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

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Figure 5: The 12 Dimensions of “Authenticity of Corporate Purpose” .90*** .83*** .98*** .84*** .93*** .96*** .86*** .86*** .94*** .59*** .90*** .90*** Figure 5 reports the test results of the 12 dimensions and shows how each dimension relates to the construct of authentic corporate purpose. The relationship between the dimensions is expressed in terms of standardized factor loadings, which reflect the strength of the relationship between the dimension and the construct of authentic corporate purpose 3 . Since all of the 12 dimensions are significant at the 1% level, it is clear that each of the dimensions presented has a role to play in establishing and maintaining an organization’s authentic corporate purpose. However, as the numbers reported in Figure 5 show, not all the dimensions have the same impact. For example, the originality dimension scored lower than the other 11 dimensions with a standardized factor loading of 0.59, while awareness is highly correlated to authenticity of corporate purpose with a standardized factor loading of 0.98. In addition, not all dimensions were equally strong in terms of the internal consistency and composite reliabilities of their measures 4 . As such, it is possible that a more parsimonious empirical model exists. For the purposes of this report, however, the full theoretical model is retained in discussing the different dimensions of authentic corporate purpose. 3 We tested several different models to ascertain the dimensionality of the ACP construct determining that the second order factor model represented the best model fit. 4 See Appendix XVI for the standardized factor loadings for each item and Appendix XVII for the internal consistency and composite reliability of each dimension. 20
6. Leadership and Authentic Corporate Purpose Having established the twelve dimensions of the Authentic Corporate Purpose (ACP) construct, we next examined the relationship between leadership and ACP in more detail. A review of the literature reveals that the role of leadership is considered crucial to setting the direction, vision and mission of the organization in a manner that defines the organizations corporate purpose. While much has been written about how different types of leadership (e.g. transformational, transactional, transcendent, servant, spiritual, primal etc.) affect dimensions of organizational performance, here, we were interested in the degree to which effective leadership matters to perceptions of authenticity of corporate purpose specifically. As such, we estimated several structural equation models linking our effective leadership variables to ACP. Overall, we found very strong support for leadership as predictor of ACP as can be seen in Figure 6. With a β = .70, almost 50% of the variance in ACP can be explained by the leadership factor. This suggests that effective leadership is in fact essential to establishing an authentic corporate purpose. This finding was also reiterated in our qualitative interviews discussed in the next section. 21
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 and 16: 4. Survey Results and Key Findings
Page 17 and 18: Figure 4: Top Five Companies with a
Page 19: We then asked more specifically for
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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