Noblesse Oblige? Firm Status, Social Crisis, and Prosocial Claims

Topic:	Noblesse Oblige? Firm Status, Social Crisis, and Prosocial Claims
Time&Date:	10:30 am -12:00 pm, May 15, 2025 (Thursday)
Venue	Room 403, Teaching Complex D Building
Speaker:	Michael Jensen University of Michigan
Abstract:	Whereas high status typically grants firms access to more resources and opportunities, high status firms also face suspicions about their moral character, even in the absence of specific misconduct, thus suggesting that character suspicion is an integral aspect of status. We argue in this study that social crises provide opportunities for high-status firms to make prosocial claims to counteract the suspicion that they perpetuate, or are indifferent to, social problems. We identify three key factors—social crisis intensity, local victims, and local counterclaimants— that are likely to influence whether high-status firms make prosocial claims during social crises. We focus empirically on prodiversity claims in quarterly earnings calls before and after the social crisis triggered by the May 2020 murder of George Floyd. We find that this crisis led to a significant increase in the propensity of high-status firms to make prodiversity claims. The propensity to make prosocial claims is particularly high for high-status firms headquartered in cities experiencing high social crisis intensity, whereas being located in cities with a high concentration of counterclaimants were less likely to do so. Our study provides a novel perspective on social crises as opportunities for high-status firms to leverage prosocial claims to defend themselves against character suspicions. We also raise important questions about whether these claims are simply acts of impression management or represent genuine efforts to engage more deeply with the communities in which these firms are embedded.
Biography:	Prof. Michael Jensen is a Professor of strategy at Ross School of Business, University of Michigan. His research focuses on the role of social structures in markets. He views markets as social structures that encompass social networks and cognitive categories. Within this broad theoretical framework, his research focuses mainly on deepening our understanding of how status, reputation, and identity shape various important outcomes for organizations and individuals in a variety of different empirical contexts.