Mary-Hunter McDonnell

A Dynamic Process Model of Private Politics: Activist Targeting and Corporate Receptivity to Social Challenges

This project explores whether and how corporations become more receptive to social activist challenges over time. Drawing from social movement theory, we suggest a dynamic process through which contentious interactions lead to increased receptivity. We argue that when firms are chronically targeted by social activists, they respond defensively by adopting strategic management devices that help them better manage social issues and demonstrate their normative appropriateness. These defensive devices have the incidental effect of empowering independent monitors and increasing corporate accountability, which in turn increase a firm’s receptivity to future activist challenges. We test our theory using a unique longitudinal dataset that tracks contentious attacks and the adoption of social management devices among a population of 300 large firms from 1993 to 2009.

The Scope-Severity Paradox: Why Doing More Harm is Judged to Be Less Harmful

Punishment should be sensitive to the severity of the crime. Yet in three studies the authors found that increasing the number of people victimized by a crime actually decreases the perceived severity of that crime and leads people to recommend less punishment for crimes that victimize more people. The authors further demonstrate the process behind the scope-severity paradox—the victim identifiability effect—and test a strategy for overcoming this bias. Although Studies 1 and 2 document this phenomenon in the lab, in Study 3 the authors used archival data to demonstrate that the scope-severity paradox is a robust, real-world effect. They collected archival data of actual jury verdicts spanning a 10-year period and found that juries required defendants to pay higher punitive damages when their negligent behavior harmed fewer people.

Good Firms, Good Targets: The Relationship between Corporate Social Responsibility, Reputation, and Activist Targeting

Organizational scholarship has become increasingly interested in the relationships between corporate social responsibility, reputation, and movement activism. Activist groups target corporations in order to pursue their social change agendas. These groups are not only motivated to alter particular companies’ policies and practices, but they also use corporations as public platforms through which to communicate their causes to a broader audience. Some scholars have posited that corporations seek to protect themselves from activist targeting by building strong reputations and engaging in socially responsible behavior. By outwardly projecting an image of being a virtuous company, these firms hope to develop goodwill with activists and deter the activists from making public attacks against them. Our study assesses the extent to which a strong reputation and claims about social responsibility buffer firms from activist pressure. Using data on corporate boycotts, we find that corporate attempts to create a reputable, socially responsible image actually make firms more vulnerable to being targeted by activists. We argue that building a strong reputation as a socially responsible firm creates certain expectations, making incongruent behavior more noticeable and damaging to the firm’s image. In addition, we suggest that activists target reputable firms because they seek to draw more public attention to their causes.

What Constitutes Torture? Psychological Impediments to an Objective Evaluation of Enhanced Interrogation Tactics

Torture is prohibited by statutes worldwide, yet the legal definition of torture is almost invariably based on an inherently subjective judgment involving pain severity. In four experiments, we demonstrate that judgments of whether specific interrogation tactics constitute torture are subject to an empathy gap: People who are experiencing even a mild version of the specific pain produced by an interrogation tactic are more likely to classify that tactic as torture or as unethical than are those who are not experiencing pain. This discrepancy could result from an overestimation of the pain of torture by people in pain, an underestimation of the pain of torture by those not in pain, or both. The fourth experiment shows that the discrepancy results from an underestimation of pain by people who are not experiencing it. Given that legal standards guiding torture are typically established by people who are not in pain, this research suggests that practices that do constitute torture are likely to not be classified as such.

Blacklisted Businesses: Social Activists' Challenges and the Disruption of Corporate Political Activity

This paper explores whether and how social activists’ challenges affect politicians’ willingness to associate with targeted firms. We study the effect of public protest on corporate political activity using a unique database that allows us to analyze empirically the impact of social movement boycotts on three proxies for associations with political stakeholders: the proportion of campaign contributions that are rejected, the number of times a firm is invited to give testimony in congressional hearings, and the number of government procurement contracts awarded to a firm. We show that boycotts lead to significant increases in the proportion of refunded contributions, as well as decreases in invited congressional appearances and awarded government contracts. These results highlight the importance of considering how a firm’s sociopolitical environment shapes the receptivity of critical non-market stakeholders. We supplement this analysis by drawing from social movement theory to extrapolate and test three key mechanisms that moderate the extent to which activists’ challenges effectively disrupt corporate political activity: the media attention a boycott attracts, the political salience of the contested issue, and the status of the targeted firm.

