Firms are increasingly facing campaigns by nongovernmental organizations (NGOs) over a broad range of issues such as the environment, labor, human rights, consumer rights and animal rights. The number of international NGOs has increased by 400% in the last decade and the number of mentions of NGOs in the Wall Street Journal has increased twenty-fold during this period. Corporate managers often fail to appreciate the deeper dynamics behind these campaigns and, as a result, respond to them in ineffective or even counterproductive ways. These managers are also often surprised at how effective small – and often ideologically radical – NGOs can be in tackling much larger firms. In this chapter I will (1) differentiate between two very different types of campaigns – watchdog campaigns and proxy war campaigns, which need to be understood and responded to in very different ways; (2) explain how it is that these small “David” NGOs can beat “Goliath” corporations; and (3) provide some guidance for managers on how to avoid and respond to these campaigns. The discussion presented here draws on three years of qualitative research including interviews, case studies and a large-scale global survey of NGOs that have campaigned against firms.

Differentiating watchdog campaigns from proxy war campaigns

Early neo-institutional theory focused on how organizations, in order to gain and maintain the legitimacy necessary to survive, must conform to institutional demands in the form of norms and rules.