Periodic Reporting for period 3 - METAPoF (Metaphor as the Purpose of the Firm)
Periodo di rendicontazione: 2021-10-01 al 2022-09-30
How does language reflect, and shape, sense-making about the purpose of the firm? In the last decade, corporations have made explicit commitments to social purpose in mission statements, policies, and communications. Growing corporate power has triggered calls for firms to tackle “grand challenges”—including economic inequality, climate change, and resource scarcity. Firms’ efforts to tackle such challenges bring into sharp relief the perceived tension between their financial and social objectives. Thus far, most explanations why executives identify the firm’s purpose as extending beyond creating economic value focus on the external environment. Thus, executives in Anglo-Saxon countries, such as the United States and United Kingdom, tend to prioritize their duties to shareholders. Managers in German-speaking Europe and in Japan are more often acknowledge duties towards non-shareholding stakeholders. However, these explanations ignore variance across firms within the same country.
A linguistic lens complements the dominant focus on external forces to explain how executives and their stakeholders conceive of the purpose of the firm. Language offers a particularly promising lens. Language—not only content, but also latent features such as grammar and figures of speech—sheds light on how actors construe the world. Moreover, discourse can shape which policies and practices become accepted. By using discourse strategically, executives can project their actions as legitimate, potentially shaping the reactions of stakeholders, including investors. Intriguingly, the ways in which complex ideas—such as purpose—are constructed in language are not always explicit. I build on research at the interface of linguistics and cognitive science to argue that even highly subtle ways of speaking about the future and agency shape understandings of the kinds of societal challenges that firms are responsible for tackling. Metaphor, a figure of speech whereby an abstract or elusive concept is described in terms of something more concrete or readily understood, is of particular relevance because it reveals underlying attitudes and subtly influences audience opinions.
The overarching aim is to investigate two dimensions of language that matter for sense-making and sense-giving about purpose: how the future is conceptualized, and how agency is conceptualized. Addressing societal challenges implies that decision makers sufficiently value the future so that they make efforts today that will only pay off after many years. It also implies that they recognize their capacity to effect change so that they believe their efforts will be worthwhile. Both of these dimensions come to the fore in metaphors that express time and agency in terms of space and motion. The project uses archival analysis and experiments to address three concrete objectives, namely to understand 1) why executives use the metaphors they do to describe the future and their agency to act, 2) how distinct metaphors influence the reactions of investors, as well as 3) how the dominant ways of constructing purpose in language vary across nations.
A linguistic lens complements the dominant focus on external forces to explain how executives and their stakeholders conceive of the purpose of the firm. Language offers a particularly promising lens. Language—not only content, but also latent features such as grammar and figures of speech—sheds light on how actors construe the world. Moreover, discourse can shape which policies and practices become accepted. By using discourse strategically, executives can project their actions as legitimate, potentially shaping the reactions of stakeholders, including investors. Intriguingly, the ways in which complex ideas—such as purpose—are constructed in language are not always explicit. I build on research at the interface of linguistics and cognitive science to argue that even highly subtle ways of speaking about the future and agency shape understandings of the kinds of societal challenges that firms are responsible for tackling. Metaphor, a figure of speech whereby an abstract or elusive concept is described in terms of something more concrete or readily understood, is of particular relevance because it reveals underlying attitudes and subtly influences audience opinions.
The overarching aim is to investigate two dimensions of language that matter for sense-making and sense-giving about purpose: how the future is conceptualized, and how agency is conceptualized. Addressing societal challenges implies that decision makers sufficiently value the future so that they make efforts today that will only pay off after many years. It also implies that they recognize their capacity to effect change so that they believe their efforts will be worthwhile. Both of these dimensions come to the fore in metaphors that express time and agency in terms of space and motion. The project uses archival analysis and experiments to address three concrete objectives, namely to understand 1) why executives use the metaphors they do to describe the future and their agency to act, 2) how distinct metaphors influence the reactions of investors, as well as 3) how the dominant ways of constructing purpose in language vary across nations.
I have conducted two literature reviews: one review of purpose, and one review of metaphors used to depict time and agency.
- The first review has been a foundation of the paper "Corporate Social Counterpositioning: How Attributes of Social Issues Influence Competitive Response" (accepted for publication in 2022 in the Strategic Management Journal). In addition to a theoretical model, the paper includes case studies illustrating how corporations address questions of purpose when they face contested social issues. This paper has been presented at the University of Amsterdam and the Strategic Management Society.
- The second review is the basis for the paper “A Metaphorical Theory of Temporal-Emotional Sensegiving.” After two rounds of peer review, this paper was rejected from the Academy of Management Review, but will be submitted shortly to a new journal. This paper has been presented in Dallas, Texas.
I have also collected extensive archival data and conducted experiments.
