Corporate Social Responsibility in the Digital Age

How Activists Shape CSR: Insights from Internet Contagion and Contingency Theories
W. Timothy Coombs Sherry J. Holladay
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 HOW ACTIVISTS SHAPE CSR:
INSIGHTS FROM INTERNET
CONTAGION AND CONTINGENCY
THEORIES
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W. Timothy Coombs and Sherry J. Holladay

ABSTRACT

Purpose This chapter proposes a framework for analyzing how stake-

holder-initiated challenges through social media and traditional media
can shape the meaning of responsible behavior and pressure organiza-
tions to alter irresponsible behavior in order to protect their reputations.
Methodology/approach Following a description of the nature of stake-
holder challenges, concepts from Internet Contagion Theory and
Contingency Theory are used to develop the Integrated Framework for
Stakeholder Challenges, an analytic tool that can be used to provide
insights into how specific digital and traditional public relations tactic
can be used by activists. A case study demonstrating application of the
framework is presented.
Findings The case study describes how the lens provided by the
Integrated Framework for Stakeholder Challenges illustrates how

Corporate Social Responsibility in the Digital Age

Developments in Corporate Governance and Responsibility, Volume 7, 85 97
Copyright r 2015 by Emerald Group Publishing Limited
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85
 86 W. TIMOTHY COOMBS AND SHERRY J. HOLLADAY

Greenpeace’s detox campaign built power, legitimacy, and urgency to

draw attention to environmental and human problems associated with the
use of hazardous chemicals in a manufacturer’s supply chain.
Research limitations/implications The chapter offers one case study
of Greenpeace’s detox campaign against Zara to demonstrate the utility
of the Integrated Framework for Stakeholder Challenges. Additional
case studies are needed to further demonstrate how factors in the frame-
work can account for the success and failure of activist challenges.
Moreover, measurement of factors included in the framework, rather
than conceptual analysis alone, could demonstrate the relative impor-
tance of the factors, as well as various constellations of factors, in
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accounting for organizational decision making about responses to the

challenges.
Practical implications Concepts derived from Internet Contagion
Theory and Contingency Theory provide a vocabulary and conceptual
framework for describing and analyzing stakeholder-initiated challenges
as well as assessing the potential threats posed by stakeholder challenges
to an organization’s reputation.
Originality/value This chapter proposes a new analytical tool, the
Integrated Framework for Stakeholder Challenges, which can contribute
to the analysis and evaluation of stakeholder efforts to influence corpo-
rate behavior.

INTRODUCTION

Engagement has become a central term in CSR (Manetti, 2011).

Stakeholder engagement is a means of understanding stakeholder con-
cerns and soliciting their input on key topics. Corporations seek to
engage stakeholders to help formulate and to evaluate their CSR efforts.
Engagement is critical because corporations need to insure that their CSR
efforts are considered socially responsible actions by their key stake-
holders. Corporations typically report their formal stakeholder engage-
ment process in their responsibility/sustainability reports (Manetti, 2011).
Formal engagement initiated by corporations is one means by which sta-
keholders help to shape the meaning of responsible behavior. However,
only a select few stakeholders are asked to participate in this corporate-
initiated engagement.
 Insights from Internet Contagion and Contingency Theories 87

Another more aggressive way of shaping the definition of “responsible

behavior” is public challenging of corporate behaviors. We can view this as
stakeholder-initiated engagement. Any motivated stakeholder can seek to
challenge an organization’s behavior and seek to influence the meaning of
responsible behavior. The Internet facilitates stakeholder challenges by pro-
viding the channels necessary for the challenge to become a public event.
The challenge redefines an existing corporate practice or behavior as “irre-
sponsible.” An example would be the reform in the garment industry fol-
lowing concerns over sweatshop conditions in the 1990s. Stakeholders
define what constitutes responsible behavior by identifying what behaviors
are irresponsible. There seems to be both an increase in the use of and the
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success of stakeholder challenges (e.g., King, 2008). Success is defined by

