The Rise of Digital Activism and its Strategic Implications

Abstract

The diffusion of social media has fundamentally changed the way social movements pressure corporations. For decades, marginalized actors relied on social movement organizations that proficiently engaged in private negotiations with corporate elites and coordinated long-lasting campaigns to force corporations to comply with their demands. Today, social media platforms make it easy for any individual to share information on questionable business practices and call for hostile actions against firms, making social movement organizations less necessary for marginalized groups to express their discontent. But how will this new and dominant form of digital activism through social media platforms differentially impact corporations and their strategic responses?

In this dissertation, I provide a comprehensive answer to this broad research question through three separate but complementary studies. In the first study, I posit that the democratization of digital activism has made corporations more susceptible to the voice of distant stakeholders, but at the same time, I argue that the lack of coordination in formal organizations has made this type of activism more superficial and short-lived. To shed light on the evolution from traditional to digital activism against firms, I explore the context of consumer boycotts in the United States between 1968 and 2020, and I develop a conceptual model to propose how these forms of activism will differentially operate against companies and impact their performance, resources, and strategies.

In the second study, I investigate the factors driving the emergence of social media activist campaigns as well as their ability to threaten the financial performance of targeted firms. First, I suggest that corporate issues with stronger ideological connotations will lead to larger activist campaigns. Second, I propose that activist campaigns with more numerous interactions between platform users will have a stronger negative impact on the stock market valuation of targeted corporations. My empirical analysis of consumer boycotts on Twitter against S&P 100 corporations between March 2006 and June 2022 supports these predictions.

In the third study, I examine an unexplored organizational effect of activist pressures: the ideological polarization of targeted corporations. I propose that activist campaigns promoting specific values and beliefs and pushing for the reform of corporate practices will reshape the ideological composition of targeted corporations triggering an ideological divide in them. To do so, I introduce the construct of ideological polarization within a focal corporation, and I argue that social movement pressures will increase the ideological polarization of targeted firms by intensifying the ideological engagement and political activism of their members. I find support for these arguments in the sample of consumer boycotts on Twitter against S&P 100 corporations in combination with data on employee campaign contributions between January 2015 and May 2022.

By studying the rise of digital activism and its strategic implications for firms, this dissertation contributes to three different academic fields. First, the studies contribute to strategic management and nonmarket strategy work on how stakeholders shape the performance, resources, and strategies of firms. Second, this investigation extends sociological work on the emergence of social movements and their interaction with business organizations. Third, this dissertation adds to political science research on the political participation of citizens through online platforms as well as the political engagement of corporations and their members.