Cognitive Antecedents of Highlighting and Decoupling in Response to Social Pressure

Abstract

Firms can engage social pressures in a variety of substantive and symbolic ways, such as highlighting (pursuing both substantive and symbolic activities) and decoupling (pursuing only symbolic appearance while avoiding substantive action). To better understand such responses to social pressures, we offer an integrative institutional-cognitive model suggesting that publicly traded status, certainty regarding the social pressure itself and perceived threats in the firm’s issue array predict firms’ highlighting and decoupling. We test these ideas using data on how restaurants responded to a major nutritional pressure campaign. Our findings suggest that when firms face social pressures, managers’ perception regarding issue certainty and perceived threats in the firm’s issue array positively affects a highlighting response. Furthermore, both the managerial accountability associated with publicly traded status and issue array threats negatively affects response decoupling. Taken together, these results suggest that cognitive elements are the more consistent drivers of response to social pressures, and we discuss these findings in light of their theoretical relevance and suggest future directions for research.