Order in the Court: How Firm Status and Reputation Shape the Outcomes of Employment Discrimination Suits:

This article explores the mechanisms by which corporate prestige produces distorted legal outcomes. Drawing on social psychological theories of status, we suggest that prestige influences audience evaluations by shaping expectations, and that its effect will differ depending on whether a firm’s blameworthiness has been firmly established. We empirically analyze a unique database of more than 500 employment discrimination suits brought between 1998 and 2008. We find that prestige is associated with a decreased likelihood of being found liable (suggesting a halo effect in assessments of blameworthiness), but with more severe punishments among organizations that are found liable (suggesting a halo tax in administrations of punishment). Our analysis allows us to reconcile two ostensibly contradictory bodies of work on how organizational prestige affects audience evaluations by showing that prestige can be both a benefit and a liability, depending on whether an organization’s blameworthiness has been firmly established.

Taxing a Tarnished Halo: Reputation and Ambiguity in Evaluations of Corporate Transgressions

The literature on reputation suggests contradictory patterns in how audiences respond to corporate misconduct. On the one hand, a high reputation is thought to buffer a firm because it predisposes audiences to give reputable firms the benefit of the doubt. On the other hand, audiences might judge firms with positive reputations more harshly when they violate expectations. Our study attempts to reconcile this contradiction and provide a theoretical explanation for the conditions that underlie reputations differential effects on audience evaluations. We argue that the manner in which a firm’s reputation influences audiences’ judgments of controversial actions depends on whether the organization’s guilt is ambiguous or established. When there is ambiguity about the charges made against the organization, audiences are inclined to give the benefit of the doubt to an organization with a positive reputation because they are motivated to assess its actions in a manner congruent with their positive expectations. But when an organizations blameworthiness is firmly established, audience members are more likely to punish a reputable organization with harsher sanctions, leading to the “halo tax.” We test our hypotheses using a novel database of over 500 jury verdicts in employment discrimination cases brought against a sample of public companies from 1998-2008.

Does Gender Raise the Ethical Bar? Exploring the Punishment of Ethical Violations at Work

We investigate whether women are targets of more severe punishment than men following ethical violations at work. Using an experimental design, Study 1 finds evidence that ethical behavior is more strongly prescribed for women than for men, even when they occupy an identical professional role. Study 2 manipulates the gender of a manager in a hypothetical scenario and finds that women are punished more severely than men for ethical violations at work. It also tests the scope of our theory by asking whether women are punished more for errors in general, or only for intentional ethical violations. Using field data, Study 3 examines how severely attorneys are punished for violating the American Bar Association’s ethical rules. Female attorneys are punished more severely than male attorneys, after accounting for a variety of factors. Greater representation of women among decision-makers diminishes the gender disparity in punishment. Our research documents a new prescriptive stereotype faced by women and helps to explain the persistence of gender disparities in organizations. It highlights punishment severity as a novel mechanism by which institutions may derail women’s careers more than men’s.

Gender Board Diversity as Reputation Insurance Against Discrimination Litigation

A discrimination lawsuit levied against a firm can cause irreparable damage to its reputation. Therefore, some firms try to find strategies that will help reduce the incidence of discrimination and mitigate the risk of litigation. The reputation insurance literature argues that if firms develop goodwill with stakeholders before a negative event occurs, firms can prevent severe consequences when a negative event, in this case, a discrimination lawsuit, does happen. In this paper, we consider how appointing a female member to the board of directors acts as reputation insurance for firms that face discrimination lawsuits. We find that female directors reduce the likelihood of future discrimination litigation for firms, but that this effect is contextual. Specifically, this effect is weaker for firms in socially contested industries; however, we find no support that this effect is stronger for small firms compared to large firms.

Into the Dark: Shifts in Corporate Political Activity after Social Movement Challenges

Using a unique database on social movement boycotts of corporations, we examine how firms alter their political activities in the wake of a reputational threat. We show that boycotts lead to significant reductions in the amount of targets’ political action committee campaign contributions and simultaneous increases in targets’ CEOs’ personal campaign contributions, as well as targets’ lobbying expenditures. We argue that these patterns represent a shift toward more covert forms of political engagement that present new problems for activists and shareholders seeking to monitor corporate political activity.