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University of Amsterdam

Company response to internet activism: The role of social

media and the stakeholder network.

МASTER ТHESIS Deyan Denev

Student ID: 11373636

MSc Business Administration - International Management Track Faculty of Economics and Business

Date: January 26th, 2018

Supervisor: Dr. Michelle Westermann-Behaylo Second Reader: Dr. Ilir Haxhi

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2

Statement of originality

This document is written by Deyan Denev who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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3 Acknowledgement

I would like to thank my supervisor, Dr. Michelle Westermann-Behaylo for her guidance, diligence and accurate feedback during the research process. I would also like to thank Emily Jennings for taking the time to read my thesis and provide feedback. Last, but not least I would like to express gratitude to my father and my mother for their consistent support.

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4 Contents Statement of originality ...………...……….……… 2 Acknowledgements ...….………... 3 Abstract…………..…….……….……. 5 1.Introduction ……….…. 6 2. Literature review ………..……….… 8 2.1 Stakeholder theory……….. 8 2.2. Corporate Response ……….………..…….……… 10

2.3. The Stakeholder network………..….………….…………. 18

2.4. Distance ………...……... 23 2.5. Social media ………..……….….………... 27 3. Conceptual Framework ………...……….….…… 31 4. Data Sample ...……….….……..…. 38 5. Methodology ………....………..….……40 5.1. Dependent variable ………..……….…..…... 40 5.2. Independent variables ………..….. 40 5.3. Control variables ………....……… 42 5.4. Descriptive statistics ……….. 44 6. Results ...………..……….………..…..…... 45 7. Discussion……….…. 47 8. Conclusion ………..53 9. References ……….54 10. Appendix 1 ……….……..58

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5 ABSTRACT

Multinational companies usually decide to respond to stakeholder claims through symbolic or substantive actions. This master thesis researches why there is the difference between these type of responses and what influences this decision-making process. In order to develop the thoeretical framework, the paper deduces seminal theories from stakeholder literature and develops further Rowley`s (1997) concept of the stakeholder network. The analysis attempts to illustrate the new role of social media as the necessary ecosystem that allows stakeholder networks to materialise. Both the advent of the Internet and the central role of social media suggest that the influence on national borders diminishes when it comes to the unrestrained flow of information. Interestingly, findings from the quantitative research on the role of social media in this new operational setting suggest that national borders to some extent still restrain stakeholder demands.

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6 1. INTRODUCTION

In spring 2010 British Petroleum (BP) faced the environmental crisis of the Deepwater Horizon oil spill. Before the oil spill, the company engaged in a hefty “Beyond Petroleum” impression management campaign (Matajek and Gossilng, 2013). BP promoted itself as an environmental pioneer among oil companies and claimed to differentiate from the traditional approach in the oil industry.

In the midst of the Deepwater Horizon crisis the company built upon its image of environmental pioneer and engaged further in the impression management campaign. Before the crisis, the company had rebranded its strategy to account for climate change. During the crisis, BP transformed its Twitter account as a response tool to social concerns (Wauters, 2010). The launch of the “we will make this right" advert campaign continued the discourse of the same public impression. In May 2010, weeks after the spill, BP`s CEO doubted the expected prolific environmental impact of the oil spill and proposed it to be “very, very modest” (BBC, 2010). Meanwhile, BP`s Twitter account itself reached fifteen thousand followers. At the same time, an activist group created an alternative incisive Twitter account that reached twelve times more supporters. This alternative group gained the attention of the public by exposing additional facts regarding the oil spill and targeted the symbolic management of the crisis by BP. This new form of activism, defined by Illia (2003) as cyberactivism, changed the narrative of the crisis. This example of the capability of Twitter to form communities (Gruzd, 2011) proposed alternative explanations from BP`s symbolic framing (Matajek and Gossilng, 2013) and demanded more a substantive approach from the

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7 multinational company. In the aftermath of the crisis, BP claimed full responsibility. The company`s CEO at the time, Tom Hayward, resigned two months after the start of the crisis.

In a study about the 2010 Deepwater Horizon oil spill, Merry (2013) suggests that, during the corporate crisis, the ability of the public to organise a protest in social media or “tweet for a cause” (p. 304) contributed to the convergence of how regulators and litigators managed the crisis. The spontaneous formation of interest group targeted BP`s symbolic management of the crisis. These events incurred significant financial costs in billions to the petroleum company (Matajek and Gossilng, 2013).

This example suggests that pressure groups organised in the Internet and social media can extract more substantive actions from multinational enterprises (hereafter MNEs). In the case of Gulf of Mexico oil spill, Merry (2013) posits that social media shifted BP‟s initial symbolic response and turned it later into more substantive action. According to Oliver (1991), companies that have to address demands from stakeholders could choose between two strategies. First, companies can adjust the narrative during campaigns from secondary stakeholders and point the public opinion towards other relevant concerns. In other words, companies tend to retreat to the tactics of symbolically framed responses to corporate scandals. Oliver (1991) argues that the choice of businesses to comply with external pressure from stakeholders is the second choice for a strategic response. Waldron et al. (2013) make a further distinction that companies may choose the tactics of symbolic and substantive action responses. Interestingly, Waldron et al. (2013) refer to the symbolic accommodation of a social issue as an approach similar to “kicking the can down the road” (ibid, p. 412).

This master thesis examines the role of social media in the interplay between company`s responses and stakeholder claims. The paper develops as follows. The next chapter examines the relevant literature aiming to narrow the research gap. The third chapter proposes the conceptual framework and the hypotheses. Chapters four and five describe the

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8 data sample and the quantitative methodology to test the hypotheses. Chapter six summarises the results of the regression. The last two chapters provide a discussion and limitations of the results with conclusive remarks.

The chapter that follows presents a deductive analysis of the relevant stakeholder literature to narrow the research gap and provides essential definitions to develop the theoretical framework.

2. LITERATURE REVIEW

2.1. Stakeholder theory

Freeman (1984) proposes the stakeholder theory of the firm as an extension of the conventional view of the firm by standard economic theory. The latter traditionally analyses the firm using input-output processes where principals and agents aim to maximise their utility. Therefore, the literature review starts with the broad definition of a stakeholder that Freeman (1984) provides: “those groups or individuals who can affect or is affected by the achievements of organisation`s objectives" (ibid p.9). Clarkson (1995) suggests an analytical framework that makes a distinction between two the types of stakeholders: primary or internal stakeholders (employees, customers, suppliers, financiers, etc.) and secondary stakeholders (communities, non-governmental organisations, media). Clarkson (1995) posits that secondary stakeholders do not relate to the corporation via formal contractual agreements. Instead, they can organise as groups with a special purpose to affect the focal organisation. His article recognises media and non-governmental organisations as secondary stakeholders.

