Examining the Conflicting Consequences of CEO Public Responses to Social Activist Challenges

Abstract

While the notion that CEOs have a general influence over their firms’ stakeholder strategies is well accepted, little attention has been given to how CEOs can actively and performatively manage social activism in and around their firms. I seek to develop an initial understanding of this phenomenon by examining some of the critical consequences of CEOs’ public responses to social activist challenges. Drawing on instrumental stakeholder theory and social movement theory, I recognize the dualistic nature of CEOs’ public responses to social activist challenges; that is, a single response can influence both the direct pressure received from the focal social activists confronting the firm as well as the potential pressure the firm could face in the form of additional challenges. I argue that a CEO’s accommodative public response—seen by social activists as a sign that the CEO and firm are aligned with their beliefs, values, and motivations—will be negatively associated with the focal social activists’ willingness to punish the firm. At the same time, however, a CEO’s accommodative public response sends a broader signal—reflective of the CEO and firm’s relative openness to social activism and social issues—that will be positively associated with the perceived attractiveness of the firm’s corporate opportunity structure for social activism, increasing the potential for the firm to receive additional social activist challenges. I conduct a laboratory experiment based on a real-life case and find support for my arguments. The results yield important implications for research on strategic leadership, stakeholder strategy, and social movements.

Keywords

CEO laboratory experiment opportunity structure social activism stakeholder strategy strategic leadership

Social activists have been highlighted in academic research and the media for their increased influence over firm policies and practices related to societal welfare (Briscoe & Gupta, 2016; Carberry et al., 2017; de Bakker et al., 2013; den Hond & de Bakker, 2007). When social activists challenge a firm over policies and practices they deem detrimental to society, a CEO, as the face of the firm, is uniquely positioned to manage activist pressure and other stakeholder evaluations of the firm by issuing a public response about what they and the firm might be prepared to do about these policies and practices (Fanelli & Misangyi, 2006; Finkelstein et al., 2009; Mintzberg, 1973; Pfeffer, 1981). For example, amid activist protests and calls for boycotts against Chick-fil-A for supporting organizations seen as hostile to lesbian, gay, bisexual, and transgender (LGBT) rights, CEO Dan Cathy—in an interview with the Baptist Press—stated, “we are very much supportive of the family—the biblical definition of the family unit,” adding “we intend to stay the course” (Blume, 2012). Similarly, Mark Benioff (Salesforce), Tim Cook (Apple), Elon Musk (Tesla), and Dan Schulman (PayPal) are other notable CEOs who have attempted to shape stakeholders’ evaluations of their firms in response to social activist challenges and contentious social issues.

In this vein, management and organizational scholars have increasingly recognized the important role that CEOs play in shaping firm stakeholder strategy. For example, recent work has demonstrated that CEOs’ decisions to emphasize social initiatives are traceable to various individual-level attributes—including political and social orientation (Chin et al., 2013; Mazutis, 2013), regulatory focus (Gamache et al., 2020), and compensation (Kang, 2015). Similarly, research occurring at the nexus of firms and social activism has recognized CEOs as key actors who can influence the dynamics of firm–social activist interactions (Briscoe et al., 2014; Weber et al., 2009). While important, much of the work that might inform our understanding of CEOs’ roles in managing social activism—and stakeholder strategy more broadly—unfortunately stops short of examining CEOs’ social influence tactics, such as how they publicly respond to a social activist challenge.¹ As a result, we still know relatively little about how CEOs can actively and performatively manage social activism in and around their firms (Briscoe & Gupta, 2016).

The primary goal of this study is to develop an initial understanding of how CEOs can use social influence tactics to manage social activism in and around their firms. Specifically, I examine some of the critical consequences stemming from CEOs’ public responses to social activist challenges. However, the highly visible nature of such responses means that they are likely to be evaluated differently by different stakeholders (Barnett, 2014; Bridoux & Stoelhorst, 2014; Cornelissen et al., 2015; Zavyalova et al., 2016). As such, it is necessary to take a holistic approach to understand some of the key consequences of CEO public responses to social activist challenges. Thus, I consider two interrelated questions: How does a CEO’s public response to a social activist challenge influence the amount of pressure the firm could receive from the focal activists confronting the firm? How does a CEO’s public response to a social activist challenge influence the pressure the firm could potentially receive in the form of additional social activist challenges?

To effectively answer these two questions, I integrate arguments from two relevant theoretical perspectives: instrumental stakeholder theory and social movement theory. Drawing on instrumental stakeholder theory, I recognize that social activists’ evaluations of the firm depend on how the firm treats them and other stakeholders (Bosse et al., 2009; Bridoux & Stoelhorst, 2014; Bundy et al., 2018). Thus, from this perspective, a CEO’s public response to a social activist challenge could influence pressure received from the focal social activists confronting the firm. Complementing this view with social movement theory, I further recognize that the public nature of a CEO’s response to a social activist challenge means it could also send a signal about the firm’s relative attractiveness as a potential target for additional challenges by making it appear more or less receptive to social activism and social issues (Briscoe et al., 2014; Briscoe & Gupta, 2016; King, 2008a; McDonnell et al., 2015). Hence, although a CEO’s public response to a social activist challenge likely influences the direct pressure received from the focal activists confronting the firm, it also likely influences the potential pressure the firm could face from social activism in general. For instance, the focal activists could issue additional challenges. Other social activists in the field not currently engaged with the firm could mobilize and challenge it on issues that might be entirely unrelated to the current issues under contestation. Depending on the costs that the focal activists could impose on the firm relative to the costs resulting from additional challenges, CEOs’ public responses to social activist challenges could prove materially consequential for firms in unsuspecting ways. Given their natural cognitive limitations, CEOs may not be able to fully anticipate all the consequences of their public responses to social activist challenges (Hambrick & Mason, 1984; Ocasio, 1997; Simon, 1947). Furthermore, because they may be seen narrowly by CEOs as largely symbolic and isolated responses to the focal social activists confronting the firm, public responses may not reflect CEOs’ true inclinations for how they generally wish to manage social activism in and around their firms. Thus, the main consequences of CEOs’ public responses to social activist challenges seem all the more interesting and important to investigate.

Building on these considerations, I argue that an accommodative CEO public response—potentially seen by the focal social activists confronting the firm as a sign that the CEO and firm are aligned with their beliefs, values, and motivations—will be negatively associated with these activists’ willingness to punish the firm. However, I also argue that an accommodative CEO public response—reflective of the CEO and firm’s openness toward social activism and social issues—will be positively associated with the perceived attractiveness of the firm’s corporate opportunity structure for social activism. I test these arguments with a laboratory experiment in which the participants assumed the role of social activists and were presented a scenario in which a CEO’s public response to their initial challenges was manipulated, finding support for my theory.

With this study, I make important contributions to management and organizational research. First, I add to research on the influence of CEOs over firm stakeholder strategy, including managing social activism (Briscoe et al., 2014; Chin et al., 2013; Gamache et al., 2020; Mazutis, 2013; Weber et al., 2009). Concretely, I provide a useful initial demonstration of the performative role CEOs can take to manage social activism in and around their firms. In many ways, I revisit the “spokesman role” Mintzberg (1973) originally assigned to CEOs—whom he partly saw as external-facing communicators of company priorities, practices, and plans—in the context of managing social activism. Although symbolic to an extent, CEOs’ willingness to put themselves in the spotlight to manage social activism could influence their careers in profound ways, as well as their firms’ strategic initiatives, reputations, and performance (Chatterji & Toffel, 2019; Hambrick & Wowak, 2021).

