If You Can't Beat Them, Join Them: Corporate Sponsorship of Social Movement Boycotts

Abstract:     
This article explores the link between market contention – activist campaigns working to coerce companies to change contested practices or products – and cooperative relationships between firms and activists. Specifically, I suggest that savvy firms strategically react to increased stakeholder social activism by joining with – rather than fighting against – contentious social movements. I explore this possibility by empirically tracking the emergence of a new strategic non-market phenomenon – the corporate-sponsored boycott – in which firms voluntarily cooperate with contentious social movement organizations to sponsor boycotts that protest contested social practices of other companies or entities at higher orders of market organization, such as industries, transnational regulators, or states. Using a longitudinal database that tracks the internal and external contention faced by 300 large companies between 1993 and 2007, I employ a rare events discrete time event history analysis to examine the link between contention and the incidence of a corporate-sponsored boycott. I argue that that the relationship between contention and use of the corporate-sponsored boycott is moderated by weakening firm performance and declining social approval, suggesting that firms are motivated to employ this strategy to mitigate the adverse consequences of stakeholder contention when facing challenging competitive and social environments. But, firms build trust and learn new capabilities from these initial, strategically-motivated cooperative initiatives with social activists, making them more likely to continue cooperating with activists in the future. Thus, initial cooperative endeavors between social activists and firms may be the bellwethers of more lasting shifts toward collaboration.

Number of Pages in PDF File: 47

Keywords: social movements, corporate social responsibility, non-market strategy

working papers series