Deconstructing corporate activism: a consumer approach

Abstract

Defending social and political positions other than those that a company's clients might support has always been an avoidable risk. However, this practice, called ‘corporate activism,’ has gradually been integrated into the strategies of organizations. The object of this work is thus to understand the antecedents of corporate activism from the consumer's point of view. To understand this, we carry out structural equation modeling (SEM) based on a sample of 1,521 consumers. The results demonstrate that: (i) institutional credibility, corporate credibility, and authenticity act as antecedents of corporate activism; (ii) corporate credibility has a positive influence on corporate activism, while institutional credibility has a negative impact. These findings represent an interesting and novel contribution that helps to understand how these types of high-risk strategies should be adopted. The application of these results could enable companies to determine the conditions that favor a positive evaluation of corporative activism by consumers and avoid the use of such strategies in less favorable situations.

The Side Effect of Political Standing: Corporate Activism and Its Impact on Stock Returns

“…In summary, previous empirical literature has focused on the relationship between corporate activism and purchase intention (Corcoran et al, 2016;Krebel Chang, 2017;Overton et al, 2021;Robinson et al, 2012), changes in consumer attitudes (Atanga et al, 2022;Parcha & Kingsley Westerman, 2020), the impact on brand equity (Korschun et al, 2019;Vredenburg et al, 2020), reputation (Den-Hond et al, 2014), or both (Villagra, Clemente-Mediavilla, et al, 2021), as well as understanding the antecedents of the concept (institutional and corporate credibility and authenticity) from the consumer's point of view (Villagra et al, 2022). Moreover, the relationship between corporate activism and financial performance is receiving research attention (Bhagwat et al, 2020;Dodd, 2018;Dodd & Supa, 2014;Glambosky & Peterburgsky, 2022;Villagra, Monfort, & Méndez-Suárez, 2021;Weinzimmer & Esken, 2016), which is closely related to the principal objective of this research.…”

“…On the other hand, Villagra et al (2022) used a sample of 1,521 consumers to propose a theoretical model on the antecedents of corporate activism; these authors showed that institutional and corporate credibility and authenticity act as antecedents of this phenomenon, thus conditioning and explaining which circumstances contribute to the use of corporate activism. They also found that the higher the perceived credibility and authenticity of companies, the more positively their corporate activism actions will be regarded.…”

“…In fact, even though corporate activism is attracting growing attention within the marketing research community and professional discourse (Villagra et al, 2022), the gap between this strategy and corporate finance results is not clear. In previous research, authors have viewed corporate activism as part of strategic issue management and have discussed its importance to companies (Dodd & Supa, 2014).…”