Second, I advance the literature on CEO social influence (Fanelli & Misangyi, 2006; Hambrick & Lovelace, 2018; Pfeffer, 1981; Zajac & Westphal, 1995) by introducing the notion that social influence tactics may present multiple—and possibly conflicting—consequences for a firm. Thus, I further highlight the potential perils of CEOs’ social influence tactics which, although seemingly costless as an attempt to ingratiate the firm to a specific stakeholder, could prove costly when considered from a multifaceted perspective. In doing so, with a focus on CEOs, I also add to the body of work that examines the unintended consequences of impression management in response to social activism (Georgallis, 2017; King & McDonnell, 2015; McDonnell et al., 2015).

Third, I contribute to work at the nexus of firms and social activism by broadening the construct of the corporate opportunity structure for social activism via considering a CEO’s public response to a social activist challenge as an additional element of the corporate opportunity structure for social activism. To this point, research on the corporate opportunity structure for social activism has seldom focused on CEOs (for an exception, Briscoe et al., 2014)—despite their importance as strategic leaders and personifications of their firms—and instead emphasized relatively objective firm-level attributes (e.g., performance).

Finally, I advance stakeholder strategy research, which generally remains silent about the consequences of responding to social activists and other stakeholders in different ways. Specifically, I consider that CEOs’ public responses to social activist challenges might act as possible antecedents of the broader interactive process through which both social activists and firms are engaged in “performances” to garner public support (McDonnell & King, 2013), rather than as a final outcome, as it has been more commonly viewed.

CEO Public Responses to Social Activism

Firms, especially large publicly traded corporations, have become increasingly susceptible to being targeted by social activists who attempt to modify socially or environmentally related practices and policies (den Hond & de Bakker, 2007; Eesley & Lenox, 2006; Eesley et al., 2016). Social activists are generally considered secondary stakeholders (den Hond & de Bakker, 2007; King, 2008a) or “those who influence or affect, or are influenced of affected by, the corporation, but they are not engaged in transactions with the corporation or are not essential for its survival” (Clarkson, 1995, p. 107). Although not essential for a firm’s survival per se, social activists can disrupt firm routines and impose costs on it, create impediments for it in obtaining resources, and mobilize public opinion against it, potentially damaging its reputation (den Hond & de Bakker, 2007; Eesley et al., 2016; King, 2008a; McDonnell & King, 2013). Furthermore, social activist challenges often require firms to address simultaneous and conflicting concerns for social welfare, the natural environment, and competitive advantage (King, 2008a; Pacheco & Dean, 2015). Thus, no consensus has emerged regarding how firms should respond to social activist challenges. It also means we know little about the consequences of different responses to social activist challenges.

The notion that CEOs carry influence over a firm’s stakeholders, such as social activists, is generally well accepted across management and organizational sciences (Briscoe et al., 2014; Fanelli & Misangyi, 2006; Gamache et al., 2020; Hambrick & Wowak, 2021; Weber et al., 2009). Given their roles as strategic leaders and personifications of their firms, CEOs are uniquely positioned to leverage social influence tactics to manipulate stakeholders’ evaluations of the firm (Fanelli & Misangyi, 2006; Hambrick & Lovelace, 2018; Hambrick & Wowak, 2021; Mintzberg, 1973). For example, Fanelli et al. (2009) found that CEOs could use charismatic language to encourage greater support from analysts. Beyond this specific examination, however, there have been a few attempts to shed light on the effect of specific types of CEO social influence tactics on stakeholders’ evaluations of the firm. Yet, such efforts are needed to build a better understanding of how CEOs can actively and performatively manage social activism in and around their firms, their stakeholders in a broader sense (Briscoe & Gupta, 2016).

Building on these considerations, CEOs might attempt to actively and performatively manage a social activist challenge is by making a public statement about what they and the firm might be prepared to do about the issues under contestation. Indeed, there are numerous examples of CEOs issuing public statements in response to social activist pressure and social issues that social activists typically mobilize around (Denning, 2015; Nobel, 2016 see also Hambrick & Wowak, 2021). One recent example is that of Starbucks CEO Howard Schultz, who, in response to antigun advocates, wrote an open letter to the public requesting that patrons not bring their firearms to Starbucks stores (O’Connor, 2013). This letter came on the heels of Schultz responding to a boycott by the National Organization for Marriage (Allen, 2013). Moreover, the nature of CEOs’ public response to social activist challenges can also offer activists and other stakeholders some insights into CEOs’ tendencies, aspirations, ideologies, and strategic thinking (Amernic & Craig, 2006; Hambrick & Wowak, 2021). Thus, understanding the effect of CEOs’ public responses to social activist challenges is important because although symbolic to an extent (Fanelli & Misangyi, 2006; Pfeffer, 1981; Zajac & Westphal, 1995), such responses can affect CEOs’ careers in profound ways; a false statement could prove costly for CEOs and their firms (Chatterji & Toffel, 2019; Hambrick & Wowak, 2021). Equally important, however, is that CEOs’ public responses to social activist challenges may have various—and potentially conflicting—consequences that may not have been anticipated by these CEOs at the outset.

The Range of CEO Public Responses to Social Activists

CEOs can issue varying types of public responses to social activists. Prior research in various disciplines (e.g., impression management, crisis management) has presented a number of typologies that may be used to conceptualize the tenor of CEO responses (Benoit, 1995; Bundy et al., 2013; Durand et al., 2019; Elsbach, 1994; Lamin & Zaheer, 2012; Zavyalova et al., 2012). Because of the similarities that exist among these various typologies, “a useful way to integrate them is along a continuum from defensive to accommodative” (Bundy et al., 2017, p. 1673).

Following Bundy and Pfarrer (2015), I consider a response seen as attempting to reduce a firm’s taking responsibility to work on the issues identified by social activists might generally be labeled as defensive. Discrete forms of defensive responses include denial, defiance, and scapegoating. Conversely, a response seen as acknowledging the firm’s responsibility to work on the issues identified by activists might generally be labeled as accommodative. Accommodative responses include apologies, expressions of sympathy, and promises of corrective actions. Responses in the middle of the defensive-accommodative continuum—emphasizing limited firm responsibility—include decoupling (e.g., “greenwashing”) and reducing offensiveness via justifications or excuses (see also Bundy et al., 2017).

An example of a defensive public response (i.e., denial) was issued by Exxon Mobil when it was ordered to pay almost US$105 million in damages related to the contamination of New York City’s groundwater. Following a federal jury’s decision, Exxon Mobil spokesperson, Kevin Allexon, stated, “We do not believe I should be required to compensate the City of New York for someone else’s contamination” (Navarro, 2009). In contrast, BP’s response to the Deepwater Horizon oil spill in the Gulf of Mexico provides a recent example of an accommodative response (BP, 2014):

We acted to take responsibility for the clean-up, working under the direction of the federal government to respond swiftly to compensate people affected by the impact of the accident, to look after the health, safety and welfare of the large number of residents and people who helped respond to the spill, and to support the economic recovery of the Gulf Coast’s tourism and seafood industries impacted by the spill. I have conducted studies with federal and state natural resource trustees to identify and define the injury to natural resources in the Gulf of Mexico.

