Session 28

The Social Contract and Strategy

Track B

Date: Tuesday, October 9, 2012


Time: 17:30 – 18:45


Room: Dressing Room 221

Session Chair:

  • Panayiotis Georgallis, University of Michigan

Title: Gaining Environmental Legitamcy: Does Symbolism Work?


  • Pascual Berrone, IESE Business School
  • Andrea Fosfuri, Bocconi University
  • Liliana Gelabert, IE Business School

Abstract: We investigate the impact of environmental symbolism, i.e., policies or codes of conduct which might serve symbolic purposes without necessarily being applied in practice, on environmental legitimacy, i.e., the external validation of a firm’s alignment with those environmental values demanded by the broader public. Drawing on institutional theory, we first argue and then empirically test the proposition that symbolic environmental actions increase a firm’s environmental legitimacy only when they are coupled with evidence of the implementation of more substantive policies. Our findings suggest that symbolic environmental endeavors alone might harm a firm’s environmental legitimacy.

Title: Reputation and Transparency: Why do High Reputation Firms Send Noisy Signals about their Sustainability Actions?


  • Samuel Touboul, IPAG Business School
  • Anup Menon Nandialath, HEC-Paris

Abstract: This article studies the antecedents of the transparency with which firms disclose their sustainability actions. We argue that stakeholders rely on reputation as a filter to set their expectations and that firms respond to these expectations. We find that while in general more reputable firms disclose more precisely their sustainability actions, depending on the degree of consistency of their sustainability performance, there are situations where reputable firms send noisy information. Using a unique dataset (1790 observations over 8 years), we find support for our hypotheses and discuss their implications.

Title: Social Pressure and Innovation: Does Social Pressure Dilute the “Greenness” of Innovative Efforts of Organizations?


  • Yoona Youm, George Washington University
  • Jorge Rivera, George Washington University

Abstract: This paper addresses the question of whether or not, and if so how, social pressures influence organizations’ innovative activities. In examining organizations’ innovative efforts, the paper examines the patenting activities of U.S. chemical manufacturers, and the relationship between various social pressures and organizations’ patents in environmentally friendly (“green”) technology. Also, it examines how well organizations’ innovations align with the goals of external influences, and under what conditions the discrepancies increase. Following, this study gives implications on how managers and organizations can strategically comply with social pressures, and provides directions in which organizations can successfully integrate the demands of external actors.

Title: The Impact of the Environmental Movement on Firms’ Timing of Entry in the Solar Photovoltaic Industry


  • Panayiotis Georgallis, University of Michigan
  • Rodolphe Durand, HEC-Paris

Abstract: In this study we ask how characteristics of firms’ socio-institutional environment influence their entry timing decisions as new industries emerge and how they interact with firm attributes to shape entry timing. Using the solar photovoltaic (PV) industry as our empirical setting we link environmental movement activity with firms’ entry timing in this industry, and we further study how movement activity moderates the impact of two firm attributes, entrenchment in the energy industry and technological heritage, on firms’ entry timing in solar PV. Our study aims to contribute to strategy research investigating the determinants of firms’ entry timing in new industries, and complement work at the intersection of social movement and strategy research.

All Sessions in Track B...

Mon: 08:00 – 09:15
Session 27: Competition and Sustainability
Mon: 09:30 – 10:45
Session 26: Transitions towards environmentally sustainable models
Tue: 17:30 – 18:45
Session 28: The Social Contract and Strategy

Strategic Management Society