Corporate Responses to Shareholder Activists: Considering the Dialogue Alternative

Motivators of Mobilization

“…Butterfield et al 2004;Lenox 2006a, 2006b;King 2008;Rowley and Berman 2000;Wolfe and Putler 2002); and (3) stakeholder resource dependence on the firm, which has been highlighted in work by Frooman (1999), Frooman andMurrell (2003, 2005) and , and touched upon by many others (e.g. King 2008;Rehbein et al 2013;Zietsma and Winn 2010). Throughout, we, adopt a broad interpretation of the term 'stakeholder' based on Freeman's (1984) definition of a stakeholder as an individual, group, or organization which can affect or is affected by the ongoing operation of the firm.…”

“…Inequities of either type are expected to produce 'tension' or 'dissonance' within the perceiver such that a need or drive for equity will be activated (Campbell and Pritchard 1976;Festinger 1957), with the intensity of the drive proportional to the degree of inequity. However, the affective responses associated with the dissonances related to over-reward and under-reward differ: under-reward is expected to produce affective reactions such as anger, resentment, or frustration (Adams 1965;Scheer et al 2003), whereas over-reward is expected to elicit positive feelings such as gratitude (Rehbein et al 2013), but also negative affective states such as guilt (O'Malley and Becker 1984). Equity restoration attempts can take a number of forms, but very often involve attempts by the party perceiving inequity to act to influence his O/I ratio or that of the comparison other (the latter especially in cases where the comparison other is the other party to the exchange relationship).…”

“…Conversely, the firm will have power over a stakeholder to the extent that the latter is highly resource dependent on it (Frooman 1999;Frooman and Murrell 2005): a stakeholder's resource dependence can result from its investment in or possession of specific assets relevant to its relationship with the FO, or from its excessive reliance on the FO for non-substitutable resources (Hill and Jones 1992). Resource dependence relations between a stakeholder and firm have implications for how the firm responds to stakeholder attempts to influence it (Eesley and Lenox 2006a, b)-for instance, firms that exhibit low resource dependence with respect to their stakeholders are better able to ignore stakeholder demands and resist stakeholder pressures (Rehbein et al 2013). The nature of these firm-stakeholder resource dependencies should likewise have an impact on how the stakeholder responds to the activities of the firm.…”

The Institutional Investor Stewardship Myth: A Theoretical, Legal and Empirical Analysis of Prescribed Institutional Investor Stewardship in a Dutch Context

“…However, recent research by Rehbein et al (2013) into the behavior of companies in relation to shareholders (specifically activist shareholders) shows that shareholders in general should be considered neither as egoistic principals, nor as stakeholders as such, but as providers of an important resource crucial to the company's survival. In this theory shareholders, and in particular institutional investors, can be seen as not merely providers of capital, residual claimants seeking a financial return on their investments.…”

Exploring the research fronts and main paths of literature: a case study of shareholder activism research

“…Mackenzie et al (2013) examined the impacts of a responsible investment index on environment management practices. Rehbein and Logsdon (2013) investigated how corporations respond to social-policy related shareholder resolutions and noted that corporate managers are more likely to communicate with shareholder activists when the firms are larger and have a lower percentage of institutional investors. This subfield signified a critical milestone for studies of shareholder activism.…”