To increase the extent of firm response to their demands, activist organizations often seek to raise the salience of their demand by engaging many other stakeholders. We argue that by doing so, however, activist organizations also increase the uncertainty firms face as to how to respond to their demand. Demands made by a small number of stakeholders are not salient enough to generate a substantive response, while demands made by too many stakeholders may generate a high degree of uncertainty and result in delayed and non-substantive responses. Therefore, we propose that there is a curvilinear relationship between stakeholder engagement by activist organizations and target firms’ extent of response. We propose key factors that moderate the impact of uncertainty on firms’ extent of response and discuss important abilities through which activist organizations can neutralize such impact as well as reasons why activist organizations may struggle to do so.
