ORGANIZATION SURVIVAL VIA DYNAMIC NONMARKET STRATEGY: SOCIAL MOVEMENT CONTENTION AND INDUSTRY COUNTER-MOBILIZATION IN SCOTCH WHISKY DISTILLING, 1680–1922

Michel Lander H.E.C. Paris

Pursey Heugens Rotterdam School of Management

Marc VanEssen University of South Carolina

Timothy Werner University of Texas at Austin

November 2019

Abstract We document and theorize about an elongated period of nonmarket strategic initiatives by Scottish temperance movements and whisky distillers, ensnared in a protracted conflict with the legitimacy and survival of the organizational form at stake. We use generalized estimation equation and event history modeling techniques on a unique, hand-collected dataset to bring these dynamics in purview. Analyses show, first, that nonmarket initiatives by social movements spur counter-initiatives by the industry, thus adding interplay as a salient element to the corpus of nonmarket theorizing. Second, industry countermobilization is found to drive down organizational mortality in a contested organizational field, which sheds new light on the long- term effectiveness of nonmarket strategic initiatives. Strikingly, both the repertoire of initiatives taken and the dynamics of (counter-)mobilization found in the Scotch whisky distilling field are as recognizable today as they were several centuries ago.

1 INTRODUCTION

Institutional theory argues that organizations can fall victim to nonmarket forces that delegitimize organizational forms and unsettle existing institutional arrangements (Hiatt, Sine, &

Tolbert, 2009; Oliver, 1992; Stryker, 2000). These forces can involve the regulative dimension of an organization’s institutional environment in the form of the coercive power of the state, or social movements that focus on the cognitive and normative dimensions (Scott, 2001). These two oppositional forces occasionally also coalesce in challenges to the societal license to operate of organizations. When this happens, marketplace competitiveness is an insufficient quality for survival. Instead, scholars have posited theoretically that survival may drive organizations’ efforts to shape their environments via nonmarket strategy (Schneiberg, King, & Smith, 2008;

Walker & Rea, 2014). That is, organizations aim to deflect state coercion and counteract the influence of those social movements that seek to delegitimize or even deinstitutionalize the focal organization or organizational form via nonmarket engagement of their own (Hiatt et al., 2009).

These interactions between movements, organizations, and the state are consistent with the broader observation that organizational forms rarely go uncontested in complex environments (Lounsbury, Ventresca, & Hirsch, 2003; Meyer & Rowan, 1977). Importantly, however, they also suggest that organizations’ formulation of nonmarket strategy is a dynamic, co-evolutionary process in which organizations, especially business organizations, have less agency than is often appreciated (McDonnell & Werner, 2018). This dynamic conceptualization of nonmarket strategy processes harbors three interrelated elements. First, social movements and other external stakeholders regularly attempt—either through private politics that directly target cognitive and normative perceptions of the organization (Soule, 2009; Werner, 2012) or through public politics that target the organization indirectly through the regulative power of the state

2 (McCarthy & Zald, 1977; Schneiberg, 2002)—to eliminate or constrain the behavior of particular organizations or organizational forms with which they conflict materially or ideologically.

Second, the targeted organizations respond to this mobilization dynamically via nonmarket counter-mobilization of their own, which may too employ a mixture of private and public politics (McDonnell, King, & Soule, 2015; Hiatt, Grandy, & Lee, 2015). Third, depending upon whether this counter-mobilization succeeds in overcoming its movement critics, the organization survives or fails—or in the extreme, the organizational form itself is eliminated.

In this paper, we develop and test this dynamic, co-evolutionary process, ultimately seeking to answer two questions: first, whether the mobilization of social movements and their initiation of subsequent nonmarket strategic initiatives leads to the unintended consequence— from the movement’s perspective—of increased and long-lasting engagement in nonmarket counter strategies by representatives of the contested organizational form. Focal organizations can respond to social movement activity by crafting formal (nonmarket action) associations of their own and by engaging in grassroots activities to directly address movements’ claims and, via these efforts to defang their critics, to indirectly reduce the threat of state intervention (Carlos,

Sine, Lee, & Haveman, 2018; Hiatt & Carlos, 2019). Second, we ask whether this increased engagement by focal organizations increases their chances of survival, despite the on-going efforts of their social movement opponents. Addressing this latter question effectively would offer a unique opportunity to assess the long-term consequences of investments in nonmarket strategic initiatives by socially contested business organizations.

We examine the protracted interaction between temperance movements and the whisky trade in Scotland to test two theoretically motivated hypotheses, derived from the above questions. We have constructed a unique, hand-collected dataset to test our hypotheses in this

3 context in two steps. First, we use generalized estimating equation (GEE) models to establish whether temperance movements’ anti-whisky mobilization efforts shaped distilleries’ nonmarket strategy choices. Specifically, we assessed whether temperance movement activity triggered the whisky industry to engage in counter-mobilization and in building a non-market institutional infrastructure of its own (Carlos et al., 2018). Second, we use event-history models to establish the effectiveness of the distilleries’ nonmarket strategies in terms of their impact on distillery mortality rates. The idea here is that whereas temperance movement mobilization can speed up whisky industry exit by narrowing the whisky industry’s resource base and diminishing its entrepreneurial opportunity structure (Hiatt et al., 2009; Hiatt & Carlos, 2019), industry counter- mobilization can maintain or even improve nonmarket conditions and thus slow down the whisky distillery mortality rate. Ultimately, we find support for both hypotheses and for our overarching theoretical argument that social movements and their organizational targets are mutually engaged in a co-evolutionary dynamic. Thus, along all three dimensions of the institutional environment (Scott, 2001), movements and their targets struggle for dominance, and new, lasting nonmarket strategic initiatives by industry representatives are spurred primarily when temporary victories are recorded for the movement (Meyer & Staggenborg, 1996).

Through this analysis, we contribute to multiple streams of organizational and strategy scholarship. First, we add to the literature on the movement-organization interface (e.g., Carlos et al., 2018; Meyer & Staggenborg, 1996; McDonnell et al., 2015) by demonstrating how the tactics social movements adopt lead to a tactically similar counter-movement by the focal organization. Further, we show that this tit-for-tat response in terms of tactical repertoires appears to weaken the movement and prolongs the survival of focal organizations. Second, in terms of strategy formulation in the nonmarket arena (see, e.g., Bonardi, Holburn, & Vanden

4 Bergh, 2006; Hillman & Hitt, 1999), we show that focal organizations do not have as free a hand in formulating nonmarket strategy as extant literature assumes. Instead, we demonstrate that nonmarket strategic initiatives are often reactive and emerge in response to delegitimization attempts by field-level actors beyond industry competitors. Third, we contribute to the literature on organizational survival (Hiatt et al., 2009; Ruef & Scott, 1998; Soule & King, 2008) by showing how nonmarket counter-mobilization can elongate the survival of an organizational form. In doing so, we show that grassroots nonmarket tactics, which stimulate broad popular support for an organization, are roughly fifty percent more effective than more traditional forms of political mobilization, such as the creation of trade associations. Lastly, we also contribute to the emerging literature on the use of corporate social responsibility initiatives as a political tactic

(Dorobantu, Kaul, & Zelner, 2017; Scherer & Palazzo, 2011), showing that the provision of public goods by an industry (even in centuries past) can pay political benefits. By looking at the effects of mobilization and the related process of counter-mobilization, we thus add a ‘strategic’ nonmarket dimension to the study of movements and counter-movements, demonstrating how strategically interacting parties “produce historical, path-dependent trajectories and a sequence over time of different movement effects” (Schneiberg et al., 2008: 657).

SOCIAL MOVEMENTS, DYNAMIC NONMARKET STRATEGY, AND ORGANIZATIONAL SURVIVAL: THEORY AND HYPOTHESES

Social movements need to create an understanding amongst wide societal audiences of the problematic conditions or situations they seek to address. To do so, they attribute blame or point out opportunities to third parties, propose alternatives to the status quo, and build social platforms for change (Benford & Snow, 2000; Carlos et al., 2018), hoping to “organize experience and guide action” (Snow, Richerford, Jr., Worden, & Benford, 1986: 464). In

5 challenging organizations and organizational forms, social movements can act along three dimensions of the institutional environment: normative, cognitive, and regulative (Scott, 2001).