Relatedly, research on shareholder activism via proxy proposals suggests that a firm’s management has three general options in its response repertoire. They could take a defensive stance toward the proposal (i.e., the proposal is omitted via the firm’s successful challenge to the Securities and Exchange Commission (SEC)), the firm could take a neutral stance (i.e., the proposal goes to vote at the annual meeting), or the firm could be accommodative (i.e., the proposal is withdrawn by the submitting stakeholder because the firm is willing to negotiate in hopes of addressing the stakeholder’s concerns). Prior research has used these categories in a similar defensive-accommodative continuum fashion (Gamache et al., 2020; McDonnell et al., 2015; Rehbein et al., 2013).

In line with the above discussion as a basis of understanding the tenor of responses that CEOs might publicly issue following a social activist challenge, and in consideration of providing an initial demonstration of the principle consequences of CEO public responses to social activist challenges, I focus on defensive and accommodative responses as two opposing yet prevalent ideal types of public responses (Doty & Glick, 1994).

The Conflicting Consequences of CEO Public Responses to Social Activism

Although a CEO’s public response to a social activist challenge should expectedly influence the focal social activists confronting the firm’s evaluations of it, the public nature of the response also makes it subject to scrutiny from a variety of stakeholders whose evaluations of it are likely to vary (Barnett, 2014; Bridoux & Stoelhorst, 2014; Cornelissen et al., 2015; Zavyalova et al., 2016). As such, in addition to influencing the focal social activists confronting the firm, a CEO’s public response to a social activist challenge may also send a signal that affects the firm’s dealings with social activists in a broader sense. Therefore, I argue that a CEO’s public response to a social activist challenge presents two critical consequences related to managing social activism that warrant further consideration: (a) the focal social activists’ willingness to punish the firm and (b) the perceived attractiveness of the firm’s “corporate opportunity structure” for social activism. These consequences are rooted in two important theoretical perspectives that can be applied to understand relationships between firms and social activists: instrumental stakeholder theory and social movement theory.

First, because social activists are secondary stakeholders of a firm, as outlined previously, their evaluations of a firm and its CEO’s commitment to societal welfare will be consistent with the arguments found in instrumental stakeholder theory. Instrumental stakeholder theory focuses on the motivations and sociocognitive processes of stakeholders to understand how stakeholders evaluate a firm and behave toward it (Bosse et al., 2009; Bridoux & Stoelhorst, 2014; Bridoux & Vishwanathan, 2020; Bundy et al., 2018). For example, Bosse and colleagues argued that “stakeholders choose the levels of effort and resources they provide the firm based on their perceptions of justice and fairness received from the firm” (Bosse et al., 2009, p. 450). More recently, Bundy and colleagues (2018) outlined an organization–stakeholder fit framework and argued that stakeholders could be intrinsically motivated to cooperate with a firm if it exhibits values congruent with those of the stakeholder in question. Others have even argued that stakeholders’ decisions to cooperate with a firm also depend on how the firm treats other stakeholders (Bridoux & Stoelhorst, 2014). A key insight from this perspective is that stakeholders, such as social activists, can withdraw their support for—or even punish—a firm if it behaves in a manner that violates their motivations and expectations. I extend instrumental stakeholder theory by considering how a CEO’s social influence tactics—represented by their public response to a social activist challenge—influence the focal social activists confronting the firm’s willingness to punish the firm.

Second, social movement theory developed the idea of “political opportunity structures” in reference to the influence of contextual conditions on the likelihood of activism being successful and, hence, arising in the first place (King & Pearce, 2010; Tilly, 1978).² Political opportunity structures are theorized as influencing social movement behavior and formation through influencing the options that are available to activists and the extent to which resources must be mobilized to affect change within targeted institutions (Amenta et al., 2005; King & Pearce, 2010). Recently, management and organization scholars have introduced the concept of a “corporate opportunity structure” for social activism, which refers to the features of a firm that make it a more (or less) attractive target for social activism (Briscoe et al., 2014; Briscoe & Gupta, 2016; King, 2008a; McDonnell et al., 2015). Although the rise of social media has made it easier for social activist groups to coalesce and mobilize (van den Broek et al., 2017), activism remains costly and risky in terms of time, financial resources, and the possibility of backlash or reprisal, which could be detrimental to social activists’ legitimacy (Briscoe et al., 2014). Accordingly, social activists must consider whether their efforts are likely to pay off; when it seems like efforts might be successful, firms are more likely to be targeted (Briscoe et al., 2014). Therefore, firms viewed as having a more attractive corporate opportunity structure are more likely to be targeted by social activists in general (Briscoe et al., 2014; King, 2008a; McDonnell et al., 2015).

Although research on the corporate opportunity structure for social activism is still in its relative infancy, it does offer some insights into the features of firms that influence the likelihood of such firms being targeted. Conceptually, King (2008b) was among the first to propose a number of firm features that could increase the likelihood of it being targeted by activists—namely, changes in corporate structure and leadership, such as mergers and acquisitions, corporate restructuring, and the promotion of a new CEO. Consistent with these propositions, King (2008a) demonstrated that declining firm performance and reputation signal some level of vulnerability in the eyes of social activists, increasing the likelihood of a firm being targeted. More recently, Briscoe and colleagues’ (2014) findings suggest that social activists may also pay attention to CEOs’ political ideologies. Finally, McDonnell and colleagues (2015) showed that firms adopting “social management devices,” such as creating corporate social responsibility (CSR) committees and issuing CSR reports, increase the likelihood of firms being targeted by activists (see also King & McDonnell, 2015). Briscoe and colleagues (2014) noted the following: “The challenge for scholars is to identify those corporate features that serve as signals to activists regarding the presence (or absence) of opportunity” (p. 1787). I broaden the concept of the corporate opportunity structure for social activism by moving beyond consideration of highly visible firm-level attributes toward considering a social influence tactic in the form of a CEO’s public response to social activism.

Taken together, both of these theoretical perspectives suggest studying the principle consequences of CEOs’ public responses to social activist challenges should be approached holistically. Overall, I focus on how a CEO’s public response can have both a direct influence over the focal social activists currently confronting the firm’s willingness to punish the firm while also obliquely sending a signal about the firm’s openness to social activism and social issues. By sending such a signal, a CEO’s public response to a social activist challenge could, for instance, increase the likelihood that the focal activists issue additional challenges or that other social activists in the field but not currently engaged with the firm challenge it on issues that might be entirely unrelated to the current issues under contestation. I examine these interesting possibilities below.

CEO Public Response and Social Activists’ Willingness to Punish the Firm

Applying instrumental stakeholder theory to CEOs’ public responses to social activist challenges, I first argue that such responses will have the immediate consequence of affecting the focal social activists’ willingness to punish the firm. Central to this perspective is the idea that stakeholders’ beliefs, values, and motivations act as lenses through which they evaluate and behave toward the firm (Bosse et al., 2009; Bridoux et al., 2011; Bridoux & Stoelhorst, 2014; Bundy et al., 2018). Social activists are generally motivated by a desire to affect industry-wide changes and seek social justice (Briscoe et al., 2014; den Hond & de Bakker, 2007) and are known to evaluate firm behavior according to criteria such as societal impact and fairness in the treatment of stakeholders (cf., Bridoux & Stoelhorst, 2014; Lamin & Zaheer, 2012). Therefore, when social activists confronting the firm receive a CEO’s public response to their challenges, it will be compared against how such responses correspond with these underlying beliefs, values, and motivations.

