This study by Todd Schifeling and colleagues, published in the Strategic Management Journal, investigates when outsider stakeholders can influence organizations to make transformative changes. Examining coal-retirement and solar-investment decisions in the U.S. electric utility industry from 2008 to 2015, the authors show that workers and local communities tied to coal plants slowed retirement decisions, while pressure from the Sierra Club’s Beyond Coal campaign accelerated them. For-profit utilities were generally less responsive to activist pressure than government and cooperative utilities. However, activists gained greater influence when their interests aligned with powerful insider stakeholders. Alignment with consumer advocates encouraged for-profit utilities to retire coal generators, producing transformative change, while alignment with customers generating solar power encouraged exploratory investments in solar capacity. The findings demonstrate that outsider stakeholders can help organizations overcome resistance to adaptation, but their influence depends on organizational governance and their ability to build alliances with insiders who support specific forms of change.
Beyond coal: When can outsider stakeholders drive transformative change?