Donaldson and Ronald (1995) suggest that stakeholder theory comprises of three branches: normative, instrumental, and descriptive. The normative branch posits that corporate governance practices should consider the ethics and the values which prevail in

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9 society. The instrumental branch asserts that stakeholder management should contribute to the corporate goals of the organisation and maximise value (e.g. profit, return on assets, shareholder dividends). The instrumental branch puts forth strategies for organisations‟ corporate social responsibility (CSR). To some extent, CSR policies should serve corporate goals. However, the ambiguity of the CSR concept has reached the point of scrutiny as Aguillera (2007) suggests that the “s” in the abbreviation has lost meaning. In the instrumental branch, the main concern is which CSR policies MNE should adopt to achieve corporate goals. Therefore, I consider the linkage between CSR and secondary stakeholders as rather vague because CSR is firm-centric. The descriptive branch pertains to how the corporation deals with decision-making and the strategic response to claims by secondary stakeholders. Mitchell et al. (1997) refer to the descriptive branch as an element of corporate social responsiveness. Their seminal paper proposes that stakeholders‟ claims should possess the salient features of power, legitimacy, and urgency. This concept extends the descriptive branch. The Mitchell et al. (1997) paper posits the question, "Who and what counts?" in the relationship between secondary stakeholders and corporations.

Berman et al. (1999) also measure the empirical relevance of stakeholder theory quantitatively. The authors base the research on Kinder, Lindeberg, and Domini (KLD) data ratings on US companies. Their findings corroborate the instrumental branch in stakeholder theory and confirm that corporate orientation towards stakeholders matters when directed into shareholders, employees, and customers or the primary stakeholders in general.

Waddock and Graves (1997) show that financial and social performance are intertwined. Hence companies are entitled to respond to primary stakeholders‟ claims since they influence financial results. Frooman (1999) adopts an agency theory approach and assumes that stakeholders or activists tend toward forming alliances to change firms‟ decisions and behaviour. He concludes that corporate managers and board members control

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10 most of the corporate resources in which activists are interested. Hence, it is likely that the power to influence corporate practices resides not with social activists, but rather with the board and management. The approach of Frooman (1999) stems from agency theory where the principal is the organisation, and the agents are the primary stakeholder. The gap in how secondary stakeholders may influence the strategic path of the corporation is still open.

Agle et al. (1999) investigate empirically the theoretical model for the saliency of the stakeholder attributes – power legitimacy and urgency as conceptualised by Mitchell et al. (1997). They use surveys sent to CEOs, and the approach accounts for the differences in CEOs‟ values, which are expected to elicit different evaluations from different stakeholders. Their findings established a hierarchy among stakeholders and are similar to the results of Berman et al. (1999), as companies tend to emphasise the relationship with primary stakeholders.

The framework for how the organisation needs to arbitrate their interests is not a novelty in economic and business literature. In their seminal contribution to the organisational theory, March and Simon (1958) suggest that organisations are complex structures and should arbitrate between corporate and social interests, information flows, preferences and knowledge of individuals and groups which may differ.

The next section examines the literature on the tactics companies employs in their responses to external pressure from secondary stakeholders.

2.2. Corporate Response

The differences in handling social issues by corporations relate to their corporate social responsibility agendas and strategies. Frederick (1994) makes a distinction between corporate social responsibility (CSR 1.0) and corporate social responsiveness (CSR 2.0). CSR 1.0 aims to recognise the obligations of business to society. However, the scholars` debate still needs to

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11 answer what institutional mechanisms are necessary for the functions and of CSR 1.0. The CSR 1.0 apparatus might include various channels of reaction by companies, such as new national regulations imposing social and environmental standards that answer to traditional market forces and legal ramifications through various codes of governance. A more precise definition of what counts for the proper level of corporate social responsibility continues to be a grey area. Snider‟s (2003) research of the US and global companies reveals that a precise definition for CSR 1.0 continues to be elusive as the boundaries of to what extent corporations should be responsible for social issues remain vague.

Frederick (1994) introduces the term CSR 2.0 and defines it as “the capacity of a corporation to respond to social pressure, the act of responding or achieving a responsive posture (ibid, p. 154).” CSR 2.0 relates to the management and organisational design of the company. Therefore, the response is an endogenous decision-making process that takes place inside the company. Frederick (1994) argues that CSR 2.0 favours managerial studies while CSR 1.0 relates more to social studies. CSR 2.0 relates to the ability of the company to manage relations with social pressure groups.

This paper examines corporate responses and adopts the theoretical framework of Ashford and Gibbs (1990) and Waldron (2013), who make the distinction between substantive and symbolic corporate response. According to this framework, a symbolic response is more likely to emerge from interest-driven companies which do not acknowledge the stakeholder claims as an economic or identity threat. Conversely, substantive responses are more likely to come from companies that recognise the claims as incurring economic costs and posing identity threats.

Easley and Lennox (2006) investigate firms‟ response to secondary stakeholders using the framework for power, legitimacy, and urgency. Interestingly, in their definitions of the three attributes, media attention and public opinion are elements of all three characteristics.

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12 They use timing as a critical measurement of the level of urgency of the claim. Their results conclude that companies choose to comply with activist claims (those of secondary stakeholders), which have power and legitimacy. According to their framework, the urgency of the claim is an auxiliary attribute and triggers a response only when combined with power and legitimacy.

In a subsequent article on company response, Eesley and Lennox (2009) investigate companies that become targets of predominantly public campaigns with mass media exposure for issues that concern media attention. Laplume et al. (2007) posit that stakeholder literature should shift from qualitative studies towards more quantitative research to justify the significance of stakeholder theory through empirical evidence. Tybout and Roehm (2009) recommend that the timing of the business reality often provides little time to respond once the threat occurs. They suggest that the nature of the claim challenges companies to act quickly and have crisis management teams in place before they become a target of activists or before a corporate scandal unfolds. Therefore companies are encouraged to adopt a general strategy and waste no time in crisis management.

