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How Do Employees React When Their CEO Speaks Out? Intra- and Extra-Firm Implications of CEO Sociopolitical Activism

Administrative Science Quarterly 2022 67(2), 553-593
Business leaders have traditionally avoided wading into society’s debates. Yet more and more CEOs are taking visible public stands on hotly contested issues, engaging in what has come to be called CEO sociopolitical activism. Despite its growing prevalence and potentially major implications, this class of executive behaviors remains largely unexplored by organizational scholars. Our study tests and elaborates on stakeholder alignment theory to investigate the influence of CEO activism on employees’ attitudes and behaviors, particularly its effects on employees’ organizational commitment and support for the ideology underpinning the CEO’s public stance. Our theoretical predictions hinge on the degree of alignment between the CEO’s stance and the prevailing ideological tilt of the employee population, as well as the degree to which employees view the CEO as a credible leader. We test our ideas in the context of a highly publicized letter signed by nearly 100 public company CEOs in opposition to North Carolina’s controversial 2016 “bathroom bill.” Relying on multiple data sources to examine differences between firms whose CEOs signed the letter and firms whose CEOs declined the invitation to sign, we find general support for our theory, indicating that CEO activism has important intra- and extra-firm implications.

The Dynamics of Organizational Autonomy: Oscillations at Automobili Lamborghini

Administrative Science Quarterly 2022 67(3), 721-768
Through a 21-year longitudinal study of the relationship between Italian supercar manufacturer Automobili Lamborghini and its parent, German carmaker Audi AG, we examine how a unit’s degree of organizational autonomy is renegotiated over long periods of time. Using detailed empirical data, we develop a process model of the dynamics of organizational autonomy in a unit–parent relationship. This process model shows an ongoing dialectical tension between parent managers’ autonomy-reduction efforts and unit managers’ autonomy-extension efforts, and it reveals oscillations in the unit managers’ discretion over resource-orchestration decisions. Driving this dialectic are parent managers’ appraisal respect for the unit, their search for firm-wide strategic integration, and unit managers’ organizational identity and concern for distinctiveness. Our process model captures concurrent feedback loops that endogenously produce these oscillations between lower and higher autonomy. We then conceptualize a harmonic domain in the unit–parent relationship, in which these oscillations persist without deviating toward amalgamation or separation. Finally, we develop a theory of change in autonomy by identifying a theoretical link between resource orchestration and specific dimensions of organizational identity. Our study highlights the dialectical, dynamic, and ongoing nature of organizational autonomy.