In this issue: Spring 2020

Faculty Profile

Business Divided

Michael

If you’re a current or former chief executive officer with a history of personal misconduct, chances are Daniels’ new assistant professor of management Michael Nalick has seen your record.

For his research, Nalick combed through 20 years of media articles for stories about company leaders’ DUIs, drug and alcohol abuse, sexual misconduct, domestic violence and other indiscretions to build a data set that enabled him to study how scandals like these impact firms.

One of Nalick’s 10 current research projects will examine how board directors involved in corporate misconduct at one firm end up handling a similar event when it occurs at another firm where they also occupy the director’s chair.

Nalick wants to know if they are learning, positively or negatively, from the misconduct—i.e., are they more likely to conduct it again if they “get away with it” the first time with minimal consequences?

Observing national political scandals and politicians’ resulting strategies contributed to Nalick’s curiosity and desire to investigate whether similar tactics are being used in business. Daniels’ core tenet of ethical leadership was appealing to Nalick in selecting an academic institution where he could both teach and conduct his research.

He sees the College as being at “the forefront of the movement to re-examine the purpose of a business. Is it really just creating a product for profit? Or is it creating a strong community?”

The intersection between politics and business has long fascinated Nalick. After earning his master’s in public policy, he went to work as a policy director for an elected official in Travis County, Texas. He got the research bug when he realized during meetings with companies like Facebook and Samsung that “they all had different strategies toward me [as a policy director].”

With a PhD in strategic management from Texas A&M, Nalick’s research now focuses on uncovering the nuance of those strategies. One of his recent publications analyzed how firms react to scandalized politicians. He found that their strategy is more complex than the simple decision to either maintain or end the endorsement.

At times, companies double down on their support of a politician. They might also maintain support while developing a new relationship with a rival—just in case. In other instances, they initially appear to drop the relationship and then come back around when things blow over.

Nalick said this boomerang tactic played out when companies dropped their support of the 2016 Republican National Convention when Donald Trump secured the nomination, then renewed their support of the GOP once Trump was elected president.

Likewise, when former Democratic congressman Anthony Weiner resigned from office after a sexual misconduct allegation against him went viral, several companies dropped their support of the politician, then renewed it when he (unsuccessfully) ran for mayor of New York City.

The major takeaway across Nalick’s scholarship is that just as our culture is more divided and partisan than it has ever been, so are companies. Nalick’s work shows how this condition is shaping everything from firms’ lobbying strategies to their likelihood to speak out on polarizing social issues.

As the 2020 election heats up, corporate involvement is only going to become more apparent. “Firms are getting more political,” Nalick said. “To me, that’s a really big deal.”

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