I argue that CEO public responses to social activist challenges will influence the focal social activists’ willingness to punish the firm via two interlinked mechanisms. First, instrumental stakeholder theory suggests that the social activists will interpret a CEO’s public response to their challenges through the lens of how the firm intends to treat them (Bosse et al., 2009; Bundy et al., 2018). A defensive response may be perceived as reflective of a lack of values fit between the focal social activists and the firm, such that the activists become less trusting of the firm’s character, perceive greater relational uncertainty with the firm, become less harmonious and inclined toward cooperation, and less inclined to take an empathetic perspective toward understanding the firm’s position on the issues under contestation (Bundy et al., 2018). Thus, in receiving a defensive response that is likely in conflict with their beliefs, values, and motivations, social activists could “experience unease at the mismatch, motivating them to neglect—if not actively reject—the painful information” (Hodgkinson & Healey, 2011, p. 1504). Ultimately, social activists may internalize a defensive CEO’s public response as unfair treatment, thereby leading them to reciprocate with animosity (Bosse et al., 2009; Bridoux & Stoelhorst, 2014). Conversely, an accommodative response might be viewed as reflective of values fit between activists and the firm, such that they become more trusting of the firm’s character, perceive greater relational certainty with the firm, become more inclined toward harmonious cooperation, and more motivated to develop a mutual understanding with the firm on the issues under contestation (Bundy et al., 2018). Thus, social activists may view an accommodative CEO’s public response as a gesture of fair treatment, leading them to reciprocate with greater willingness to support the firm (Bosse et al., 2009; Bridoux & Stoelhorst, 2014).

Second, instrumental stakeholder theory further suggests that social activists may interpret a CEO’s public response to their challenges through the lens of how the firm treats other stakeholders (Bridoux & Stoelhorst, 2014). In this sense, a defensive response may be seen by the focal social activists as reflective of the firm taking an arm’s length, inconsistent, or unfair approach toward managing its stakeholders in general (Bundy et al., 2013; Hambrick & Wowak, 2021). In other words, a defensive response might be viewed as “self-serving rhetoric that puts industry interests ahead of the welfare of the public” (Elsbach, 1994, p. 75). Accordingly, the focal social activists will seek to reciprocate this perceived inconsistency and lack of overall fairness with animosity (Bridoux & Stoelhorst, 2014). In contrast, an accommodative response may be seen as reflective of the firm taking a fairness-based approach toward managing its stakeholders and social issues. This is likely to result in a de-escalation of willingness to punish the firm (Bosse et al., 2009; Bridoux & Stoelhorst, 2014). Overall, via offering an indication of how the firm intends to treat the focal social activists and its other stakeholders, an accommodative CEO’s public response should reduce these social activists’ willingness to punish the firm. Therefore, I hypothesize the following:

Hypothesis 1 (H1): Social activists will exhibit a lesser (greater) degree of willingness to punish the firm when a CEO issues an accommodative (defensive) public response to their challenges.

CEO Public Response as an Element of the Corporate Opportunity Structure for Social Activism

Complementing the instrumental stakeholder theory perspective, I now apply social movement theory to understand the key consequences of CEOs’ public responses to social activist challenges in a holistic manner. Drawing on social movement theory, I anticipate that CEOs’ public responses to social activist challenges will also send a signal related to the firm’s relative openness to working with social activists and on social issues, a signal likely to affect the pressure the firm could face from additional social activist challenges. As outlined, such pressure could conceivably come from the focal activists issuing additional challenges or from other social activists in the field.

I argue that a CEO’s public response to a social activist challenges will inform general perceptions of the attractiveness of a firm’s corporate opportunity structure for social activism for two main reasons. First, a CEO’s public response may offer insights into the CEO’s mindset and general stance toward social activism and social issues (Amernic & Craig, 2006; Chatterji & Toffel, 2019; Hambrick & Wowak, 2021). Research using CEO language as an unobtrusive indicator of a CEO’s underlying cognitive and motivational attributes suggests this to be the case (Chatterjee & Hambrick, 2007; Gamache et al., 2015; Nadkarni & Chen, 2014). Given the CEO’s position as a strategic leader and personification of the firm, their mindset matters greatly as an indicator of how receptive and, hence, how open the firm might be toward social activism and social issues (Briscoe et al., 2014). Therefore, in issuing a defensive public response to a social activist challenge, a CEO could be sending a signal about their personal closure to social activism and commitment to social issues, likely translating into collective perceptions and beliefs that the firm is an unattractive target for social activism in general. In contrast, by issuing an accommodative public response to a social activist challenge, a CEO could be signaling their personal openness to social activism and social issues, which would translate to collective perceptions and beliefs that the firm is an attractive target for social activism in general.

Second, a CEO’s public response to a social activist challenge could be seen as indicative of immediate substantive changes within the firm, which are associated with the firm’s relative openness to social activism and social issues (King & McDonnell, 2015; McDonnell et al., 2015). Although potentially symbolic to an extent, CEO public responses to social activist challenges may not solely be “cheap talk” (cf., Farrell & Rabin, 1996). As Fanelli and Misangyi (2006) described it, “although symbolic management may be deceptive, this is not always the case” (p. 1052). For instance, a CEO’s public response to social activism may create a social contract whereby a false statement could prove costly for the CEO’s and the firm’s reputation (Gao et al., 2016). Therefore, in issuing a defensive public response to a social activist challenge, a CEO could be sending a signal about their unwillingness to take substantive action to correct the issues under contestation, which is likely to translate into collective perceptions and beliefs that the firm is an unattractive target for social activism and advancing social causes. In contrast, in issuing an accommodative public response to a social activist challenge, a CEO could be signaling their intentions to take substantive action to correct the issues under contestation, which “in turn, alters a firm’s internal political agenda such that the firm becomes more receptive to future activist claims” (McDonnell et al., 2015, p. 655). Building on this, I hypothesize the following:

Hypothesis 2 (H2): The firm’s corporate opportunity structure for social activism will be viewed as more (less) attractive when a CEO issues an accommodative (defensive) public response to a social activist challenge.

Method

I sought to test my hypotheses in a way that would allow me to clearly identify and isolate social activists’ willingness to punish a firm and evaluations of the corporate opportunity structure for activism. Hence, an experiment constituted an ideal study design (Shadish et al., 2002). A principle advantage of an experiment is that many confounding factors that could influence social activist behavior, such as firm size, reputation, and past performance (Eesley & Lenox, 2006; King, 2008a; McDonnell et al., 2015), can be held constant to focus on the variables of interest. Indeed, experiments have become more frequently used in stakeholder strategy research (Chatterji & Toffel, 2019; Flynn & Staw, 2004; Krause et al., 2014; van den Broek et al., 2017).

An additional advantage of an experiment is that it allows for higher levels of internal validity than cross-sectional and longitudinal studies by enabling researchers to make clearer inferences about the causal processes involved between the variables (Shadish et al., 2002). A potential drawback to this method is that external validity may be limited, in that generalizing from a laboratory environment to real-world settings is more difficult than generalizing from one real-world setting to another. However, as I describe below, I believe I struck the right balance between internal and external validity through (a) selecting an appropriate sample—one in which the participants fit the profile of social activists—and (b) building the experimental scenario based on plausible and realistic instances of social activist–firm interactions.