Normatively, they can challenge organizational forms by discrediting certain properties, condemning certain behaviors, and suggesting alternatives to both (Meyer & Rowan, 1977; Hiatt et al., 2009). Cognitively, they can, through education and persuasion, more fundamentally discredit the taken-for-granted nature of the organizational form (Meyer & Rowan, 1977;

Aldrich & Fiol, 1994). Undercutting the cognitive foundations of an organizational form can be a lengthy process, however, because organizational forms are usually buttressed by non-conscious beliefs once they have become fully institutionalized (Soule, 1997; Hiatt et al., 2009). Finally, via the regulative dimension, movements can persuade actors with coercive authority, principally the state, to enact rules, impose sanctions on, or withhold resources from organizations, impacting the survivability of the organizational form (McCarthy & Zald, 1977; Schneiberg,

2002). In the following two sections, we hypothesize, first, as to why and how the targets of social movements will counter-mobilize in response to movement activism, and, second, as to the effectiveness of this counter-mobilization in terms of prolonging the survival of the targeted organizations.

Movement and counter-movement mobilizations in the nonmarket

In the wake of social movement mobilization, some organizations respond by either acknowledging their wrongdoing or claiming that there is simply a general misunderstanding about the link between their actions and the movements’ claims (Sutton & Callahan, 1987).

Other organizations engage in reactive, defensive tactics to mitigate the negative effects they experience from the movements’ actions, such as deflecting attention away from the situation

6 altogether or attacking those who criticize them (Barros, 2014). Still other organizations sever ties with controversial or stigmatized categories or actors, in hopes that their disengagement will restore favor in the movement’s and broader public’s eyes (Piazza & Perretti, 2015; Vergne,

2012). These responses are thought to shape the joint environment of the firm and movement

(Benford, 1993; Haines, 1996), and in particular their respective political opportunity structures

(e.g., Schneiberg et al., 2008; Vogus & Davis, 2005; Meyer & Staggenborg, 1996; Zald &

Useem, 1987).

Despite these understandings, little research examines how organizations’ (especially, firms’) nonmarket strategies, beyond their proximate response to activists, change when they are targeted by social movements. That is, although work shows that targeted organizations vary in their immediate responses to movement activism, with some more likely to engage in impression management (McDonnell & King, 2013), to alter extant practices so as to acquire an activist- receptive identity (Briscoe & Safford, 2008), to start new organizational initiatives that are more closely aligned with activists’ demands (Hiatt & Carlos, 2018), to participate in activism targeting similar organizations (McDonnell, 2016), or to create social management devices

(McDonnell et al., 2015), little research examines how organizations strategically mobilize more broadly and for the longer term to defend themselves along the three dimensions of their institutional environment in the wake of a social movement challenge.

Just as scholars working at the nexus of organizations and movements have not explored this possible response by organizations, nonmarket strategy researchers have largely ignored the role of social movements in dynamically and responsively spurring organizations’ nonmarket strategic decision-making. Instead, these researchers have largely modeled firms’ formulation of their nonmarket strategies as being relatively unilateral and voluntaristic, portraying

7 organizations as having wide latitude in deciding whether and how they will engage on the regulative dimension of their institutional environments (see, e.g., Bonardi et al., 2006; Hillman

& Hitt, 1999; Schuler, 1996). This focus on treating the regulative dimension as a “political marketplace” and thus on rational motivations for nonmarket activity is surprising, because research has often shown that corporate political investments are unassociated with firms’ market performance and thus seem to represent poor quality investments, with the exception perhaps of those made by firms operating in regulated industries (e.g., Hadani & Schuler, 2013). This lack of a correlation between nonmarket activity and firm market performance suggests that alternative sources of pressure in firms’ institutional environments may help drive the former.

In particular, there are several reasons to expect that social movement activism (Carlos et al., 2018; Hiatt et al., 2009) may have the “unintended effect” of creating a dynamic and protracted nonmarket counter-mobilization on all three dimensions of the institutional environment by the targeted focal organizations. First, the regulative dimension historically has been and still is today a crucial dimension of the institutional environment on which activists challenge organizations, as they often seek to mobilize the state to increase regulation of industry

(McAdam & Scott, 2005; Clemens, 1993; McCarthy & Zald, 1977). Beyond providing a proximate response to an activist attack, counter-mobilization in nonmarket strategy via political and social engagement may also lead to a long-term investment in a public reservoir of goodwill or the building of a capability that organizations can call upon when challenged by activists in the future (Henisz, Dorobantu, & Nartey, 2014). Second, social movement mobilization on the regulative dimension often spills over and eases activists’ challenges on the other two institutional dimensions (Haveman, Rao, & Paruchuri, 2007; Schneiberg, 2002; Edelman, 1990).

Organizations may therefore be especially motivated to build nonmarket social capabilities or

8 nonmarket cognitive frames that are similar to those of their social movement opponents, and that address both the valence of normative sentiments toward and the cognitive perceptions of the industry by its societal audiences (Hiatt & Carlos, 2018). Finally, defeat on any of the three environmental dimensions can lead to significant constraints on the organization’s resources and operations (Zald, Morrill, & Rao, 2005) and even, as we discuss further below, to organizational failure or a prohibition of the organizational form itself (Scott, 2001).

These arguments suggest that organizational responses to activism ought to involve not just temporary reciprocal initiatives but rather more substantial and broader counter-mobilization commitments to engage on the regulative and normative dimensions of their environments.

These commitments could consist of strategic investments in nonmarket activities, understood in the context of firms to include both corporate political activity (CPA) and corporate social responsibility (CSR). This particular form of counter-mobilization may therefore parallel to some degree the tactics of the social movement in order to address the proximate challenge posed by the movement: by responding in a similar manner, the targeted organizations can use the same tactics as the social movement as an instrument both for challenging and undermining their rivals’ efforts (Kaplan, 2008, Kellner, 1992) and for winning audiences, such as policymakers and other interested publics, to their cause in the long run.

For example, with regard to CPA, when labor in the U.S. began to amass greater political power through union organizations and to use that power to influence public policy at the turn of the 20th century, business counter-mobilized in 1912 through the permanent establishment of a national-level chamber of commerce organization, and that body, the U.S. Chamber of

Commerce, remains over 100 years later the top-lobbying organization in the U.S., despite a substantial decline in union membership (Verini, 2010). Similar qualitative examples exist with

9 regard to other, less formal, CPA-specific tactics that social movement activists may employ against organizations: Walker (2014) documents how a grassroots social movement in the

Chicago suburbs that organized against the acquisition of a rail line by Canadian National (CN) led CN to hire a public affairs consultancy to create a grassroots campaign on behalf of the firm that sought not only to counteract the social movement before the relevant regulatory bodies, but also, via CSR-oriented arguments, to build a broad-based coalition for CN that it could call upon when nonmarket challenges arose during the implementation of the acquisition.

These examples and their underlying logic lead to the following pair of hypotheses, which formally argue that the focal organizations of social movement activism will counter- mobilize in tit-for-tat fashion. This means that focal organizations will often employ nonmarket tactics that mimic those of the movement, and may even use these tactics more intensively and persistently.

Hypothesis 1a: When social movement mobilization involves organizing via formal associations, the focal organizations of this activism will mobilize in formal associations of their own at a higher rate.

Hypothesis 1b: When a social movement is able to mobilize a larger membership, the focal organizations of this activism will mobilize via grassroots efforts that signal mass support for the organization at higher rates.

Organizational nonmarket counter-mobilization and survival

To assess the effectiveness of organizations’ nonmarket counter-mobilization as a response to the activism of their social movement challengers, we examine whether the forms of mobilization predicted by Hypotheses 1a and 1b affect focal organizations’ mortality rates.

