The value of a company’s ethical reputation has become a focal point for management researchers. We seek to join this conversation and extend the research centered on a firm’s ethical reputation. We accomplish this by shifting our focus away from its impact on external stakeholders to its impact on internal stakeholders. To this end, we rely on signaling theory to explain why a firm’s ethical reputation matters to its employees in an effort to bridge the macro–micro research gap. Across two (...) studies, we propose and demonstrate that a firm’s ethical reputation impacts employee subjective career success in form of career opportunities and work–life balance. Given our signaling theory framework, we also identify and explain when two industry-level characteristics operate as boundary conditions that distort a firm’s ethical reputation signaling properties. Specifically, the results demonstrate that a firm’s ethical reputation is positively related to employees’ perceptions of career opportunities and work–life balance. The results of our studies also demonstrate that the relatively high levels of industry competition and industry regulation weaken the positive impact of a firm’s ethical reputation on career opportunities and work–life balance. Theoretical and practical implications are discussed. (shrink)

In our study, we examine the association between hedge fund activism and a target firm’s corporate social responsibility (CSR) activities and whether activists can promote socially responsible investments while upholding shareholders’ interests. Using different matched samples, we find a strong positive association between the target firm’s CSR in the year before it is targeted by activists and its probability of being targeted by a hedge fund. Classifying hedge fund activists into socially and non-socially responsible funds based on their objectives, we (...) find that both give similar level of consideration to a firm’s CSR activities when initiating campaigns. Similar to DesJardine and Durand (DesJardine and Durand, Strategic Management Journal 41:1054–1082, 2020), we demonstrate that hedge funds have, on average, a negative impact on target firms’ CSR in the years following the initial investments. Complementary to DesJardine and Durand (DesJardine and Durand, Strategic Management Journal 41:1054–1082, 2020), we compare the two types of hedge funds and find an asymmetric effect of the hedge funds’ campaigns. Socially responsible hedge fund campaigns are associated with a large _increase_ in their target’s CSR, whereas non-socially responsible hedge funds _decrease_ this measure in their target. Finally, we find that target firms exhibit a long-term improvement in future stock returns and profitability. These findings provide evidence that certain types of activists, such as socially responsible funds, promote both _stakeholder_ and _shareholders’_ long-term interests. (shrink)