The literature reviewed so far presented how the research shifts from measuring CEOs‟ perceptions of stakeholders to how companies react to outside pressure from secondary stakeholders. In an exhaustive review of stakeholder literature, Margolis and Walsh (2003) argue that research should focus on the interconnection between companies and society. Their paper suggests that research on stakeholder theory is relatively biased concerning the relationship between financial performance and social performance. Thereby, most studies focus more on the instrumental branch of the theory.

Margolis and Walsh (2003) propose that the starting point of the research should be how companies respond and manage these relationships. Instead of repeatedly marking the significance of the legitimacy of corporate social responsibility and performance, the analysis

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13 should tend toward the corporate response to stakeholders claims. This approach would prove more to be a pragmatic stance and explores the interaction between corporations and society. Stakeholders may issue claims against certain activities of the company; therefore, senior management has to acknowledge their salience. Margolis and Walsh (2003) argue that the stakeholder literature needs a more comprehensive framework concerning what triggers firms‟ responses to "social misery." Because company interests might conflict with societal interests, a detailed analysis of how these interests coordinate would fill the gap.

Bundy et al. (2013) expand further the concept of Mitchell et al. (1997) that the degree of corporate responsiveness determines the salience of the claim. According to their concept, issues recognised as less critical by managers are to receive more symbolic attention. Claims that present direct danger to the identity and strategy of the company might result in higher priority. Bundy et al. (2013) proposed a theory of strategic cognition which is used by companies to evaluate the salience of the social issue and measure the response. Bundy et al. (2013) also acknowledge the presence of secondary stakeholders as outside drivers responsiveness.

To construct the first variable, this paper outlines the first main point of interest: corporate response. The dependent variable, corporate response, originates from the symbolic and substantive response theories outlined by Waldron (2013) and Ashford and Gibbs (1990).

The framework provided by Waldron et al. (2013) makes a distinction between substantive and symbolic corporate responses. These authors adopt a cognitive perspective to develop a model explaining variance in the reactions of targeted or non-targeted firms by activist campaigns. Managerial perceptions specify the reasons for the differences in the reactions and modifications of activists` campaigns. Targeted firms are classified as egoist leaning or moralist leaning. Egoist leaning stands behind more symbolic responses. Managers in moralist leaning firms perceive activist campaigns as identity threats, hence their response

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14 is substantive. Waldron et al. (2013) examines the cases of Apple and Timberland, targeted respectively by a student organisation based in Hong Kong and Greenpeace.

According to this theoretical framework, managers of moralist leaning firms (both targeted and non-targeted) recognise campaigns as legitimacy threats and source of competitive advantage. These managers recognise stakeholder claims as a threat to their identity and market capacity, in turn, would symbolically or substantively accommodate activists` requests. Not only does financial harm matter, but so makes identity threat (Timberland case). Hence their response is substantive and accommodates the competitive advantage, enhancing their core identity. This paper focuses on the corporate responses issued from targeted companies and makes a similar distinction between the substantive and the symbolic type of accommodation of the issue by the targeted company.

According to this framework, the symbolic type of response creates an agency theory-based corporate culture which corresponds to the theories of Frooman (1999), Berman et al. (1999), and Waddock and Graves (1997). Waldron`s et al. (2013) symbolic accommodation means that managers would acknowledge the stakeholder`s request with a promise to address the issue. The response of these companies originates from their stakeholder cultures. One such corporate culture focuses more on primary stakeholders. Firms assigned to this category perceive the necessity to conform to the demands of the stakeholders if the threat comes from financially oriented stakeholders.

Ashford and Gibbs (1990) also make a distinction between symbolic and substantive responses. The company which offers symbolic accommodation may adopt the social principles in the claim through an advert campaign, but in reality still uses the same means in pursuit of the objective. According to Ashford and Gibbs (1990), such companies prefer to frame the issue and bring to the fore other values that also provide legitimacy. These authors refer to the symbolic management of social issues as strategic tactics. One such tactic is to act

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15 defiantly and try to suppress information flows regarding the activities that undermine the legitimacy of the company. However, in the paper, I claim that such a tactic occurs with limited probability if put into contemporary operational settings. Companies which operated in the 80s and 90s were allowed to media-manage their targeted activities and involvement in corporate scandals. Multinational enterprises in the 21st century have limited resources available for managing information streams originated from online platforms and social media (Kaplan and Haenlien, 2010).

According to the frameworks of Ashford and Gibbs (1990) and Waldron (2013), corporations who adopt symbolic management of social issues evaluate more the economic value of the social issue. This utility-based approach relates to the standard economic theory of a more conventional view of the firm. In these circumstances, corporate executives seek to balance between costs and gains in the utility of the company. Waldron (2013) defines this as “fiscal mentality” (p.404) because the companies‟ main goal is to maintain their social image without inducing costs. One such company responds to a social issue by a promise or commitment (or both) with few to none actual steps undertaken to change the targeted activity.

Both Ashford and Gibbs (1990) and Waldron (2013) assign substantive responses to companies, posing moralist traits. Ashford and Gibbs (1990) suggest that companies involved in the management of stakeholder claims with substantive responses are more inclined to reconsider their strategy and adapt it to observed alternations in society. Waldron (2013) posits that companies which emphasise intrinsic values and sustainable business models are expected to respond more substantively. These MNEs perceive the involvement in social issues as identity threat and reputational pressure. Hence Waldron suggests that substantive response consists of actual steps for a change instead of a promise to change. The main point in this relationship is that both types of companies identify the threat, those with a fiscal

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16 mentality and those with moralist traits. The variation in the responses originates in the subsequent actions. Both types of companies could issue a press release addressing the importance of the issue; however, their subsequent actions differ. The substantive response connects with an immediate or non-belated action by the targeted company. Waldron et al. (2013) presents Timberland as a company with moralist traits, and therefore as one which should issue a substantive response.

The propositions of Bundy et al. (2013) are similar to the framework provided by Waldron et al. (2013). According to these similar concepts, issues cognised as less critical by managers will receive more symbolic attention. Claims that present direct danger to the identity and strategy of the company might have higher priority. Bundy et al. (2013) propose a theory of strategic cognition, which is used by companies to evaluate the salience of the social issue and measure the response. Bundy et al. (2013) also acknowledge the probability for outside drivers of these responses.

Waldron et al. (2013) also suggest that perceptions of legitimacy threats and financial performance navigate the assessment and answers by top management teams. Both articles acknowledge that the media attention of activist campaigns and the demand for transparency influences whether or not the company becomes a target. Limited insight, however, is given concerning how media attention adds urgency to these claims. For instance, Chandler (2014) argues that intense media coverage of a company`s misconduct leads the firm to address social issues more thoroughly.

