Organizational Political Ideology and Corporate Openness to Social Activism

Abstract

This paper argues that organizations tend to be more “open” or “closed” as a function of their members’ political ideologies and that this variation can help explain firms’ responses to social activism. Integrating research on social activism with political psychology, we propose that when firms experience activists’ protests, a liberal-leaning firm will be more likely to concede to activists’ demands than its conservative-leaning counterpart, because its decision makers will more readily accept the interconnectedness of the firm’s activities with the activists’ claims. Building on this core concept, we examine how factors that increase the salience of an organization’s ideology also amplify its effect on responses to protests. Based on a longitudinal sample of 558 protest events directed against Fortune 500 firms from 2001 to 2015, our results support the notion that liberal-leaning firms concede more to activism, an effect that exists after accounting for the ideological valence of the protest issues. When an organization’s members are more proximate to the corporate headquarters, this effect of its ideology is heightened. The same is true when the firm’s ideology is incongruent with that of its local community or its industry. These findings inform research on the organizational implications of political ideologies, as well as on social movements, institutional complexity, and non-market strategy.