Empathy in Organizations and its Value to Society

As we continue to share the new Corporate Empathy Test—now live on my site—each week we will be publishing blog content that touches on the theoretical background of this new test and its outcomes. Below is the second of several posts to come over the course of the next few weeks.

In recent scientific papers, empathy has been examined in relation to a plethora of organizational phenomena such as organizational citizenship behavior [1], leadership emergence [2], interpersonal justice [3] and has been advanced as a critical predictor of pro-social behaviors, job performance, crisis management, corporate philanthropy, and forgiveness. [4] Research has shown empathy to have diverse benefits ranging from maintaining and enhancing cooperation [5] and increasing the likelihood of helping behavior [6] to foster desirable sales behaviors [7], more effective leadership [8] and market outperformance.[9]

The emotional impact companies have on their stakeholders (i.e., staff, clients, shareholders, local communities, and natural environment) should be prioritized at the core of their decision-making process. Organizations need now more than ever to encourage a spirit of empathy, both inside and outside the work environment.

Starts with Employees…

Building a more empathic organization is critical for organizational success and starts with employees. For instance, a survey conducted by a technology firm in 2019 on 1,000 employees revealed that empathy is a key element that drives retention, motivation, and productivity with 69% of those surveyed believing that empathetic organizations have more productive employees. [10]

As employee engagement is on the rise in the USA, according to a Gallup poll based on mailed surveys conducted from January to June 2018, [11] it’s now more important than ever for organizations to incorporate empathy in their business strategy and show compassion for external initiatives such as social causes, volunteer programs and environmental conservation. Ultimately, this benefits employees, clients, and organizations alike.

Then Go Beyond

At the intersection of corporate culture, business performance and people lies the collective capacity of an organization to show empathy to all its stakeholders, as well as a commitment to develop a deep understanding of their needs. [12] According to Belinda Parmar, [13] the founder of The Empathy Business, a consultancy helping the world’s biggest companies to use empathy to transform internal cultures, organizations must demonstrate empathy across three channels: internally, to their own employees, externally, to their customers, and to the public.

According to the author, a combination of each with equal weighting across all three dimensions – internal (i.e., employees), external (i.e., customers), and social (i.e., community) results in an organizational empathy quotient. The same author is behind the “Empathy Index” study which looks at which companies are successfully creating empathetic cultures. The author reveals that these are the companies that generally retain the best people, create the right environments for team dynamics and diversity, and ultimately reap the greatest financial rewards. 

In light of the above, becoming a truly empathic organization with a significant empathetic culture takes time and commitment. Leaders have to set the tone and ensure that there is an empathy lens on areas such as employee development, customer experience, media communication, social and environmental issues, and corporate social responsibility initiatives. By demonstrating the inclusion of both internal and socio-environmental concerns in business operations and in interaction with stakeholders, organizations are more likely to gain credibility [14], an improved image and reputation [15], strengthen customer relationships [16], become more profitable and productive, and produce more value for the society. [17]

Stay tuned for the next blog post as we continue our discussion and explore the science of corporate empathy and, of course, be sure to take the test, here, to determine the empathy score of your company or employer today so you can formulate an action plan to improve it.


  • [1] Settoon, R. P., & Mossholder, K. W. (2002). Relationship quality and relationship context as antecedents of person-and task-focused interpersonal citizenship behavior. Journal of Applied Psychology, 87, 255.
  • [2] Wolff, S. B., Pescosolido, A. T., & Druskat, V. U. (2002). Emotional intelligence as the basis of leadership emergence in self-managing teams. The Leadership Quarterly, 13, 505-522.
  • [3] Patient, D. L., & Skarlicki, D. P. (2010). Increasing interpersonal and informational justice when communicating negative news: The role of the manager’s empathic concern and moral development. Journal of Management, 36, 555-578.
  • [4] Clark, Malissa & Robertson, Melissa & Young, Stephen. (2018). “I feel your pain”: A critical review
    of organizational research on empathy. Journal of Organizational Behavior. 10.1002/job.2348.
  • [5] Rumble, A. C., Van Lange, P. A., & Parks, C. D. (2010). The benefits of empathy: When empathy may sustain cooperation in social dilemmas. European Journal of Social Psychology, 40(5), 856-866.
  • [6] Davis, M.H. (1996). Empathy: A social psychological approach. Routledge: New York.
  • [7] Anaza, N. A., Inyang, A. E., & Saavedra, J. L. (2018). Empathy and affect in B2B salesperson performance. Journal of Business & Industrial Marketing, 33(1), 29-41.
  • [8] Rahman, W. A., & Castelli, P. A. (2013). The impact of empathy on leadership effectiveness among business leaders in the United States and Malaysia, International Journal of Economics Business and Management Studies, 2(3), 83-97.
  • [9] Tony Schwartz, (2013), Companies that Practice “Conscious Capitalism” Perform 10x Better, Harvard Business Review
  • [10] Business Solver (2019). State of Workplace Empathy
  • [11] Gallup Poll – Employee Engagement Rise
  • [12] What is Organizational Empathy? | Complete Definition and Characteristics
  • [13] Parmar, B. (2015). Corporate empathy is not an oxymoron. Harvard Business Review, 917-934.
  • [14] C. Lin, S. Chen, C. Chiu, W. Lee. Understanding purchasing intention during product harm crises: moderating effects of perceived corporate ability and corporate social responsibility, Journal of Business Ethics, 102 (2011), pp. 455-471
  • [15] R. Tewari. Communicating corporate social responsibility in annual reports: A comparative study of Indian companies & multinational corporations. Journal of Management & Public Policy, 2 (2011), 22-51
  • [16] J. Peloza, J. Shang. How can corporate social responsibility activities create value for stakeholders? A systematic review, Journal of the Academy of Marketing Science, 39 (2011), pp. 117-135 Call
  • [17] Argandoña, A. (2009). Can corporate social responsibility help us understand the credit crisis?

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