having the corporation accept the new meaning of responsible behavior
and alter the challenged behavior.
The purpose of this chapter is to explore the way activist groups utilize
social media to shape the meaning of “responsible behavior” through chal-
lenges of irresponsible behavior. An analytic framework is constructed by
fusing elements of Internet Contagion Theory (ICT) and Contingency
Theory (Cancel, Cameron, Sallot, & Mitrook, 1997). We call this new ana-
lytic tool the Integrated Framework for Stakeholder Challenges. This
fusion of the two theories provides insights into how digital and traditional
public relations tactics are used to shape the meaning of responsible corpo-
rate behavior by increasing the salience of stakeholders and the challenged
behavior to an organization. The chapter begins by explaining the
dynamics of a stakeholder challenge. The next section examines how
Contingency Theory and ICT can help to explain the value of social and
traditional media in stakeholder challenges. The emphasis is on social
media and visibility. The final section presents an extended case analysis
and considers the implications of stakeholder efforts to shape the meaning
of responsible behavior.

CHALLENGES OF IRRESPONSIBLE BEHAVIOR:

DYNAMICS OF STAKEHOLDER-INITIATED
ENGAGEMENT

Typically, stakeholder engagement is a rather structured and controlled

process for a corporation. Stakeholders are selected and some mechanism
developed to solicit their ideas about what constitutes responsible behavior
 88 W. TIMOTHY COOMBS AND SHERRY J. HOLLADAY

(Cummings, 2001). Stakeholders who are outside of the official engagement

process may believe their perspectives should be heard and become moti-
vated to shape the meaning of responsible behavior. They then challenge
corporations to act responsibly by claiming current corporate practices are
irresponsible. A successful challenge does refine what constitutes responsi-
ble corporate behavior. The 2009 Greenpeace challenge of Nestlé’s palm oil
sourcing illustrates the basic challenge process.
In 2009, Greenpeace wanted to define Nestlé’s purchasing of palm oil
from Sinar Mas as irresponsible. Greenpeace argued that Sinar Mas was
destroying orangutan habitat to produce palm oil and asked Nestlé to
change its palm oil sourcing. Hence, Nestlé’s was irresponsible by purchas-
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ing from Sinar Mas. Nestlé’s said they had a plan to source palm oil more
responsibly by 2015. Greenpeace wanted change now and applied pressure
through a YouTube video that parodied a Kit Kat commercial (a Nestlé
product) and attacks on the Nestlé’s Facebook page over the palm oil sour-
cing policy. Greenpeace was defining the current palm oil practices of
Nestlé’s as irresponsible and responsible behavior required a change to sus-
tainable producers. Within a few months, Nestlé changed its position,
ended the contract with Sinar Mas, and developed a program with the
Forest Trust to create a sustainable palm oil purchasing program.
The key elements of stakeholder-initiated engagement are the challenger,
the challenge, and the challenged corporation. The challenger is the stake-
holder, typically a nongovernment organization (NGO). The challenge is
criticism/attack on the corporate behavior that is being redefined as irre-
sponsible. The challenged corporation is the entity acting in an irresponsible
manner. Attributions are a key element of the stakeholder challenges.
Lange and Washburn (2012) have identified three factors that influence sta-
keholder attributions of corporate irresponsibility: (1) perception that the
organization’s actions produce an undesirable effect, (2) the corporate is
held responsible for the undesirable effect, and (3) the victims of the undesir-
able effect have no responsibility for the undesirable effect. Social irrespon-
sibility starts with some action that negatively impacts society. People must
believe something undesirable is occurring. Next, stakeholders must believe
the organization is responsible for the negative impact. Finally, the victims
cannot be complicit in the process. In other words, the victims cannot be
willingly accomplices in the creation of the problem. The challenge must be
viewed as negative and attributable to the challenged organization. We can
return to the Nestlé example to illustrate the three points.
First, orangutan habitat destruction is an undesirable effect. People dis-
like the idea that orangutans are dying needlessly for palm oil production.
 Insights from Internet Contagion and Contingency Theories 89

