Making Sense of and Giving Sense to Management Research on Social Evaluations and Ethical Decisions: A Three Essay Dissertation

Organizations, whether private or public, are subject to evaluations by their stakeholders and society. While positive social evaluations can help organizations build their reputation and social capital, negative evaluations can cause significant social and economic distress. In both cases, stakes are high for organizations. Thus, understanding how social evaluations are formed and taken into account during firms’ strategic decision-making is paramount. This three-essay dissertation builds on the sensemaking and sensegiving literature in order to explain positive and negative social evaluations in the context of ethical decision-making. Specifically, the following three questions are addressed: a. Which types of sensemaking and sensegiving processes do various internal and external stakeholders engage in? b. What are the consequences of key stakeholders’ evaluations of an ethical violation on firms’ strategic decision-making? c. What are the effects of firms’ substantive and symbolic actions on creating positive social evaluations? The question about sensemaking and sensegiving of various stakeholders is addressed in Chapter 1 of this dissertation through the lens of stakeholder theory. A comprehensive review of management studies on this subject published between 1991-2020 reveals an untapped explanatory potential of sensemaking and sensegiving for research on social evaluations and identifies research gaps that motivate empirical studies in the following two chapters of this dissertation. Chapter 2 tackles the question of stakeholders’ evaluations of an ethical violation by conducting two empirical studies – an event study of 577 integrity-based organizational crisis events conducted by 188 S&P 500 firms in 2008 – 2013, and a policy capturing experiment with 96 (executive) MBA respondents. The findings reveal that both media and investor evaluations of an integrity-based organizational crisis influence a firm’s selection of a crisis response strategy, with a firm’s endowments of social approval modifying the relationship between media evaluations and response strategy selection. Chapter 3 explores the effects of firms’ substantive and symbolic actions on positive social evaluations in an empirical study of 556 corporate social responsibility (CSR) actions conducted by twelve of the largest oil and gas firms in 2015 – 2018. Firms are shown to draw more media attention and positive media evaluations when they engage in environmental CSR actions, as compared to social CSR actions. While the effect of a firm’s CSR action on media attention is shown to be influenced by a firm’s use of organizational virtue orientation rhetoric within a CSR announcement, the effect of a firm’s CSR action on media’s positive evaluation is shown to be influenced by the media’s political bias. Overall, this dissertation contributes to strategic management research by increasing scholars’ knowledge of the dynamic, reciprocal relationships that exist between stakeholders’ emotionally-driven social evaluations and firms’ strategic actions, behaviors, and decisions. Broadly, this dissertation’s findings contribute to the literature on social evaluations with specific contributions to stakeholder theory, sensemaking and sensegiving literature, signaling theory, crisis management research, and CSR researc