Spar, D. L., La Mure, L. T. 2003. The power of activism: assessing the impact of NGOs on global business. In California management review, vol. 45 (3): 78-101.
Key issue: Why corporations respond differently to NGOs pressure?
This exploratory study identifies three strategies that corporations can choose to respond to activism: pre-emption, capitulation, resistance. What determines this variation? First of all, a fast excursus of the history of activism is offered. Drawing a parallel between the slavery abolition movement founded in 1775 by the Pennsilvania Quaker activists and today’s pressure groups, the authors identify “the business of NGOs” (p. 79) in targeting the source of power and the possible agents of change. They remember that the shift from pressuring state actors to non-state is not something new: the American anti-British movement in 1765 organized a boycott against the old-country. So, the more corporations become powerful, the more they become the target of activism. Due to limited resources, NGOs concentrate their effort on the big brands. The main instrument they use is the threat of a financial harm. However, the cost of activism is not directly measurable and there is scattered evidence from the literature. Why then corporations respond to activism? According to a rational response model, the cost of activism should be considered as another cost of doing business, therefore evaluating potential harm and cost of response. In particular, managers evaluate: transaction costs, brand impact and competitive position. If an economic view were dominant, resistance would be the normal response in many cases, but actually many companies pre-empt activism. This could be explained looking at manager’s personal motives and beliefs, which become particularly significant in case of family businesses and strong charismatic leadership. 3 case studies follow: Unocal in Burma, Nike and Novartis.
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