Interpreting Violence: How Community Context Shapes Corporate Responses to Street Protests

Abstract

Violence that erupts in communities invites complex interpretations that can create a dilemma for business leaders about how to respond. Investigating how organizations respond to violence in protests, we build on the community embeddedness literature and propose that business leaders’ responses to protest violence depend on their perceptions of whether the violence is justified. Leaders may view reported protest violence as evidence of either social disorder or a valid grievance in the community where the violence occurs and where their companies are headquartered. We theorize that business leaders’ interpretations of violence are influenced by their community’s recent history: A history of protest violence unrelated to the social cause underlying the current protest weakens the managerial perception that the social issue is relevant to the community, while a history of grievance-validating events strengthens this perception. Using hand-collected data on corporate announcements following the 2020 Black Lives Matter (BLM) movement, we find that firms are less likely to announce diversity actions in response to reported protest violence in communities marked by persistent violence in previous non-BLM protests, but they are more likely to do so in communities with records of more police shootings. These same community conditions also shape the effect of violence on whether firms decide to publicly endorse the movement when they announce their corporate actions. Demonstrating that violence reshapes the ways that organizations respond to protests, we discuss the implications of our findings for research on violence, social movements, and corporate activism.