Participants

Using version 3.1 of G*Power, I conducted an a priori power analysis to determine the desired sample size for the experiment. I specified an anticipated effect size of 0.25, which was derived from an η² = .06, a conventional value utilized in anticipation of a medium effect size (Cohen, 1988; Murphy et al., 2014). Following prior recommendations, I set the anticipated effect size as medium to ensure that the effect size chosen was “the smallest effect that would be meaningful in some practical sense” (Fritz et al., 2012, p. 18) and knowing that large effect sizes are not common in behavioral science (Cohen, 1988, p. 284). In addition, I specified a desired α = .05 and power (1 − β) = .8. The power analysis revealed a desirable sample size of at least 125 participants.

In line with prior research on social activism (Corning & Myers, 2002; Gousse-Lessard et al., 2013), the population of participants was composed of individuals involved in proenvironmental organizations, university employees and students in the field of geosciences, or other individuals and students who can be considered sympathetic toward the proenvironmental movement. To enhance the validity of the findings, all participants, regardless of their background, were screened for inclusion in the final sample. The extent to which the participants were considered either active in or sympathetic toward the proenvironmental movement was determined with two screening questions. First, the participants answered the following question: “In the past, I have supported and/or participated in one or more special interest groups that promote sustainable development and/or the effective management of environmental problems” (Yes / No). Second, the participants answered the following question: “I would strongly support and/or actively participate in special interest groups that promote sustainable development and/or the effective management of environmental problems” on a 7-point Likert-type scale (1 = very unlikely, 7 = very likely). The participants were considered actively engaged in the proenvironmental movement if they answered “yes” to the first question and if they answered “somewhat likely,” “likely,” or “very likely” to the second question. The participants were considered sympathizers if they answered “no” to the first question and “likely” or “very likely” to the second question. These screening questions were administered at the conclusion of the experimental portion of the procedure to eliminate reactivity bias (Lavrakas, 2008; Orne, 1962). Including sympathizers in the sample was justifiable, given the high degree of similarity in the opinions and attitudes that activists and sympathizers express toward a range of environmental topics (Crabtree, 2002) and also in light of prior work showing that social activists routinely “draw in” sympathetic third parties that become active participants in the movement (Downey & Rohlinger, 2008; Tilly, 1978).

Although there is some criticism that students constitute a “narrow data base” (Sears, 1986), more recent investigations have demonstrated that student participants do not intrinsically pose a problem for a study’s external validity (Druckman & Kam, 2009). In addition, students constitute a demographic segment of the general population that is heavily represented among activists (Walgrave et al., 2010; Wong, 2015). As such, using students as some of the participants was not dissimilar to recent research arguing that MBA students have the sophistication necessary to be utilized as adequate proxies for company shareholders (Bigelow et al., 2014; Krause et al., 2014). Thus, the use of students and the inclusion of sympathizers provided a strong test of the theory.

The final sample included 148 participants, of which 99 (66%) were considered active participants in the proenvironmental movement and 49 (34%) were sympathizers toward the movement.³ The participants averaged 25.35 years in age (SD = 6.63), and 46% were male.

Procedure

Elaboration of the research task

To enhance the validity of the study’s findings, I followed recommendations to design the experimental scenario based on a real-life case (Aguinis & Bradley, 2014; Highhouse, 2009). Specifically, this scenario was based on an event in which Greenpeace targeted Shell Oil Corp to abandon its drilling operations in the Arctic. In early 2015, Greenpeace mounted a campaign against Shell as a result of the firm ramping up its exploration and drilling in the Chukchi Sea off the coast of Alaska. During this time, the U.S. government also issued a report that forecasted a 75% chance of a large oil spill occurring in the Arctic over a 77-year scenario (see Koch, 2015). Other social activists, such as Resisting Environmental Destruction on Indigenous Lands, also expressed concerns over Shell’s foray into the Arctic. These elements were leveraged to construct the initial scenario (Appendix).

Data collection

Data were collected using a between-subjects design embedded into an online survey. In Part I of the study, each participant was told that they were an active and important participant in an interest group—The Ecology Alliance (a pseudonym)—that is particularly concerned with the extent to which organizations promote sustainable development and the effective management of environmental problems (Appendix). I then randomly assigned the participants to receive either a defensive CEO response or an accommodative one (Appendix). Following the presentation of the CEO’s response, I then asked a series of questions to measure the participants’ willingness to punish the firm and their general beliefs about the firm’s corporate opportunity structure for social activism. These questions represented the dependent variables. In Part II, the participants answered a series of questions related to their demographic and sociocognitive attributes. I developed and validated this research material and conducted the online experiment as part of a larger series of studies in the spring 2016.

Manipulation check

As mentioned above, the study involved the manipulation of CEO responses to a social activist challenge using two different responses: defensive and accommodative. At the conclusion of the experiment, the participants answered the question, “Without referring back to the comments issued by JRE’s CEO, how would you rate these comments?” on a 9-point Likert-type scale (−4 = not cooperative at all, 4 = very cooperative). A one-way ANOVA confirmed that the accommodation condition was rated as the most cooperative of the two responses (p = .001).

Dependent Variable(s)

Willingness to punish the firm

Social activists may use a range of tactics to inflict damage on a firm. Three prevalent tactics (listed here in the increasing order of disruption) are as follows: (a) start a petition, (b) disrupt the annual shareholder meeting, and (c) boycott the firm (den Hond & de Bakker, 2007; Eesley et al., 2016; Schrempf-Stirling et al., 2013). As such, to comprehensively test H1 in a multifaceted manner, the participants were asked to rate their likelihood to punish the firm via starting a petition, disrupting the annual shareholder meeting, and boycotting the firm. The participants rated their likelihood of undertaking each tactic using a 4-point Likert-type scale (1 = extremely unlikely, 4 = extremely likely).

Evaluation of the firm’s corporate opportunity structure

Because there is no established instrument to measure individuals’ beliefs pertaining to a firm’s corporate opportunity structure for social activism, I drew on experiments on entrepreneurial opportunity recognition for guidance, opting for a simple and direct approach of asking the participants to evaluate whether “the organization and its executives are sufficiently receptive to social issues to be effectively targeted by interest groups” (see Grégoire & Shepherd, 2012; Krueger et al., 2000). Participants answered on a 9-point Likert-type scale (−4 = no, certainly not, 4 = yes, certainly). This single-item measure met the three conditions stipulated by Wanous and Hudy (2001): the construct of interest (a) can be regarded as one dimensional, (b) should be clear to respondents, and (c) should be sufficiently narrow. Using a single item also alleviates the need for redundant items (Wanous et al., 2001).

In addition, I took a number of steps to address common method variance. First, I measured each dependent variable on different scales (Podsakoff et al., 2003). Second, I reduced ambiguity by keeping the wording simple and employing very distinct language for items related to activists’ willingness to punish the firm (i.e., start a petition, disrupt shareholder meeting, boycott) and their perceptions of the firm’s corporate opportunity structure for social activism (Tourangeau et al., 2000). Finally, I used different scale endpoints and placed questions on separate survey pages (Podsakoff et al., 2003; Spector, 2006). Hence, even though I measured both variables within a short period, as has similar research on stakeholder evaluations (Bigelow et al., 2014; Krause et al., 2014), I am confident these steps sufficiently limited common method variance. As evidence the two measures were tapping separate constructs, a factor analysis produced a two-factor solution in which the items related to each construct loaded cleanly onto a distinct factor. Furthermore, the shared variance between the measures was below 50%, which is indicative of discriminant validity.

Independent Variable: CEO Public Response

The participants were randomly assigned to a condition in which the CEO issued either a defensive or an accommodative public response. The accommodative response was coded as 1 for the participants who received such a response; the defensive response was coded as 0.