Although organizational vital events are a common measure of social movements’ efficacy (e.g.,

Hiatt et al., 2009; Schneiberg et al., 2008; Haveman et al., 2007; Ruef, 2004; Rao et al., 2000), existing studies focus almost exclusively on movements’ tactics and actions, leaving issues

10 related to the dynamics and effectiveness of focal organizational nonmarket counter-mobilization strategies unaddressed. For example, in their study of the temperance movement’s effects on the survival of American breweries, Hiatt and his associates (2009) explicitly note that their analysis

“does not address how the effectiveness of social movement organizations might be moderated by characteristics of the targets (e.g., industries or organizations) of social movement activity”

(660). Specifically, they note that the fragmentation of breweries in the U.S. may have contributed to social movement success against them, and although they do model the density of breweries, they do not model the breweries’ political counter-mobilization, including any formal or informal attempts to influence public policymakers or other nonmarket stakeholders. Scholars of nonmarket strategy have similarly left organizational survival unexamined as a dependent variable, as the vast majority of work in this space instead focuses on whether and how CPA affects financial market- and accounting-based measures of firm performance (see, e.g., Hadani

& Schuler, 2013).

There are multiple reasons to expect that social movement-motivated nonmarket mobilization by targeted organizations will reduce a movement’s efficacy, reverse its progress, and close off opportunities for its future development (Schneiberg et al., 2008), thus extending the focal organizations’ lifespans. First, the simultaneous presence of social movement and focal organizational counter-movement creates the potential for disputes in which different actors emphasize their versions of reality in form of competing cognitive frames, affecting the cognitive dimension of the institutional environment (Benford, 1993; Haines, 1996; Hiatt & Carlos, 2018).

Further, these cognitive contests can affect the regulative institutional dimension of organizational fields as well, as organizations may highlight their positive attributes or those of their organizational form before audiences such as citizens or policymakers, while the social

11 movement stresses the negative characteristics of both (Levin, Schneider & Gaeth, 1998: 158-

167). The same can be argued for the potential social and economic consequences of the organizational form (Levin et al., 1998: 167-178).

An example of how such framing elongated the survival of an organizational form can be seen in the efforts of the U.S. tobacco industry. Rather than allow itself to be shut down by the claims of public health advocates, the industry mobilized politically by exploiting important constituency links with powerful members of the U.S. Congress (arguing that the industry was an important source of employment), creating research institutes that went so far as to highlight the health benefits of tobacco, and, only when the industry’s hand was completely forced, making marginal regulatory concessions that still did not provide full disclosure of the health risks of smoking (Dethick, 2002; Pertschuk, 2001). In combination, these nonmarket efforts allowed the industry’s member organizations to survive and operate with relatively few regulatory constraints, well past the point when activists and scholars had established clear evidence of the threat of smoking to human health (Jones, 1997; Freudenberg, 2014).

A second reason to expect that organizational counter-movements will reduce the effectiveness of a social movement is that when contention is focused on the regulative dimension, formal organizations, which have greater resources and are not “outsiders” to the political process, are advantaged. That is, established organizations, such as firms, have preexisting constituency connections and structural power in the economy that they can call upon politically when their organizational survival is at risk, even when they have not been employing more active political instruments such as lobbying and campaign contributions. Evidencing this,

Duchin and Sosyura (2012) find that despite broad public disapproval of and activism against bailing out the financial system in the wake of the 2008 financial crisis, even those firms that

12 were just passively active in politics (i.e., they were represented by a member of a relevant

Congressional Committee) were more likely to receive bailout funding from the Troubled Asset

Relief Program that allowed them to continue their operations. In contrast, social movements are often understood to form because they are quintessential political outsiders, and thus lack power in the political process (Gamson, 1990). Additionally, much movement activism is relatively

“episodic” in nature (Hiatt et al., 2015), meaning that movements often have to adopt transactional, as opposed to relational, approaches to nonmarket strategy (Hillman & Hitt, 1999), which puts them at a significant disadvantage to the established organizations they are challenging. This disadvantage would be worsened still if our Hypotheses 1a and 1b were supported, and if challenged organizations indeed adopt nonmarket tactics that persist beyond the immediate period of movement-organization contention.

For these two reasons we expect that when social movement activism leads organizations to formally counter-mobilize in politics, these counter-mobilization initiatives will enhance organizational survival. We can formalize this reasoning as follows:

Hypothesis 2a: The failure rate of the focal organizations of social movement activism is negatively associated with their nonmarket counter-mobilization via the creation of formal associations.

We similarly expect organizational survival to be enhanced by focal organizations’ grassroots efforts, which target the normative dimension of their institutional environment, principally through CSR. Since organizations deploy grassroots efforts in an effort to show that their market aims are shared by broader constituencies (Walker, 2014), these efforts may be a particularly efficacious way to demonstrate the normative values and worth of the organization/organizational form to public policymakers and other publics. For example, via

CSR-focused grassroots efforts that include the provision of public goods such as infrastructure

13 or healthcare, organizations can argue that they are providing benefits that, in their absence, might go unprovided or have to be provided by the state. Boddewyn and Doh (2011) argue theoretically that provision of such public goods provides organizational actors with a competitive advantage on the normative and regulative dimensions of their institutional environment, as social movements and other actors cannot easily match these efforts. In the U.S. context, evidence suggests that firms are advantaged in nonmarket strategy when they engage in such efforts, with more socially responsible firms gaining more access to policymakers (Werner,

2015), as well as pecuniary benefits via greater government contracts (Flammer, 2017). Both of these outcomes—enhanced influence over regulation and enhanced top-line revenues—have clear and positive implications for organizational survival. Thus, we expect these social movement-motivated but less direct and more informal grassroots efforts by focal organizations to enhance or their vitality. In formal terms, we argue:

Hypothesis 2b: The failure rate of the focal organizations of social movement activism is negatively associated with their nonmarket mobilization via the sponsorship of grassroots efforts that signal mass support for these organizations.

EMPIRICAL CONTEXT & METHODS

Empirical context

The Scotch whisky distilling industry offers an empirical setting that is uniquely suited to observe the dynamics we have theorized about concerning social movement mobilization, focal- organizational counter-mobilization, and the effects of both on organizational survival in practice, for several reasons. First, excellent written archival records exist for this industry and are continuously available since the founding of the first legally chartered distillery in 1680, which offers a unique opportunity to study the long-term effectiveness of nonmarket strategic initiatives from both angles of the movement-organization relationship. Second, the whisky trade

14 is special in that it has historically been an important pillar of the Scottish economy, while it has also had a hand in aggravating many woes in Scottish society over the centuries—ranging from alcohol abuse through indolence and unemployment to domestic strife—such that this is a truly contested industry that cannot simply be hailed or condemned off the cuff. Referred to as ‘the curse of Scotland’, alcohol abuse was widely recognized as a social problem, as described by

William Collins in 1834 (quoted in King, 1979:6): “So much has spirit drinking become associated with customs and practices in Scotland, that there is scarcely an event in life, scarcely a circumstance that occurs, not a transaction can be done, or a change can be effected, with which spirit drinking is not associated: it is associated with our births, and with our deaths, with our marriages and baptisms; it is associated with a man’s entry on any employment, with his apprenticeship, with his change of employment in the same work; it is the complimentary usage of life among the middling and lower orders; it is employed in making bargains, at the payment of accounts, at fairs and roups, and every possible circumstance of life. And that is the greatest difficulty we have to contend with: it struck its fibrous roots into everything so deeply, that to tear up the spirit-drinking practise is like tearing up the whole social system of society.” Third, the repertoire of nonmarket initiatives used by social movements and focal organizations to contest the Scotch whisky market over the centuries spans both CPA and CSR and thus remains surprising recognizable and relevant for contemporary nonmarket strategy scholars (Den Hond,

Rehbein, de Bakker, & Lankveld, 2014; Lawton, Doh, & Rajwani, 2014).

Within this context, we focused on two dynamic processes involving nonmarket strategic initiatives. First, to test the theoretical ideas captured in Hypotheses 1a and 1b, we looked into the dynamic interaction between the nonmarket strategic initiatives developed by social movements, and the responses these activities provoked by the whisky industry. Second, to

15 scrutinize the ideas laid down in Hypotheses 2a and 2b, we investigated whether the CPA and

CSR activities undertaken by the whisky industry were effective in terms of buffering the pressure of social movements, thus reducing the failure rates of whisky distilleries.

