How Do Employees React When Their CEO Speaks Out? Intra- and Extra-Firm Implications of CEO Sociopolitical Activism

Adam J. Wowak, John R. Busenbark, Donald C. Hambrick

Research output: Contribution to journalArticlepeer-review

35 Scopus citations

Abstract

Business leaders have traditionally avoided wading into society’s debates. Yet more and more CEOs are taking visible public stands on hotly contested issues, engaging in what has come to be called CEO sociopolitical activism. Despite its growing prevalence and potentially major implications, this class of executive behaviors remains largely unexplored by organizational scholars. Our study tests and elaborates on stakeholder alignment theory to investigate the influence of CEO activism on employees’ attitudes and behaviors, particularly its effects on employees’ organizational commitment and support for the ideology underpinning the CEO’s public stance. Our theoretical predictions hinge on the degree of alignment between the CEO’s stance and the prevailing ideological tilt of the employee population, as well as the degree to which employees view the CEO as a credible leader. We test our ideas in the context of a highly publicized letter signed by nearly 100 public company CEOs in opposition to North Carolina’s controversial 2016 “bathroom bill.” Relying on multiple data sources to examine differences between firms whose CEOs signed the letter and firms whose CEOs declined the invitation to sign, we find general support for our theory, indicating that CEO activism has important intra- and extra-firm implications.

Original languageEnglish (US)
Pages (from-to)553-593
Number of pages41
JournalAdministrative science quarterly
Volume67
Issue number2
DOIs
StatePublished - Jun 2022

All Science Journal Classification (ASJC) codes

  • Arts and Humanities (miscellaneous)
  • Sociology and Political Science
  • Public Administration

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