McDonnell and King (2013) provide more insight into how the role of media attention can modify the response of the firm. Companies with a historical record of targeting use impression management tactics to mitigate the negative outburst of future claims. They adopt the tactics of pro-social claims as preemptive action towards activist campaigns as these

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17 claims are a tool for future responses. One such example for pro-social claims is the example of the BP campaign “Beyond Petroleum” mentioned in the introduction.

More recent studies like that of Arahonson and Bort (2015) argue that when faced with amassed pressure, the strategies of senior executives changes and leads to further engagement in uncharted activities and resource allocation. Arahonson and Bort (2015) also suggest the media coverage significantly influences managers' attention and decisions. Their paper argues that as the media coverage becomes more negative, it increases the probability the firm to prompt a substantive response. Therefore, the urgency of the claim corresponds to media coverage and navigates the response.

One might argue this approach might seem similar to the concept of DiMaggio and Powel (1983) for coercive isomorphism. Organizations would eventually accommodate the norms and values promoted by formal and informal institutions. However, in the case of targeted activism, the central point is the timing to conform to a request. Bansal and Kistruck (2006) concur that the use of media and internet domains by large multinationals is efficient for impression management. However, in modern operational settings, the demand for a response by the company is much more urgent compared to the operational settings at the time of most of the articles presented so far in the paper. In a more recent modification of the theory, Freeman et al. (2010) acknowledge that primary stakeholder groups, such as employees, suppliers, financiers, stockholders, and even customers are part of the value creation chain of the firm. These primary stakeholders receive a form of benefit and have contractual agreements with the company. Freeman et al. (2010) argue that raising red flags on social issues may conflict with their objective to make the firm "going concern" (ibid, p.210). Therefore, such groups have obstacles in their path to instigate change and raise public opinion concern over social issues. Freeman et al. (2010) acknowledge the role of the media and pressure activist groups to steer the attention of companies and to address social

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18 issues. The rise of social media and online platforms gives companies fewer tools to control the narratives of social issues once targeted by secondary stakeholders (Kaplan and Haenlien, 2010)

This master thesis explores how secondary stakeholders elicit responses from multinational companies. The next section outlines the characteristics of the stakeholder network in order to develop the first independent variable.

2.3. Stakeholder Network

Mahon and Waddock, (1992) suggest that control over the narrative and public opinion is an integral part of the life cycle of social issues. They conceptualize that social issues have a timeline and analyze three perspectives: corporate, political and the social activism. Mahon and Waddock (1992) hypothesize that social activists are similar to pressure groups. From the pressure group perspective, once the issue is formulated and put into the public agenda, then a second process starts. In this second stage, the issue may attract participants or "issue network members." The authors argue these networks often are comprised of hidden participants. The formation of these networks of interest remains largely unnoticed through the issue‟s life cycle. The role of these networks is to facilitate the participation of numerous stakeholders in the gathering of a social movement. Their paper proposes that these networks represent a novelty, and future research should focus on their characteristics.

In the construction of the independent variable, I combine theory from Mitchell et al. (1997) on the saliency of stakeholder and the concept for the stakeholder networks by Rowley (1997). I intend to test the relevance of social media quantitatively by using these theories. These concepts were developed in a different operational environment and needed to

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19 acknowledge that social media could influence the organisational patterns of stakeholders to impose pressure and target companies.

Rowley (1997) argues that stakeholder research focuses more on defining stakeholder categories, instead of on how stakeholders operate. He suggests the relationship between stakeholders and the organisation becomes more complex if the stakeholder starts to interact with another stakeholder. According to Rowley (1997), two main characteristics define stakeholder networks: density and centrality. The first characteristic, centrality, explains whether or not different network members could exchange information and resources. When members can easily exchange communication, the network becomes more centralised. The second characteristic is the network density, which Rowley (1997) defines that as more individuals or groups participate and form the network, denser, it becomes. The denser the network becomes, the more likely it is that coalitions will occur. By forming such networks, stakeholder groups may exert influence over the company. Then the network possesses higher centrality and is more likely to elicit a response that affects the targeted company. Rowley (1997) proposes that future research test the influence of networks on company response empirically. Rowley and Berman (2000) suggest that the cost of information exchange prevents stakeholders from organising in large numbers. However, the advent of social media (also called social networks) substantially decreases the cost of individuals exchanging information, creating more organised pressure over companies. In the following paragraphs, I will explore how this happens by first discussing some theories on social issues and the possible implication of social media in the timeline of contemporary social issues.

Rowley (1997) and Rowley and Berman (2000) argue that the existence of infrastructure and the ecosystem as crucial for stakeholders to be able and exert pressure. Mitchell et al. (1997) propose a concept that focuses on the attributes stakeholder claims must possess for those claims to be matters of importance to CEOs. The attributes of power and

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20 legitimacy in their article exemplify the seriousness of the pressure group‟s stance of demanded action. Mitchell et al. (1997) define the third attribute, urgency, as “the degree to which stakeholder claims call for immediate attention” (p. 869). Their analysis of urgency emphasises that urgent claims can affect the response from the company if combined with other attributes, such as power and legitimacy. These three attributes reinforce the salience of the claims and engender a response from the targeted company. The distribution of power in the management-stakeholder relationship determines the level of interdependency between the business and a given stakeholder. Legitimacy, however, is more associated with the role of regulators and the state-organised agencies, which could also target the company.

Interestingly, the authors introduced the urgency concept as a somewhat novel feature in the stakeholder theory. Urgency stands for "the degree to which stakeholder claims call for immediate attention" (Mitchell, Agle, and Wood, 1997, p. 864). Mitchell et al. (1997) argue that in cases of urgency, stakeholders see the relationship with the firm as critical. More specifically, secondary stakeholders might perceive urgent claims as originating from risk exposure and loss of utility. The authors suggest that urgency is a multidimensional attribute, and it matters most when placed side-by-side with power and legitimacy. This attribute adds more dynamics to the relationship. In a complementary paper, Agle et al. (1999) found empirical support for these attributes using a sample of U.S. companies. Their paper explores how CEO`s assign different levels of importance among on these three attributes.

