Abstract
Prior research in upper echelons suggests that CEO values shape the decisions and outcomes of their firms. Our study extends this literature by considering how CEO values, conceptualized in terms of CEO political ideology (on the conservatism-liberalism spectrum), can influence other CEOs’ strategic decisions. Specifically, we integrate research on upper echelons with inter-organizational imitation to argue that ideological incongruence–i.e., the perceived incompatibility between a CEO’s values and the new practice they adopt– positively affects its subsequent adoption by other CEOs. In particular, we theorize that conservative-leaning CEOs’ decisions to adopt a CSR executive position (i.e., appoint a CSR specialist in the top management team) will be imitated at a higher rate by observing CEOs than those of liberal-leaning CEOs due to the increased perceptual salience and situational attributions associated with ideologically-incongruent actions. We further posit that these effects will be stronger when observing CEOs themselves lean conservative and when observing firms experience shareholder pressure to improve their CSR efforts. We test these ideas in a sample of Fortune 500 companies during 2001-2013 and find broad support for our hypotheses. Additionally, in supplementary experimental analyses, we find some evidence for our envisioned theoretical mechanisms.
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