Does perceived morality of CEO activism matter? Understanding employees' responses to CEO actions on sociopolitical issues

Abstract

Purpose

From an internal perspective, the purpose of this study is to understand employees' responses to chief executive officer (CEO) activism, a phenomenon wherein a company's CEO expresses his/her own opinions and ideas on controversial sociopolitical issues. Integrating corporate social responsibility (CSR), public relations and leadership literature, this study examines the effects of employees' expectations toward CEOs and transformational CEO leadership on the perceived morality of CEO activism and its attitudinal and behavioral outcomes.

Design/methodology/approach

An online survey was conducted with 417 full-time employees in the US whose CEO has been engaging in sociopolitical issues.

Findings

The results showed that employees' ethical expectations toward their CEOs and transformational CEO leadership were positively associated with perceived morality of CEO activism, whereas economic expectations toward CEOs had no significant relationship with it. In turn, perceived morality of CEO activism contributed to employees' positive attitudes and supportive behaviors for their CEOs and their companies.

Originality/value

This study is among the first attempts to examine the effectiveness of CEO activism from an internal perspective, drawing from CSR, public relations and leadership literature.

Citation

Lee, Y. and Tao, W. (2021), "Does perceived morality of CEO activism matter? Understanding employees' responses to CEO actions on sociopolitical issues", Management Decision, Vol. 59 No. 10, pp. 2329-2354. https://doi.org/10.1108/MD-04-2020-0498