Mitchell et al. (1997) posit that the attributes of power, legitimacy, and urgency are an essential part of the claim, should it be considered as salient for managers. This paper examines urgency by considering the definition of Mitchell et al. (1997). Urgent demands in the context of activist campaigns provoke companies to respond to social issues with little or no delay. De Hond and Den Bakker (2007) support this idea and argue that higher visibility makes the social issue more urgent. Stakeholders may use network tactics because of the

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21 chance to gain more supporters. Social media and online platforms provide the means for these groups to gain supporters.

. Online platforms provide the infrastructure for stakeholders to organise into networks, to raise social issues with more urgent attention and elicit a reaction from the targeted company. In other words, modern social media allows potential activists to usually overcome the costly organisational process and more or less spontaneously organise themselves into stakeholder network.

Rowley and Moldoveanu (2003) provide support for this approach. First, they use the term stakeholder group instead of stakeholder. Their theory applies to activist groups where individuals organise themselves intentionally. Having the opportunity to collaborate with other members, they form a network. Primary stakeholders such as shareholders and customers, possess contractual agreements with the focal organisation and are not part of these stakeholder groups.

Rowley and Moldoveany (2003) suggest three dimensions regarding what motivates secondary stakeholders. The first dimension, motivation, originates from mutual interests in economic gains. Groups motivated by common interest are cost-conscious. They have difficulties in organising quickly into action because forming a network implies costs. Motivation can also be identity-based, an alternative motive for action which justifies why some stakeholders pursue lost causes. In such cases, Rowley and Moldoveanu (2003) suggest that simply expressing one`s identity through participation in a group action is the desired end itself, regardless of the probable outcome of that action regarding utility-based interests.

This motivation could reciprocally influence rationally driven interest-based motives. In such a case, there is an overlap between identity, interests, and membership of the individuals in the group. Hence, groups form a dense network because urgency dictates interest and the desire to act. The authors conclude however that future research may look into

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22 the question of how the stakeholder group overcomes the cost of their utility in the event of initial mobilisation.

The dominant discourse in the empirical research of several authors, including Easley and Lennox (2006), Agle et al. (1999), Anderson and Bateman (2000), and Harvey and Schaefer (2001), is that the primary role of an urgent claim cannot provoke an immediate reaction. However, these papers examine more static operational settings. Agle et al., (1999) and Anderson and Bateman (2000) use surveys and interview data where CEOs of affluent U.S. companies measured the relevance of the three attributes. Harvey and Schaefer (2001) interviewed senior managers of British companies to arbitrate the applicability of these characteristics in general. Easley and Lennox (2006) explored the LexisNexis database, which mostly consisted of letterbox campaigns and civil acts against U.S. companies between 1971 and 2003. According to Mitchell et al. (1997) and Easley and Lennox (2006), the urgency of the claim exemplifies the timing and demand for immediate action. The research approach of the above-described articles test urgency in more static and formal settings, such as claims issued through civil actions, letterbox campaigns, and petitions.

Once again, Mitchell et al. (1997) provide a definition of urgency that emphasises the timing of the protest and demand for an immediate response. According to Rowley and Berman (2000) and Rowley (1997), stakeholder groups tend to form networks and collectively monitor and discipline the abnormal behaviour of corporations. However, Rowley and Berman (2000) conclude the higher costs for individuals organising themselves into groups hinders the formation of such alliances. They also argue that fewer obstacles for an exchange of information would allow weaker stakeholders to form coalitions. Then one might argue that it is necessary to put both urgency attribute and the stakeholder network in a different operational setting. Thereby, this paper sets a task to examine these theories in more

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23 dynamic and an up-to-date operational setting which is typical for a modern MNE. One of the dimensions is the international environment in which MNEs operate.

The next paragraphs elaborate on the role of distance between the home country of the targeted company and the country of the targeted activity.

2.4. Distance

This section attempts to point out country-specific factors and the international aspect of stakeholder activity. Aguilera and Jackson (2003) note that firms do not function in a vacuum. Instead, they are part of a complex network of interdependencies. Companies exist in particular national and institutional frameworks that modify their strategic decisions. Aguilera et al. (2007) also suggest that information flow is vital for stakeholders to exert their demands. Stakeholder networks may have different influences across national settings.

This international environment is of specific importance for the multinational enterprises. Buyssee and Verbecke (2003) posit that studies on corporate social policies need to acknowledge the institutional context in which the MNEs operate. Pressure on a company`s operations may either originate in the MNE`s home country or as a reaction to operations in a subsidiary of the host country.

MNEs operate beyond national borders, and Marano and Kostova (2016) suggest that these firms have to arbitrate between complex operational settings in different countries. Therefore, MNEs are likely to adopt various practices to meet stakeholder demands and different patterns of corporate social responsiveness in different countries. The complex role of distance in international business opens a research gap on the degree of internationality on stakeholder campaigns, in other words, how international stakeholder claims could evolve across borders. In the analysis of distance in international business, the role of

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24 institutionsboth formal and informal is of particular importance. Institutions potentially serve as moderators of the relationship between stakeholders and companies.

The role of institutions as described by North (1991) is to construct a framework for economic, political, and social connectivity. In a seminal work, North (1991) makes a distinction between informal and formal institutions. For what concerns stakeholder theory, formal institutions represent state regulators and consumer agencies, as well as state-sanctioned organisations in general. The role of informal institutions is to constrain the behaviour of companies when it exceeds the established norms of tolerance of malpractices. It corresponds to the normative branch of stakeholder theory. When a given MNE violates the norms for environmental pollution or employee discrimination, it might become a target of activist campaigns. However, both the formal and informal institutional dimensions are not entirely the same in every country. DiMaggio and Powel (1983) argue that society can use coercive mechanisms, such as collusion and exert informal pressure on corporations in order for the latter to conform to organisational change.

The construct of a stakeholder network illustrates one such form of informal collusive pressure; hence, the stakeholder network represents the informal dimension of institutions. The ability to construct such a network mostly depends on its cultural characteristics in different societies. According to Hofstede (2006), society`s cultural dimensions require evaluations in an intangible sense. Hofstede (2006) proposes that his construct should serve as a tool to explain the complex reality of international business which MNEs should consider if want to operate in foreign countries. Zaheer (2011) suggest that Hofstede`s dimensions could lose uniformity in a thorough and in-depth analysis. She uses Hofstede`s data from Belgium to present an interesting example of the seminal study. In Hofstede`s study, the French-speaking part of Belgium shared cultural similarities with neighbouring France. Therefore, the absence of distance suggests similarities. However, the Dutch-speaking part of the country

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25 differed significantly from the neighbouring Dutch-speaking country, the Netherlands. Zaheer (2012) points out that these two countries have the highest level of discrepancy of all countries with a shared border in Hofstede`s research. Hence, the cultural dimensions of Hofstede may serve as a starting point but are rather not the general case.

