Juggling During Corporate Change: How Executive Job Demands Affect Corporate Social Irresponsibility

High job demands have been argued to constrict strategic leaders’ cognitive capacity and thus may cause harm to organizations. This study examines the interaction between temporary and existing job demands during critical corporate change events (asset divestitures). We find that temporary increases in executive job demands from intense divestiture activities do result in higher corporate social irresponsibility (CSI). However, female CEOs and new insider (vs. outsider) CEOs mitigate the impact of divestitures on CSI. We also document that higher diversification strengthens the impact of divestitures on CSI, whereas this effect is reduced in firms operating in a more uncertain market. Challenging prior assumptions, these findings suggest that job demands may actually expand executives’ decision scope. Thus, some characteristics of job demands, especially when pressure and challenges come from gender role stereotype and reliance on external stakeholders, could result in positive firm outcomes by reducing CSI. This study sheds light on the factors that contribute to the ‘bright’ side of executive job demands in the context of corporate portfolio change and highlights the importance of looking into specific sources and mechanisms, rather than the overall magnitude of job demands on executives, to better understand their heterogeneous impact on organizations.