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The 1990s brought a strong dominance of the US model of corporate governance, setting the continental European model at a disadvantage. Due to the financial crisis, the shareholder dominated Anglo‐American model has lost much of its evidence. The purpose of this paper is to try to come to terms with this development.

The paper compares the American model of corporate governance shaped by the idea of the capital market as the market for corporate control and the Continental European model shaped by the idea of consensual decisions and co‐determination of stakeholder groups. The paper uses as the main parameters the dominant features of both models, the capital market orientation in the case of the American and the consensus orientation in the case of the Continental European model and demonstrates the strengths and shortcomings of both models. It analyses the idea of the purpose of the firm and its impact on the formation of the legal and ethical rules of the corporation.

The paper finds that different concepts of the firm's purpose lead to different concepts of the firm, to a shareholder or a stakeholder concept of the firm. Basic models of philosophical theory like purpose, agency and consensus are used to describe foundational ideas of the theory of the firm.

The philosophical foundational concepts of the firm discussed in the paper add new insight to the discussion about corporate governance and allow a better understanding of the underlying models of corporate governance. They make the differences and the common features of the American and European models visible.

The research seeks to evaluate stakeholder perceptions of firms, the extent these assessments impact trust in firms and possible implications for sustainability communications.

Three 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.

Results 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.

Findings 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.

This 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.

Extant research presents firms’ purpose as a consensual and positive attribute. This paper introduces an alternative perspective, which sees firms’ purposefulness as defined in relation to specific audiences. A firm’s purposefulness to a focal audience can be either positive or negative. Audiences find firms with which they share a common prioritization of issues more purposeful in absolute terms. Audiences find firms with which they share a common understanding of issues positively purposeful. Conversely, audiences find firms with an opposite understanding of issues negatively purposeful. Audiences harness specific resources to support firms they find positively purposeful and to oppose firms they find negatively purposeful. This paper introduces topic modeling and word embeddings as two techniques to operationalize this audience-based approach to purposefulness.

Research has found that firms with deep purpose treat purpose as an existential intention that informed every decision, practice and process. They adopted purpose as their operating system, perceiving it as a vital animating force. As a result, they navigated the tumultuous terrain of multi-stakeholder capitalism far more adeptly than most, increasing value for all stakeholders, including investors, over the long-term.

The author analyses Professor Ranjay Gulati’s new book “Deep Purpose” and his HBR article, “The Messy but Essential Pursuit of Purpose” that introduce the concept of “deep purpose,” which has enabled some firms to “operate with heightened passion, urgency, and clarity”.

Firms with deep purpose treat ‘purpose as an existential intention that informed every decision, practice and process’.

Purpose serves as an organizing principle that shapes decision-making and binds stakeholders to one another.

This is a very timely article that will held senior executives develop and articulate their firms purpose statement and connect it to their operating practices.

Loan officer decisions are of particular importance to entrepreneurial firms which rely heavily on debt financing as a primary source of capital. The authors investigate whether social purpose in these firms impact loan officer response to the violation of a debt covenant and whether there is a differential response in decision making between loan officers that work at local banks and those that work at national banks.

In total 332 loan officers from cities in the South and Midwest United States participated in a quasi-experiment comparing entrepreneurial firms that violated their debt covenants. The loan officers were asked to evaluate loan materials and decide whether they would enforce loan covenant provisions of renegotiated interest rate and by what magnitude. In the treatment group, the loan officer evaluated loan materials of an entrepreneurial firm that included information related to the firms social purpose within their community. In the control group, the evaluation materials did not include this information.

Consistent with social capital theory, the results suggest that loan officers view community involvement as beneficial to entrepreneurial firm value. Loan officers were less likely to increase interest rates among firms that demonstrated social purpose. Loan officers that decided to increase interest rates punished socially purposeful firms less severely than non-socially purposeful firms. Additionally, loan officers at community banks were less likely to increase interest rates than those at national banks.

While the prior literature examines loan covenant violations, the authors focus on the impact of loan officer decision making in entrepreneurial firms specifically around covenant enforcement. Loan officer decisions have important implications for debt financing but are typically not observable to researchers. Prior work examining the relationship between social purpose and debt financing focuses on large public firms. This study recognizes that social purpose in entrepreneurial firms is less formalized and explicit and thus should be studied separately from large firms.

The purpose of this paper is to examine market reactions to private equity placements and intra-industry information spillover effects in the Taiwan Stock Exchange.

The authors first use the market model to compute the abnormal announcement returns. To examine the joint impact of the private investment in public equity (PIPE) purposes and the lead investor industry, the authors regress the issuers’ cumulative abnormal returns (CARs) on the dummy variables of PIPE purposes and the lead investor industry. To study the spillover effects, the authors regress the rivals’ CARs on the issuers’ CARs, PIPE purposes, and the lead investor industry. Finally, the industry Herfindahl index is used as a proxy for the market power of issuers and rivals to examine its impact on the spillover effects.

The authors find that issuing firms experience positive abnormal returns during the announcement period. Issuers enjoy more positive market reactions when the proceeds of offerings are primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the same industry. Furthermore, the authors show that the contagion effect dominates the competitive effect in private equity placements at the aggregate level. At the subsample level, the authors find competitive effect overpowers contagion effect when the purpose of offerings is primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the different industry. Finally, the authors show that rivals with relative lower market power enjoy more positive contagion effects.

First, the analysis documents the simultaneous importance of both the purposes of private offerings and the lead investor’s industry on announcement reactions, which shed new light on the positive abnormal returns during the announcement period. Second, the study adds to the literature on the information spillover effects by analyzing the role played by purposes of offerings and rivals’ market power. This paper provides a more complete picture of the offsetting competitive and contagion effects.

The currently dominant version of the corporate form – the profit-maximizing corporation – is one of the most influential organizational forms in contemporary society. It is also one of the most criticized organizational forms, especially with respect to questions of purpose, participation, and ownership. The corporation’s strong focus on profit maximization and its non-democratic nature, as it excludes non-shareholding stakeholders from participating in how the corporation is run, have all attracted significant criticism. There are, however, several debates over alternative ways of organizing besides the corporation. In this chapter, we review the most influential of these: co-operatives, state-owned enterprises, democratically organized firms, social enterprises, stakeholder firms, and firms based on the sharing economy business model. We first analyze how these alternative ways of organizing do things differently with respect to questions of purpose, participation, and ownership and then we discuss how these different approaches can inspire efforts to reform the corporation.

Due to the emergent use of social media for marketing purposes, and the limited number of studies focusing on the use of social media by firms, the purpose of this paper is to explore the inclusion of social networks in the traditional marketing mix models.

A sample of 20 small and large Italian liquor producers was used, and their Facebook profiles were content analyzed.

The results provide evidence about the emerging shift from the use of social media for communication purposes through static advertising (characterized by pictures and slogans), to its use as an interactive channel that can influence consumers’ purchasing behaviour through multimedia tools (i.e. games and interactive applications able to solicit users’ interest), by emphasizing the extent to which a higher level of participation by a firm involves a higher level of consumer interaction. The findings also suggest that the firm’s participation should be considered as a new element of the traditional marketing mix model and as an additional tool for efficient market sizing and sensing.

The study offers findings on actual usage of Facebook as part of marketing mix strategies based on large and small enterprises operating in the food and beverage sector, where a dearth of studies is observed. The study enhances and advances the social media and marketing literatures.