The analysis of Zaheer (2012) supports Shenkar`s (2011) critique of distance. Shenkar‟s (2011) critical arguments suggest that the concept of distance possesses the illusion of symmetry. Shenkar (2011) provides additional arguments that distance should avoid analysis based on the illusion of symmetry. For example, a company that is incorporated in the U.S.A and has activities in China faces cultural differences, whereas if a Chinese company were to enter the U.S.A, it would not face the same amount of differences as the American company in China. The two societies do not possess the same similarities and differences, thus are not symmetric.

Henriques and Sadorsky (1996) found that Canadian companies have to change their strategies to suit the demands of communities in addition to their liability to regulators. Rugman and Verbeke (1998) conducted an analysis and found that a company operating in Canada and the United States would have different strategies for handling corporate reactions to stakeholder demands. Using the example of Belgium, the Buyssee and Verbecke (2003) posit that international and homegrown companies differ in their strategies concerning stakeholders. If a company relies on the internal market, it has a more integrated approach towards local communities. Rugman and Verbeke (1998) hypothesise that a company that is not a target of stakeholders in its home country would have difficulties and not be interested in complying with formal rules. Foreign companies may use their adherent CSR practices to differentiate from home MNEs in case home MNEs neglect the role of secondary stakeholders. A response might be a strategic product to stand out from the competition or to employ strategies from the home country. Interestingly, Rugman and Verbeke (1998)

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26 conclude that MNEs from smaller open economies may consider substantive responsiveness to social demands as firm-specific advantages to gain market share.

Since the response is a decision-making process and takes place in the boardroom, countries with more flexible business codes of governance based on common law might respond differently. Aguilera and Jackson (2010) point out the legal framework of a given country as a key institutional force to influence social relations. A study by Hatxi and Aguilera (2017) on corporate governance makes a more thorough distinction between the classic shareholder-oriented model and the stakeholder-oriented consensus model. The shareholder-oriented model relates typically to common law countries and business environments with strong emphasis on the financial market and more flexible management-labour relations. The stakeholder-oriented model typical for Germanic and Scandinavian countries puts less emphasis on the financial market and accounts more on the consensus-based decision process which includes a wider array of stakeholders. Therefore, responses to stakeholder demands may vary between different countries and regions depending on the relative influence of internal and secondary stakeholders in the decision-making process of the company.

The Internet infrastructure plays a vital role in the information flows across countries. Ghemawat (2003) is a keen proponent of the concept of the semi-globalised world of international business He argues that distance is still important and that the exchange of information moves predominantly within national borders. According to Berry et al. (2010), the institutional distance and the information flow should measure how globally connected a given country is. The authors propose the percentage of internet users as a relevant measure of one country`s distance with the outside world. The percentage of internet users in a given country contributes to the visibility and the popularity of the claim. Petitions in the platform change.org are available on the Internet and count on online support. The inclusion of this

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27 measurement allows monitoring for initially omitted factors which may cause variance in the responses. Negative news travels fast in business, and social media provides a large spectrum to channel reactions and make social issues viral if the necessary ecosystem is available on the Internet.

The next section presents the advent of social media as the novel and necessary ecosystem for the constituency of the stakeholder network.

2.4. Social media

Social media represents a new operational setting described by Lee et al. (2013) as difficult to manage by companies. This new media information streams are intertwined and have a potentially infinite number of network nodes. The lack of deliberate coordination makes this operational setting to some extent immune to outside management by corporations (Illia, 2003). The research of this study employs a dataset of online petitions gathered from the online platform change.org. Each petition that originates in change.org can expand in social media. The paper focuses on petitions from change.org that expand on Twitter.

Ward and Ostrom (2006) revealed that protest websites serve as an operational platform for the construction of social movements and pressure groups. Once a consumer protest agenda is set up, the website-based operational setting has the potential to attract numerous supporters in the form of collective action. This set of events has similarities with the Mahon and Waddock (1992) theory of the life-cycle of the social issue. Ward and Ostrom (2006) analyse this operational setting from the perspective of marketing theory. They argue that website based protests have difficulties with evolving into social movements that are organised and have agendas.

However, with the rise of social media websites like Facebook, and Twitter, and users can easily organise networks in support and target MNE. (Merry, 2013). Merry‟s (2013)

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28 research concerning the social media outbursts on Twitter regarding the 2010 Deepwater Horizon oil spill provides evidence of two important changes concerning the operational setting. First, social media serves as a medium as environmental groups use Twitter is used to organise spontaneous supporters and call for action when social issues arise. Second, these activist groups exhibit a speedy response to the relevant social issue and make the media coverage more consistent. Unlike conventional mass media, the pressure group in social media specialise in the activist campaigns through support-seeking actions. Merry (2013) recognises that BP initially tried to navigate and media manage the issue using legitimate claims of press releases and corporate communication strategies. Although the sole outburst in Twitter did not inflict direct monetary damage on BP (via social media), the public opinion changed the narrative led by the company. Merry (2013) suggests that the change of the narrative in public opinion influenced U.S. authorities which considered BP as responsible for this crisis. Matejek and Gossling (2013) posit that after the oil spill BP suffered a corporate legitimacy crisis because of discrepancies between its self-proclaimed green image and the media handling of the crisis. Lee et al. (2013) found that information on social media exposes companies to consistently negative narratives. It allows messages to become viral in a matter of hours and appear on official social media pages.

In a seminal article about the role of online platforms and social media Kaplan and Haenlein (2010) propose that “social media represent a revolutionary new trend that should interest companies operating in online space – or any space, for that matter” (Kaplan and Haenlein, 2010, p.59). In 2014, a study by Barnes and Lescault (2015) estimated that 83% of Fortune 500 companies use active corporate Twitter accounts and 80% had a Facebook page. Perrault et al. (2014) propose that social networks change the management of social issues because of the speed with which the issue becomes viral. It enables the social issue to emerge quickly and with high intensity.