Control Variables

Although the participants were randomly assigned to one of the two CEO response conditions, certain individual differences could affect their understanding of the scenarios—not to mention their willingness to punish the firm and evaluations of its corporate opportunity structure. I controlled for age, gender, and political ideology because such factors are associated with dispositions toward social issues, including diversity, social justice, social change, and protecting the natural environment (Briscoe et al., 2014; Jost et al., 2003; Tetlock, 2000). Consistent with how political ideology has been previously conceptualized and measured, I measured the participants’ political ideologies using a 7-point Likert-type scale (−3 = liberal, 3 = conservative).⁴ Furthermore, I controlled for positive affect using the well-established Positive and Negative Affect Schedule (PANAS; Watson et al., 1988) because it is associated with perceptions of risk and opportunity recognition (Baron, 2008; Isen et al., 1988).⁵

Results

Table 1 presents the descriptive statistics and intercorrelations for the study variables. I used an ordinary least squares (OLS) regression to test the hypotheses. Table 2 presents the results. Figure 1 visually depicts the mean differences in the participants’ willingness to punish the firm in its various forms (i.e., start a petition, disrupt the annual shareholder meeting, and boycott the firm). Figure 2 displays the mean differences in the participants’ beliefs about the firm’s corporate opportunity structure for social activism. Both figures illustrate that the two types of CEO public response led to clear differences, both in terms of participants’ willingness to punish the firm and their beliefs about its corporate opportunity structure for social activism.

Table 1.

Descriptive Statistics and Correlations.

Variable	M	SD	1	2	3	4	5	6	7
1. Petition	2.74	0.92
2. Disrupt meeting	1.91	0.85	.35
3. Boycott	2.51	1.03	.49	.36
4. Opportunity structure	0.35	2.03	−.07	.04	−.07
5. Age	25.35	6.64	.18	.01	.27	.04
6. Female	0.53	0.50	−.06	−.08	−.07	.13
7. Political liberalism	−0.65	1.52	−.09	.06	−.05	.02	−.05	−.30
8. Positive affect	31.26	8.49	−.15	−.13	−.14	.37	.09	.00	.06

Note. N = 148. All correlations above |0.17| are significant at p < .05.

Table 2.

Results of OLS Regression Analyses.

	H1—Willingness to punish									H2—Opportunity structure
	Petition			Disrupt meeting			Boycott			H2—Opportunity structure
	β	SE _β	p	β	SE _β	p	β	SE _β	p	β	SE _β	p
Accommodative	−.27	0.15	.032	.00	0.14	.994	−.28	0.16	.042	1.03	0.29	.001
Controls
Age	.03	0.01	.024	.00	0.01	.804	.04	0.01	.001	.00	0.02	.874
Female	−.11	0.15	.488	−.11	0.15	.463	−.11	0.17	.512	.46	0.31	.146
Political liberalism	−.05	0.05	.347	.03	0.05	.583	−.02	0.06	.699	.04	0.10	.681
Positive affect	−.01	0.01	.040	−.01	0.01	.115	−.02	0.01	.037	.09	0.02	.000
Constant	3.11	0.51	0.000	2.32	0.49	0.000	2.41	0.57	0.000	−3.89	1.04	0.000
R ²	.09			.03			.12			.22
F value	2.76		0.021	0.76		0.583	3.95		0.002	8.16		0.000

Note. N = 148; one-tailed p values for hypothesized relationships and two-tailed p values for other relationships. OLS: ordinary least squares.

Figure 1.

Participants’ willingness to punish the firm.

Figure 2.

Participants’ beliefs of the firm’s corporate opportunity structure.

H1 predicted that social activists would exhibit a lesser willingness to punish the firm when a CEO issues an accommodative, rather than a defensive, public response to their challenges. The results of the analyses indicate that an accommodative CEO’s public response is more negatively associated with the willingness to punish the firm via starting a petition (β = −.274; p = .032) and boycott (β = −.282; p = .042) than a defensive CEO’s public response. Substantively, an accommodative public response to a social activist challenge represents a 25% decrease in the willingness to start a petition and a 26% decrease in the willingness to boycott, relative to the participants’ intentions to carry out both these tactics when a defensive response is issued. However, the coefficient for disrupting the shareholder meeting suggested no statistical difference between both responses. While somewhat surprising at first glance, I believe these findings can be reconciled by revisiting prior theory. Relative to starting a petition or participating in a boycott, which requires relatively little effort, disrupting the annual shareholder meeting relies on “the quality of resources that a small number of highly dedicated activists bring into the protest” (i.e., “elite” participation; den Hond & de Bakker, 2007, p. 911). In other words, it is possible that only the dedicated few among social activists are willing to engage in this tactic.⁶ This, in part, may help explain the absence of a significant difference for either response on the participants’ willingness to disrupt the annual shareholder meeting. All things considered, these results suggest support for H1.

H2 predicted that the firm’s corporate opportunity structure for social activism would be viewed as more attractive when a CEO issues an accommodative, rather than defensive, public response to a social activist challenge. The results indicate that an accommodative response is more positively associated with the attractiveness of the firm’s opportunity structure than a defensive response (β = 1.027; p = .001). Concretely, a CEO’s accommodative public response to a social activist challenge represents a 45% increase in the perceived attractiveness of a firm’s corporate opportunity structure compared with when a CEO issues a defensive response. These results suggest strong support for H2.

Supplemental Analyses and Robustness

I conducted several supplemental analyses to assess the robustness of the findings. First, recognizing that in a between-subjects experiment, where the participants are randomly assigned to a condition, it is not technically required to include the control variables, I conducted a series of additional tests—one-way ANOVAs, t tests, and OLS models—focused solely on the focal independent and dependent variables. I obtained results consistent with those reported above.

Second, I examined whether the participants’ predispositions related to large corporations and the general role of business in society could have biased the findings in any way. To examine this, I obtained the responses from all study participations to the following two items: “I feel that sustainable development and/or the effective management of environmental problems is an important issue in our society” and “I feel that businesses and/or corporations have an obligation to ensure the promotion of sustainable development and/or the effective management of environmental problems” on 7-point Likert-type scales (1 = strongly disagree, 7 = strongly agree). Regarding these two questions, I conducted additional tests (i.e., one-way ANOVAs, t tests) and found no significant differences between the groups included in the study. I also ran OLS models in which I included responses to these two questions as controls and again found results consistent with those presented in my main analyses.⁷

Finally, because the sample consisted of individuals both considered active participants in the proenvironmental movement and sympathizers toward the movement, I sought to investigate whether key differences existed between these two types of participants. A series of tests (i.e., one-way ANOVAs, t tests) further confirmed that active participants and sympathizers did not systemically differ in terms of key demographics, namely, age, gender, and political ideology. I also ran additional OLS models where I included active participant as a control, here using a dummy variable, and again found results consistent with those presented in my main analyses. However, in the model predicting participants’ willingness to disrupt the shareholder meeting and that predicting participants’ willingness to boycott the firm, it is interesting to note that the active participant coefficient was positive and significant. Although I hesitate to draw strong conclusions about these results, I believe they could be indicative of active social movement participants’ general (a) preferences for more damaging influence tactics, such as boycotts, and (b) willingness to engage in relatively more arduous tactics, such as disrupting the shareholder meeting. These results are in line with prior theory linking activists’ degree of radicalness with a preference for damaging tactics and a lesser aversion toward arduous tactics (see den Hond & de Bakker, 2007).

