Researchers identify tactics for successful activist campaigns

The internet and wider world are full of activists pressuring firms to change their ways, and when campaigns garner media attention, firms face even greater pressure. The activists behind these campaigns have a knack for creating headlines, but what separates a successful campaign from one that fizzles without creating change? A researcher from the Colorado State University College of Business may have the answers.

The management department's Gideon Markman and his co-authors examined several successful campaigns mounted by activists such as Greenpeace and People for the Ethical Treatment of Animals (PETA). These campaigns targeted diverse firms such as Home Depot and McDonald's, urging them to adopt more responsible business practices.

Researchers also identified campaigns that didn't achieve activists' intended outcomes to identify strategies that do influence firm behavior. Gathering that data was an added challenge due to activists' habit of downplaying or obscuring references of failed campaigns from their self-directed narratives.

"Increasingly, we see the tremendous influence that activists can wield on firms," Markman said. "In a sense, activists' attacks on firms are only intensifying in frequency, but often such attacks are more deleterious and more consequential than the competitive pressure due to direct rivals."

The research, "Toward a Theory of Activist-Driven Responsible Innovation: How Activists Pressure Firms to Adopt More Responsible Practices," was published in the Journal of Management Studies. It creates a theory of activist-driven responsible innovation (ARI) to explain activists' efforts to change corporate behavior through three distinct stages of attack campaigns.

By examining extensive data from diverse sources, Markman and his co-authors identified the pressure tactics most likely to advance campaigns and ultimately change firms' behavior.

Stages of pressure campaigns

The research examines how activists ratchet up pressure on corporations in hope of influencing their behavior, charting the dialog between firms and activists through three distinct phases. In the initiation phase, activists begin pressing for change by making claims that the industry-wide or institutional practices that guide firms' actions are no longer socially or environmentally acceptable. Targeted firms often counter that their actions are still acceptable and widely used in their respective industries. This phase looks to establish awareness that existing corporate practices are outside of social norms.

The second stage of a campaign, the translation phase, moves the discussion to place responsibility on individual firms' practices. In response, companies typically dispute and challenge assertations that they are directly responsible for perpetuating socially unacceptable practices.

In the final stage of a pressure campaign, the intensification phase, activists build on the momentum of previous efforts and increase the pressure on firms. In response, firms too begin to change tactics, often shifting from merely disputing claims about their alleged irresponsibility to resisting pressure to change their practices.

"Activists try to generate a Chicken Little effect; they are using publicity campaigns that humiliate firms and lead executives to believe that society will buy into the activists' narrative and thus come down hard on their companies for behaving irresponsibly," co-author Theodore Waldron of Texas Tech University explained.

Claim types and timing for maximum impact

Activists turn to several rhetorical tactics in these pressure campaigns and frequently modify their claims as campaigns move through the three phases. The paper organizes claims into three broad categories that encompass several tactics.

Destabilizing claims stake out societal reasons for firms to change their practices, focusing on using ethics and legal guidelines to define acceptable behavior. These claims adopt a variety of tactics, such as questioning firms' behavior from a societal context, offering alternatives to unacceptable behavior and identifying consequences of inaction. Researchers found that in successful activist efforts, these claims played a central role in the initiation stage of a campaign.

Activists use antagonizing claims to put more pressure on firms, attaching stigma, pointing out firms' hypocritical behavior and rallying opposition to targeted firm behavior. This type of claim is most effectively used in translation and intensification phases when activists find success.

Fomenting claims offer activists a third rhetorical approach to pressure firms. This category of claim stakes out commercial benefits of making changes. They typically praise early adopters for progressive changes and expand on the benefits of making that change. It's most effectively used in translation stages; the second phase in activists' campaign.

Regardless of the tactics, these activists' campaigns seek to leverage the risk-averse nature of modern corporations. While potentially generating a lot of dialog around firms' practices, prior researchers have discovered that these types of activist-driven publicity campaigns have negligible impact on companies' long-term bottom lines.

"The DNA of most corporations is that they don't want bad attention, bad publicity," Markman said. "They fear the liability that activists' exposure creates. And when almost everything is framed as a liability and negative exposure, a firm's internal reality and dialogs are already leaning in favor of the activists' position rather their own."

Failed pressure campaigns

While studying the approaches that activists took to influence firms, Markman and his co-authors also collected data about the campaigns that failed. This approach adds dimension to the research, helping better understand the dynamics between firms and activists.

The paper found three factors common among failed activists' campaigns. The first was inconsistency. When activists vary their messaging, alter their claims or change tactics when targeting a firm, the efficacy of their campaign plummets. The researchers also discovered that moderate tacticss yield the greatest success: Attack campaigns that were too aggressive or too passive fail to produce change.

Firm-level factors, such as experience with activists' campaigns, influence activists' success rates. Firms that have previously engaged with activists and adapted their practices appear to be more resilient to activists' influence. Finally, firms with a decentralized structure, such as franchises and those with a looser corporate structure, are also found to be more resistant to pressures to adopt practices activists frame as socially acceptable.

More information:
Theodore L. Waldron et al, Toward a Theory of Activist‐Driven Responsible Innovation: How Activists Pressure Firms to Adopt More Responsible Practices, Journal of Management Studies (2019). DOI: 10.1111/joms.12548

Provided by Colorado State University