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

• DOI: http://doi.org/10.1111/basr.12196
• Author: Jennifer G. Manegold,Dennis J. Marquardt,Lee Warren Brown
• Published date: 01 March 2020
• Date: 01 March 2020

Bus Soc Rev. 2020;125:119–141.

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119

wileyonlinelibrary.com/journal/basr

Received: 28 January 2020

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Accepted: 29 January 2020

DOI: 10.1111/basr.12196

ORIGINAL ARTICLE

The effects of CEO activism on employees

person-organization ideological misfit:

A conceptual model and research agenda

Lee WarrenBrown1

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Jennifer G.Manegold2

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Dennis J.Marquardt3

© 2020 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc., 350 Main Street, Malden,

MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

1College of Business, Texas Woman's

University, Denton, Texas, USA

2Department of Management, Florida Gulf

Coast University, Fort Myers, Florida, USA

3Department of Management Sciences,

Abilene Christian University, Abilene,

Texas, USA

Correspondence

Lee Warren Brown, Texas Woman's

University, P.O. Box 425738, Denton,

Texas 76204, USA.

Email: lbrown37@mail.twu.edu

Abstract

Research has found many positive benefits to person-

organization (PO) fit, for both individuals and the organiza-

tion. However, PO misfit has received far less attention in

the literature. In this article, we look specifically at PO mis-

fit 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 ac-

tivist CEO can impact workplace outcomes. We consider

how peer group reactions, ethical climate, external needs

fulfillment, and moral identity serve as boundary condi-

tions 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.

KEYWORDS

CEO activism, corporate political activity, ideological misfit, person-

organization misfit

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INTRODUCTION

Employee compatibility with the employing organization has been classified as person-

organization (PO) fit in the literature. Kristof (1996) posits that when the characteristics of a

person (e.g., values, goals, etc.) match those of an organization, it leads to PO fit. In general, it is

desirable for PO fit to be high because it can lead to positive outcomes for the organization, such

as increased job satisfaction, organizational commitment, job performance, and organizational

citizenship behaviors (Kim, Aryee, Loi, & Kim, 2013). On the contrary, PO misfit often leads to a

deterioration in the PO relationship leading to increased turnover intentions, the active withhold-

ing of positive benefits, lower job attitudes and performance, and/or deviant behaviors (Harold,

Oh, Holtz, Han, & Giacalone, 2016; Wheeler, Coleman Gallagher, Brouer, & Sablynski, 2007).

One potential impediment to an employee feeling PO fit in their organization is the current politi-

cal environment in America and in many nations around the world. Political ideology is becoming

increasingly divisive (Pew Research Center, 2014). Corporations are no longer shying away from

sociopolitical issues that, by their very nature, lack social consensus (Haider-Markel & Meier,

1996; Nalick, Josefy, Zardkoohi, & Bierman, 2016). This increasing activism from leaders in an

environment where political ideology is more salient and important to employees has implications

in the workplace.

Recent examples of politically charged rhetoric from prominent CEOs have been highly publi-

cized (e.g., Chick-fil-A, Koch Industries, Ben and Jerry's), and in some cases, they have been the

subject of court cases that have been reviewed by the Supreme Court (e.g., Burwell vs Hobby Lobby,

Inc., 2014). CEOs have always been influential, but in the past, they chose to use their influence

through less public means, such as lobbying, campaign contributions (Hillman, Keim, & Schuler,

2004), or influencing their network through less vocal approaches (Faccio, 2006). Traditionally,

CEOs have been expected to act in the best interest of their shareholders, while avoiding self-

interested indulgences. The goal for CPA was for firms to appear apolitical and not to alienate

prospective customers, especially when stakeholder pressures are high (McDonnell & Werner,

2016). However, for CEO activism, in practice, this rule of thumb is not always upheld. CEOs are

also now engaging in activism that is removed from their role with their organization. CEO activism

has been defined in the literature as, “corporate leaders speaking out on social and environmental

policy issues not directly related to their company's core business” (Chatterji & Toffel, 2018, p.

1). In this article, we suggest that because of the increased ideological sorting of individuals in the

workplace, along with the increasing likelihood of CEO activism, will lead to high ideological mis-

fit (IM)––the degree to which a person and an organization have value-based ideologies that are in

direct conflict with one another––for some employees with their organization. Understanding IM is

timely and needed in today's working environment (Bermiss & McDonald, 2018; Elzweig, Roberto,

& Johnson, 2017; Johnson & Roberto, 2018).

In this article, we attempt to conceptualize how CEO activism influences employees within the

organization. We suggest that CEO activism will lead to several possible distal employee outcomes

including increased employee turnover intentions, employee activism (both internally directed and ex-

ternally directed), and nonaction (an internal value compromising outcome). We identify antecedents

to CEO activism, namely industry regulation and CEO power. Finally, we identify several contextual

factors that will influence employee reaction to CEO activism as both mediating and moderating

variables. This is an important topic of study in our current context because the increasing political

polarization combined with CEOs increasing tendency to engage in public activism has the potential

to create conditions of IM within the organization.