Discussion

The purpose of the current study was to conduct an initial investigation into how a CEO’s public response to a social activist challenge might influence a firm’s engagement with social activists; this was done by uncovering some of the key consequences of CEO public responses to social activist challenges. More generally, I sought to develop a better understanding of how CEOs can actively and performatively manage social activism in and around their firms. To do so, I integrated instrumental stakeholder theory and social movement theory to examine the principle consequences of CEOs’ public responses to social activist challenges in a holistic manner that reflected the key arguments from each perspective. In doing so, I outlined a novel theoretical perspective concerning CEOs’ public responses to social activist challenges, arguing that a given response could present divergent consequences related to managing direct pressure from focal social activists confronting the firm while also influencing the pressure the firm could potentially receive in the form of additional social activist challenges.

Consistent with instrumental stakeholder theory, my findings suggest that accommodative CEO public responses to social activist challenges are negatively related to social activists’ willingness to punish the firm. However, consistent with social movement theory, results also demonstrate that accommodative CEO public responses to social activist challenges may simultaneously send reputational signals about the firm’s openness toward social activists and social issues, such that it may expose the firm to additional social activist challenges.

Contributions to Theory

My study makes several novel contributions to management and organizational research. First, I advance research on the role and influence of CEOs over a firm’s stakeholder strategy, including their relationships with social activists (Briscoe et al., 2014; Chin et al., 2013; Gamache et al., 2020; Mazutis, 2013; Weber et al., 2009). Specifically, I revisited the “spokesman role” of the CEO (Mintzberg, 1973) and how it might influence social activism in and around their firms. My theory and findings suggest that CEOs’ public responses to social activists do, in fact, appear to have an influence on these increasingly prevalent stakeholders. Maintaining harmonious relationships with social activists may “help firms gain social legitimacy and learn how to better manage their external constraints given the increasing institutional pressures from their sociopolitical environments” (Su & Tsang, 2015, p. 1129). Thus, I demonstrated that via being external-facing communicators of company priorities, practices, and plans, CEOs can take an active and performative role to maintain such relationships.

Second, I add to the literature on CEO social influence (Fanelli & Misangyi, 2006; Fiss & Zajac, 2006; Mintzberg, 1973; Zajac & Westphal, 1995). Consistent with recent work, I recognized that social influence tactics may be viewed in a multifaceted way by different constituents (Hambrick & Lovelace, 2018). As such, I more deeply considered the idea that certain social influence tactics may present divergent consequences for a firm, some of which might be unintended. In some ways, I also challenged the notion that CEO social influence tactics are relatively costless. Specifically, I demonstrated some potential perils of CEOs’ social influence tactics in the context of dealing with social activism. Although seemingly costless as an attempt to ingratiate the firm to a specific constituent, these tactics could prove costly when considered from a broader perspective. By placing a specific focus on the CEO’s social influence tactics, I also advance the body of work that has examined the unintended consequences of impression management in response to social activist challenges (Georgallis, 2017; McDonnell et al., 2015)

Third, the current study further develops research at the intersection of firms and social activism in noteworthy ways. I broaden the construct of the corporate opportunity structure for social activism by articulating and testing how a CEO’s public response to a social activist challenge (or CEO language, more generally) may constitute an additional and important aspect of a firm’s corporate opportunity structure for social activism. Compared with prior work that generally considers relatively objective firm-level attributes (e.g., firm performance, firm reputation), I draw attention to how social influence tactics of CEOs can also be an element of the corporate opportunity structure for social activism (see Briscoe & Gupta, 2016). This is an important extension of prior research as it demonstrates that CEOs do have some level of discretion over the attractiveness of their firm’s corporate opportunity structure for social activism. Furthermore, on the empirical front, while prior work has also largely made assumptions related to how social activists might evaluate a firm’s corporate opportunity structure, the present study is the first to my knowledge to actually measure social activists’ evaluations of a firm’s corporate opportunity structure for social activism.

Finally, because social activists are considered secondary stakeholders of a firm (den Hond & de Bakker, 2007; King, 2008a), I advance stakeholder strategy research. In general, stakeholder theory remains silent about the consequences of responses to social activists and other stakeholders; it largely assumes that defensive responses yield negative consequences and that accommodative responses yield positive ones for a firm. As Edward Freeman (1984) originally stated, “as unsavory as it is to admit that such ‘illegitimate’ groups have a stake in our business, from the standpoint of strategic management, it must be done” (p. 53; emphasis added). However, to the extent that some firms are not equipped to cope with increased social activism, in general—for various reasons, including resource constraints and pressure from shareholders—the present study’s findings suggest that CEOs issuing an accommodative public response to a seemingly isolated social activist challenge could inadvertently place their firm in a situation where it receives “more than it bargained for” by enhancing the attractiveness of the firm’s corporate opportunity structure for social activism. Although some reputational benefits might come as a result of taking an accommodative stance on social activist challenges and related social and ethical issues (Lamin & Zaheer, 2012), these reputational benefits may not—in and of themselves—completely insulate a firm from social activist challenges (King & McDonnell, 2015; McDonnell et al., 2015). Accordingly, the current study further suggests that responding to social activists, especially if in an accommodative manner, may only represent the beginning of the firm’s dealings with a given social activist group and others in the field.

Future Research

As an initial demonstration of the principle consequences of CEO public responses to social activist challenges, the current study stimulates several avenues of future research. It is important to note that great care was taken in designing the experimental scenario by following recommendations to elaborate on it based on a real-life case so as to optimize internal and external validity (Aguinis & Bradley, 2014; Highhouse, 2009). Although my research design provided a strong test of the theory, future research could examine the relationships of interest in a field setting or with detailed case studies with firsthand accounts to further build on theory from an inductive perspective. Future work might also take a longitudinal approach to understand the full range of consequences associated with different types of responses to social activist challenges. For example, what might the consequences be for a CEO and/or firm that “dig their heels in” and opt for a defensive approach for an extended period of time? Along similar lines, another possible approach would be to design an experiment in which certain performance feedback information was presented to social activists—for instance, informing participants about how certain prominent media outlets were reporting on the targeted CEO’s public response and the social activist group in which they participate (see King, 2008a; McDonnell & King, 2013). Firm reputation was also another variable that was held constant in my study. However, I see potential for considering the influence of reputation in future work. For example, it would be interesting to examine how firm reputation—especially, a history of past misconduct—may influence social activists’ reactions, specifically skepticism, to different responses (see Durand & Georgallis, 2018).

Although the current study drew theoretical attention to social activists’ values, beliefs, and motivations to develop an understanding of how different CEO public responses to social activist challenges might be received by such entities, social activist–sided mechanisms were largely held constant in my empirical approach, a standard consequence of a between-subjects experiment with random assignment of participants. Therefore, this inquiry opens up exciting avenues for future research that might seek to consider various forms of activist heterogeneity (e.g., looking at the core values or ideologies of different social activist organizations) as additional factors that can further help us understand the nuance and complexity of social activist–firm interactions (cf., Eesley et al., 2016). In this vein, future research might also seek to further integrate activist- and firm-sided sources of heterogeneity.