- Using archival data, I have assessed the influence of journey- and war-related language in explaining reactions to firms’ strategy announcements. The analysis shows a negative influence of war-related language. Specifically, a 1% increase in war-related language produces on average a decline of 0.57% in cumulative abnormal returns. In preparing this analysis, I have also controlled for other (i.e. non-war- and non-journey-related) metaphors, resulting in the development and validation of 12 mini-dictionaries. The archival analysis has been complemented by experiments using investor participants. This paper, an early version of which was presented at the Academy of Management in August, 2020, is soon going to be resubmitted for third-round review at Organization Science.
- I have conducted experiments using English-speaking and German-speaking participants to show the differential ways in which English and German can be used to motivate costly engagement to mitigate the long-term effects of climate change. These experiments form the basis of a paper that has been invited to be resubmitted for third-round review at the journal Futures.
- I have compiled a data set of social enterprises, which includes investment pitches and indicators of funding success. Analysis shows that how entrepreneurs speak about time is a critical driver of funding success. Specifically, speaking about the distant future is beneficial when ventures are focused on delivering short-term financial returns. Otherwise, ventures are successful in raising funds when their leaders draw attention to the near future. I have also conducted two experiments using investors as participants. A paper based on these data has been presented at the Strategic Management Society (September, 2022) and will be submitted to a journal in early 2023.
- I have also compiled a data set of reports from Japanese companies in the automobile and energy sectors, hand coding how purpose is articulated. This data set has been complemented by reports from Japanese, U.S. and German space agencies which, together with funding data, allow a cross-country/language comparison of the ways in which how purpose is understood and conveyed.
- The first review has been a foundation of the paper "Corporate Social Counterpositioning: How Attributes of Social Issues Influence Competitive Response" (accepted for publication in 2022 in the Strategic Management Journal). In addition to a theoretical model, the paper includes case studies illustrating how corporations address questions of purpose when they face contested social issues. This paper has been presented at the University of Amsterdam and the Strategic Management Society.
- The second review is the basis for the paper “A Metaphorical Theory of Temporal-Emotional Sensegiving.” After two rounds of peer review, this paper was rejected from the Academy of Management Review, but will be submitted shortly to a new journal. This paper has been presented in Dallas, Texas.
I have also collected extensive archival data and conducted experiments.
- Using archival data, I have assessed the influence of journey- and war-related language in explaining reactions to firms’ strategy announcements. The analysis shows a negative influence of war-related language. Specifically, a 1% increase in war-related language produces on average a decline of 0.57% in cumulative abnormal returns. In preparing this analysis, I have also controlled for other (i.e. non-war- and non-journey-related) metaphors, resulting in the development and validation of 12 mini-dictionaries. The archival analysis has been complemented by experiments using investor participants. This paper, an early version of which was presented at the Academy of Management in August, 2020, is soon going to be resubmitted for third-round review at Organization Science.
- I have conducted experiments using English-speaking and German-speaking participants to show the differential ways in which English and German can be used to motivate costly engagement to mitigate the long-term effects of climate change. These experiments form the basis of a paper that has been invited to be resubmitted for third-round review at the journal Futures.
- I have compiled a data set of social enterprises, which includes investment pitches and indicators of funding success. Analysis shows that how entrepreneurs speak about time is a critical driver of funding success. Specifically, speaking about the distant future is beneficial when ventures are focused on delivering short-term financial returns. Otherwise, ventures are successful in raising funds when their leaders draw attention to the near future. I have also conducted two experiments using investors as participants. A paper based on these data has been presented at the Strategic Management Society (September, 2022) and will be submitted to a journal in early 2023.
- I have also compiled a data set of reports from Japanese companies in the automobile and energy sectors, hand coding how purpose is articulated. This data set has been complemented by reports from Japanese, U.S. and German space agencies which, together with funding data, allow a cross-country/language comparison of the ways in which how purpose is understood and conveyed.
First, hitherto research in management and economics has largely focused on external forces in explaining understandings of corporate purpose and investor reactions to such understandings. The focus on figurative language is novel. Whilst there is some research in management that examines metaphor, researchers usually treat metaphor as a single category of language. However, the archival and experimental data show that different metaphors have differential effects on investors.
Second, the research using corporate reports and social enterprise pitches underscores the different forms of discourse used to make sense of the future and agency. It surfaces new ideas about how metaphors of the future and agency. Whereas metaphors are usually understood as forms of linguistic embellishment, the results show that metaphors are effective in evoking emotion and perceptions of morality.
Third, beyond any language-specific explanation, the research shows that attributes of social issues (e.g. salience, polarization) matter for whether and how corporate executives engage with such issues.
Second, the research using corporate reports and social enterprise pitches underscores the different forms of discourse used to make sense of the future and agency. It surfaces new ideas about how metaphors of the future and agency. Whereas metaphors are usually understood as forms of linguistic embellishment, the results show that metaphors are effective in evoking emotion and perceptions of morality.
Third, beyond any language-specific explanation, the research shows that attributes of social issues (e.g. salience, polarization) matter for whether and how corporate executives engage with such issues.