Transforming Markets? Activists’ Strategic Orientations and Engagement With Private Governance

Abstract

Private governance regimes—instances where nonstate actors set rules that govern their behavior and/or the behavior of others—are increasingly common intermediaries between activists and corporations. Activists are often thought to drive corporations to participate in private governance. By participating, corporations hope to be shielded from activist pressures. Yet there are many instances where activists oppose particular private governance regimes, even ones that are seen as leaders in a sector. Why is this? This article contributes answers to this question by examining how activists’ different strategic orientations affect their perceptions of private governance. It unpacks three distinct ideal-type strategic orientations—prefiguration, targeting, and cooperation—activists may hold in their efforts to transform markets and the different forms of private governance each orientation will prefer. It then details how market entry conditions, sequencing and interactions, and feedbacks affect how activists are likely to engage the private governance regimes that develop in a given sector.