5 - Impact

• Self-regulation: Industry members monitor their adherence to environmental, ethical, or safety standards (rather than a government/ regulatory body monitoring and enforcing those standards).
• Why Self-regulate?

  • Collective reputation
  • Risk of common sanctions
  • Asymetric information - credence goods
  • Address first-order dilemmas: appropriation of public goods
• Why firms join self-regulation?

  • Institutional pressures
  • Strategic choice to signal superior environmental performance, or avoid stricter monitoring
• Caution for self-regulation: smoke screens deployed to prevent more effective stakeholder or government action

  • These institutions derive their meaning and power from the distributed interpretations and choices of numerous actors.
  • the intentions of the original sponsor may be modified or subverted
  • economic meaning may change over time
• Moral markets: sectors not only concerned with wealth creation but whose existence is to create social value by addressing the negative externalities associated with conventional practices, legacy technologies, and extant institutions.

  • Moral markets exist to create social value and thus their products, services, and/or respective means of production are considered to be normatively superior to alternatives
  • Moral markets are typically supported by organized actors (usually social movements) motivated by moral or normative considerations rather than only by the pursuit of economic interest
• Market entry is the initial production of a product or provision of service by a firm for a particular market, with two stages: opportunity identification and evaluation
• Organizational identity is conceptualized here as the collective understanding, shared among organizational members and key audiences, of the defining elements that encompass what the organization “is”

  • influences what organizational members pay attention to and how they process and interpret information
  • affects external stakeholder expectations, and thus organizations are positively rewarded when they engage in activities consistent with their identity
  • restricts the range of opportunities that managers attend to
• The impact of organizational identity on entry in moral markets will be less steep for firms having a congruent but more flexible organizational identity, and stronger for firms having an oppositional but more flexible organizational identity.
• When an identity movement (rather than an instrumental movement) backs the moral market, the likelihood of market entry will be higher for firms with a congruent identity and lower for firms with an oppositional identity.
• The likelihood of market entry will be higher for identity-congruent firms when the moral market is backed by a movement focused primarily on prognostic, rather than diagnostic framing.
• When the moral market is backed by a movement focused primarily on diagnostic (vs prognostic) framing, the likelihood of market entry will be (P5a) weaker for firms with oppositional identity if the market is backed by an identity movement; or (P5b) stronger for firms with oppositional identity if the market is backed by an instrumental movement.
• The effect of social movements on the likelihood of entry into moral markets will be stronger for entrepreneurial firms than for diversifying firms.
• Positive social change: “the process of transforming patterns of thought, behavior, social relationships, institutions, and social structure to generate beneficial outcomes for individuals, communities, organizations, society, and/or the environment beyond the benefits for the instigators of such transformations”
• Insider social change agents: persons working from within an organization to advance changes linked to external societal concerns, which have purposes distinct from the core strategies and operations of the organization, and which require mobilization activities to work against the grain to advance broad social change goals.
• Prognostic framing involves the articulation of a proposed solution to the problem, or at least a plan of attack, and the strategies for. carrying out the plan
• Diagnostic Framing concerns the simple identification of a problem and its attributes. This is a basic prerequisite for a problem to be perceived as worth addressing.
• How social movements and moral markets affect opportunity identification

  • SMs point to the companies that are to blame (diagnostic): Firms with oppositional identities become aware of the opportunities as they become targets of activists.
  • SMs point to solutions (prognostic): firms with a congruent identity become aware of market opportunities.
• employee activism:

  ● Preparing - Identify issue and develop expertise

  ● Motivating others - Motivate others to act, typically through framing activities

  ● Connecting - Build coalitions and connections

  ● Resourcing - Acquiring internal and external resources

  ● Implementing - Experimenting, adapting and resisting pushback

  ● Evaluating - Reflecting on tensions, self-evaluations and roles and careers

  ● Coping - Manage emotional labor and burnout
• Empowering Insider Social Change Agents

  Companies should create roles that allow employees to "climate persist" and make a positive impact
• Finding a Role as an Insider Social Change Agent


  Consider organizations that embrace environmental and social concerns as part of their purpose
• Redefining the Business Case

  Redefine what is "business-relevant" to drive social impact from the inside out
• Building Networks for Social Change

  Insiders should work collaboratively as facilitators and network members (instead of individual heroes)
• Finding and Sharing Resources in Communities

  Find or create platforms that allow insiders to access best practices, learn from failures, and inspire each other
• Connecting Small Wins

  To effectively leverage small wins, it is essential to begin with a well-defined strategic roadmap
• Mechanisms of social movement influence:

  ➢ “Diagnostic framing” prompts search for alternative solutions

  ➢ “Prognostic framing” draws attention to business opportunities, and

  induces motivation

  ➢ Provision of information leads to uncertainty reduction, and lowers

  the cost of search

  ➢ Enable socio-political and cognitive legitimacy

  ➢ Help create industry infrastructure (e.g. standards, policy

  frameworks)