Corporate purpose has increasingly become an interest in management research. However, empirical studies on the topic are scarce, arguably due to the challenges that operationalization and measurement of this complex construct generate. In this paper, we utilize the upheaval generated by the COVID-19 pandemic to understand the relationship between corporate purpose and corporate disruption response. To that aim, we use a novel dataset generated by JustCapital’s COVID-19 response tracker that characterizes the early responses of 928 companies included in the Russell 1000 Index to the disruption generated by the COVID-19 pandemic. We marry this data to the list of the Business Roundtable corporate purpose statement signatories, which includes 210 firms that declared “a fundamental commitment to all stakeholders” as their corporate purpose. We estimate the differential impact of purpose-driven firms on the rest. After controlling our results with financial indicators and ESG data, we convey that purpose-driven firms were more likely to develop strategies that benefited their surrounding communities and other stakeholders. Moreover, corporations with high ESG were less likely to have an early response that directly benefited stakeholders other than shareholders, except for layoffs and unpaid leave. We discuss the outcomes in light of the corporate purpose literature and its relation to authenticity and stakeholder management.
When Corporate Purpose Fails: Exploring the Inconsistency Between Declarations and Practices
Loza Adaui C.;Mion G.
2025-01-01
Abstract
Corporate purpose has increasingly become an interest in management research. However, empirical studies on the topic are scarce, arguably due to the challenges that operationalization and measurement of this complex construct generate. In this paper, we utilize the upheaval generated by the COVID-19 pandemic to understand the relationship between corporate purpose and corporate disruption response. To that aim, we use a novel dataset generated by JustCapital’s COVID-19 response tracker that characterizes the early responses of 928 companies included in the Russell 1000 Index to the disruption generated by the COVID-19 pandemic. We marry this data to the list of the Business Roundtable corporate purpose statement signatories, which includes 210 firms that declared “a fundamental commitment to all stakeholders” as their corporate purpose. We estimate the differential impact of purpose-driven firms on the rest. After controlling our results with financial indicators and ESG data, we convey that purpose-driven firms were more likely to develop strategies that benefited their surrounding communities and other stakeholders. Moreover, corporations with high ESG were less likely to have an early response that directly benefited stakeholders other than shareholders, except for layoffs and unpaid leave. We discuss the outcomes in light of the corporate purpose literature and its relation to authenticity and stakeholder management.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
