Stakeholder Political Ideology, Purpose of Business Beliefs, and Responses to CEO Activism: Introducing an Asymmetry Model

This study frames CEO activism as a sensegiving process and focuses on the effects of CEO activism on organizational outcomes. We propose that the effects of CEO activism on firm performance are contingent upon whether CEO activism is perceived as congruent with employees’ dominant political ideology. As a symbolic action, CEO activism has the power to influence employees’ values and goals; therefore, when it is aligned with employees’ political ideology, it will engender a positive employees’ cognitive, affective and behavioral response in the organization, which will ultimately benefit firm performance. However, such positive outcomes will be hindered when the executive is perceived as not invested in the activism. By contrast, CEOs who are also firm founders tend to amplify the beneficial effects of CEO activism. All of these findings were derived from tests of a sample of 236 CEOs who engaged in activism between 2015 and 2018 and a total of 880 firm-year observations. Through a set of post-hoc and supplementary analyses we also tested for endogeneity concerns, treatment effects, and the plausibility of our theoretical mechanism.

Purpose Given the need for social consciousness among public figures and the increasing social influence of influencer CEOs, we examined how influencer CEO activism, influencer CEO styles of social media use (e.g. self-disclosure) and political ideology of followers interact to affect perceived intimacy and attitudes. Design/methodology/approach We conducted an online experiment with 219 participants randomly assigned to one of six conditions manipulating influencer CEO activism and influencer CEO self-disclosure on social media posts. Participants' political ideologies were measured. From the perspective of social penetration theory, we assessed perceived intimacy and examined a moderated mediation model. Findings The three-way interaction effect among influencer CEO activism, CEO self-disclosure and political ideology on intimacy was significant, affecting attitudes toward the activism, the CEO and the brand. The two-way interaction of influencer CEO activism and political ideology was significant in the professional self-disclosure condition but not in the personal self-disclosure condition. Practical implications This research underscores the importance of aligning influencer CEO activism with audience characteristics, highlighting personal disclosure as a potential buffer against backlash. Originality/value The findings show that the personal self-disclosure of influencer CEOs in their social media posts can insulate CEOs when their expressed opinions diverge from the opinions of their audience. Delving into the intrinsic mechanism behind this phenomenon through the lens of social penetration theory sheds light on the role of perceived intimacy in the persuasive power of influencer CEOs.

Research has shown that the political ideology of top executives is an important predictor of behaviors in organizations. While a number of recent studies have identified the impact of political ideology on some organizational outcomes, much more theory and research are needed to understand the full influence of ideology. This symposium seeks to shed additional light on the role of various types of ideologies, including the classic liberalism-conservatism axis, communist ideology, and Confucianism, in the United States and China with four theoretically rich empirical papers. Specifically, the papers in this symposium contribute to research on ideology in the management literature by: 1) examining not only liberalism- conservatism political ideology but also other types of ideologies, including communism and Confucianism; 2) expanding the scope of contexts from the United States to China; and 3) showing the ideologies of top executives are deeply connected with a range of novel organizational decisions and outcomes, including CEO activism and firms’ engagement in controversial social issues, governance orientation of the board, internationalization strategies, and stakeholder-oriented governance practices. The New Activist CEO: CEO ideology and Firms Socio-political Involvement Presenter: Michael Seth Nalick; mnalick@memphis.edu Presenter: Scott Kuban; Tulane U. Presenter: Matthew Josefy; Indiana U. - Kelley School of Business Presenter: Ronei Da Silva Leonel; U. of Memphis Presenter: M. K. Chin; Indiana U. Bloomington The Effect of the Board Chairs Political Ideology on Governance Orientation Presenter: Matias Kalm; Arizona State U. Presenter: Ryan Adam Krause; Texas Christian U. Presenter: Abhinav Gupta; U. of Washington, Seattle Presenter: Matthew Semadeni; Arizona State U. Allying with Thy Enemy? A Study of The Communist Ideological Imprint of Chinese Entrepreneurs Presenter: Christopher Marquis; Cornell U. Presenter: Kunyuan Qiao; UESTC/SFI Prosocial Values of Top Executives and Stakeholder Governance in China Presenter: XuHong Li; Fudan U. Presenter: David H. Zhu; Arizona State U. Presenter: Yuejun Tang; Fudan U.

Chief executive officers (CEOs) who engage in activism take public stands on issues that are largely unrelated to the core business of their firms. This study assesses the impact of CEO activism on shareholder value and investigates potential drivers behind the decision to advocate. We conduct an event study centred on a particular episode of CEO activism: the resignation of a group of business leaders from their roles as advisors to President Trump. We choose this setting since activism is likely to have a stronger impact when a CEO is politically connected. However, by engaging in advocacy, a CEO risks severing the very same political links that underlie the strength of the message. We find that shareholders react negatively to the decision to quit a presidential advisory council, which is consistent with a fear of weakening their firm's political influence. The decision to publicly advocate seems to be driven more by a CEO's personal political ideology than by a company's general involvement in corporate social responsibility. We also observe that managers are more likely to take a stand when they are protected by their firm's corporate governance rules. This study provides empirical evidence of the risks associated with CEO activism.

CEO Political Ideology and Woke CEO Activism: The Role of Board Engagedness