The enterprise activism risk model: How good intentions can jeopardize business success

Abstract

Companies are increasingly expected to contribute, above and beyond a profit motive, to society. Leaders across industries have addressed the expectation by engaging in activism. While some upper echelons leaders initiate activism efforts in a way that strengthens their firms, others are struggling to do so without risking brand and business performance. This research addresses this important managerial challenge by conceptualizing activism through a risk paradigm. To do this, we first introduce and define a construct called Enterprise Activism. The construct comprises all forms of firm-initiated activism which can impact brand and business performance, such as brand activism, CEO activism, and corporate activism, regardless of who is making the decision (e.g., Chief Marketing Officer or store manager) or whether a portfolio brand or the corporate brand is involved (e.g., Harris Teeter or the corporate brand, Kroger). We then conceptualize the Enterprise Activism Risk Model, providing insight into how different types of actions can pose market share and positional advantage risks. Leveraging insight from C-level leaders, we identify ways that firm leaders can deploy the model to advance business practice. Finally, we provide a research agenda to develop new theory and evidence to help support and improve practice. The new insight provided herein provides a framework that can enable upper echelons leaders to evaluate, discuss, and navigate activism to minimize business risk.