The Cost of Taking a Stand: New Insights on Corporate Activism and Stakeholder Reactions
In Spring 2024, Yale's Program on Stakeholder Innovation and Management conducted research examining the complex dynamics of corporate activism.
The research found that taking public stances on polarizing issues consistently generates stronger negative reactions from opponents than positive support from advocates. This asymmetry results in a net negative impact on stakeholder engagement, particularly for organizations with ideologically diverse stakeholders. The findings held true across both liberal and conservative issues studied.
While remaining silent often proves beneficial, the research shows this too carries risks. Companies with a history of activism faced reduced stakeholder interest when choosing not to engage on similar issues later, highlighting the importance of consistent organizational behavior over time. Additionally, attempts to justify corporate positions – whether through appeals to customer preferences, employee values, or company history – failed to significantly mitigate opposition.
Through five studies involving over 9,500 participants using hypothetical employee and consumer scenarios, these findings provide evidence-based insights for organizations navigating increasing pressure for corporate activism. The research indicates that optimal approaches vary based on stakeholder composition. Organizations with ideologically aligned stakeholders may have greater latitude for activism, while those with diverse stakeholder bases benefit from carefully tracking issue polarization and maintaining consistency with past patterns of engagement.
