More and more businesses take stands on political and social issues, especially it’s obvious in such countries as the USA and the UK, where society is highly polarized after Trump’s election and Brexit. However, the question is how such statements influence the reputations and image of the companies.
If we will look at cases, there are many examples of both success and losses because of such activists positions. For instance, everybody knows well, that Apple always stands for freedoms for different social groups from ethical minorities to LGBTI+ representatives to different confessions. Media, and therefore, the general public praise its CEO Tim Kook for such firm position and see him and the company as the leader among business activists (Andy Meek, 2015). The other case is Starbucks that tried to start the anti-racism campaign after the murder of black men by police in Ferguson in 2015, and this winter among others companies stand against Trump’s travel ban, initiating the hiring program to support 10.000 refugees worldwide. They were highly criticized by customers, media and general public as their actions were misinterpreted and considered as inappropriate activism for a coffee company (Kate Taylor, 2017). These two cases show us extremely different attitudes towards business activism, so the question is not only about legitimacy but also about consequences for companies of taking stands.
The statistics by different companies on the issues differ dramatically. While annual reports by Global Strategy Group show that support of such companies among customers and their belief in the power of business to influence the politics grow from 72% and 81% in 2013 to 81% and 88% in 2016 respectively, the research by Weber Shandwick & KRC Research found that only 41% of consumers think companies should have an opinion on issues that may be controversial. Going further, people do not always behave as they say.
“As we found in last year’s study, there remains a disconnect between what the public thinks is theoretically appropriate and how people react to real-world practices”, reports Global Strategy Group (2014).
It means that even if customers suppose that companies should take stands and be active participants in social and political decisions when choosing where to buy and who support with their money, that would consider their own interest first. Both mentioned reports show the number of people who will boycott the company if they disagree with its position is slightly higher than the number of those who will support the business. Considering this, the risk of taking stands is initially higher than possible benefit.
While the Global Strategy Group in their latest report underline that now the ratings of approval for government and Congress are recordly low, and that Americans look for business to make the difference and change the situation for better, for me it still seems to be a tricky way. The advice both reports give to business who is going to take the activist position is to develop communication strategies and be prepared for crisis cases; to stay upon the problems, related to their business; and to research the views and attitudes of customers before risking to loose all of them. It’s also important to stay true to corporate mission and values, defending the company’s reputation and history when taking positions (Paul Holmes, 2017). However, I wonder whether in the time of polarization there should stay some islands of neutrality where opponents can have a rest of these political and social driven battles?
Andy Meek (2015). Tim Cook’s activism is changing Apple – but his future may depend on a watch. Guardian. Available from https://www.theguardian.com/technology/2015/apr/04/tim-cook-activism-steve-jobs-apple-watch.
Global Strategy Group. (2014). Business& Politics: Do They Mix? 2014 ANNUAL STUDY. http://globalstrategygroup.com/wp-content/uploads/2014/10/2014-Business-and-Politics-Report.pdf
Global Strategy Group. (2016). Business & Politics Do They Mix? Fourth Annual Study. Available from http://www.globalstrategygroup.com/wp-content/uploads/2016/12/2016-GSG-Business-and-Politics_Do-They-Mix_Fourth-Annual-Study.pdf.
Kate Taylor (2017). People are boycotting Starbucks after CEO announces plan to hire thousands of refugees. Business Insider. Available from http://uk.businessinsider.com/starbucks-boycott-after-ceos-refugee-support-2017-1?r=US&IR=T.
Paul Holmes (2017). Consumers May Reward Companies That Stand Against Trump. The Holmes Report. Available from http://www.holmesreport.com/research/article/consumers-may-reward-companies-that-stand-against-trump.
Weber Shandwick & KRC Research. (2016). The Dawn of CEO Activism. Available from http://www.webershandwick.com/uploads/news/files/the-dawn-of-ceo-activism.pdf.