Inferring Employees’ Social Media Perceptions of Goal-Setting Corporate Cultures and the Link to Firm Value

We present a novel social media dataset and employ an automated computational linguistics technique to infer employees’ perceptions of corporate culture. In particular, we provide an empirical test of ‘goal-setting theory’ which states that the extent to which employees perceive their roles to be challenging directly impacts their job satisfaction and firm performance. Our findings are consistent with the organizational view that firms realise greater value by aligning employee goals to strategic objectives rather than the pursuit of employee satisfaction alone. This value only appears to be recognized by financial analysts during earnings announcements, creating systematic “errors-in-expectations” of firms’ cash flows. Our study highlights the merits of textual analysis for automated corporate culture analysis and builds on the growing body of evidence which suggests that intangible information is not fully exploited by investors. JEL Classification: G10, G14, J3, L21