Cashing in on the culture wars? CEO activism, wokewashing, and firm value

Melloni, Gaia, Patacconi, Andrea and Vikander, Nick (2023) Cashing in on the culture wars? CEO activism, wokewashing, and firm value. Strategic Management Journal, 44 (13). pp. 3098-3121. ISSN 0143-2095

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Abstract

In this article, we examine under what conditions CEO activism—the practice of corporate leaders to take public stances on sociopolitical issues—can create firm value. In our model consumers care about the type of firm they buy from, but also understand that corporate leaders can make false or misleading statements to pander to valuable demographics. We show that, although the profitability of CEO activism is severely compromised by this wokewashing, under some conditions credible, value-enhancing sociopolitical communications can still take place. We characterize (i) when corporate leaders prefer to stay silent; (ii) when wokewashing is so widespread that no credible communication is possible; and (iii) when instead some credible communication can take place. We also show how an intrinsically motivated CEO can destroy or increase firm value.

Item Type:	Article
Uncontrolled Keywords:	ceo activism,cheap talk,strategic communication,wokewashing,business and international management,strategy and management ,/dk/atira/pure/subjectarea/asjc/1400/1403
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
UEA Research Groups:	Faculty of Social Sciences > Research Groups > Strategy and Entrepreneurship
Related URLs:	http://www.scopus.com/inward/record.url?...
Depositing User:	LivePure Connector
Date Deposited:	19 Sep 2023 12:30
Last Modified:	18 Nov 2023 01:38
URI:	https://ueaeprints.uea.ac.uk/id/eprint/93064
DOI:	10.1002/smj.3542

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