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29 The report of Barnes and Lescault (2015) conveys the popularity of social media with companies, who use corporate social media accounts for marketing purposes. Research on Fortune 500 companies, estimates that 100% of the companies in the food industry have an active corporate Twitter account, while only 67% of companies in the mining and fossil fuels industry maintain such accounts. Waldron et al. (2013) point out that controlling for industry effects is also necessary to account for what types of industries are prone to be targeted by social claims. Easley and Lenox (2006) argue that industry and timing of the claim control the unobserved factors of a company`s responsiveness. Since certain industries have a different approach to handling social media in their corporate image strategy, this master thesis will employ industry as a control variable in the quantitative part of the analysis.

Kahn and Keller (2004) claim that new media can influence government policies. Their paper makes a distinction between the hacking activists that can organise political protests, anti-government pressure groups, blogging. The latter is based on democratic principles of freedom of speech and favour networking as social proves as a successful political tool (Shirky, 2011). Kahn and Keller (2004) provide examples of traditional media that may negate social issues by assigning tertiary or back-page coverage. Blogging activists can reverse this trend and assign primary or front-page importance to social misconducts. Their analysis focuses on the success of internet activism effects on political misconducts and concludes that new forms of media can adjust corporate agendas.

Taylor and Van Dyke (2004) suggest that in the modern operational setting, social movement pursuits change in corporate and political agendas through indirect channels, such as the media and the Internet. Social issues may arise suddenly, and the resulting social movements will then attempt to gather a larger number of supports. This rule of numbers is consistent with prior studies (Taylor and Van Dyke, 2004; Della Porta and Diani, 2004; den Hond and de Bakker 2007). The traditional tactics to convey larger support consist of

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letter-30 writing campaigns, petitions, or more plaintiffs. The new operational setting of the Internet provides social movements with novelty tactics which have proven to be more persuasive when striving for corporate change. However, both the traditional and modern operational settings extract incentives for campaigns from a higher number of supporters. Consistent with earlier theories (Taylor and Van Dyke, 2004), the adoption of novel tactics combined with the aggregation of large numbers improve the probability for wider coverage of the issue, thereby provoking a substantive response from the targeted company. This logic of numbers suggests that quantity becomes a quality in both operational settings.

This paper aims to investigate the descriptive branch and perform quantitative research how companies respond to stakeholder claims. In an extensive review of stakeholder literature, Laplume et al. (2007) outline some discrepancies in the stakeholder research area. The majority of papers in their review focus on drawing concepts of socially responsible behaviour. Laplume et al. (2007) estimate that the research which addresses empirical evidence of stakeholder management comprise just 10% of the existing literature.

The aggregate discussion of variables such as corporate response, stakeholder network, and social media present an unexplored research gap in the stakeholder literature. Due to time constraints, few of the articles discussed in the previous sections have had the chance to put these variables in different, non-static operational setting. The rise of social media may help address some relevant analysis on how stakeholders operate and how companies react. Den Hond and De Bakker (2007) suggest further research should focus on how stakeholder groups collaborate. Do these groups work together? What type of coordination they use (ibid, page 919). Den Hond and De Bakker (2007) also acknowledge that the result of these activist campaigns needs further research which leads to the following research question:

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31 How does the construction of stakeholder networks influence the response from the targeted company?

The next chapter examines the relationship between the stakeholder network and its pressure mechanisms in order to test the probability whether this pressure will elicit a substantive response from the targeted company.

3. CONCEPTUAL FRAMEWORK

Interestingly, research by Harvey and Schaefer (2001) found that most managers do not acknowledge the media as a reliable stakeholder. Keeping companies out of the headlines is often regarded as a good example of management. In their survey on CEO`s perceptions are keen to avoid media attention or even disregard media as a stakeholder. Harvey and Schaefer (2001) examine the empirical relevance of power, legitimacy, and urgency among British utility companies. Senior managers prefer to cooperate with mainstream pressure groups (e.g., NGO and consumer agencies and regulators), which have a nationwide presence. Managers recognise these groups as "reasonable" and "co-operative." Hostile pressure groups receive relatively less attention as firms have preferences to engage with non-threatening pressure groups. Managers maintain closer contact with such groups and are more inclined to share internal information with them. Interestingly, national and international pressure groups receive less acknowledgement as particularly salient stakeholders by the companies. Often managers avoid collaboration with activists and the media as they recognise these outside watchdogs as a threat. Harvey and Shaefer (2001) suggest that the demands of these groups require urgent attention if receive media attention. Nonetheless, of the findings, a major

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32 implication of their research is that managers of these companies evaluate public opinion and legal compliance with equal importance.

On the other hand, behavioural economics research on decision-making processes provides a different perspective (Ariely et al., 2009). The more transparent the communication of the social issue is, the greater the probability of CEOs to prompt substantive action. Ariely et al. (2009) present evidence that due to image concerns individuals are more inclined to support "good causes" if their actions are visible and transparent to society. They are more inclined to contribute to “bad causes” when their actions are not transparent. Therefore, transparency or media visibility has a major influence on the strategy of the company and the decision-making process by managers.

The study of Arahonson and Bort (2015) argues that when faced with amassed pressure, the strategies of senior executives change and lead to a more substantive approach. Arahonson and Bort (2015) also suggest media coverage significantly influences managers' attention and decisions. Due to the transparency concerns, the probability of a firm responding to a substantive manner increases simultaneously the more negative the media coverage becomes. Social media provide the necessary infrastructure stakeholders to organise themselves quickly. Social issues that remain consistent through social media carry more urgent demands and could navigate the response.

Rowley (1997) expands the theory beyond the simplified assumption for a dyadic relationship between stakeholders and corporations. A stakeholder network according to Rowley (1997) is formed because stakeholders have relationships with other stakeholders during their campaign (e.g. media). For example, employees, who make up a primary stakeholder group may start a strike which is then covered by the media. Then the strike gathers support outside of stakeholders‟ group through solidarity campaigns in social media. Rowley (1997) emphasises the fact that stakeholders or pressure groups are capable of

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33 forming their networks. The modification of Freeman`s stakeholder theory proposed by Yassin (2009) presents three distinct groups of stakeholders: stakeholders, stake-watchers, and stake-keepers. According to Yassin (2009), they function in a triangular relationship. These arguments reinforce the concept that contemporary stakeholders are more capable of functioning in a network of ties rather than in a simple dyadic relationship.

