Why Do Firms Have "Purpose"? The Firm's Role as a Carrier of Identity and Reputation

This article develops a theory in which a firm's adoption of a prosocial purpose can increase profitability by strengthening employees' reputation and identity—leading to higher effort and lower wages—as long as implementing purpose is costly with respect to direct monetary payoffs. Employ...

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Bibliographic Details
Published in:The American economic review 2015-05, Vol.105 (5), p.326-330
Main Authors: Henderson, Rebecca, Van den Steen, Eric
Format: Article
Language:English
Subjects:
Accountancy
Business management
Business structures
Corporate identity
CULTURE, TRUST, AND PRODUCTIVITY
Economic models
Economic theory
Employees
Identity
Monetary economics
Pay-off
Philanthropy
Profitability
Profitable firms
Prosocial behavior
Reputation
Reputation management
Reputations
Social identity
Social impact
Strategic management
Studies
Values
Wages
We they distinction
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