The Authenticity of Purpose Claims: Firm Capacity and Job Seeker Responses to Recruitment Efforts

Whereas corporate purpose involves a claim made to galvanize stakeholders, recent research on the topic has not examined it as a claim. Given the information asymmetry that many evaluators of purpose claims face, a key question concerns the conditions under which they are not simply viewed as cheap talk but are instead perceived as authentic. We argue that the difficulty and future orientation inherent to purpose claims make firm capacity a key source of authenticity and, ultimately, positive evaluations. We examine these ideas in the labor market context, where employers often present purpose claims to job seekers facing information asymmetry. First, we develop and validate a novel measure of purpose claim strength using a combination of topic modeling, dictionary-based validation, and experimental validation. Using this measure, we test our capacity hypothesis with job application field data, using firm size as a proxy for capacity. We find that high-purpose job posts receive approximately 50% more applications than low-purpose job posts when the firm has more than 1,000 employees, but only receive about a 10% increase when the firm has fewer than 50 employees. In a second study, we use vignette experiments to directly test our hypothesized mechanism. We show that, conditional on a strong purpose claim, size manipulations shape capacity perceptions, leading to greater perceived authenticity and increased application likelihood. Next, holding size constant, we show that an affiliation-based manipulation leads to similar results. Our paper helps scholars understand what gives authenticity to purpose claims and helps practitioners understand how they can more effectively communicate purpose. This paper was accepted by Lamar Pierce, organizations. Funding: This research was supported by funding from the Center for Sustainable Business at the University of Pittsburgh School of Business. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.03931 .