Responsible for Whom? The Impact of Corporate Social Responsibility on Firm Vulnerability and Responsiveness to Social Movement Activism

Abstract

ABSTRACT Are corporate socially responsible (CSR) firms more receptive to social movements? In this paper, we examine whether the CSR profile of a company shapes its engagement with social movement protestors at three key steps: 1) the decision of activists to target firms for protest, 2) the responses of shareholders to the protest, and 3) management responses to the demands of protesters. In all three cases, we test broad competing theories of whether CSR status serves as a vulnerability for firms making them more susceptible to social movement pressure or is a resource shielding them from such pressure. Using an original dataset on protests against Fortune 500 corporations between 2005–2010, we demonstrate the following: Consistent with the resource view, CSR firms are protected from activist targeting and, once targeted, are better insulated from negative shareholder reactions than less responsible firms. However, we find social movements may also turn this resource into a vulnerability: When protests disrupt the firms’ financial interests, CSR firms instead become more likely to concede to demands. Finally, we find that financial disruption also plays a clarifying role for firm managers, encouraging firms to move away from partial response—operationalized as firms conceding to some but not all demands—toward more definitive responses. We conclude that while CSR can serve as a resource for firms, this is a contingent benefit, exposing the socially responsible firm to additional pressures if the movement is able to disrupt its interests.