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People and Profits: The Impact of Corporate Objectives on Employees’ Need Satisfaction at Work

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Abstract

For decades, scholars have debated the corporate objective. Scholars have either advocated a corporate objective focused on generating value for shareholders or creating value for multiple groups of stakeholders. Although it has been established that the corporate objective can shape many aspects of the corporation—including culture, compensation, and decision making—to date, scholars have not yet explored its psychological impact; particularly, how the corporate objective might influence employee well-being. In this article, we explore how two views of the corporate objective affect employee self-determination, a key component of overall psychological need satisfaction and well-being. We hypothesize that a corporate objective based on creating value for multiple stakeholders will increase employee psychological need satisfaction as compared to one focused on creating value for only shareholders. Across four experimental studies and one field survey, we find consistent support for our hypotheses and test three facets of a stakeholder-focused corporate objective. Theoretical implications and future research directions are discussed.

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Notes

  1. Researchers have evaluated MTurk for the quality of data and compared it to other platforms. They have concluded that MTurk samples are more representative of the US population than in-person convenience samples (Mason and Suri 2012) and that MTurk results demonstrate internal and external validity (Berinsky et al. 2012; Horton et al. 2011). Research has demonstrated that the data obtained are at least as reliable as those obtained via traditional methods (Buhrmester et al. 2011).

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Acknowledgements

This study was funded by the Darden School of Business Administration; no grants were given.

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Correspondence to Bidhan L. Parmar.

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Bidhan Parmar declares that he has no conflict of interest. Adrian Keevil declares that he has no conflict of interest. Andrew C. Wicks declares that he has no conflict of interest.

Appendices

Appendix 1

Self-determination at work questionnaire (Ilardi et al. 1993).

  • Need for autonomy

    • I feel free to express my ideas and opinions in this job.

    • I feel like I can be myself at my job.

    • At work, I often feel like I have to follow other people’s commands.

    • If I could choose, I would do things at work differently.

    • The tasks I have to do at work are in line with what I really want to do.

    • I feel free to do my job the way I think it could best be done.

    • In my job, I feel forced to do things I do not want to do.

  • Need for competence

    • I don’t really feel competent in my job.

    • I really master my tasks at my job.

    • I feel competent at my job.

    • I doubt whether I am able to execute my job properly.

    • I am good at the things I do in my job.

    • I have the feeling that I can even accomplish the most difficult tasks at work.

  • Need for relatedness

    • I don’t really feel connected with other people at my job.

    • At work, I feel part of a group.

    • I don’t really mix with other people at my job.

    • At work, I can talk with people about things that really matter to me.

    • I often feel alone when I am with my colleagues.

    • At work, people involve me in social activities.

    • At work, there are people who really understand me.

    • Some people I work with are close friends of mine.

    • At work, no one cares about me.

    • There is nobody I can share my thoughts with if I would want to do so.

Appendix 2

Questions for stakeholder and shareholder focus (study 2)

  • I believe that my organization values profits above all else.

  • My organization predominantly emphasizes the bottom line.

  • Leaders in my organization care predominantly about profits.

  • To perform my role well I need to focus on increasing profits.

  • I believe my organization cares about multiple-stakeholder groups including: employees, customers, suppliers, the community, and shareholders/lenders.

  • My organization emphasizes more than the bottom line.

  • Leaders in my organization care about a broad group of stakeholders.

  • To perform by role well I need to focus on more than the bottom line.

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Parmar, B.L., Keevil, A. & Wicks, A.C. People and Profits: The Impact of Corporate Objectives on Employees’ Need Satisfaction at Work. J Bus Ethics 154, 13–33 (2019). https://doi.org/10.1007/s10551-017-3487-5

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