Why Do Some Conservative CEOs Publicly Support Liberal Causes? Organizational Ideology, Managerial Discretion, and CEO Sociopolitical Activism

Adam J. Wowak () and John R. Busenbark ()
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Adam J. Wowak: Department of Management & Organization, Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana 46556
John R. Busenbark: Department of Management & Organization, Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana 46556

Organization Science, 2024, vol. 35, issue 4, 1388-1408

Abstract: The phenomenon of chief executive officers (CEOs) speaking out on contested social issues is a recent one, as CEO sociopolitical activism was seen as overly risky, and even taboo, for most of American business history. Yet, CEOs are increasingly choosing sides in societal debates despite the inherent risk of alienating stakeholders who disagree with the CEO’s stance. Even more puzzlingly, conservative CEOs sometimes espouse liberal stances in such debates, which runs counter to the otherwise consistent evidence in the upper echelons literature that CEOs are guided by their own values in their actions. Our study addresses this paradox by examining the antecedents of CEO liberal activism, with an emphasis on the interplay between the CEO’s ideology and the prevailing ideological tilt of the employee population in driving CEOs’ activism decisions. Drawing on the concept of managerial discretion, or latitude of action, we theorize that a pronounced organizational ideology constrains a CEO’s ability to act in accordance with their own values—particularly in the highly symbolic domain of activism. We also argue that conservative CEOs are relatively more focused on instrumental rationales for activism, whereas liberal CEOs tend to prioritize more intrinsic rationales, a consequence of which is that conservative CEOs more heavily weight organizational ideology in their activism decisions. We test our theory in the context of a highly publicized letter signed by nearly 100 CEOs of public companies in opposition to North Carolina’s controversial 2016 “bathroom bill.” Relying on a variety of novel data sources, we find robust support for our theory.

Keywords: chief executive officers (CEOs); sociopolitical activism; managerial discretion; political ideology; organizational political ideology (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:35:y:2024:i:4:p:1388-1408

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