Institute Insights: How Companies Respond to Pressures on Issues
Corporations face constant pressure to respond to a wide range of social, environmental and governance issues, many of are outside the company’s core mission. Determining whether or how to respond to such pressures is a complex process, often requiring substantial time and resources on the part of senior management. In a new paper, “Willing and Able: A General Model of Organizational Responses to Normative Pressures,” Olga Hawn, University of North Carolina Kenan-Flagler Business School Assistant Professor for Strategy, Entrepreneurship, and Sustainability; Rodolphe Durand of HEC Paris; and Ioannis Ioannou from the London Business School provide a dynamic framework for understanding how companies analyze and respond – or don’t respond – to “normative pressures” on matters that include global warming, environmental stewardship, occupational health, executive compensation and corporate governance, among others. This pressure comes from a wide range of interest groups that may include activists, non-governmental organizations (NGOs) and other stakeholders.