Corporate campaign contributions can enhance firm performance by securing lobbying access to recipient politicians but may also incidentally advance controversial sociopolitical causes peripheral to firm performance that these politicians champion. This paper examines how employees shape firms’ decisions to navigate the trade-off between advancing regulatory interests and mitigating the unintended social impact of corporate campaign contributions. Using the context of the January 6, 2021, U.S. Capitol Insurrection, we analyze how employees’ political leanings influenced U.S. public companies’ decisions to halt campaign contributions to Members of Congress who objected to certifying the 2020 presidential election results (“Objectors”). Firms with employees who supported pro-certification legislators significantly reduced contributions to Objectors following the Insurrection. These reductions constrained firms’ ability to lobby Objectors, even when the latter wield outsized power over firms’ regulatory interests, and were particularly pronounced when employees could easily monitor corporate political spending.

Extant research has overlooked why companies receive varying levels of criticism for not engaging with polarized social issues. Further, little is known about the consequences of engaging with these issues in the face of criticism. To understand which firms are at the highest risk of missteps, we integrate insight from expectations management and identity theory. We argue that external criticism stems from general audiences’ expectations being left unmet. These expectations have two dimensions: predictive, reflecting audiences’ perceptions of the likelihood a firm will engage based on past actions and related cues; and prescriptive, based on their beliefs as to whether a firm has a moral obligation to respond. We further posit that responding to a polarized issue in the face of criticism can backfire, eliciting greater and increasingly bipartisan critique. An empirical analysis of criticism for silence and subsequent corporate responses to a controversial voting law in Georgia supports these arguments. In this context, prescriptive and predictive expectations interacted to lead to mostly Democratic-leaning critique. Firms that subsequently broke their silence received both Democratic- and Republican-leaning criticism afterwards. Post-hoc analyses revealed that early (prior to a buildup of critique) and substantive (vs. symbolic) engagement was associated with less criticism.

A growing body of research considers how consumers react when companies become aligned with a stance on a polarized sociopolitical issue. Prior studies of individual responses have examined customer reactions to specific companies supporting a particular side of a given issue. However, no study has examined whether the resulting reactions may differ depending upon the side the company supports. This may limit the generalizability of these findings, especially because sociopolitical alignment tends to be disproportionately carried out by a small number of companies and predominantly in support of left-wing positions on a small number of issues. We thus provide the first evidence on how customers react to corporate alignment on different sides of the same issue. We do this with two experiments involving well-known real-world companies (Bud Light and McDonald’s) which simultaneously were aligned with different stances on two controversial issues (transgender rights and Israel-Palestine). We find asymmetrically negative effects of sociopolitical alignment on customers: consumers react negatively when a company supports the opposing side but do not react positively when it supports the side they prefer. While the direction of consumer reactions are asymmetrically negative, this effect is symmetric across opposing stances on the same issue.