Second, Greenpeace made a clear connection between Nestlé and the habi-
tat destruction. Nestlé was not directly destroying the habitat but their irre-
sponsible purchasing behavior was. Corporations are held accountable for
actions within their supply chains (Bhattacharya, Korschun, & Sen, 2009).
Finally, orangutans were not complicit in the destruction of their habitats.
If no one knows about irresponsible behavior does it matter? In a moral
sense it should but there is a more pragmatic aspect to stakeholder chal-
lenges that creates a need for visibility. The challenger must gain the atten-
tion of (1) the challenged organization and (2) other stakeholders. The
challenger must know about the challenge or no change will occur. If other
stakeholders know about and support the challenge, that provides incen-
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tives and pressure for corporate behavior change. The public association
between a corporation and irresponsible actions will erode the corpora-
tion’s reputation. CSR plays an important part in the creation of corporate
reputations (Fombrun, 2005; Schnietz & Epstein, 2005). According to a
2012 study by the Reputation Institute, 42% of a corporation’s reputation
is based upon perception of their CSR efforts. Moreover, CSR perceptions
are linked to important outcomes such as recommending the company
(CSR, 2012; Smith, 2012). It follows that a threat to CSR is a threat to cor-
porate reputation and to the well-being of the corporation. The importance
of CSR to corporate reputations means that public revelations of irrespon-
sibility will damage a reputation. The need for visibility leads to a discus-
sion of social media’s role in stakeholder challenges.

VISIBILITY AND STAKEHOLDER-INITIATED

ENGAGEMENT

Visibility is more than public visibility when we consider the relationship

between corporations and stakeholders. Stakeholder salience, how impor-
tant a stakeholder is to management (Mitchell, Agle, & Wood, 1997), is cri-
tical to visibility. If a stakeholder (challenger) lacks salience, corporate
managers can easily ignore the challenge. Mitchell et al. (1997) defined sta-
keholder salience as a function of power, legitimacy, and urgency. We have
translated these three concepts into the parlance of the stakeholder chal-
lenge. Power is the ability of the stakeholders to threaten a reputation.
Legitimacy is the willingness of other stakeholders to accept the challenge
as worthy of their support and the recognition of the challenger’s right to
advance the challenge. Urgency is the level of commitment the stakeholders
 90 W. TIMOTHY COOMBS AND SHERRY J. HOLLADAY

have for the challenge and the spread of the challenge to other stakeholders
(Coombs & Holladay, 2012).
Salience is related to the public visibility of a challenge. Social media
help to promote stakeholder salience by creating the opportunity to build
power, legitimacy, and urgency through highly visible, public communica-
tion. It is too simplistic to claim online visibility increases salience. Social
media must be used strategically if stakeholders hope to build power, legiti-
macy, and urgency. ICT provides the basic structure for examining how
social media can impact stakeholder-initiated engagement by influencing
stakeholder salience. Contingency Theory examines a multitude of internal
and external factors that shape how organizations respond to conflicts with
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stakeholders. The responses vary from accommodative, give stakeholders

what they want, to advocacy, arguing against the stakeholder demands
(Cameron, Pang, & Jin, 2008). The external factors are applied to the sta-
keholder challenges. ICT explains how stakeholders utilize online commu-
nication resources in attempts to change their power relationship with
organizations and how stakeholders can leverage online communication to
push organizations into changing policies and/or behaviors (Coombs &
Holladay, 2012). Table 1 summarizes the three key variables in stakeholder
challenges and their connections to power, legitimacy, and urgency (the
threat assessment).

THE CHALLENGING STAKEHOLDERS

Challenging stakeholders are the ones initiating the challenge crisis. Power,
legitimacy, and urgency are all important to the challenging stakeholders.
If challenging stakeholders do not establish their power, organizations are
likely to ignore them. Table 1 presents the Integrated Framework for
Stakeholder Challenges and identifies the Contingency Theory and ICT
factors that are relevant for establishing the power of challenging stake-
holders. Power is enhanced through the number of supporters, past success-
ful challenges, the hiring of communication consultants, and the number
and variety of communication channels utilized. Legitimacy involves the
connection between the challenger and the issue. Does it seem appropriate
that challenger is representing a particular social or environment issue?
(Coombs, 1998). Contingency Theory refers to this as credibility. Urgency
is the commitment to the issue, unwillingness to dilute the cause, crossover
into traditional media and in-person activities, and skill in structuring the
 Insights from Internet Contagion and Contingency Theories 91

Table 1. Integrated Framework for Stakeholder Challenges.

