Proactive versus Reactive Issues Management Strategies and Stakeholder Support for a Company

The way in which companies manage social issues can affect how stakeholders perceive these companies and their actions. Research has suggested that proactive issues management strategies may be more effective than reactive strategies. However, this research has mainly focused on environmental management, and has not taken into account how the effect of proactivity can depend on characteristics of the issue at hand. The current study examines the effect of proactive versus reactive management of an issue related to consumer health on stakeholder support for the company, and the potential moderating effects of the perceived locus of causality of the issue (either internal or external to the company). The results of an experimental vignette study show that a proactive approach towards the issue leads to a higher willingness to use resources to the benefit of the company than a buffering approach, but did not differ from a reactive approach. However, an exploratory analysis suggests that a proactive approach may specifically lead to a higher willingness to invest in the company than a reactive approach. This effect of proactive issues management on willingness to support the company is observed both when stakeholders perceive the issue as largely caused by the company, and when they perceive it as largely the result of external factors.