Purpose wins? A study of purpose-profit orientations, stakeholder perceptions and trust in firms

Abstract

PurposeThe research seeks to evaluate stakeholder perceptions of firms, the extent these assessments impact trust in firms and possible implications for sustainability communications.Design/methodology/approachThree studies were undertaken involving two experiments (n = 436, n = 393) and one survey (n = 217). Analyses of variance was used in all three studies and in studies 2 and 3—to test for possible mediators—each variable was tested using Hayes' PROCESS macro (Hayes, 2013) with bootstrapping of 5,000 samples.FindingsResults demonstrate significant favouring of sustainability-minded firms. Some differences between consumers and investors were found but also notable commonalities such as a general propensity to favour purpose-oriented firms and similar determinations of trust in firms.Practical implicationsFindings could support more effective sustainability communications and firm decisions regarding investments in purpose- and sustainability-oriented initiatives. The results may also support designs to pursue and promote designations (e.g. B Corp) that legitimize sustainability claims.Originality/valueThis research was unique in its evaluation of two stakeholder types in the same context. Further, it provides new insights into how a firm’s profit-purpose orientation affects stakeholder perceptions and assessments of trustworthiness.