Challenge Core Threat Contingency Theory ICT Constraints
Variables Factors

Challengers
Power • Number of • Number of
supporters communication
• Past success channels
• Hired • Structure of
communication communication
consultant channels
Legitimacy • Credibility
• Commitment to
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Urgency
issue
• Willingness to
dilute cause
Challenge
Legitimacy • Quality of messages Type of
• Utilization of challenge
legitimacy resources • Expose
• Organic
Urgency • Crossover to
traditional and in-
person
• Communicative skill
Challenged
organization
Power • Power relative to Constraints
challenger power • Cost
• Strategy
• Feasibility
• CSR use

communication effort. If a challenger will not yield, the threat could be

long term because of the commitment to the cause (Cameron et al., 2008).

THE CHALLENGE

The challenge is the actual cause/concern being raised by the challengers.

The challenge is the behavior and/or policies that have been identified as
irresponsible (Lange & Washburn’s, 2012 idea of an undesirable effect).
 92 W. TIMOTHY COOMBS AND SHERRY J. HOLLADAY

Legitimacy is the core of the challenge. Other stakeholders must accept

that the challenge is worthy of their support. Others must believe the beha-
vior and/or policy is irresponsible. As noted in Table 1, challenger legiti-
macy is a function of message quality and utilization of legitimacy
resources. If a message is unprofessional, people are likely to dismiss it
without too much analysis. Hence, a quality message is one that is profes-
sionally presented. For example, the posts are not poorly written or include
misspellings. Legitimacy resources are the various ways to build legitimacy
including endorsements from legitimate sources, use of logical evidence
(statistical data) to support claims, and the emotions evoked from the con-
cern. Child slave labor can be used as an example. A respected source from
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the UN could endorse the concern, data about the number of children in
slave labor worldwide can establish logical support, and the emotional
stories of those in child slave labor will reinforce the importance of the
concern give people another reason to care about the concern.
The challenge also must establish the link between the organization and
the negative outcome. There must be credible, factual evidence to docu-
ment that the organization has responsibility for the actions and/or poli-
cies. The challenge must document that the organization is engaged in the
irresponsible actions (Lange & Washburn’s, 2012 notions of organizational
responsibility and victim complicity). The challenge also can affect urgency.
Crossover to traditional media expands the number of stakeholders
exposed to the challenge and increases the potential for reputational
damage. In-person activities demonstrate commitment to the cause
(Coombs & Holladay, 2012).
The challenge crises can actually have three variations: organic, exposé,
and villain (Coombs, 2010). Over time, the values and beliefs of stake-
holders can change, leading them to expect different behaviors from the
corporation. This is a natural process where corporate behavior can lag
behind stakeholder expectations as the stakeholders and corporations drift
apart in terms of expectations. The exposé challenge occurs when stake-
holders demonstrate that a corporation’s words do not match their actions.
Charges of “washing” appear when corporations overstate their commit-
ment to some social or environmental concerns or talk about social and
environmental concerns with no corresponding action. Exposé challenges
create the impression of malice because there appears to be a purposeful
attempt to confuse stakeholders about the corporation’s social performance
and to pretend to meet stakeholder expectations.
The villain challenge is simply one act in a larger drama between parti-
cular stakeholders and a corporation or industry. The villain challenge
 Insights from Internet Contagion and Contingency Theories 93

typically involves a professional activist group trying to force change on a

specific company or industry. The villain challenge is one in a series of
actions designed to paint the corporation or industry as a villain that must
reform its wicked ways. The villain challenges are personal between the sta-
keholder and corporation/industry (Coombs, 2010). The organic and
exposé crises are the focus of the analysis of CSR-based challenges. Villain
crises are rather unique and part of a larger conflict between the challenger
and the challenged organization. CSR-based challenge crisis are likely to be
either organic or exposé challenges.
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CHALLENGED ORGANIZATION

