContext, type);
}

g_originalSPNavigateFunc = _spNavigateHierarchy;
_spNavigateHierarchy = _spNavigateHierarchyEx;
var _fV4UI = true;//]]>
</script>
<script type="text/javascript">RegisterSod("msstring.js", "\u002f_layouts\u002f1033\u002fmsstring.js?rev=QtiIcPH3HV7LgVSO7vONFg\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("browserScript", "\u002f_layouts\u002f1033\u002fnon_ie.js?rev=EVTj1bu32\u00252FMla6SDN\u00252FsNTA\u00253D\u00253D");</script>
<script type="text/javascript">
//<![CDATA[
var __wpmExportWarning='This Web Part Page has been personalized. As a result, one or more Web Part properties may contain confidential information. Make sure the properties contain information that is safe for others to read. After exporting this Web Part, view properties in the Web Part description file (.WebPart) by using a text editor such as Microsoft Notepad.';var __wpmCloseProviderWarning='You are about to close this Web Part.  It is currently providing data to other Web Parts, and these connections will be deleted if this Web Part is closed.  To close this Web Part, click OK.  To keep this Web Part, click Cancel.';var __wpmDeleteWarning='You are about to permanently delete this Web Part.  Are you sure you want to do this?  To delete this Web Part, click OK.  To keep this Web Part, click Cancel.';//]]>
</script>
</form>

Skip to Main Content

11 Oct 2016Working Paper Summaries

Corporate Purpose and Financial Performance

by Claudine Gartenberg, Andrea Prat, and George Serafeim

An organization’s purpose is not a formal announcement, but depends on the employees believing in and acting to promote that purpose. This study provides evidence about whether employee beliefs in a strong corporate purpose are associated with superior or inferior financial performance. It shows that organizations where middle managers and salaried professionals feel a strong sense of purpose and have clarity about their job responsibilities and tasks experience superior future financial performance. There was no association for senior executives, sales, or hourly workers.

Author 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.

Paper Information

Full Working Paper Text
Working Paper Publication Date: September 2016
HBS Working Paper Number: HBS Working Paper #17-023
Faculty Unit(s): Accounting and Management

Trending

- 26 Jun 2020
- Research & Ideas
Why Japanese Businesses Are So Good at Surviving Crises
- 12 Jul 2020
- Book
The Harvard Business School Faculty Summer Reader
- 13 Jul 2020
- Research & Ideas
Merck CEO Ken Frazier Discusses a COVID Cure, Racism, and Why Leaders Need to Walk the Talk
- 17 May 2017
- Research & Ideas
Minorities Who 'Whiten' Job Resumes Get More Interviews
- 27 Jul 2020
- Book
Reflection: The Pause That Brings Peace and Productivity

George Serafeim

George Serafeim

Charles M. Williams Professor of Business Administration

Contact

→ More Articles

Find Related Articles

Sign up for our weekly newsletter

Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.