To analyze the first process, we set our observation window at 1840 – 1922. We started our observations in 1840, as this was the founding year of the very first national temperance organization in Scotland, the Scottish Temperance League (STL). Whereas temperance and abstinence societies initially followed a moral suasion framing strategy, the passing of the Maine

Liquor Law in the U.S. in 1851 opened the eyes of many to the possibilities offered by legislative action (Blocker Jr. et al., 2003; King, 1979; Logan, 1983). Although the Scottish

Temperance League remained committed to propaganda and education as its primary tools, subsequently founded societies like the Scottish Permissive Bill Association (SPBA, founded in

1855) pressed for legislative intervention. In their opinion, the drink problem was too serious to be addressed through moral suasion alone (Logan, 1983). The prohibitionists built their case carefully by integrating physiological, psychological, and pathological research findings into their arguments. In order to win politicians for their cause, the prohibitionists used framing tactics that had proved successful in anti-slavery campaigns, which lead to the Slavery Abolition

Act of 1833, namely the public meeting, the deputation, and the petition (Logan, 1983).

We ended the observation window in 1922, when the STL amalgamated with the SPBA, then the second largest temperance organization in Scotland. We focused on these two temperance organizations because (a) both temperance organizations employed very different tactics in their efforts to challenge the whisky industry, (b) they were by far the largest temperance organizations in Scotland at the time, and (c) their membership records are very extensive and detailed. Before 1840, there were little organized social movement activities

16 targeting the whisky industry in Scotland, and whisky distilleries—possibly as a consequence— did not structurally engage in either CPA or CSR activities. For this first analysis, our sample comprises 205 distilleries and 9,403 distillery-year observations.

To analyze the second process, grasping the effects of nonmarket strategic initiatives by whisky distillers on organizational survival, we used a sampling frame starting at the dawn of the legal whisky industry in 1680 and again finishing with the aforementioned amalgamation of STL and SPBA in 1922. Whisky production prior to 1680 mostly involved small quantities and was organized around farm and croft (Hume & Moss, 2000). This started to change with the founding of the first large-scale distillery in 1680 (Ferintosh), an event that is commonly seen to mark the beginnings of the professional whisky industry, and is therefore taken as the first entry in our dataset. The founding of Ferintosh also implied the birth of a new organizational form, as whisky distilling now no longer was a mere by-product of farms and crofts, but rather the core product of an organizational form established deliberately to generate profits by distilling spirit. We chose to extend our sampling window back further in time, because distilleries also frequently fail because of operational inefficiencies, industry competition, and—especially in the earlier stages of the industry’s evolution—weak constitutive legitimacy. By ensuring a complete observation plan, we were able to establish a failure base rate taking into account these competing explanations for organizational failure. For this second analysis, our sample contains 710 distilleries, 564 distillery failures, and 20,596 distillery-year observations.

Data and measures

Dependent variables. Legal distilleries and the licensed trade responded to temperance movement pressure with counter-framing actions under the slogan of “Our trade: Our politics”

17 (Logan, 1983). To test whether the whisky industry responded to the nonmarket strategy initiatives developed by social movements in a like fashion, we used two different dependent variables. The first concrete step in the industry’s countermovement was the establishment of several whisky industry associations. Whereas these associations were initially intended as instruments for regulating prices and competition, they subsequently became a vehicle for the collective defence of the industry through framing tactics. The Scottish Whisky Association, of which almost all distillers were members, was founded in 1865 to fix prices and mute competition. Grain distillers went one step further and in 1877 formed a protective combination under the name Distillers Company Limited that became the collective owner of many grain distilleries. The malt distillers also tried to reduce competition from 1874 onwards by forming their own associations, such as the North of Scotland Malt Distillers’ Association. Thus, to test

Hypothesis 1a, we constructed the Scottish Whisky Associations variable. The founding of Scotch whisky associations was a CPA initiative, since the main purpose of these associations was to lobby for particular outcomes of political and legislative processes. At first, separate associations were founded for the various whisky producing regions, as these had diverse interests.

Subsequently, distilleries also joined larger associations, both interregional and national, to lend weight to their collective stance on political and legislative topics. The variable is a count of the number of associations distilleries could become members of, based on distillery location, which takes on a value of 0 for the period before the first association was founded (Hume & Moss,

2000).1

1 Unfortunately, there are no longer written records for association membership; however, historical documents tell us that regions specifically set these up to protect their interested distilleries, and hence, the likelihood for them to join was quite high.

18 For Hypothesis 1b, we created the Membership of the Scottish Wine and Spirits

Merchants Benevolent Institution variable, capturing the industry’s CSR initiatives. The Scottish

Wine and Spirits Merchants Benevolent Institution – as a grassroots effort – was founded in

1866. It assisted its members – distillery workers – through various forms of insurance, cared for widows, and paid for the education of the children from indigent families. Membership was open to all those working in the licensed trade, with members making a one-off payment for life membership and subsequently paying an annual premium. These investments were used in turn to invest in government bonds and the stock market. The actions of benevolent institutions lend greater credence to the pragmatic framing strategies adopted by industry protagonists, as they made a noticeable difference towards improving the living standards of many in Scottish society.

Measuring grassroots mobilization by the industry, this variable counts the number of workers per distillery who were a member of this benevolent institution. Affiliation data were obtained from the Members Book of the Scottish Wine and Spirits Benevolent Institution.

To test Hypotheses 2a and 2b, we used the distillery failure rate as our dependent variable, which we use to proxy for the effectiveness with which focal organizations can ward off the challenges of social movement nonmarket strategic initiatives aimed at them by engaging in CPA and CSR initiatives. Our primary data sources for this variable are the seminal works by

Hume and Moss (2000) and Udo (2006), which contain event tables that comprehensively document whisky distillery founding and failure data. We assigned each distillery a value of 0 for each year that it was in operation, and a value of 1 for the year in which it failed, if applicable. Our data are right-censored, with 143 distilleries remaining in operation in 1922.

Independent variables. We operationalized our independent variables at the county level

(unless indicated otherwise), since both resistance against and support for whisky distilling was

19 mostly organized locally in the period covered by our study. Hypothesis 1a suggests that the presence of formal social movement organizations will spur the founding of formal associations on the industry side. As our measure of movement organizations, we used the log-transformed number of Formal local temperance associations in a county. In Hypothesis 1b, we suggested that total social movement membership would spur grassroots efforts by focal organizations. To test this conjecture, we created a log-transformed count of the Total temperance members in a county. These variables were drawn from the following annual sources: The Scottish

Temperance League Register and Abstainers’ Almanac, and The Scottish Permissive Bill

Association Annual Report.

To test Hypotheses 2a and 2b, we used the dependent variables from our first analysis as independent variables, to assess their effect on the failure rate of whisky distilleries. These are a count of the Scotch Whisky Associations and the Membership of the Scottish Wine and Spirits

Merchants Benevolent Institution.

Control variables. For both analyses we used the same two sets of control variables. A first set captured various industry developments that had the potential to impact the fortunes of the professional whisky distilleries. Specifically, we developed a count variable capturing the

Detection and seizures of illegal stills by the Excise office in a given year at country level (Hume

& Moss, 2000). WWI is a binary variable set to 1 for the years 1914-1918, and to 0 for all other periods. Industry age counts the number of years that have passed since the founding of the first professional distillery in Scotland in 1680. To account for the density dependent effects of constitutive legitimation and diffuse competition on distillery failures (Carroll & Hannan, 1989), we included both Local distillery density and Local distillery density squared. Local distillery density captures the number of distilleries operating in a county in a given year. Distilled proof

20 spirits measures the total amount of whisky produced in Scotland in a particular year, to capture market size dynamics.

