Communication specialists have long been interested in analyzing messages. More recently, they have stressed the need for evaluative tools that account for situational ex pectations and constraints. Drawing from the literature on organizational and managerial effectiveness, we constructed an...

We develop a theory of how the intersection of business goals and the pursuit of "higher purpose" — something that produces a non-pecuniary social benefit valued by the principal and the agent — affects economic outcomes. Two types of principals — those pursuing only wealth maximization...

How does organizational higher purpose affect employee behavior and firm output? We develop an optimal-contracting model which shows that pursuing organizational higher purpose dissipates agency frictions, lowers wage costs and elicits higher employee effort. The effect on profits, however,...

We develop a model in which there are firms and employees who care about profit-sacrificing higher purpose (HP) and those who do not. Firms and employees search for each other in the labor market. Each firm chooses its HP investment. When there is no social pressure on firms to adopt a purpose,...

We develop a model in which there are firms and employees who care about profit-sacrificing higher purpose (HP) and those who do not. Firms and employees search for each other in the labor market. Each firm chooses its HP investment. When there is no social pressure on firms to adopt a purpose,...

How does organizational higher purpose (HP) affect employee behavior and firm output? We develop an optimal-contracting model which endogenizes HP investment. The model shows that HP dissipates agency frictions, lowers wage costs and elicits higher employee effort. Firm profit is non-monotonic...

Within the Ross School of Business, a debate took place a few years back that continues today regarding the role of business. It was sparked by discussion surrounding a “Positive” Pillar as a part of the school strategy. More of the background can be found in the case, “Emphasizing the...