Dr. Mark DesJardine, Dartmouth Associate Professor of Business Administration;  Daniel R. Revers T’89 Faculty Fellow

From Failed Mobilization to Corporate Irresponsibility:  How Social Movements Can Backfire

Abstract:  Social movement campaigns sometimes fail to mobilize stakeholders. Researchers have so far assumed that such failed campaigns are merely unproductive, creating costs for the activists without producing any benefits. This study explains why failed campaigns may even backfire, that is, harm the goals of these campaigns. We argue that campaigns that fail to mobilize stakeholders send important information about the preferences of key stakeholders to firms, inducing managers to engage in activities that run counter to the goals of the campaigns. Specifically, when social movement campaigns address environmental and social (E&S) issues, as they often do, a mobilization failure signals to targeted firms that E&S issues are a low priority for key stakeholders. Managers follow suit by deprioritizing E&S issues in their firms, creating an organizational environment in which corporate social irresponsibility can proliferate. An analysis of failed E&S shareholder proposals at U.S.-based publicly traded firms from 2007 to 2022 shows that failed E&S proposals induce corporate social irresponsibility. Further, we show that this response is heightened when proposals are expected to pass, and mitigated when managers are compensated on E&S issues. Our theory and findings extend research on social movements and corporate social responsibility by shedding light on the consequences of mobilization failure.