Mary-Hunter McDonnell

Mary-Hunter McDonnell and Samir Nurmohamed (2022), When are organizations punished for organizational misconduct? A review and research agenda, Research in Organizational Behavior.

Abstract: Scholars have highlighted the use of punishment as a tool to defend laws and norms, deter deviance, and restore justice in the aftermath of organizational misconduct. However, current theory and research primarily draw on a micro-oriented lens to understand how punishment occurs in response to deviant actors within organizations, neglecting macro-oriented questions of whether and how organizations are punished for their misconduct. We review sociological and macro-organizational work that suggests punitive severity can vary with three key attributes of the organization: status, reputation, and embedded ties. We then develop a mezzo-lens framework motivated at the intersection of micro- and macro-perspectives on organizational misconduct to shed light on opportunities for theoretical expansion by crossing levels of analysis.

Ishva Minefee, Mary-Hunter McDonnell, Timothy Werner (2021), Reexamining investor reaction to corporate political activity: A replication and extension of Werner (2017), Strategic Management Journal, Forthcoming ().

Abstract: Exploiting a whistleblower's leak of the American Legislative Exchange Council's (ALEC) corporate sponsors, we quasi‐replicate and extend Werner's (2017) event study of investor reaction to covert corporate political activity (CPA). Werner found that investors reacted positively to the accidental disclosure of covert ties to the Republican Governors Association. In contrast, when we apply the same research design to the ALEC leak, we find that, on average, firms tied to ALEC experienced negative abnormal returns. In cross‐sectional models, we also find that the abnormal returns of ALEC sponsors were more negative for firms that faced shareholder contention around CPA and had liberal‐leaning employees, yet less negative for firms engaged in higher levels of institutional corporate social responsibility. The latter two cross‐sectional findings extend Werner's results.

Mary-Hunter McDonnell, Katarzyna (Kate) Odziemkowska, Elizabeth Pontikes (2021), Bad Company: Shifts in Social Activists’ Tactics and Resources after Industry Crises, Organization Science, Forthcoming ().

Abstract: Social movement organizations (SMOs) are increasingly using collaborative tactics to engage firms. Implications of this are not well understood by researchers. This study investigates one risk that looms over such collaborations: if the corporate partner is later implicated in an industry scandal. Ideas are investigated in the context of the Deepwater Horizon oil spill. First, we find that industry scandals differentially affect contentious and collaborative SMOs’ ability to mobilize resources. SMOs that had collaborated with the oil and gas industry before the spill suffered from reduced public support after the spill, and those that had contentiously interacted with the industry enjoyed increased contributions. Second, we find that industry scandals affect SMOs’ willingness to collaborate with firms in the future. We show that the Horizon oil spill produced a broad chilling effect on environmental SMOs’ collaborations with firms both within and outside of the oil and gas industry. Our findings show that there are risks inherent to a collaborative strategy that cannot be fully mitigated. Further, we demonstrate that industry scandals represent critical exogenous events that affect social activists’ tactical repertoires for engaging in private politics.

Mary-Hunter McDonnell and Adam Cobb (2020), Take a Stand or Keep your Seat: Board Turnover after Social Movement Boycotts, Academy of Management Journal, 63 (4), pp. 1028-1053.

Abstract: This paper explores how contentious corporate crises -- i.e., charges of controversial political or social behavior -- affect the loyalty of a firm's most elite leaders: the board of directors. We exploit a sample of social movement boycotts, characterizing these as carriers of salient cues about a firm’s character and values that will differentially affect individual directors, depending on their personal ideology. We argue that boycotts that problematize a firm’s values will disproportionately prompt the exit of directors whose values align with the activists, while encouraging entrenchment among directors whose values are opposed to activists. Our results largely support our claims. First, we provide evidence that boycotts represent meaningful crises for boards, provoking a significant increase in turnover at targeted firms. At the director level, we find that the extent of ideological alignment between a director and the activist challengers predicts exit. While this general pattern holds across the ideological spectrum, we show that conservatives, compared to liberals, are more prone to entrenchment in the face of challenges from the opposition. Finally, we find that the relationship between ideological alignment and director exit is stronger after boycotts that generate a more adverse stock market reaction.

Stephanie Creary, Mary-Hunter McDonnell, Sakshi Ghai, Jared Scruggs, When and why diversity improves your board’s performance in ,.

Katarzyna (Kate) Odziemkowska and Mary-Hunter McDonnell (Working), Co-opting Contention: Field-level Effects of Firm-Activist Collaborations.

Abstract: In this paper, we explore the mechanisms of indirect co-optation, asking whether and under what circumstances firms that collaborate with activists face less contention from other activists. To shed light on this question, we employ a unique, self-constructed 10-year panel of all contentious and collaborative interactions between 118 environmental social movement organizations and a random sample of 150 of the largest firms in the United States. We find that indirect co-optation of the broader activist field occurs via two pathways: signaling and relational. First, as evidence of signaling, we find that collaborating with a more contentious activist produces more indirect co-optation, as these collaborations provide a stronger signal of the firm’s authentic support of the movement. Second, as evidence of relational indirect co-optation, we find that firms face less contention from activists that are board-interlocked with the activist with whom the firm collaborates. Our findings demonstrate the importance of considering the influence that firm-activist collaborations have outside the focal dyad in shaping the firm’s relationship with a broader movement. They also offer a broader view of the indirect effects of interactions between social activists and firms, inclusive of those resulting from cooperative private politics, a heretofore understudied phenomenon.

Mary-Hunter McDonnell and Brayden King (2018), Order in the Court: How Firm Status and Reputation Shape the Outcomes of Employment Discrimination Suits, American Sociological Review , 83 (1), pp. 61-87.

Abstract: This paper explores the mechanisms by which corporate prestige produces distortive 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 over 500 employment discrimination suits brought between 1997 and 2008, finding 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 affect 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.

Mary-Hunter McDonnell and Timothy Werner (2016), Blacklisted Businesses: Social Activists’ Challenges and the Disruption of Corporate Political Activity, Administrative Science Quarterly, 61 (), pp. 584-620.

Mary-Hunter McDonnell (2016), Radical repertoires: The incidence and impact of corporate-sponsored social activism, Organization Science, 27 (), pp. 53-71.

Abstract: This article explores when and why firms participate in overt corporate-sponsored social activism. To shed light on this question, I empirically explore the emergence and implications of a new strategic phenomenon in non-market strategy – the corporate-sponsored boycott – in which firms voluntarily cooperate with contentious social movement organizations to sponsor boycotts that protest the contested social practices of other companies or entities at higher orders of market organization, such as industries, transnational regulators, or states. Using a longitudinal database that tracks the social movement challenges faced by 300 large companies between 1993 and 2007, I provide evidence that overt corporate-sponsored activism is used by companies that are chronically targeted and losing ground to activists, especially when those companies are facing a reputational deficit. Further, I find that participation in overt corporate-sponsored activism is associated with significant decreases in the number of activist challenges targeting a firm in the future, suggesting that the tactic may effectively defend a firm from contentious threat by allowing firms to co-opt allies within the activist population. I discuss implications of these findings for social movement research, non-market strategy, and the study of corporate social responsibility.

Brayden King and Mary-Hunter McDonnell, “Good Firms, Good Targets: The Relationship between Corporate Social Responsibility, Reputation, and Activist Targeting”. In Corporate Social Responsibility in a Globalizing World, edited by A. Lim and K. Tsutsui, (Cambridge, UK: Cambridge University Press, 2015), pp. 430-454

Abstract: 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.