The research of McDonnel and King (2013) shows some cases of MNEs entering into strategic partnerships with NGOs in order to gain pre-emptive support from the stakeholder network. Their study reveals how companies overtly collude with NGOs to manage their public impression as a pre-emptive measure in case of an activist campaign. Once they become a target, the existence of an NGO partner allows MNE to make pro-social claims and mitigate the influence of activists. McDonnel and King (2013) specifically give examples of how an NGO partner might prevent another NGO from targeting their partnering MNE. In practice, one might consider this as MNE strategy towards not allowing the formation of stakeholder alliances. In practice, the findings confirm the concept of Rowley (1997) – that stakeholders tend to form networks in time for activist campaigns. MNEs acknowledge this through their attempts to form networks with secondary stakeholders.

Rowley (1997) argues that a stakeholder network is not a static construct. As the number of connections increases, the network becomes denser because stakeholders have a relationship with each other rather than each separately to target the company. De Hond and De Bakker (2007) posit that stakeholders use the tactic to gather a large number of supporters to achieve the desired saliency of the claim. De Hond and De Bakker (2007) propose that the formation of these new types of social networks is a more developed form of stakeholder pressure. On the other hand, Rowley and Berman (2000) posit that the implied costs prevent stakeholder alliances from materialising, thereby preventing urgent claims from occurring. In

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34 Type of

company response

such line of the analysis, one might argue that stakeholder networks exist solely in theoretical frameworks and are an onerous construct.

Figure 1. The determinants of company response.

Dawkins and Lewis (2003) suggest that the transformation of stakeholder attitude is a result of the digital transformation of international business. Social media has become part of mass media and constitutes itself as a primal tool for stakeholders to organise pressure groups. Before the advent of the Internet and social media, secondary stakeholders did not have the necessary ecosystem in place to gather consistent support for the cause. On limited occasions, traditional media coverage results in substantive actions. One such example was Shell`s response to the Brent Star crisis in the 1990s (Barkenmeyer et al. 2009; Zyglidopoulos 2002). Social media provides more consistency in the coverage of social issues, as the public and the company estimate the support in numbers.

Illia (2003) presents the development of the term “cyberactivism” as a result of Internet-based communication networks. According to her definition, cyberactivism represents an evolved form of the traditional stakeholder activism. In the operational setting of social media, the corporate response might be a result of the level of virality of the stakeholder claim in social media and serves as a measure of the existence of the stakeholder network. This paper adopts Mill`s (2012) definition of a social network: “a web-based

The existence of stakeholder

network

Distance in the stakeholder claim

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35 platform designed to encourage social interaction between individuals, groups and organisations and that enables the broadcasts of monologues into dialogues” (ibid, p.162-163).

The term virality, defined in the business context by Mills (2012), is the deliberate seeding of content in a social network. Marketing theory and advertising practitioners use virality as a measurement for the rapid distribution of an advert, phrase, picture, video, or song in social media. It relates to the potential of an event to become contagious in the social network. The potential of a social issue to gather supporters and go viral on social media results in a more dense network of supporters and forms a new of type stakeholder network. These networks can form in a matter of hours and gather support in large numbers, thereby becoming denser. Therefore, in the social media context, stakeholder networks have the potential to quickly turn a social issue to an urgent claim, depending on the level of support in social media. In other words, people are talking and sharing the content results in larger numbers. Figure 1 represents the conceptual model of the paper. The presence of this newly formed stakeholder network plays the role of a proxy for an activist pressure group and can alter the firm`s response, leading to the first hypothesis.

Hypothesis 1: The presence of stakeholder network will lead to a substantive response by the targeted company.

Social media also increases transparency levels as it makes actions and reactions more visible by simultaneously empowering stakeholders who are sharing or showing support for social issues. Therefore, companies tend to engage in more pro-social activities once they become targets of an online pressure group. Once an issue has become viral, there are fewer

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36 available options for a reaction from the management. Such an ecosystem allows the formation of stakeholder networks where the content of the issue might crossover from one online platform to another. In the online platform, change.org petitions originate and gather supporters in the form of online signatures. This is the first phase in the formation of stakeholder network. Each petition may cross over social media outlets, such as Twitter and Facebook. According to Kwak et al. (2010), Twitter exemplifies a social media outlet due to the specificity and non-reciprocal relationships established between its users. Change.org allows petitions to expand on Twitter via a tweet: this is the first multiplication and the second phase of the stakeholder network. Then, the tweet becomes part of a Twitter community (Gruzd et al. 2011), allowing many more multiplications to occur.

The distance between countries also plays a role in the response management and the overall behaviour of the company. The global connectedness, according to Berry et al. (2010), is a sufficient measure of institutional distance. Ghemawat and Altman (2016) suggest the use of the internet traffic is a prime measurement of a company`s national and international connectedness.

The home country of the claim bears the consequences of the targeted activity. Therefore, this paper considers the home country of the request as a more relevant determinant of the company`s substantive response. According to Illia (2003), the advent of information and communications technologies facilitates the quick access to markets across national borders and blurs the significance of distance between countries. This is a more relevant assumption from the perspective of corporate communications and marketing theory. In the context of the management of social issues, however, the institutional distance between host and home countries still matters. When it comes to the research question, the level of connectedness between the host and home country is expected to affect the type of response. For instance, if an American company receives criticism for a business move done in China,

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37 the latter scores low on recent reports of freedom on the internet (Freedom House, 2017). Chinese online space qualifies as the non-free online environment and is less likely to contribute to the formation of online stakeholder networks. Berry et al. (2010) suggest that the connectedness of a country with the different parts of the world allows individuals and companies to exchange information flows. For instance, a study on the impact of national borders on social media shows that Twitter is more international media outlet compared to Facebook; but still, 75% of Twitter`s network users are within in one country (Ghemawat and Altman, 2016; Takhteyev et al. 2012).

This paper explores stakeholder actions that are born and permeate online. Therefore, cross-country institutional discrepancies and the percentage of internet users may obstruct the probability of a substantive response. Buyssee and Verbecke (2003) argue that studies on management of stakeholder claims provide little evidence for how institutional contexts shape social strategies of multinationals. The approach of MNEs addressing stakeholder claims might depend on whether or not the claim originates in the home country and leads to the second hypothesis.

Hypothesis 2: When the host country of the stakeholder's claim matches the home country of the targeted company, there is a higher probability for a substantive response.

Social media limits companies from controlling the speed and the breadth of social issues. On the other hand, traditional media and methods of communication allow more time for companies to respond. If companies resort to social media, they dictate the speed and the breadth an issue‟s emergence. Social media overcomes these obstacles as stakeholders can now facilitate their claims much faster and reach a larger audience. The petitions in change.org are targeted directly at the company and often at the CEO personally. Hence it is

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