Managing stakeholder perceptions: Organized hypocrisy in CSR disclosures on Facebook

Abstract

This study examines stakeholders’ perceptions of CSR disclosures by exploiting big data about the interactions between firms and stakeholders in social media. Given that social media represent public arenas where divergent – sometimes conflicting - stakeholder interests are present and debated, we draw on organized hypocrisy theory to explore how stakeholders react to hypocrisy talk, decisions, and actions strategies employed in CSR disclosures on Facebook. We retrieve and analyze S&P100 firms’ Facebook posts and the related stakeholders’ reactions for the period starting 24th February 2016 to 2nd March 2017. We find that stakeholders exhibit diverse reactions towards firms’ hypocrisy strategies. While stakeholders put more value on firms’ actions-related information, and such actions disclosures attract both positive and negative reactions, talk and decisions disclosures generate positive reactions and reduce negative perceptions. We also investigate how stakeholder reactions trigger firms’ post-disclosure replies and find that firms engage selectively with stakeholders, avoiding those who have concerns or criticism towards firms’ CSR practices. Overall, our findings show that the use of organized hypocrisy disclosure strategies in social media allows firms to manage stakeholder perceptions and maintain legitimacy.