Stakeholder Ideological Incongruence and Diffusion of Controversial Practices: Evidence from LGBT Domestic Partner Benefits Adoptions by U.S. public universities
Prior research has shown that organizations tend to adopt contentious practices that align with their stakeholders’ values and resist practices that do not. In this study, we introduce the concept of stakeholder ideological (in)congruence, which refers to the degree to which key organizational stakeholders are ideologically (mis)aligned with a practice, and theorize its relevance for how organizations adopt – and justify their adoption of – contentious practices. In a longitudinal analysis of public universities in the United States that were confronted with the decision to adopt domestic partner benefits, we show that having a conservative-leaning state legislature is associated with universities’ heightened susceptibility to emulating adoption decisions of proximally situated corporations. We also show that the universities with conservative-leaning legislature are more likely to justify their adoption decisions using market-based reasoning, an effect that is amplified based on universities’ resource dependence on the state. We discuss the implications of our theory and findings for research on institutional complexity, stakeholder theory, and cross-sector diffusion.