Research
on Spirituality and the Bottom Line
Are spirituality and profitability mutually exclusive? Bringing ethics
and spiritual values into the workplace can lead to increased productivity and
profitability as well as employee retention, customer loyalty, and brand
reputation, according to a growing body of research. More employers are
encouraging spirituality as a way to boost loyalty and enhance morale.
In the Corporate Social and Financial Performance report, Mark Orlitsky
of the University of Sydney (Australia) and Sara Rynes of the University of
Iowa (USA) reviewed studies over the last 30 years and found a significant
relationship between socially responsible business practices and financial
performance that varied from “moderate” to “very positive.”
A study done at the University of Chicago by Prof. Curtis Verschoor and
published in Management Accounting found that companies with a defined
corporate commitment to ethical principles do better financially than companies
that don’t make ethics a key management component. Public shaming of
Nike’s sweatshop conditions and slave wages paid to overseas workers led to a
27% drop in its earnings several years ago. And recently, the shocking
disregard of ethics and subsequent scandals led to financial disaster for
Enron, Arthur Anderson, WorldCom, Global Crossing, and others.
Business Week magazine
reported on recent research by McKinsey and Company in Australia that found
productivity improves and turnover is greatly reduced when companies engage in
programs that use spiritual techniques for their employees.
In researching companies for his book, A Spiritual Audit of Corporate
America, business professor Ian I. Mitroff found that “Spirituality could
be the ultimate competitive advantage.”
Ed Quinn, a top business consultant in Philadelphia, found that many companies
he works with demand confidentiality about the spiritual techniques he teaches
them—but not because they’re afraid of publicity about unconventional
approaches. The real reason is they don’t want their competition to learn
how effective these approaches are.
A study reported in MIT’s Sloan Management Review concluded that,
“People are hungry for ways in which to practice their spirituality in the
workplace without offending their co-workers or causing acrimony.” The
word “spirituality” is used generically and seems to emphasize how one’s
beliefs are applied day to day, rather than “religion”, which can invoke fears
of dogmatism, exclusivity and proselytizing in the workplace.
Research by UCLA business professor David Lewin found that “companies that
increased their community involvement were more likely to show an improved
financial picture over a two year time period.” A two year study by the
Performance Group, a consortium of seven leading European companies such as
Volvo, Monsanto, and Unilever, concluded that environmental compliance and
eco-friendly products can increase profitability, enhance earnings per share
and help win contracts in emerging markets. Investment returns on the
Domini 400 Social Index (publicly traded, socially responsible, triple bottom
line companies) have outperformed the S&P 500 over a ten year period ending
last year.
Business Week reported that 95% of Americans reject the idea that a
corporation’s only purpose is to make money. 39% of U.S. investors say they
always or frequently check on business practices, values and ethics before
investing. The Trends Report found that 75% of consumers polled
say they are likely to switch to brands associated with a good cause if price
and quality are equal.
