Corporate Purpose in Public and Private Firms

Claudine Gartenberg () and George Serafeim ()
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Claudine Gartenberg: Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104
George Serafeim: Accounting and Management, Harvard Business School, Boston, Massachusetts 02163

Management Science, 2023, vol. 69, issue 9, 5087-5111

Abstract: Analyzing data from approximately 1.5 million employees across 1,108 established public and private U.S. companies, we find that the strength of employee beliefs related to purpose is weaker in public companies. Among public companies, those beliefs are stronger for firms with more committed owners. These patterns are most pronounced within the salaried middle and hourly ranks rather than senior executives. Differences across firms can be attributed, in part, to differences in leadership and incentive characteristics. Our findings are consistent with higher owner commitment and the corresponding policies that arise alongside this higher commitment, enabling a stronger sense of purpose inside organizations.

Keywords: corporate purpose; corporate ownership; long-term investment (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:9:p:5087-5111

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