Profit, Purpose and the ‘Price of Change’: Evidence From Benefit Corporation Transitions

This study investigates the short-term financial consequences of transforming into a benefit corporation, a hybrid organisationalform that embeds a dual mission of profit and public benefit. Drawing on the Social Resource-Based View and sustainability-oriented change management, we argue that the transition entails a reconfiguration of organisational priorities and resourceallocation, which may temporarily affect firms' financial performance. Using a longitudinal event study on Italian firms, wecompare transformed benefit corporations with a matched sample of non-benefit firms. The results reveal lower performance inrevenues, more tentative evidence on total assets, together with a reconfiguration of the debt structure following the transfor-mation. Rather than signalling structural weakness, these dynamics may reflect transitional adjustment costs associated withthe development of social and relational capabilities. The study contributes to research on hybrid organisations by clarifying thefinancial implications of benefit transformation and offers managerial insights on the need for careful financial planning duringthe transition process.