For the second analysis we added additional controls that could have a direct bearing on the survival of whisky distilleries. First, we controlled for a specific period in Scottish history – somewhat different from county to county – when through referendum citizens could vote to have local areas in a county ‘wet’, ‘damp’ or ‘dry,’ which represent three different regimes of strictness towards the operation of local public houses. This is a binary variable called Local

Veto Era. We also included the number of Labour Party politicians elected to represent a county in parliament, as Labour was the third-largest political party in Scotland at the time, typically held the swing vote on issues pertaining to the whisky trade, and was thus important in terms of passing temperance legislation. We obtained this data from the Brewer’s Almanack. We also counted the number of Conservative Party politicians elected to represent a county in parliament using the Brewer’s Almanack. The conservative party was generally supportive of the whisky trade, and thus a source of support for the distilleries. We also coded for the passing of the 1853

Forbes Mackenzie Act, which regulated the operating hours of Scottish public houses, with a binary variable that was assigned a value of 1 for the period after 1853 and 0 for all preceding years.

The second set of variables includes distillery-specific controls, allowing us to rule out alternative organizational-level explanations of distillery failure. Distillery age is measured as the number of years that have passed since founding, capturing liability of newness effects

(Carroll & Hannan, 2000). Distillery size is measured as the production volume in litres, accounting for the liability of smallness (Carroll & Hannan, 2000). In order to distinguish between different distillery types, we introduce two binary variables – Malt distillery and Grain

21 distillery. Both take a value of 1 when a distillery belongs to that category, and 0 otherwise. The two variables are not mutually exclusive, as some distillers produced both malt and grain whisky during our observation window. As a location control we include a binary variable taking on a value of 1 when a distillery is located in the Lowlands of Scotland, and 0 otherwise. Lowland distilleries benefit from their proximity to the English market and from better land transport facilities. County size was measured in square miles and used to account for local environmental conditions. We retrieved this information from the Statistical Account of Scotland records. All independent variables were measured temporally prior to our measurement of the dependent variable.

Additional temperance movement variables. In addition to the above controls, in a final set of control variables, we included all relevant temperance movement measures to parse out their specific effects on distillery failure. We counted the number of Local churches using unfermented wine to account for the moral stance of local churches towards the whisky industry

(those using unfermented wine during mass being more staunchly opposed), and we counted the number of Liberal Party politicians, as this party opposed the whisky trade. These variables complement the counts of Formal local temperance associations and Total temperance members used as the key independent variables in the tests of H1a and H1b.

Analysis

For our first analysis, the nature of our dependent variable dictates the use of a count model.

Specifically, the negative binomial model allows for over-dispersion, which fits with our dependent variables Scottish Whisky Associations and Membership of the Scottish Wine and

Spirits Merchants Benevolent Institution. Next, due to the panel nature of our dataset, we ran a

Hausman test, with the result indicating that the adoption of a random effects model must be

22 rejected. Thus, we need to choose between fixed-effects and population-averaged negative binomial models. Fixed effects (FE) estimators control for unobserved time-invariant heterogeneity, but at the expense of dropping all observations lacking observed nonmarket activity by the distilleries during our observation window (about 20% of distilleries). FE models also neglect between-firm variation, which is a focal point of our paper. In addition, standard errors that are robust to firm-level heteroskedasticity are available only for population-averaged estimators in the case of the panel negative binomial model. Therefore, we estimated a population-averaged panel negative binomial estimator with heteroskedasticity-consistent standard errors at the firm level (cf. Zelner, Henisz, & Holburn, 2009).

For the second analysis, similar to other studies interested in survival or failure of organizations (e.g., Delmar & Shane, 2004; Hiatt et al., 2009; Sorenson & Audia, 2000), we used piecewise exponential hazard models to assess the effects of our predictor variables on the professional distillery failure rate, with standard errors clustered by organization. This class of models assumes that hazard rates are constant within time intervals but may vary between intervals. We chose 20-year time periods because we felt that this interval length struck a good balance between approximating changes in the baseline rate with appropriate sensitivity and avoiding estimation problems arising due to the occurrence of too few failures within time periods. The advantage of using piecewise exponential hazards models is that they rely on non- parametric estimation, meaning that they do not assume that the time dependence of the ecological process follows a particular distribution form (Fichman & Levinthal, 1991). They therefore have more statistical power than partial likelihood estimation, which analyzes only the sequence of events.

23

RESULTS

Figure 1 graphically shows the interplay between, on the one hand, the number of Formal local temperance associations and the Total temperance members in a county (capturing the intensity of nonmarket strategic initiatives by social movements), and, on the other hand, the Scottish

Whisky Associations and Membership of the Scottish Wine and Spirits Merchants Benevolent

Institution variables (capturing focal firm nonmarket strategic responses). In general, and in line with our theoretical narrative formalized in Hypotheses 1a and 1b, we clearly detect interplay between these two sets of variables. Descriptive statistics for our test of Hypotheses 1a and 1b are presented in Table 1, those for Hypotheses 2a and 2b in Table 2.

------

Insert Figure 1, and Tables 1 and 2 about here

------

The results of the GEE models predicting a dynamic and strategic nonmarket response by the focal firms in the whisky industry in response to social movement actions are provided in Table

3. Models 1 and 3 examine the relationship between the local temperance organizations and the formation of formal associations on the part of the industry, which are (a) the trade association – the Scottish Whisky Association – in Model 1 and (b) the grassroots association – the Scottish

Wine & Spirits Merchants Benevolent Institution – in Model 3. Likewise, Models 2 and 4 respectively illustrate the influence of local temperance membership on the formation of these same formal associations. In H1a, we hypothesized that the formal associations would be formed in response to formal associations of the temperance movement, which is tested in Model 1.

Hypothesis 1b suggested that social movement strength would lead to increased grassroots efforts on the part of the industry, which is tested in Model 4.

24 We find support for Hypothesis 1a: in Model 1, we see that presence of formal temperance associations in a county strongly and positively predicts the increased presence of

Scottish Whisky Associations in that county, on average. Interestingly, formal temperance associations do not have an effect on the grassroots efforts of the whisky industry (Model 3), suggesting a tit-for-tat style strategic response to the temperance movement by the industry. We find a similar pattern in the results of our tests of Hypothesis 1b: the presence of temperance members in a county positively and significantly influence the grassroots efforts of distilleries – in the form of membership of their workers in the Scottish Wine & Spirits Merchants Benevolent

Institutions (Model 4) – and mirroring the effects of Model 3, in Model 2 we find that the presence of more temperance members in a county does not increase the formation of formal associations.

------

Insert Table 3 about here

------

The piecewise exponential hazard models predicting distillery failures are provided in

Table 4. Model 1 contains the control variable results, as well as the effect of the local temperance associations. In Model 2 we replaced the local temperance associations with local temperance members. In Model 3 we reintroduced the local temperance associations and added the nonmarket industry mobilization variables – Scotch Whisky Associations and Scottish Wine and Spirits Merchants Benevolent Institutions – to the model. Model 4 is similar to Model 3 but again with local temperance members instead of local temperance associations.

25 ------

Insert Table 3 about here

------

Across the models, six of our control variables are consistently significant. In line with insights concerning the liability of newness (Freeman, Carroll, & Hannan, 1983), the likelihood of distillery failure decreases with Distillery age. Consistent with ideas on competitive crowding in mature markets (Baum & Mezias, 1992), Industry age increases the distillery failure rate.

Contrary to density dependence theory (Carroll & Hannan, 1989), we find that Local distillery density first increases the failure rate amongst distilleries, whereas after a tipping point subsequent density increases reduce the failure rate. Detection and seizure of illegal stills reduced the failure rate of professional distilleries, as these actions removed competitors from local markets. Unexpectedly, the passing of the Forbes Mackenzie Act, which reduced the opening hours of pubs, had a negative effect on failures rates. Possibly, the act stimulated home consumption, which it would not have negatively affected the overall production and consumption of alcohol (Hume & Moss, 2000). We do however find a positive effect of the

Local Veto Era on the failure rate in models 1, 3, and 4, and we also find the predicted positive effects of the presence of local temperance associations and local temperance members on distillery failure.