Finally, examining the cognitive processes of social activists in vivo may yield additional insights. In doing so, researchers would be better able to observe the thought processes of individuals who participate in social activist groups in real time. Alternatively, especially when it comes to understanding social activists’ evaluations of the corporate opportunity structure for social activism, it is also possible that such evaluations rely on a configurational array of factors—they identify certain gestalts of (un)attractive firms. As such, because CEOs’ public responses to social activists may affect these entities’ evaluations in conjunction with other factors (e.g., firm performance, CSR investments, CEO gender), future investigations may give further consideration to these possibilities. Relatedly, it is also important to note that this study focused closely on social activists’ intuitive evaluations of CEOs’ public responses, but I recognize that the actions they ultimately decide to take are also the result of deliberate thinking and strategic planning (King & McDonnell, 2015). Thus, future efforts could seek to understand the strategy-making process of social activists and how their evaluations of firms are linked with their strategic choices.⁸

Practical Implications

Given my focus on CEOs, the findings also offer practical advice for CEOs and other individuals who are in strategic leadership positions. First, I generally show CEOs and other individuals in strategic leadership positions that their social influence tactics—in this case, their public responses to social activist challenges—can be inherently dualistic in nature. Thus, these individuals need to think through both the upside and potential downside that might be associated with executing a certain type of action to influence a social activist or other stakeholders.

Second, and specific to the context of social activism, the findings show CEOs and others in strategic leadership positions that although helping to address the immediate threat of a social activist challenge, an accommodative public response may—perhaps unintentionally—also invite more social activist challenges in the future. As such, it might appear that when faced with a social activist challenge, the best course of action—if management’s intention is to accommodate the demand without inviting other challenges—is to do so quietly and away from the public eye (cf., Carlos & Lewis, 2018; Kim & Lyon, 2015). This might, for instance, be crucial in instances where a firm has a reputation for previous misconduct and risks having its response to social and environmental issues be greeted with doubt or skepticism (Durand & Georgallis, 2018).

Conclusion

In the current study, I sought to develop an initial understanding of how CEOs can use social influence tactics to manage social activism in and around their firms by investigating some of the main consequences of CEOs’ public responses to social activist challenges. Overall, my findings demonstrate that CEOs’ public responses have a direct effect on social activists’ willingness to punish the firm while obliquely influencing the attractiveness of the firm’s corporate opportunity structure for social activism in a broader sense. Altogether, the present study advances current thinking on the role of CEOs in managing the firm’s stakeholders including social activists, CEO social influence efforts, firm–social activist interactions, and stakeholder strategy. I hope that management and organizational scholars will further consider the important role and influence of CEOs as they continue to make sense of the complicated interactions between firms and social activists.

Footnotes

Appendix

Experimental Procedure.

Description of the initial scenario (Identical for all participants)
You are an active and important participant in a special interest group—The Ecology Alliance—that is particularly concerned with the extent to which organizations promote sustainable development and the effective management of environmental problems. The JRE Corporation, a large oil and gas company, recently had its plan to drill for oil in the Chukchi Sea in the Alaskan Arctic approved by the U.S. Congress. Since that approval, both of JRE’s rigs—the Northern Light and the Polaris Star—have failed routine inspections. However, JRE plans to use the Northern Light to drill for oil in the Alaskan Arctic in less than 2 weeks from now. In addition, an environmental analysis revealed a 75% chance of a major oil spill if all the Chukchi Sea’s oil is produced. In a recent statement, Robyn Fontaine, the Executive Director of Resisting Environmental Destruction on Indigenous Lands stated, “JRE’s Arctic venture is seriously reckless. This company has no capability to address an oil spill in unpredictable ice conditions and has proven in previous attempts that they are not equipped for the harsh and volatile conditions of the Chukchi Sea.” As a result of these developments, your special interest group has decided to publicly denounce JRE on its website. As an active and important participant in your interest group, consider the following information: • Through publicly denouncing JRE, your interest group expects that JRE will—at a minimum—ensure that the rigs it is using to drill for oil in the Arctic are adequately maintained and compliant with routine inspection standards. • Any response from JRE executives that does not comply with your interest group’s demands will be considered a failure for your group and by the environmental activist community at large.

Description of the initial scenario (Identical for all participants)

You are an active and important participant in a special interest group—The Ecology Alliance—that is particularly concerned with the extent to which organizations promote sustainable development and the effective management of environmental problems.
The JRE Corporation, a large oil and gas company, recently had its plan to drill for oil in the Chukchi Sea in the Alaskan Arctic approved by the U.S. Congress. Since that approval, both of JRE’s rigs—the Northern Light and the Polaris Star—have failed routine inspections. However, JRE plans to use the Northern Light to drill for oil in the Alaskan Arctic in less than 2 weeks from now. In addition, an environmental analysis revealed a 75% chance of a major oil spill if all the Chukchi Sea’s oil is produced.
In a recent statement, Robyn Fontaine, the Executive Director of Resisting Environmental Destruction on Indigenous Lands stated, “JRE’s Arctic venture is seriously reckless. This company has no capability to address an oil spill in unpredictable ice conditions and has proven in previous attempts that they are not equipped for the harsh and volatile conditions of the Chukchi Sea.”
As a result of these developments, your special interest group has decided to publicly denounce JRE on its website. As an active and important participant in your interest group, consider the following information:
• Through publicly denouncing JRE, your interest group expects that JRE will—at a minimum—ensure that the rigs it is using to drill for oil in the Arctic are adequately maintained and compliant with routine inspection standards.
• Any response from JRE executives that does not comply with your interest group’s demands will be considered a failure for your group and by the environmental activist community at large.

Defensive CEO public response	Accommodative CEO public response
At the present time, I have determined that it is in the best interest of the JRE Corporation to maintain our current stance on drilling for oil in the Arctic, including our intentions to use both the Northern Light and Polaris Star rigs as is. JRE has no intention of altering our objectives or of revisiting the manner in which our rigs are inspected for compliance with safety and environmental standards.	At the present time, I have determined that it is in the best interest of the JRE Corporation to revise our current stance on drilling for oil in the Arctic, including our intentions to use both the Northern Light and Polaris Star. JRE has every intention of modifying our objectives and of revisiting the manner in which our rigs are inspected to ensure their compliance with safety and environmental standards.

Defensive CEO public response

Accommodative CEO public response

At the present time, I have determined that it is in the best interest of the JRE Corporation to maintain our current stance on drilling for oil in the Arctic, including our intentions to use both the Northern Light and Polaris Star rigs as is. JRE has no intention of altering our objectives or of revisiting the manner in which our rigs are inspected for compliance with safety and environmental standards.

At the present time, I have determined that it is in the best interest of the JRE Corporation to revise our current stance on drilling for oil in the Arctic, including our intentions to use both the Northern Light and Polaris Star. JRE has every intention of modifying our objectives and of revisiting the manner in which our rigs are inspected to ensure their compliance with safety and environmental standards.

Acknowledgements

I am very grateful to my associate editor Ivan Montiel and three anonymous reviewers for their helpful guidance and suggestions. I would also like to thank Pam Barr, Jay O’Toole, Elizabeth Lim, Mark Kiel, Nikos Dimotakis, and participants at the 2019 Strategic Management Society Special Conference in Las Vegas for their helpful guidance in the development of this research and for their feedback on earlier drafts of this article, as well as Fergie for her research assistance. Any errors are my own.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

François Neville

Notes

Author Biography

François Neville (PhD, Georgia State University) is an assistant professor of strategic management at McMaster University, DeGroote School of Business (Hamilton, Ontario, Canada). His research interests focus on strategic leadership and corporate governance with a current focus on the role that strategic leaders play in shaping a firm’s stakeholder strategy. His articles have appeared in Business & Society, Journal of Business Venturing, Journal of Management, Journal of Management Studies, and Strategic Management Journal.

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