The challenged organization is the target for the challenge. The two criti-
cal factors are the relative power of the organization and its prior use of
CSR in building its reputation. A corporation that is much more power-
ful than the challenger stands a better chance of convincing stakeholders
to accept its side of the cause (Cameron et al., 2008). If the organization
uses CSR to build its reputation, a CSR-based challenge is more urgent
because it poses a greater threat to the reputation. An organization that
professes to support CSR creates certain expectations. The challenge can
indicate a violation of expectations and that can create a crisis (Sohn &
Lariscy, 2014).
Challenged organizations are bound by at least four constraints: (1) strat-
egy, (2) cost, (3) feasibility, and (4) prior CSR efforts. Management does
not want to change practices or policies that deviate from their core strat-
egy. If the challenge requires an organization to shift strategy, management
is likely to reject the challenge (Coombs, 2010). Cost is a common driver in
risk management. Organizations do not pursue risk reduction that is too
costly or risk reduction efforts that lack feasibility. Risk reduction needs to
be at the right price and have a strong likelihood of being effective
(Coombs, 2012). Similarly, organizations will reject challenges that will be
cost prohibitive or problematic, from their perspective, to enact. Finally,
CSR efforts create expectations for future actions. Managers must make
every effort to be consistent with their CSR claims or risk offending stake-
holders by being hypocritical. Organizations that have little invested in
CSR do not generate the same type of expectations (Sohn & Lariscy, 2014).
Creating expectations for being socially responsible is a constraint for a
challenge that is CSR-based.
 94 W. TIMOTHY COOMBS AND SHERRY J. HOLLADAY

DETOX ZARA: CASE STUDY OF A STAKEHOLDER

CHALLENGE

The Detox campaign is an effort by Greenpeace to convince apparel manu-

factures to help remove hazardous chemicals (to detox) from their supply
chains. The focus is eliminating hazardous chemical from fabric making.
Greenpeace began the Detox campaign in July of 2011. First, Greenpeace
sent formal requests to major, global apparel makers to end the use of
hazardous chemicals in their supply chains. Greenpeace received no com-
mitments for change and launched a public campaign. Multiple corpora-
tions have been targets since 2011. Greenpeace selects a specific company
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for attention and moves to a different company once the targeted one
agrees to detox. We have chosen Zara to illustrate how our Integrated
Framework for Stakeholder Challenges can be used to analyze and to
explain the success or failure of stakeholder-initiated engagement.
Greenpeace specifically targeted Zara in November of 2012.
Greenpeace (the challenger) built power quickly through the number of
followers, past successes, communication channels, and structure of the
communication channels. Within a week, over 7 million people were fol-
lowing the Zara detox efforts on Facebook, Twitter, and Weibo. In one
week there were 43,800 mentions of Zara and Detox on Twitter. Over
300,000 people signed the Zara Detox page on Greenpeace’s web site.
Greenpeace demonstrated a large number of supporters for the Zara
detox effort. Greenpeace reported a list of other apparel manufacturers
who had agreed to detox including Nike, adidas, Puma, H&M, M&S,
C&A, and Li-Ning. The success involved companies from a number of
different countries. Greenpeace had a strong record of success for Detox.
A variety of communication channels were utilized, including web sites,
Facebook, Twitter, Weibo, news conferences, online videos, and in-store
protests. Over 700 people were part of in-store protests in 20 countries.
This included hanging large Detox banners from five Zara flagship stores
in Europe and Asia. Greenpeace utilized a variety of communication
channels. The communication channels and tactics were organized around
the Detox web site. This hub and spoke design is powerful for messaging
(People! Zara commits to go toxic-free, 2012).
Greenpeace build credibility through investigations by universities and
governments that revealed the extent and types of hazardous chemicals in
clothing. Experts were used to build Greenpeace’s credibility on the topic.
Urgency was established by Greenpeace’s commitment to the issue and
 Insights from Internet Contagion and Contingency Theories 95

