BM_IMD_REPORT-How-Authentic-is-your-Corporate-Purpose

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Figure 3: Top Five Companies with an Authentic Corporate Purpose – Unsolicited 10 Top 5 Companies Mentioned by Executives 9 8 7 6 5 4 Count Percent 3 2 1 0 Google Nestlé Apple IKEA Patagonia To supplement our first open-ended question, we also asked respondents to rate the corporate purpose authenticity of a predetermined list of 30 companies. For this list, we selected organizations that have been previously ranked as highly reputable businesses by Corporate Knights, Global ESG 100, Ethisphere, Fortune’s Most Reputable Companies and the Dow Jones Sustainability Index. Again, we found that no single company emerged as a clear “winner.” On the whole, respondents did not “strongly agree” (7) that any one company stood out from other companies on the list in terms of the authenticity of their corporate purpose. As can be seen in Figure 4, the highest-rated solicited company was BMW with a score of 5.87 (refer to Appendix X for data). However, the difference in mean values between companies is not great, in that the number 5 company, Michelin, scored a 5.64. Interestingly, however, both Nestlé and Patagonia appeared in both the unsolicited and solicited lists suggesting that these two companies, despite only marginally higher ratings, may nonetheless represent current best in class organizations for authenticity of corporate purpose (refer to Appendix XI for the ranking of full list of 30 companies solicited). 16
Figure 4: Top Five Companies with an Authentic Corporate Purpose – Solicited Q: In your opinion, to what extent do you believe that the following companies have an authentic corporate purpose? Top 5 Ranked Companies: Average Score (1-Strongly Disagree; 7-Strongly Agree) BMW Patagonia Nestlé Volkswagen Unilever Michelin 5.45 5.50 5.55 5.60 5.65 5.70 5.75 5.80 5.85 5.90 Based on our research, we suggest several reasons why it may be so difficult to identify a company with an authentic corporate purpose. When we asked respondents whether the company they selected as having an authentic corporate purpose uses its purpose to guide its strategic decisionmaking, the executives as a group generally agreed that this was the case (average score of 5.91). As such, the alignment between a firm’s stated corporate purpose and the strategic decisions the firm makes seems to be a very important determinant of authenticity. Given this finding, we might conclude that either: 1) There may in fact not be that many companies with corporate purposes that are seen to be completely aligned with their strategic actions. In this situation, even though the company says one thing, it behaves in a different way (in other words, the “walking the talk” part of the equation is not operational). This makes external stakeholders view the company’s corporate purpose as untruthful, and therefore they cannot view the firm as having an authentic corporate purpose. Or: 2) In general, a significant number of companies may not be effectively communicating their corporate purposes to the external world (in other words, the “talking the walk” part of the equation is not operational). In this case, external constituents do not have enough information to connect a company’s strategic actions to its corporate purpose. Thus, the external stakeholders do not see the firm as having an authentic corporate purpose. 17
Page 1 and 2: How Authentic is your Corporate Pur
Page 3 and 4: Contents Executive summary ........
Page 5 and 6: Executive summary Introduction Over
Page 7 and 8: although awareness is critical to a
Page 9 and 10: Research by Burson-Marsteller and I
Page 11 and 12: To validate the dimensional structu
Page 13 and 14: Leading Image: In contrast, researc
Page 15: 4. Survey Results and Key Findings
Page 19 and 20: We then asked more specifically for
Page 21 and 22: 6. Leadership and Authentic Corpora
Page 23 and 24: 7. Qualitative Research Findings In
Page 25 and 26: One executive described the “doub
Page 27 and 28: companies as members. Other such fo
Page 29 and 30: - Is the organization aware of the
Page 31 and 32: 1) Seeking feedback from stakeholde
Page 33 and 34: knowledge for the broader good. Tha
Page 35 and 36: - Does the organization openly shar
Page 37 and 38: • Strategy has to illustrate purp
Page 39 and 40: making process. If managers are not
Page 41 and 42: De Hoogh, A. H., Den Hartog, D. N.,
Page 43 and 44: Leading 13. Appendices Appendix I:
Page 45 and 46: Appendix II: Qualitative Interview
Page 47 and 48: Appendix III: Qualitative Interview
Page 49 and 50: Appendix V: Characteristics of Surv
Page 51 and 52: Appendix VII: Industry Demographics
Page 53 and 54: Appendix IX: Companies Identified a
Page 55 and 56: Appendix XI: Ranking of Full List o
Page 57 and 58: Appendix XIII: Status of Authentic
Page 59 and 60: Appendix XV: Standardized item fact
Page 61: Appendix XVII: Confirmatory Factor

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