2020
Working Paper
HBS Working Paper Series

Corporate Purpose in Public and Private Firms

By: Claudine Gartenberg and George Serafeim

Format:Print
| Language:English
| Pages:47

Abstract

Analyzing data from approximately 1.5 million employees across 1,108 established public and private U.S. companies, we find that employee beliefs about their firm’s purpose is weaker in public companies. This difference is most pronounced within the salaried middle and hourly ranks, rather than senior executives. Among private firms, purpose is lower in private equity owned firms. Among public companies, purpose is lower for firms with high hedge fund ownership and higher for firms with long-term investors. We interpret our findings as evidence that higher owner commitment is associated with a stronger sense of purpose among employees within the firm.

Keywords

Purpose; Corporate Purpose; Culture; Corporate Culture; Public And Private Organizations; Hedge Fund; Executive Pay; Organizational Culture; Mission and Purpose; Employees; Attitudes; Ownership; Leadership; Executive Compensation

Citation

Gartenberg, Claudine, and George Serafeim. "Corporate Purpose in Public and Private Firms." Harvard Business School Working Paper, No. 20-024, August 2019. (Revised July 2020.)