Domesticating Radical Rant and Rage: An Exploration of the Consequences of Environmental Shareholder Resolutions on Corporate Environmental Performance

Posted: 20 May 2013 Last revised: 29 Jun 2014

See all articles by Michael Lounsbury

Michael Lounsbury

University of Alberta - Department of Strategic Management and Organization

Min-Dong Paul Lee

Department of Business and Economics, Wheaton College

Date Written: May 17, 2010

Abstract

This article examines the effect of social shareholder activism on one of the most visible aspects of corporate social behavior, namely corporate pollution management practice. Social shareholder activism is a distinct form of social movement that engages firms “in the suites.” We theorize the effect of social shareholder activism using three social movement mechanisms: (a) disruption of routines, (b) reframing of issues using extant institutional logics, and (c) mobilization of relevant third-party constituents. Our empirical analysis using 13-year panel data of 58 public corporations strongly confirm the positive effect of environmental shareholder resolutions on the targeted firm’s pollution management practice. We have also found that certain firms targeted by social shareholder activism are more likely to respond positively to the demands than others. In particular, firms that can potentially incur higher disruption costs and are more dependent on reputation for critical resources such as larger firms as well as firms in industries that are closer to end-user consumers are more likely to concede to the demands from shareholder activists.

Keywords: corporate environmental performance, corporate social behavior, shareholder resolutions, social movements, social shareholder activism

Suggested Citation

Lounsbury, Michael and Lee, Min-Dong Paul, Domesticating Radical Rant and Rage: An Exploration of the Consequences of Environmental Shareholder Resolutions on Corporate Environmental Performance (May 17, 2010). Business Society 2011 50: 155; University of Alberta School of Business Research Paper No. 2013-32. Available at SSRN: https://ssrn.com/abstract=2266657

Michael Lounsbury

University of Alberta - Department of Strategic Management and Organization ( email )

Edmonton, Alberta T6G 2R6
Canada

Min-Dong Paul Lee (Contact Author)

Department of Business and Economics, Wheaton College ( email )

501 College Ave
Wheaton, IL 60187
United States
(630) 752-5312 (Phone)

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