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Week 3: Organizations as targets of SMs - Coggle Diagram
Week 3: Organizations as targets of SMs
Impact of Social Movement Activities on Organization
Disruption of resources
Future Financial uncertainty
may impact external ratings
eg. MSCI-KLD 400 index rates social and environmental factors of firms to help investors make informed decisions
influence relationships with stakeholder (eg. government)
eg. Boycotts incentivise governments to give back political contributions received from organizations and stop relationship ie. cancel contracts (McDonnell & Werner)
Direct financial implications
activity can lead to financial losses in different ways
social movement protests led to negative stock price returns (King & Soule)
stock returns targeted firms were c.1% lower between 1962-90
large effects on sales (Barley & Child)
overall firm profits decline after profits ( Luders)
Disruption of reputation
Reputation
unique evaluation of an organisations behaviour and quality of products/services. It sets an organization apart from others
organisations can build strong reputation by sending
performance and quality signals
to meet society's expectations
has consequence for financial performance, ppl might disengage from low reputation organizations
SMs prefer attacking Organizations with high reputation (Florida; Etzion)
generates more media attention, enhances movements influence
knock-on effefcts, other organisations feel threat and respond to SM positively out of fear getting targeted too
activists therefore ignore smaller firms and those with lower reputation all together
Organisations with high reputation for socially responsible activities, who then engage in reprehensible acts VERY likely to be attacked
accused of organisational hypocrisy (Vogel)
eg. Nike made itself very vulnerable bc it tried to brand itself as good corporate citizen, but faces detrimental labor conditions
interestingly , some adopt "
strategic
silence
" regarding positive record of activities in order to not attract unwanted attention
Unintended impact
Organizations can observe and learn ho SM attack
can learn to hide "bad" practices
strategically avoid markets/industries/locations
Organizational Responses to SM activities
Response continuum
responses placed along continuum from very aggressive and defensive to very accommodative and giving in
Prosocial claims
Firm issues statements and press releases, commitment to social action , Aim: distract from claims
eg. called for boycott of VW for emissions scandal, VW responded with high profile auction of a pink beetle to raise money for breast cancer
Symbolic Concessions
institutes policies, procedures, positions meant to manage image, aim: show "active" without doing much
eg. issuing CSR reports or implementing comittees, to respond to SM
Cooptation/ Partnerships
invite activist to partner or response to critics, sometimes to silence activists or learn and benefit from them
eg. Many organisations explicitly work with LGBTQIA+ groups.
Collaboration can be instrumental to get more LGBTQIA+ individuals to become costumers and supporters of the organisations
population with great deal of disposable income
Donations/ Philanthropy
donates money to cause
eg. Google donated 2.35$ mil to BLM after facing pressure
Denial/ Ignore
ignore
activists, deny culpability/ responsibility for charges
eg. Unocal, energy company, attacked by Free Burma Movement in 90s. Unocal refused to divest from Buma despite threats
Concrete Concession
concedes to demands by granting concessions
eg. universities terminated contract with clothing companies after anti-sweatshop activism OR firms adopted voluntary emissions controls
Retaliation/ Repression
responce by
policing
, repressing, censoring against activists
eg. polaroid responded to activism by firing a number of employees involved in organising it
critic: too narrow as leader will often need to draw on different combinations of responses to deal with social movement pressure successfully. either at the same time or over time
broader managerial responses
4W Framework
2. Withdraw
withdraw from dispute, pursue objectives in different context (or capitulation)
change
internally
, so not targeted anymore eg. stop production of set. OR
physically
moving to different place
Mini Case: Bioscience
Wait
wait for dispute to shift/ go away. Not the same as ignoring... Waiting is concisely passing time
Mini Case: Endesa
unstable strategy, matter can suddenly become urgent
1. Wage a Fight
opposing and defying demands
eg. lawsuits, support of political elites, intimidation, police, public opionion, potential allies
Mini Case: Freeport Indonesia
4. Work it out
active engagement with stakeholders, ongoing process of dialogue, solutions mutually accepted
active process seeking common ground, generation of new options, compromise or collaboration
Mini Case: Bloedel
brings many of individual responses together into broader strategies
Determinants of Organisational Responses
3 characteristics (& combos) of situation, influencing strategy pursued
Firm Power
capacity to control behavior of others
Utilitarian power
control of material rewards & punishments (SM: offering financial benefits to activists or imposing costs on them)
Normative power
persuasion, rest on ability to shape others opinions (SM: convincing activists to stop protests by highlighting 'expert' opinions)
Coercive Power
threat of physical punishment (SM: working with courts, police = suppress social movement activities
power an organisation has influences partly how it responds to SM pressure
Resource dependence
organisations depend on external actors & their resources, it may shape response to SM pressure -> especially when SM can influence actors
Dispute urgency
increase urgency
investors may pressure
organization to address quickly. especially if it is preventing revenue-generating project
Seasonality
may heighten urgency, bc limited time frame of oncome
degree to which it feels need to resolve issue quickly