A significant body of scholarly literature has addressed the issue of appropriate ways for CEO’s respond to social issues within the framework of corporate social responsibility and ethics. While the personal position of a head of a company might be validated by their beliefs and values, they might not coincide with those of the public, which threatens the sustainability of business growth. Overall, for a CEO to address tentative and even sensitive social issues without risks to their organizations, their stances should be based on both stakeholder positions and personal opinions. This paper is designed to investigate the issue in question by reviewing the evidence retrieved from three scholarly articles.
The complexity of relationships between the multiple stakeholders involved in proper organizational functioning implies several dimensions of their social positions’ influence on each other. For example, as stated by Brown et al. (2020), the value-based misfit in relationships between employees and the CEO of a company might harm organizational performance. The researchers claim that it is essential to address such misfits openly to avoid managerial drawbacks in workplace functioning. On the contrary, the positive outcomes of CEO activism in general, and environmental activism in particular, have been investigated by Branicki et al. (2021). Their study establishes that despite the beneficial social implications of advancing active environmental positions, CEO activism is not universally appropriate for value promotion to the general public. Moreover, Hambrick and Wowak (2021) state that for successful outcomes, CEOs should adjust their social activist positions with their stakeholders. In such a manner, the negative outcomes will be minimized.
Thus, the review of the literature demonstrated that scholars have different views on how CEOs should respond to social issues. On the one hand, CEO social activism is viewed as a positive indication of a company’s position. On the other hand, a misfit in positions between either society and CEO or employees and CEO might hinder organizational reputation and functioning. Therefore, organizational leaders need to verify their publically presented positions with their key stakeholders.
Branicki, L., Brammer, S., Pullen, A., & Rhodes, C. (2021). The morality of “new” CEO activism. Journal of Business Ethics, 170(2), 269-285.
Brown, L. W., Manegold, J. G., & Marquardt, D. J. (2020). The effects of CEO activism on employees person‐organization ideological misfit: A conceptual model and research agenda. Business and Society Review, 125(1), 119-141.
Hambrick, D. C., & Wowak, A. J. (2021). CEO sociopolitical activism: A stakeholder alignment model. Academy of Management Review, 46(1), 33-59.