In recent years, companies have rushed to market themselves as value-driven entities. 

During Pride month in 2022, Burger King Austria released a marketing campaign for its brand new “Pride Whopper” with “two equal buns” — a blunder that caused social media users to accuse them of attempting to monetize LGBTQ+ culture.

On the other side of the spectrum, some corporations have built ethics into their business models and public images. The outdoor clothing manufacturer Patagonia, for example, has garnered a reputation for environmental advocacy and progressive labour policies.

Research has shown that corporations that are perceived as moral and authentic are rewarded by customers. But what are the driving forces behind these perceptions? How can a business communicate effectively about its values? And which values should companies prioritize when amplifying? 

These questions are central in recent research from Rachel Ruttan, an assistant professor of organizational behavior and human resources at the Rotman School of Management.

“I noticed this huge surge of corporate communications surrounding values,” Ruttan says. “Our work provides insight into how we look at organizations when they make these claims.”

In a paper co-authored by PhD candidate Vontrese Pamphile and recently published in Organization Science, Ruttan hones in on the issue of authenticity. She makes an important distinction between “stated values” and “lived values.” Stated values are found in a company’s mission statement and marketing materials — what the organization says about its aspirations and motivations. Lived values are extrapolated from a company’s actions — the actual ethics and inclinations behind an organization's decisions.

In one experiment, the researchers recruited temporary workers to complete a task for a real North American medical device company. When the workers signed on, they were asked to read through a mission statement that emphasized opposing values — either tradition or innovation. Then, they were shown reviews from other employees that documented how the company’s policies were either in line with these values or opposing them.

The results were definitive. Employees rated the company as more authentic when they believed that the company had backed up its mission statement through action. “We find that this is a really significant driver of feelings of authenticity,” Ruttan explains.

The researchers also found that businesses benefit from this perception of authenticity. When Ruttan and her colleague analyzed Glassdoor.com reviews of 100 companies on the S&500 Index, a pattern emerged. Organizations with aligned values received significantly better feedback. 

Feedback on Glassdoor can be consequential for companies. Prospective employees often consult the site when deciding whether to accept a job offer. The opinions expressed on the site may also be related to other human resources metrics. Studies have shown that employees who believe in their employer’s authenticity stay in their jobs longer and identify closely with their company's brand. In other words, authenticity is good for the bottom line. 

Of course, it is not the be-all, end-all. Ruttan’s results show that companies whose core values differ from the core values of their employees do not enjoy the same benefits from authenticity. If a construction company’s mission is to pave over a once-protected green belt, it is unlikely to win over an employee who is a staunch environmentalist — no matter how honest its mission statement is. 

This attenuation may be more pronounced in certain contexts. While Ruttan’s study focused on relatively uncontroversial dichotomies, such as tradition versus innovation, she posits that employees are likely to place even more importance on polarizing issues. 

“People who value diversity, equity and inclusion, for instance, will really like a company that states those values, but also be super sensitive to the authenticity of those statements,” she says.

It can be especially damaging for a company to make a statement about values that their employees or customers care about that seems inauthentic. Recently, issues like LGBTQ+ rights have come into vogue for corporate communicators, but Ruttan cautions companies against stating aspirational values that aren’t laid into their foundation. While a celebration of pride month is appropriate for a non-profit that provides services to families of trans teens, it may be less appropriate for Burger King.

“You can’t take on every single value that seems socially desirable or profitable at the time,” she says. “It’s easy to lose your vision and identity with growth, but it’s important to stay true to your core mission.”

According to Ruttan, companies are successful in communicating about values when they take the time to become fully attuned to their guiding ethics and motivations. This takes some soul searching, ideally when the business is still young and growing. One valuable, but often overlooked source of insight is employees. 

“Instead of assuming what employees perceive to be the values of the organization: just ask them,” she says.

Ruttan’s research shows that corporations benefit from aligning their public identity with their fundamental mission and motivations. In life and in business, good communication is direct and honest.