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7 - License to Give

The Relationship between Organizational Reputation and Stakeholders’ Support for Corporate Political Activity

from Section III - Accountability: Linking Corporate Social Responsibility, Employee Relations, and Corporate Political Responsibility

Published online by Cambridge University Press:  16 November 2023

By
Samantha Darnell  and
Mary-Hunter McDonnell
Edited by
Thomas P. Lyon
Thomas P. Lyon
Affiliation:
University of Michigan, Ann Arbor
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Summary

This chapter explores the relationship between a firm’s informal nonmarket strategy, reflected in its reputation for social responsibility, and stakeholders’ support for formal nonmarket strategy targeting government officials. We argue that a firm’s informal nonmarket performance shapes stakeholders’ willingness to enable its formal nonmarket strategy by funding its corporate political action committee. In this way, a reputation for social responsibility operates as a social license for a firm to politically engage. We examine how a firm's overall reputation and reputation for employee relations affect employees’ contributions to firms' PACs. Through analyses of a hand-collected dataset of employees’ contributions to corporate PACs, we find that a firm’s reputation for employee relations, but not its overall social reputation, is positively associated with employee support of a firm’s formal nonmarket strategy. These findings illustrate a link between a firm’s informal and formal nonmarket strategies and demonstrate a potential constraint on corporate political influence.

Keywords

Corporate social responsibilitycorporate PACscorporate political activityemployee activismemployee relationsnonmarket strategyorganizational reputationstakeholder engagementstakeholder theory
Type
Chapter
Information
Corporate Political Responsibility , pp. 188 - 215
Publisher: Cambridge University Press
Print publication year: 2023

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