unwillingness to dilute their cause. The Detox campaign is now three years
old and regularly has the ability to create in-store actions, two signs of
commitment. Greenpeace is adamant that the response must be the pledge
to detox the entire supply chain, not just parts of the supply chain or cer-
tain chemicals.
The challenge legitimacy was built through quality messages and legiti-
macy resources while urgency for the challenge was created through cross-
over and communication skill. Detox provides an example of an organic
challenge. Greenpeace created reasoned arguments for Detox, not simple
rants against Zara. Their evidence of Zara’s use of suppliers that utilize
hazardous chemicals helped to build legitimacy. Legitimacy was also
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enhanced through the images and stories of how people were suffering
from the chemicals. The threat was real and harmful to people, animals,
and the environment. Greenpeace did generate crossover with traditional
media coverage of their Zara efforts and in-store actions against Zara
(People! Zara commits to go toxic-free, 2012). These were combined with
the communicative skill Greenpeace brings to its efforts in order to build a
strong sense of urgency. The challenge is organic because Greenpeace is
raising a new concern. Society now cares about hazardous chemicals in the
supply chain. This means corporations need to keep pace with stakeholder
expectations. There were no efforts to frame the challenge as an exposé of
corporations pretending to detox but not eliminating the hazardous chemi-
cals from their supply chains.
It is difficult to assess the relative power of Zara (the challenged organi-
zation) and Greenpeace. However, the power resources amassed by
Greenpeace suggest Zara could not be confident it had a distinct power
advantage over Greenpeace. Detox was framed in such a way that it avoids
the constraints. Costs are minimal because the safe chemical prices are the
same or less than their hazardous counterparts. Changing chemical does
not impact corporate strategy. The detox effort itself is feasible because the
alternative chemicals are known and available. Finally, detoxing is consis-
tent with CSR activities and creates an opportunity to improve stakeholder
views of responsibility. Once the shift in chemical is accomplished, it is
fairly easy to maintain this CSR effort.
Greenpeace made itself a salient stakeholder by using communication to
build power, legitimacy, and urgency. The challenge, the need to detox,
was shown to be legitimate and urgent. The organic nature of the threat
was less threatening than an exposé. Corporations needed to keep pace
with changes in stakeholder expectations instead of defending a purposeful
 96 W. TIMOTHY COOMBS AND SHERRY J. HOLLADAY

misbehavior. Finally, the detox avoided the four constraints that frequently
preclude corporations from acting on a challenge. The detox effort was low
cost, consistent with corporate strategy, feasible, and would not create
future CSR issues. The Integrated Framework for Stakeholder Challenges
helps to uncover the various factors that contributed to Greenpeace rede-
fining responsible behavior for Zara.

CONCLUSION
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Activist stakeholders, typically led by NGOs, seek to shape what constitu-

tes corporate responsibility and irresponsibility. The stakeholders are chal-
lenging existing corporate behaviors by defining those behaviors as
irresponsible. These definitional challenges have important ramifications
for corporate CSR programs. Definitional battles raise the issue of power.
There is an assumption that social media has shifted power from corpora-
tions to stakeholders. To equate power with the use of social media is both
simplistic and misleading. Power is a function of how social media is
utilized.
In this chapter we have fused ideas from Contingency Theory and ICT
to build the Integrated Framework for Stakeholder Challenges. This new
framework helps us to understand how social and traditional media can be
used as part of an effort to develop effective stakeholder challenges. The
Zara Detox case illustrated how Greenpeace utilized various elements of
the Integrated Framework for Stakeholder Challenges to establish its sal-
ience and to leverage Zara into detoxing its supply chain. Creating success-
ful stakeholder challenges is a complex process. The Integrated Framework
for Stakeholder Challenges helps stakeholders, managers, and researchers
to better understand this aspect of CSR.

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