The Individual-Level Antecedents to Corporate Political Stances

Abstract

What factors lead powerful corporate actors to take political stances as part of a business strategy? Prior research has found that corporate political stances influence critical stakeholders (such as workers and consumers), and politically motivated social activism can lead to board departures. In this study, I run a lab-in-the-field experiment examining the role of cause- individual value alignment, monetary incentives, and sustained stakeholder pushback on participants’ willingness to take a costly political stand as part of a business strategy. I find that cause-individual value mismatch and sustained stakeholder pushback lead to significantly less political stance-taking, while higher incentives encourage more stance-taking. When profits from stance-taking strategies are uncertain, cause-individual value match can lead to lower performance due to a matched individual’s higher propensity to explore (unprofitable) stance- taking strategies. Liberals are more reactive to alignment between their personal political orientation and cause orientation than conservatives, a finding partially attributable to differential attitudes towards salient controversial political organizations. Moreover, among mismatched participants, holding an outcome-based ethical outlook is associated with more stance-taking and higher earnings than holding a process-based ethical outlook. Collectively, these findings contribute causal foundations to the nascent literature on the strategic implications of corporate sociopolitical stances.