Research

Abstract: We explain how a firm’s relational strategies impact conflict risk in the broader network of societal relations. To make this contribution, we highlight how managerial decisions are evaluated, and acted on, not only by the firm’s stakeholders, but also by others attentive to their group’s access to, and control over, economic, political, and social assets in comparison to other groups with whom they are in conflict. We show that when firm actions that form or break ties in its stakeholder network inhibit the ability of groups to reach mutually acceptable settlements on the relative distribution of the costs and benefits from firm operations, conflict risk in the broader societal network increases. We thereby emphasize that managerial decisions in the normal course of business can impact conflict risk, even if unintentionally, by changing the structure of relationships between groups in conflict-affected areas.

Abstract: Many of society’s grand challenges strongly implicate an “us” and a “them”—not only through the differential impact of issues such as violence, inequality, globalization, climate change, and immigration on different social groups, but also through society’s decreasing capacity to build sufficient consensus for practical progress on these issues across racial, ethnic, economic, geographic, and other demographic divides. Managers may treat their engagement on such broader societal issues as a matter of choice, whether motivated by a sense of obligation or by more pragmatic considerations as reputation- or regulation-sensitive businesses. We argue rather that businesses inevitably have an impact on societal challenges in divided societies—whether positively or negatively, intentionally or not—through the dual mechanisms of rents and relationships. Particularly at the local level, firms may have important direct impacts on the unequal distribution of the benefits, costs, and risks of firm activities to different groups, and thus on conflict risk. Firms, through their relational strategies, also shape the willingness and ability of different groups to work together for positive change both locally and at the broader societal level. Thus, firm behaviors emerging from their daily operations have a discernable effect on society’s capacity to address its grand challenges, necessitating corporate activism that encompasses market and non-market strategies, as well as an understanding of the strategy-setting process itself.

Abstract: Corporate political connections (CPCs), or the interpersonal ties that connect a firm’s managers to political agents, have been shown to help firms manage institutional voids and capture economic rents. We argue that while CPCs can encourage transnational investments that benefit firms and certain local groups, the relationships between firms and political agents are reciprocal, create hidden costs, and contribute to conflict risk (1) directed towards firms and (2) between groups in contestation over economic assets. We test our theory on multinational corporations (MNCs) operating in Africa, where weak institutions and preexisting intergroup conflicts might exacerbate the perils of political patronage, and where CPCs are understudied. We examine 2,982 MNCs and 6,463 of their greenfield foreign direct investments and match the identities of over 80,000 unique managers and board members to novel data on politically connected persons. To measure conflict risk, we utilize natural language processing to analyze the sentiments of more than 10 million news articles surrounding these investments over time. We find that while politically connected MNCs are associated with better financial performance and more repeat investments than their unconnected peers, the former also bears a higher negative reputational cost directed towards them from minority groups. The implications of this, however, go far beyond the firm: the societal-level impacts of the “favors” that firms owe their connected political elites, such as concentrated hiring within certain ethnic or political groups, can exacerbate existing horizontal inequalities and increase conflict risk between those who are already in contestation over the distribution of economic assets.

Abstract: I explore how corporate social reputations impact the entry, promotion, and performance of new products in the sustainable consumer packaged goods (CPG) market. I utilize 1) comprehensive datasets on the weekly pricing and advertisement occurrences of consumer goods and 2) the purchasing behavior of US consumers to analyze the entry timing, promotion intensity, and sales performance of CPG products across 22 product categories. The preliminary findings suggest that when a brand experiences a negative social reputation shock, sales of the affected brand's products decrease for a short period following the shock, but long-term market shares generally remain unaffected. However, if a new product is introduced shortly after the shock, then market shares of the affected brand's products (within the same product category as the newly introduced product) are more likely to experience a decline. This effect is stronger if the new product is introduced by a rival company instead of the affect brand's company, if the new product is heavily advertised, and especially if the new product is marketed as a sustainable product.