Speak Softly and Use a Big Stick: Decoupling Symbolic and Substantive Aggressiveness

We leverage and extend the concept of decoupling to the impression management (IM) literature to argue that decoupling does not simply allow firms to manage impressions—rather, decoupling is an IM tactic. We examine this argument within the context of corporate political activity (CPA), which entails activities meant to sway the government to a focal firm’s advantage. While CPA may offer a variety of benefits to a firm, it may also provoke public ire due to its reputation as an aggressive and anti-competitive activity. We therefore propose that as firms invest in CPA, they are more likely to engage in competitively aggressive market-based behaviors while concurrently using less aggressive rhetoric—that is, firms decouple their substantive actions from their symbolic rhetoric. We then examine the contingent nature of these behaviors based on a firm’s social approval, and the extent of institutional ownership concentration. We test our hypotheses on a sample of S&P 1500 firms and find support for our hypotheses.