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The Contingent Relationship Between Purpose and Profits

Author

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  • Claudine Gartenberg

    (Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

When do for-profit corporations pursue both purpose and profits and when do they prioritize one over the other? This study explores this question, measuring the strength of purpose based on the perceptions of nearly 1 million employees across 635 U.S. public companies within 14 industry categories. Two main findings emerge. First, the relationship between purpose and profits varies widely across companies and industries. Second, companies with higher levels of innovation intensity, intangible capital, or long-term investors tend to pursue both purpose and profits, whereas companies with lower levels of these factors tend to prioritize one over the other. This evidence suggests that purpose and profits are compatible in settings that rely on innovation and long temporal horizons for value creation and opposed in settings that do not.

Suggested Citation

  • Claudine Gartenberg, 2023. "The Contingent Relationship Between Purpose and Profits," Strategy Science, INFORMS, vol. 8(2), pages 256-269, June.
    • Handle: RePEc:inm:orstsc:v:8:y:2023:i:2:p:256-269
    DOI: 10.1287/stsc.2023.0194
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    References listed on IDEAS

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    Cited by:

    1. Anita M. McGahan, 2023. "The New Stakeholder Theory on Organizational Purpose," Strategy Science, INFORMS, vol. 8(2), pages 245-255, June.
    2. Antonio Cabrales & Esther Hauk, 2026. "Optimally designing purpose and meaning at work," Papers 2601.05005, arXiv.org.
    3. Witold J. Henisz, 2023. "The Value of Organizational Purpose," Strategy Science, INFORMS, vol. 8(2), pages 159-169, June.
    4. Tyler John, 2026. "Regulation and Incentives for “Social Enterprise” in the United States: But First Greater and More Substantive Differentiation," Nonprofit Policy Forum, De Gruyter, vol. 17(1-2), pages 267-296.
    5. Sarah Kaplan, 2023. "The Promises and Perils of Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 288-301, June.
    6. Marya Besharov & Björn Mitzinneck, 2023. "The Multiple Facets of Corporate Purpose: An Analytical Typology," Strategy Science, INFORMS, vol. 8(2), pages 233-244, June.
    7. William Ocasio & Matthew Kraatz & David Chandler, 2023. "Making Sense of Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 123-138, June.
    8. Blanche Segrestin & Jérémy Lévêque & Kevin Levillain, 2025. "Companies with Multiple Purposes: A Study of Governance in French Sociétés à Mission," Post-Print hal-05015380, HAL.
    9. Juan (“John”) Almandoz, 2023. "Inside-out and Outside-in Perspectives on Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 139-148, June.

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