Through the Mud or in the Boardroom: Examining Activist Types and their Strategies in Targeting Firms for Social Change

28 Pages Posted: 6 Mar 2015 Last revised: 18 Jul 2015

See all articles by Charles E. Eesley

Charles E. Eesley

Stanford University - Management Science & Engineering

Katherine DeCelles

University of Toronto - Rotman School of Management

Michael Lenox

University of Virginia - Darden School of Business

Date Written: March 4, 2015

Abstract

We examine the variety of activist groups and their tactics in demanding firms’ social change. While extant work does not usually distinguish among activist types or their variety of tactics, we show that different activists (e.g., social movement organizations versus religious groups and activist investors) rely on dissimilar tactics (e.g., boycotts and protests versus lawsuits and proxy votes). Further, we show how protests and boycotts drag companies “through the mud” with media attention, whereas lawsuits and proxy votes receive relatively little media attention yet may foster investor risk perceptions. This research presents a multifaceted view of activists and their tactics and suggests that this approach in examining activists and their tactics can extend what we know about how and why firms are targeted.

Managerial summary: The purpose of this study was to examine how different types of activist groups behave differently when targeting firms for social change. We find that traditional activist groups rely on boycotts and protests, whereas religious groups and activist investors rely more on lawsuits and proxy votes. Additionally, we find that protests and boycotts are associated with greater media attention, whereas lawsuits and proxy votes are associated with investor perceptions of risk.

Keywords: stakeholder theory, environmental management, self-regulation, activist, activism, social movement

Suggested Citation

Eesley, Charles E. and DeCelles, Katherine and Lenox, Michael, Through the Mud or in the Boardroom: Examining Activist Types and their Strategies in Targeting Firms for Social Change (March 4, 2015). Darden Business School Working Paper No. 2574046. Available at SSRN: https://ssrn.com/abstract=2574046 or http://dx.doi.org/10.2139/ssrn.2574046

Charles E. Eesley (Contact Author)

Stanford University - Management Science & Engineering ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

HOME PAGE: http://chuckeesley.com

Katherine DeCelles

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Michael Lenox

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://faculty.darden.virginia.edu/LenoxM/index.htm

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