Corporate Purpose and Acquisitions

50 Pages Posted: 26 Mar 2021

See all articles by Claudine Madras Gartenberg

Claudine Madras Gartenberg

Wharton School, University of Penn

Shun Yiu

The Wharton School, University of Pennsylvania

Date Written: March 24, 2021


This study analyzes the relationship between acquisitions—a centerpiece of corporate strategy—and employees’ sense of purpose. Using data from more than 1.5 million employees, we find that purpose is substantially weaker in companies following recent acquisitions. This association is driven by unique acquisitions and those with opaque disclosed rationales. We explore the performance implications of this relationship. We first isolate the component of purpose directly attributable to the deal, and then relate this component to subsequent performance. We find that deals associated with stronger purpose outperform, and those with weaker purpose do not. Together, our evidence suggests a possible tension between strategic and motivational determinants of acquisition success: while firms benefit strategically from uniqueness, it may also erode the sense of purpose within firms.

Keywords: Mergers and Acquisitions, Corporate Purpose, Corporate Strategy

Suggested Citation

Gartenberg, Claudine Madras and Yiu, Shun, Corporate Purpose and Acquisitions (March 24, 2021). Available at SSRN: or

Claudine Madras Gartenberg (Contact Author)

Wharton School, University of Penn ( email )

2035 Steinberg-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104
United States
2158987755 (Phone)

Shun Yiu

The Wharton School, University of Pennsylvania ( email )

3620 Locust Walk
Steinberg-Dietrich Hall
Philadelphia, PA 19104-6370
United States

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