By Thibault Daudigeos, Thomas Roulet, & Bertrand Valiorgue

How can corporate scandals create opportunities for activists to make their voice heard against misbehaving multinational companies? This is the question we aimed at answering in the analytical framework developed in our article. We conceptualise how scandals act as turning points, enabling forms of contestation that would not be otherwise possible.

Very often, stakeholders who oppose the actions of multinational companies are in situation of “pluralistic ignorance”: that is, they do not know that other stakeholders, from consumers to governments, might share their concern against a company. After all, scandals publicise and expose the misconduct of multinationals to a broader audience, thus contributing to a larger and more successful mobilisation against them.

This is especially true when it comes to bringing up issues that were out of the radar in emerging countries (because unethical companies were more able to hide their misdeeds there), but are made visible in the companies’ home countries – thus hurting their bottom line. This is what den Hond and de Bakker call “boomerang effect” , because the misconduct comes back to haunt the misbehaving companies where it will hurt them the most.

However, with the additional visibility comes the opportunity for stakeholders to converge in their claim against the companies. Activists, when isolated, lack the resources to efficiently oppose misbehaving companies and fear repression from them. Corporate scandals enable those activists to become aware of each other and pool their often complementary resources (whether it is political influence, money, or legitimacy). Scandals enable those new allies to agree on focussing their forces and energy in tackling one issue and targeting one specific corporate actor that would epitomise the condemned behaviour.

Support might also come from inside the targeted company. When the misconduct is publicised, some managers and employees, who were unaware of what their company did, might support the outsiders and help lead the process of change. Beyond employees, supporters and partners of the incriminated company are likely to defect and sever their ties, to avoid being embroiled in the scandal themselves. Because of the broad support enabled by corporate scandals against a company, retaliation by the company is more difficult.

In conclusion, scandals provide opportunities for mobilisation against misbehaving multinationals. These make visible potential allies, provide access to a larger pool of resources to take the fight to the global stage, and, finally, dilute the risk for activists within and outside the company to raise their voices.

References:

Daudigeos, T., Roulet, T., Valiorgue, B. (2020). How Scandals Act as Catalysts of Fringe Stakeholders’ Contentious Actions Against Multinational Corporations. Business & Society, 59(3).

den hond, F., de Bakker, F. G. A. (2012). Boomerang politics: How transnational stakeholders impact multinational corporations in the context of globalization. In Lindgreen, A., Kotler, P., Vanhamme, J., Maon, F. (Eds.), A stakeholder approach to corporate social responsibility pressures, conflicts, reconciliation (pp. 275-292). Aldershot, UK: Gower Publishing.