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Do Social Movements Improve Corporate Behaviors?

Protestors gathered in a city

Watch: QUASI seminar, February 19th, 2021

Panelists: Sarah Soule; Brayden King; Mae McDonnell; Jerry Davis

Summarized by: Panikos Georgallis

Do social movements improve corporate behaviors? Many of us would think that the answer is a resounding “yes”. After all, what could justify the burgeoning research on social movements and corporations if not activists having some impact on firms? Yet the answer is not as simple. First, we must consider what kinds of improvements social movements elicit from corporations. Second, we need to place activists’ impact in the context of the broader goals of the movement. Third, we must agree on what ‘improve’ really means. And fourth, we need to consider if this question is even possible to answer. Each of these complications was raised by four excellent panelists—all working at the forefront of social movement and organization studies—who took turns in addressing this question and then collectively discussed possibilities for future research.

Starting with the first point, Sarah Soule summarizes much of what we know about the impact of social movements on corporations. Social movements can elicit concrete concessions or symbolic action. For example, activist protests have spurred divestments from countries with controversial regimes such as apartheid South Africa, and employee activism has led to the passage of corporate diversity policies favorable to LGBTQ+ communities. Symbolic concessions and gestures linked to activism have included such changes as adopting CSR committees or providing CSR reports (which have been shown to render firms more receptive to future activist challenges), or corporate statements in support of movements that are prominent at the time (e.g. Black Lives Matter). We also have robust evidence that protests are associated with increased risks of reputational damage and declines in profitability among targeted organizations. These risks, in turn, help explain why firms respond to social movements in the first place.

Are these impacts sufficient to constitute improvement? Brayden King argues that they are not. As much as fear of reputational damage allows activists to incite changes at the corporate level, their ultimate goal is to attain broader societal transformations. Such transformations, however, are not sufficiently addressed by changing individual firms’ behavior, especially since corporate responses are often symbolic or only scratch the surface of the issue. The key challenges here are that (a) social movements target problems that are systemic but firms are natural differentiators and not all of them concede to activist demands; (b) it is hard for activist groups to monitor or enforce new norms; and (c) addressing these problems requires collective action, but firms have limited incentives to engage and activists themselves are not well-coordinated. Despite these challenges, what social movements are good at is shaping the agenda. To move from agenda-setting to transformative change, it is important for activists to get support from key allies such as the state.

The next issue, raised by Mae McDonnell, is about how to interpret the question. First, rather than thinking of improvements in an absolute sense, we must think of the counterfactual: a world without social movements. The rise in movement mobilization is often attributed to activists’ disappointment with the state, and they seek to police corporate behavior in the absence of state intervention. But if activism is a substitute for regulatory action the danger is that it will ultimately be less effective. In other words, we might have preferred the counterfactual if it were a working regulatory system. Second, most of what we know comes from a focus on contentious activism, but collaborative activist tactics may be more effective at encouraging field-wide reforms as resulting changes are more likely to be seen by competitors as performance-inducing rather than ‘forced’. Finally, assessing whether social movements improve corporate social responsibility depends on what is perceived as responsible, and that in itself is in the eyes of the beholder. Activists are, after all, engaging with politically contested issues.

Moving from conceptual to methodological complications, Jerry Davis provocatively suggests that the question is not answerable. First, this type of question is best answered with experimental evidence, but researchers cannot randomly assign companies to treatment (protest) and control (no protest) groups and wait to see the effects. And while it is sometimes possible to account for why firms were selected as targets of boycotts or shareholder resolutions, often we don’t know who was ‘treated’ (e.g. we rarely hear about employee activism that failed). Second, what matters is not just whether a company faces protest, but there might be an ‘optimal’ level of activism required to achieve change. Third, further complicating our ability to empirically address this question, we don’t know how long it might take for the effects of activism to show up. Finally, Davis joins McDonnel in observing increased polarization in society, and suggests that companies can no longer escape politics – especially since the widespread availability of ICT makes it now far easier to target corporations.

Taken together, these insights raise the need to revisit classic questions in the study of social movements in light of new developments in research and practice. First, panelists suggest to reconsider the strategic and tactical choices of activists: How do activists choose targets for contention or collaboration? How can they frame their grievances to resonate with their target audiences? Which strategies maximize field-level reform? And how do repertoires of contention and framing practices look like in a technology-enabled world? Second, we need to couple research on outside and inside activism: How do outside social movements convert employees to activists, or change organizational culture and identity? Under what conditions are their agendas implemented in organizations? What happens to activists in organizations, and how can researchers help them protect against corporate misconduct? Third, there is a need to bring the state back in: What can activists do to reinvigorate the role of states in regulating corporations to address collective problems? And how does government policy mediate the relationship between activism and firm behavior? Finally, as the field is fairly US-centric, we must engage with other contexts and comparative cross-national research: How do social movement issues shift across national borders? How does the repertoire of contention and political opportunity structures across countries affect movement actions and outcomes? Clearly, a lot remains to be done. Hopefully this session will serve as a platform to accelerate the study of this important research area.