Hypothesis 2a stated that the presence of formal associations on the part of the whisky industry in the form of Scotch whisky associations would reduce the failure rate, and Models 3 and 4 support this hypothesis. We find a similar negative result on the failure rate when looking at our grassroot mobilization measure – Scottish Wine and Spirits Merchants Benevolent

26 Institution membership – as hypothesized in 2b. Hence, both parts a and b of our hypothesis 2 are strongly supported.

When looking at the respective effectiveness of the temperance and the industry efforts for Model 3 we find that when local temperance associations increase by 10%, the probability of firm failure increases by 3.03%.2 However, when the number of Scotch Whisky Associations increases by 1, the probability of firm failure decreases by 63.61%. Additionally, when the membership of Scottish Wine and Spirits Merchants Benevolent Institution increases by 1, the probability of firm failure decreases by 92.51%.

For Model 4 we find that when local temperance members increases by 10%, the probability of firm failure increases by 2.23%. However, when the number of Scotch Whisky

Associations increases by 1, the probability of firm failure decreases by 65.11%. Additionally, when the number of Scottish Wine and Spirits Merchants Benevolent Institution increases by 1, the probability of firm failure decreases by 92.96%. Combined these results suggest that organizations stand to benefit substantially – at least in terms of survival – by investing in strategic nonmarket mobilizations as a way to counter the nonmarket strategic initiatives of social movements.

DISCUSSION & CONCLUSION

The results of our empirical analyses provide strong support for all hypotheses: when challenged in their institutional environments by social movements, organizations appear, first, to dynamically countermobilize by adopting similar nonmarket strategies as the challenging

2 For nonlinear models like survival analysis, the value of an estimated coefficient does not equal the true size of marginal effect. To precisely describe the varying marginal effects for event history models, a multiplicative approach is recommended (Buis 2010; Geng et al. 2016) because multiplicative effects do not vary with the baseline hazard rate and other variables due to the exponential formula. Further, given that the local temperance association is a log transformed variable, the change of independent variable also requires a multiplicative form.

27 movements and, second, to successfully employ these new nonmarket efforts to prolong their survival. That is, in our specific context, when the Scottish temperance movement challenged whisky distilleries by creating formal organizations, the whisky industry responded by creating formal organizations in the form of trade associations of its own (Hypothesis 1a). Moreover, when the movement sought mass support for its positions of personal abstinence and political prohibition by growing its membership, the industry responded by creating mass organizations of its own, mass organizations that provided various benefits that we now associate with the modern welfare state (Hypothesis 1b). These tit-for-tat nonmarket responses, in turn, decreased the mortality rates of individual distilleries (Hypotheses 2a and 2b), suggesting that they were quite efficacious in addressing temperance movement challenges to the whisky industry, both in the short and long-term.

These results contribute to multiple bodies of organizational scholarship. First, we advance the literature on movement-organization dynamics (e.g., Carlos et al., 2018; Meyer &

Staggenborg, 1996; McDonnell et al., 2015) by demonstrating how the nonmarket mobilization of social movements leads to nonmarket countermobilization by organizations. Not only are we among the first to document how movements’ activities lead to nonmarket organizational responses, we also specifically find that the nonmarket tactics adopted by organizations are tactically similar to those employed by the challenging movement. This tit-for-tat response suggests that some form of competitive isomorphism in terms of nonmarket strategy may be at work across the movement-organization interface (cf. Hiatt & Carlos, 2018). Further, in documenting this phenomenon, we also answer a recent call by Leitzinger, King, and Briscoe

(2018: 8), “to consider the breadth of political responses [to movements] that firms use and how relationships with various stakeholder groups affect which types of political actors they use”.

28 Second, we also contribute to theory development in the area of nonmarket strategy formulation (see, e.g., Bonardi et al., 2006; Hillman & Hitt, 1999; Schuler, 1996). This stream of research is largely dominated by a “political markets” approach (see, e.g., Bonardi, Hillman, &

Keim, 2005) that suggests that firms have considerable freedom to determine both whether or not to engage in nonmarket strategy (based upon the “attractiveness” of the political market surrounding a particular issue) and the particular form its nonmarket strategy will take. The particular empirical pattern we document here in testing our Hypotheses 1a and 1b indicates that organizations’ agency in formulating their nonmarket activities, whether in the form of CPA or

CSR, may be more significantly constrained by external actors than is currently is appreciated.

That is, the tit-for-tat mobilizations we document suggest that a) organizations respond to immediate nonmarket threats from social movements by adopting tactics that are similar to those deployed by the social movements, and b) these tactics themselves may go on to become institutionalized in an associational form, which may create later inertial pressures in terms of nonmarket strategy formulation. Both focal organizational mimicry and the institutionalization of counter-associations upon which focal-organizational audiences come to depend thus seem to act as boundary conditions to unilateral and voluntaristic CPA and CSR initiatives by targeted focal organizations. Overall, these results imply that scholars need to go beyond the rational, classic microeconomic assumptions that seem to underlie the current nonmarket strategy literature (cf.

McDonnell & Werner, 2016, 2018) and examine how outside actors beyond industry competitors and the state itself, such as social movements, but also activists, NGOs, and consumer watchdog organizations, as well as broader cultural forces (Lounsbury, 2018), affect focal-organizational nonmarket decision-making.

29 Third, in addition to the above findings, importantly, we go beyond just studying the nature of organizational countermobilization to assess its efficacy, and we show that countermobilization by industry appears to weaken substantially the institutional claims of a social movement, which has the knock-on effect of prolonging the survival of focal organizations. In doing so, we contribute to the literature on organizational survival by showing how nonmarket mobilization can elongate the survival of individual organizations and of organizational forms in their entirety, as the results of the tests of our hypotheses 2a and 2b show

(Hiatt et al., 2009; Ruef & Scott, 1998; Soule & King, 2008). Additionally, we also find that different nonmarket tactics have quite different effects on organizational survival: specifically, when an organization employs a grassroots approach (here, creating a benevolence association to distribute CSR-like social and economic benefits to primary stakeholders) in response to a challenging movement, its positive effect on organizational survival is roughly 50% greater than a more traditional form of nonmarket mobilization, i.e., the creation of a trade association. This particular finding is an important contribution to the nonmarket strategy literature as well, as it allows for a clear comparison between the efficacy of different nonmarket tactics on a common organizational outcome; scholars in more modern settings tend to struggle with such comparisons, due to a lack of disclosure around many tactics deployed by firms in the management of the current nonmarket environment (but see Hadani & Schuler, 2013).

Finally, we also contribute to an emerging literature on political CSR (Den Hond et al.,

2014; Lawton et al., 2014). In particular, in the tests of our Hypotheses 2a and 2b, we show that at least one form of political CSR (in this case, the provision of public goods by an industry benevolence association) pays off politically by successfully defanging the claims of a challenging social movement and enhancing organizational survival. Further, we also

30 demonstrate via the test of our Hypothesis 1b that political CSR has deep historical roots that often go underappreciated by modern scholars, as the motivation for whisky distilleries to create grassroots support through the founding of benevolence associations appears to stem from a perceived need to counter the mass mobilization of the temperance movements, and not from any other-regarding desire to fill institutional voids in pre-welfare state Scotland.

Limitations and future research

There are three key limitations to our current study. First, we are, in effect, learning from a sample of one (March, Sproull, & Tamuz, 1991). However, the “single-case”-focus of this study is at least somewhat assuaged both by the number of players in the whisky industry and the temporal nature of our data. Further, as March et al. (1991) note, when examining emergent phenomena, which we would argue these early movement-organization interactions in the

Scottish industry represent historically, such studies are still critically important.

Second, we are of course also analyzing a historical case that played out in a Dickensian world, prior to the coming of the welfare state. As a result, there are questions as to its contemporary relevance or the generalizability of our findings toward the present. We would respond to such a critique in a two-fold manner. First, many of the arguments we make have contemporary parallels, as the lines of reasoning supporting our hypotheses suggest (see, for example, the high degree of comparability between the whisky industry’s nonmarket mobilization strategies in the 19th and early 20th centuries and those employed by the tobacco industry in the latter half of the 20th and in the 21st centuries). Second, and specific to our arguments related to political CSR, such a tactical use of CSR by firms still occurs in developing countries as a means of winning popular and political support by addressing institutional voids

31 (Boddewyn & Doh, 2011) and in developed countries as a means of securing a social license to operate, often by offsetting the negative externalities associated with the firm’s core productive activities (Dorobantu & Odziemkowska, 2017).

