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

• DOI: 10.2308/accr-52166
• Publication Date: 2018-06-15T14:21:31Z
• Authors: Anil Arya; Brian Mittendorf; Ram N. V. Ramanan
• Keywords: Dual role; Profit margin

ABSTRACT Organizations with a mission that extends “beyond profit” to achieve broader objectives are becoming increasingly common. This paper studies such hybrid entities—firms value the profits they generate, as well utility provide customers—and details their implications for industry disclosure practices. The findings demonstrate incentives perturbed not just from being entity, but also competing entities. Accounting both competitive and effects, then assesses circumstances under which firm is economically viable derives ensuing equilibrium composition. As such, we show presence of firms beyond profit can be an endogenous characteristic many industries.