Beyond Profits: The Rise of Dual-Purpose Organizations and Its Consequences for Disclosure

40 Pages Posted: 17 Apr 2017

See all articles by Anil Arya

Anil Arya

Ohio State University (OSU) - Fisher College of Business

Brian Mittendorf

Ohio State University (OSU) - Fisher College of Business

Ram Ramanan

SUNY at Binghamton - School of Management

Date Written: April 16, 2017

Abstract

Recognizing the role and value of diverse stakeholders, firms pursing a "beyond profit" agenda are becoming increasingly common. This paper studies such hybrid entities - firms that value the profits they create as well as the surpluses generated for consumers - and details their implications for industry disclosure practices. The findings demonstrate that disclosure incentives are perturbed not just for the hybrid firms but also for traditional profit-maximizing rival firms, and information revealed can be both self-serving and altruistic. Accounting for production and information consequences, the paper then assesses whether an emphasis on consumer welfare that a hybrid entity brings can itself be a strategic ploy aimed at profit maximization, rather than merely a statement of goodwill.

JEL Classification: C72

Suggested Citation

Arya, Anil and Mittendorf, Brian and Ramanan, Ram, Beyond Profits: The Rise of Dual-Purpose Organizations and Its Consequences for Disclosure (April 16, 2017). Available at SSRN: https://ssrn.com/abstract=2953743 or http://dx.doi.org/10.2139/ssrn.2953743

Anil Arya

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Brian Mittendorf

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Ram Ramanan (Contact Author)

SUNY at Binghamton - School of Management ( email )

P.O. Box 6015
Binghamton, NY 13902-6015
United States

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