Third, and following from the second limitation, some of the indicators we employ are necessarily higher-levels/units of analysis (e.g., counties). Given the limits of historical, archival research, we have focused on leveraging the data that we do have with appropriate methods for quantitative analysis. Moreover, given the length of our observation windows, a lack of cross- sectional variance in certain variables is more than offset by considerable longitudinal variance.

Furthermore, given the size of the industry and the depth of its penetration in Scottish society, our analysis is not hampered by issues of statistical power.

This research also opens up multiple avenues for future research by organizational, strategy, and interdisciplinary scholars. Although we have explored whether and how organizations dynamically reformulate their nonmarket strategies in response to movements’ nonmarket activity, we stopped short of then examining and theorizing as to the response of movements to organizations’ strategic and tactical adjustments. That is, one could go on to ask whether social movements adapt their tactics dynamically too. Their adjustments could include shifting policymaking venues on the regulative dimension of the organization’s environment or additional attempts to reframe an issue yet again on the cognitive dimension. Further, scholars could examine the efficacy of these responses by movements. Based on our evidence, if the right empirical context presents itself, such questions would be valuable to explore, as we would acknowledge that there is no reason to suspect that after one round of movement by each player a movement-countermovement contest is in equilibrium. Unfortunately, our data on the

32 membership of the eventual amalgamated temperance movement is too limited to allow us to examine this possibility here.

A second future question to examine relates to the spillover effects of movement- organization contention. Specifically, one could ask whether victory by either party in these contests spills over into and affects public policy more broadly. For example, in situations in which incumbent organizations “win” such a contest by surviving a social movement challenge, they may come to embrace intervention by the state on the underlying issue-in-play, not just for the traditional political-economic understanding that such interventions raise barriers to entry for new entrants but also because new public policies may serve as a preemptive barrier to future social movement challenges by crowding out support for them.

The above arguments, along with the findings of this paper, serve to highlight that movement-countermovement dynamics are both understudied and crucial to understand. In this paper, we have helped to bring together and to advance the literatures on social movements, nonmarket strategy, and organizational survival by showing how these movement-organization interactions affect organizations’ strategy in the nonmarket environment, and how the new tactics they adopt, which largely mimic those of the movement, seem to succeed. Ultimately, our results suggest that organizations, when targeted by social movements in their institutional environments, have the ability via nonmarket strategy not only to defang their opposition and moderate these movements’ claims but to enhance the survival prospects of the organization and ultimately of the organizational form as a whole.

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37 Figure 1

38 Table 1

Mean St. dev 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. SWASS 0.53 0.59 1.00 2. SWSMA 0.38 0.65 -0.03 1.00 3. Distillery Age 58.27 33.19 0.03 0.04 1.00 4. Distillery Size 126121 4520838 0.12 0.07 -0.05 1.00 5. Malt distillery 0.95 0.21 -0.16 -0.09 -0.08 -0.60 1.00 6. Grain distillery 0.08 0.27 0.20 0.04 0.15 0.55 -0.77 1.00 7. Lowland 0.25 0.43 0.20 0.04 0.22 0.29 -0.39 0.50 1.00 8. County size 1728.68 1312.85 -0.16 0.05 -0.04 -0.17 0.20 -0.28 -0.53 1.00 9. Distilled Proof Spirits 20500000 6121582 0.34 0.16 0.17 0.03 -0.03 0.02 -0.06 -0.01 1.00 10. Local density 14.33 11.84 -0.19 0.30 -0.09 -0.13 0.16 -0.21 -0.46 0.55 0.10 1.00 11. Local density squared 348.22 450.07 -0.26 0.33 -0.04 -0.12 0.15 -0.20 -0.41 0.57 0.08 0.98 1.00 12. Industry age 201.63 19.49 0.58 0.19 0.28 0.04 -0.03 0.01 -0.08 -0.01 0.74 0.10 0.09 1.00 13. WWI 0.08 0.27 0.25 0.02 0.13 0.01 -0.01 0.00 -0.04 -0.01 0.22 0.02 0.03 0.40 1.00 14. Seizure and detection 6.93 15.14 -0.40 -0.22 -0.23 -0.02 0.01 -0.01 0.05 -0.00 -0.55 -0.05 -0.05 -0.69 -0.14 1.00 15. Local temperance associations 2.56 0.96 -0.35 0.14 0.12 0.10 -0.23 0.26 0.43 -0.02 -0.21 -0.12 -0.10 -0.33 -0.18 0.04 1.00 16. Local temperance members 5.82 0.94 -0.03 0.29 0.19 0.18 -0.28 0.29 0.45 -0.06 0.15 -0.10 -0.10 0.15 -0.02 -0.27 0.77

39

Table 2

Mean St. dev 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. Distillery failure 0.03 0.16 1.00 2. Distillery Age 38.13 0.33 -0.11 1.00 3. Distillery Size 2151531 18400000 -0.01 0.01 1.00 4. Malt distillery 0.97 0.17 0.01 -0.12 -0.09 1.00 5. Grain distillery 0.05 0.22 -0.02 0.18 0.11 -0.75 1.00 6. Lowland 0.32 0.47 0.01 0.07 0.14 -0.23 0.31 1.00 7. County size 1653.85 1292.51 0.00 -0.02 -0.09 0.14 -0.20 -0.60 1.00 8. Distilled Proof Spirits 1310000 8662887 -0.10 0.54 -0.05 -0.11 0.12 -0.18 0.05 1.00 9. Local density 15.57 13.34 0.03 -0.13 -0.01 0.11 -0.14 -0.36 0.48 0.07 1.00 10. Local density squared 421.66 588.52 0.03 -.013 -0.02 0.10 -0.13 -0.33 0.49 0.03 0.97 1.00 11. Industry age 167.22 38.20 -0.11 0.59 -0.05 -0.11 0.12 -0.18 0.04 0.92 0.05 0.01 1.00 12. WWI 0.04 0.19 -0.02 0.21 -0.01 -0.03 0.02 -0.05 0.01 0.27 -0.01 -0.01 0.32 1.00 13. Seizure and detection 69.95 148.38 0.06 -0.21 -0.01 0.04 -0.04 0.01 0.00 -0.18 0.18 0.19 -0.21 -0.09 1.00 14. Forbes Mackenzie act 0.48 0.50 -0.12 0.58 -0.05 -0.11 0.12 -0.16 0.06 0.79 -0.09 -0.12 0.84 0.21 -0.40 1.00 15. Labour party politicians 0.01 0.11 0.00 0.10 0.00 -0.09 0.08 0.06 -0.05 0.11 -0.07 -0.04 0.14 0.14 -0.04 0.09 1.00 16. Conservative party 0.06 0.41 -0.02 0.15 0.02 -0.22 0.19 0.11 -0.03 0.26 -0.04 -0.03 0.18 -0.03 -0.07 0.15 0.05 politicians 17. Local veto era 0.01 0.12 -0.01 0.14 -0.00 -0.02 0.02 -0.04 0.01 0.18 0.00 -0.01 0.21 -0.02 -0.06 0.13 0.20 18. Local churches using 6.97 0.23 -0.03 0.31 0.01 -0.26 0.21 0.10 -0.06 0.40 -0.10 -0.09 0.41 0.25 -0.14 0.31 0.58 unfermented wine 19. Liberal Party politicians 0.30 0.91 -0.03 0.31 0.01 -0.19 0.16 0.04 -0.05 0.44 -0.11 -0.11 0.45 0.30 -0.15 0.33 0.41 20. Local temperance 1.20 1.43 -0.10 0.55 -0.03 -0.18 0.20 -0.01 0.04 0.66 -0.11 -0.13 0.70 0.11 -0.35 0.86 0.15 associations 21. Local temperance 2.72 2.98 -0.12 0.59 -0.04 -0.15 0.17 -0.09 0.04 0.79 -0.10 -0.12 0.84 0.20 -0.39 0.95 0.13 members 22. Scotch Whisky 0.00 0.49 -0.07 0.35 -0.01 -0.17 0.20 -0.19 -0.06 0.57 -0.15 -0.18 0.63 0.32 -0.24 0.53 0.15 Associations 23. Scottish Wine and Spirits 0.00 0.48 -0.06 0.25 -0.01 -0.11 0.08 -0.04 0.05 0.38 0.14 0.11 0.39 0.10 -0.17 0.38 0.10 Merchants Benevolent Institution

