The effects of CEO activism on employees person‐organization ideological misfit: A conceptual model and research agenda

Abstract

Research has found many positive benefits to person‐organization (PO) fit, for both individuals and the organization. However, PO misfit has received far less attention in the literature. In this article, we look specifically at PO misfit caused by the differing political values and beliefs of the CEO and employee. We argue that CEO activism influences employee perceptions of ideological misfit (IM), whereby differing political beliefs between employees and their activist CEO can impact workplace outcomes. We consider how peer group reactions, ethical climate, external needs fulfillment, and moral identity serve as boundary conditions for perceptions of PO misfit and related organizational outcomes. We also examine antecedents of CEO activism. Drawing on academic literature from both the micro and macro perspectives of management research, we introduce a conceptual model and discuss implications for the firm and its employees.

CEO activism. What do we know? What don’t we know? A systematic literature review

“…Researchers also find a congruent relationship between activism and employee motivation/workplace performance. They show that both are positively influenced by political alignment (Brown et al , 2020; Mkrtchyan et al , 2020). These conceptions, however, are opposed by Burbano (2021), who found a demotivating effect of CEO activism that opposed the viewpoints of their company’s workforce but no motivating effect of CEO activism in favour of these statements.…”

“…CEO activism was found to positively influence purchase intentions or attitudes when the statements aligned with the buyers’ personal opinions. However, CEO activism can create the risk of provoking controversy when it is not aligned (Dodd and Supa, 2014; Hinterecker et al , 2018; Brown et al , 2020). Chatterji and Toffel (2019), in contrast, found no significant decrease in the willingness to purchase when statements by a CEO were misaligned.…”

“…Finally, poor fit with the organisation provoked by misaligned ideologies can also lead to higher turnover (Chatterji and Toffel, 2015; Leak et al , 2015; Brown et al , 2020). Babenko et al (2020) found higher turnover rates when employees donated to political candidates not supported by the corporation’s CEO.…”

“…Most studies account for moderation based on recipients’ (mis)alignments (Hambrick and Wowak, 2021). This could be because their political and personal values diverge from general ideological beliefs (Leak et al , 2015), because of political engagement (Babenko et al , 2020) or in response to symbolic value systems (Melloni et al , 2019; Brown et al , 2020).…”

Nonmarket Responses to Regulation: A Signaling Theory Approach

“…Ideological fit has become increasingly important for politicians due to increasing political polarization which is currently at the highest point in two decades (Pew, 2014). Increased Chief Executive Officer political activism (Brown, Manegold, & Marquardt, 2020; Chatterji & Toffel, 2016a, 2016b) and a growing distaste by consumers for heavy political activity from individual leaders (McGregor, 2016), especially if that activity is counter to the consumers’ own political bents, must also be considered by politicians accepting funds from firms. Recently, politicians have attempted to distance themselves from political donations from organizations or individuals that they do not agree with or with whose association might be harmful by refunding or donating contributions given by individuals or groups that they do not want to be associated with (Martin, 2017; Willis, 2015).…”