Preliminary Conference Programme

Research suggests that firms often address a wide range of societal issues with their social impact initiatives (i.e., breadth strategy) at the expense of achieving meaningful impact on select issues (i.e., depth strategy). This arises from a distortion in the market for social impact where stakeholders who support and reward firms for addressing societal issues (e.g., consumers), are not directly affected by firms’ efforts in addressing societal grand challenges and constrained in evaluating their impact. We argue and show that nonmarket stakeholders, such as non-governmental organizations, who are more informed about and focused on societal impact, play a disciplining role in the market for social impact. Using data on 2,711 firms’ operational and product alignment with the 17 United Nations Sustainable Development Goals, we demonstrate that nonmarket stakeholders are more likely to criticize firms for superficial breadth strategies, particularly in environments with high information reliability. We also find that nonmarket stakeholders view depth strategies more favorably, especially those involving operational efforts rather than product-related initiatives, as operational efforts are perceived as more holistic, less symbolic, and better at mitigating risks.

This study uses granular data on firms’ advertising expenditures to examine how firms adjust advertising spending following ESG incidents across local markets. We find that firms on average reduce advertising immediately after ESG incidents, consistent with a visibility reduction strategy aimed at managing negative stakeholder perceptions. These reductions are concentrated in environmental and social (E&S) incidents and are stronger in regions with higher E&S sensitivity. Further analyses show that reductions are not driven by efforts to address underlying E&S issues but instead reflect a tactical reallocation of advertising expenditures away from high-sensitivity regions to low-sensitivity regions. The negative valuation effects of E&S incidents are significantly mitigated when firms reduce advertising spending in the month following the incidents. We also find spillover effects, as firms cut advertising when their suppliers or product-market peers experience E&S incidents. Our findings uncover a complex corporate visibility strategy varying across geographic market and over time.

Despite growing interest in corporate purpose, we lack understanding of how purpose diffuses within firms over time. Through an inductive study of a manufacturing firm having introduced an explicit purpose throughout the organization, we develop a recursive process model showing that purpose diffuses as an emotional process, not merely as a cognitive alignment. Our inductive analysis reveals that purpose spreads through recursive patterns of emotion regulation enacted by multiple organizational actors, through which emotional conditions for participation, experimentation, and enactment are gradually constructed and stabilized. We identify three self-reinforcing mechanisms—emotional attuning, relational resonance, and organizational affordances—through which distributed emotion regulation enables purpose to become collectively enacted and sustained. By (re)conceptualizing purpose diffusion as a distributed social-emotional process, this study advances research on corporate purpose and complements the cognitive perspective of purpose diffusion.