40 16 17 18 19 20 21 22 23 16. Conservative party politicians 1.00 17. Local veto era -0.02 1.00 18. Local churches using unfermented wine 0.50 0.16 1.00 19. Liberal Party politicians 0.35 0.12 0.85 1.00 20. Local temperance associations 0.25 0.00 0.43 0.37 1.00 21. Local temperance members 0.21 0.11 0.41 0.40 0.95 1.00 22. Scotch Whisky Associations 0.06 0.35 0.32 0.40 0.36 0.53 1.00 23. Scottish Wine and Spirits Merchants Benevolent Institution 0.21 0.05 0.29 0.21 0.41 0.44 0.19 1.00

41

Table 3 GEE model with Poisson distribution one-year lag Model 1 Model 2 Model 3 Model 4 Scottish Whisky Scottish Whisky Scottish Wine & Spirits Scottish Wine & Spirits Associations Associations Merchants Benevolent Merchants Benevolent Institution Institution Constant -11.059 (0.507)*** -10.703 (0.552)*** -2.330 (0.617)*** -2.745 (0.689)*** Control variables 1841-1860 -0.015 (0.019) 0.005 (0.019) -0.461 (0.098)*** -.0458 (0.100)*** 1861-1880 0.095 (0.006)*** 0.119 (0.005)*** -0.361 (0.099)*** -0.343 (0.101)*** 1881-1900 0.023 (0.005)*** 0.056 (0.002)*** -0.036 (0.048) -0.018 (0.038) Distillery age -0.000 (0.001) -0.000 (0.001) -0.002 (0.002) -0.002 (0.000) Distillery size 0.000 (0.000)*** 0.000 (0.000)*** 0.000 (0.000) 0.000 (0.000) Malt distillery -0.049 (0.192) -0.068 (0.212) -0.347 (0.349) -0.327 (0.331) Grain distillery 0.185 (0.124) 0.184 (0.132) -0.147 (0.289) -0.151 (0.286) Lowland -0.921 (0.118)*** -0.825 (0.118)*** 0.606 (0.292)** 0.524 (0.300)* County size -0.000 (0.000)*** -0.000 (0.000)*** -0.000 (0.000) -0.000 (0.000) Distilled proof spirits 0.000 (0.000)*** -0.000 (0.000) -0.000 (0.000)*** -0.000 (0.000)*** Local distillery density -0.006 (0.003)* -0.007 (0.003)** 0.003 (0.006) 0.005 (0.006) Local distillery density -0.000 (0.000)*** -0.000 (0.000)*** 0.001 (0.000)*** 0.001 (0.000)*** squared Industry age 0.049 (0.002)*** 0.048 (0.002)*** 0.009 (0.003)*** 0.008 (0.003)*** WWI 0.000 (0.002) 0.013 (0.002)*** -0.000 (0.013) 0.018 (0.011) Detection and seizure of 0.005 (0.002)*** 0.004 (0.002)*** -.013 (0.002)*** -.013 (0.003)*** illegal stills

Main variables anti-whisky Local temperance associations 0.053 (0.007)*** 0.030 (0.025) (log) (hypothesis 1a) Local temperance members -0.018 (0.013) 0.075 (0.031)** (log) (hypothesis 1b) Observations 9403 9403 9403 9403 Significance level: 10% *, 5% **, 1% ***

42

Table 4 Hazard Rate Models of Individual Whiskey Failures, 1690-1923 Model 1 Model 2 Model 3 Model 4 Control variables 1681-1700 -16.719 -16.804 -16.353 -16.422 (1198.324) (1232.202) (819.681) (842.811) 1701-1720 -18.164 -18.268 -17.826 -17.913 (1044.864) (1088.087) (701.930) (731.202) 1721-1740 -19.790 -19.898 -19.522 -19.612 (1067.913) (1117.420) (721.711) (755.385) 1741-1760 -7.277*** -7.281*** -7.889*** -7.878*** (1.151) (1.150) (1.151) (1.151) 1761-1780 -24.046 -24.123 -23.914 -23.981 (834.221) (869.613) (554.454) (579.248) 1781-1800 -9.329*** -9.311*** -10.116*** -10.086*** (1.336) (1.354) (1.368) (1.367) 1801-1820 -12.029*** -12.001*** -12.870*** -12.831*** (1.520) (1.518) (1.533) (1.533) 1821-1840 -12.675*** -12.614*** -13.492*** -13.427*** (1.612) (1.611) (1.618) (1.618) 1841-1860 -14.259*** -14.188*** -15.096*** -15.019*** (1.774) (1.773) (1.780) (1.780) 1861-1880 -16.418*** -16.369*** -16.910*** -16.877*** (1.952) (1.950) (1.946) (1.944) 1881-1900 -19.765*** -19.904*** -19.432*** -19.513*** (2.240) (2.243) (2.241) (2.243) 1901-1923 -19.395*** -19.783*** -19.201*** -19.408*** (2.319) (2.312) (2.318) (2.313) Distillery age -0.020*** -0.020*** -0.021*** -0.021*** (0.003) (0.003) (0.003) (0.003) Distillery size -0.000 -0.000 -0.000 -0.000 (0.000) (0.000) (0.000) (0.000) Malt distillery -0.505 -0.484 -0.771 -0.770 (0.694) (0.694) (0.678) (0.678) Grain distillery -0.689 -0.678 -0.613 -0.611 (0.584) (0.584) (0.584) (0.584) Lowland 0.023 0.024 -0.011 -0.016 (0.121) (0.121) (0.121) (0.121) County size 0.000 0.000 0.000 0.000 (0.000) (0.000) (0.000) (0.000) Distilled proof spirits 0.000 0.000 0.000 0.000 (0.000) (0.000) (0.000) (0.000) Local distillery density 0.049*** 0.048*** 0.050*** 0.050*** (0.013) (0.013) (0.013) (0.013) Local distillery density squared -0.001*** -0.001*** -0.001*** -0.001*** (0.000) (0.000) (0.000) (0.000) Industry age 0.070*** 0.070*** 0.073*** 0.073*** (0.011) (0.011) (0.011) (0.011) WWI 0.382 0.322 0.577 0.553 (0.502) (0.502) (0.511) (0.509) Detection and seizure of illegal stills -0.001** -0.001** -0.001** -0.001** (0.000) (0.000) (0.000) (0.000) Forbes Mackenzie Act -2.129*** -2.317*** -1.858*** -2.195*** (0.504) (0.660) (0.495) (0.657) Labour Party politicians 0.197 0.174 0.070 -0.003 (0.645) (0.644) (0.671) (0.670) Conservative Party politicians 0.127 0.151 0.342 0.363* (0.205) (0.201) (0.220) (0.216) Local Veto Era 1.110* 0.882 1.857*** 1.731*** (0.598) (0.581) (0.688) (0.670) Temperance movement variables Local churches using unfermented wine 0.000 0.003 0.008 0.010 (0.008) (0.008) (0.009) (0.009) Liberal Party politicians 0.112 0.100 0.081 0.076 (0.189) (0.190) (0.196) (0.194) Local temperance associations (log) 0.423*** 0.313* (0.161) (0.165)

43 Local temperance members (log) 0.257** 0.231* (0.120) (0.120) Corporate non-market activity variables Scotch Whisky Associations -1.011*** -1.053*** (0.334) (0.309) Scottish Wine and Spirits Merchants Benevolent Institution -2.592*** -2.653*** (0.624) (0.627) Observations 20059 20540 20540 20540 No. of subjects 710 710 710 710 No. of failures 564 564 564 564 Wald chi squared 5499.25 5501.25 5375.10 5370.94

44