CORPORATE ETHICAL IDENTITY IN CONTROVERSIAL INDUSTRIES: THE ROLE OF SOCIAL MEDIA SIGNALING

The idea for which the value in the economic sense and values in the ethical meaning is kept separate has been overcome: firms are now being evaluated not only for the economic value they generate but also for values, desirability or legitimacy underlying their activity. The perception of a brand’s fairness, ethic, or social utility from stakeholders has been recognized as a source of competitive advantage. Consequently, firms are striving to adopt ethical strategies and invest in carefully crafted communicative practices to reduce information asymmetry. To meet this aim, firms employ both traditional and new means of communication to send alerts on ethical achievements and make stakeholders aware of their ethical commitment. The need to stronger influence the perception of business ethics among stakeholders is more pronounced for businesses operating in controversial industries which are more likely to be affected by the scepticism of business actors. Building on signaling theory, this paper asks whether and how ethic-related social media communication could represent a signaling instrument able to stimulate the formation of trust between stakeholders and firms and if this relationship is stronger in controversial industries.