Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • January–February 2019
  • Article
  • Organization Science

Corporate Purpose and Financial Performance

By: Claudine Gartenberg, Andrea Prat and George Serafeim
  • Format:Print
ShareBar

Abstract

We construct a measure of corporate purpose within a sample of U.S. 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; Purpose; Employee Motivation; Belief Systems; Corporate Performance; Human Capital; Middle Management; Culture; Corporate Culture; Meaning; Mission and Purpose; Organizational Culture; Employees; Perception; Values and Beliefs; Performance Effectiveness

Citation

Gartenberg, Claudine, Andrea Prat, and George Serafeim. "Corporate Purpose and Financial Performance." Organization Science 30, no. 1 (January–February 2019): 1–18.
  • SSRN
  • Find it at Harvard

About The Author

George Serafeim

Accounting and Management
→More Publications

More from the Authors

    • July 2023
    • Faculty Research

    Vytal: Packaging-as-a-Service

    By: George Serafeim, Michael W. Toffel, Lena Duchene and Daniela Beyersdorfer
    • June 2023
    • Faculty Research

    Roche: ESG and Access to Healthcare

    By: George Serafeim
    • June 2023
    • Faculty Research

    Investing in the Climate Transition at Neuberger Berman

    By: George Serafeim and Benjamin Maletta
More from the Authors
  • Vytal: Packaging-as-a-Service By: George Serafeim, Michael W. Toffel, Lena Duchene and Daniela Beyersdorfer
  • Roche: ESG and Access to Healthcare By: George Serafeim
  • Investing in the Climate Transition at Neuberger Berman By: George Serafeim and Benjamin Maletta
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College