‘NIKE exists to progress sport. But in recent years, we also face a broader challenge: to protect sport itself.’ John Donahoe, President and CEO Of Nike.
Companies, particularly in the US, are increasingly involving themselves in political and social debates outside of the areas directly impacting their business, including immigration, race relations, gun control, climate change, same-sex marriage, abortion law, and LGBTQI rights, supporting both progressive and conservative positions (Branicki et al., 2020). This development comes at a time when political debate is becoming increasingly polarised, with ‘cancel culture’ resulting in campaigns seeking to punish or silence companies or individuals and social media the key battleground for such campaigns.
Many have long called for companies to acknowledge their broader social role and responsibilities, rather than to define themselves purely in terms of the bottom line. However, is situating themselves on one or other side of social and political debates a legitimate and positive manifestation of that role?
In this post, I examine this phenomenon of companies taking a stand on controversial issues, labelled in the academic literature as corporate social advocacy, and I attempt to place it in the wider context of the role of organisations in society. Citing some prominent recent examples, I look at why companies might want to take a stand, and how consumers and other stakeholders react. Is this engagement beneficial to the organisations themselves, and to society more broadly? I also relate it to my own particular interest in organisational identity, asking to what extent companies are presenting themselves as individual social actors, as a community of individuals, or as proxies for CEOs and other senior leaders, and how consumers and other stakeholders perceive them.
The emergence of corporate social advocacy
Chatterji and Toffel (2018) note that corporations have long played an active role in the political process through lobbying and contributions to candidates, but that until recently, it was rare for corporate leaders to plunge into thorny social and political discussions. Gaither et al. (2018) add that much corporate political activity has historically been hidden from the public gaze.
Since the 1970s, driven by an increasing awareness of threats to the environment and of the spreading impact of globalisation, expectations placed on corporations from campaigning groups and from governments through legislation have led to the growth of corporate social responsibility initiatives. Gaither et al. (2018) add that the political and social changes of the late 1960s and early 1970s produced today’s crop of CEOs as a product of the activist generation emerging from universities at that time.
Over the past few years, however, Chatterji and Toffel note the rise of a new phenomenon. With political partisanship growing more extreme in the US, business leaders such as Tim Cook of Apple, Howard Schultz of Starbucks, and Marc Benioff of Salesforce have become advocates for a range of causes, with Bank of America’s CEO, Brian Moynihan, telling the Wall Street Journal, ‘It’s not exactly political activism, but it is action on issues beyond business.’ This new phenomenon has been termed corporate social advocacy (CSA), to distinguish it from corporate social responsibility (CSR).
Dodd and Supa (2014) argue that corporate social advocacy moves beyond CSR in that it represents corporate engagement in controversial social or political issues that often lack direct relevance to the company. Unlike CSR, which involves corporate-sponsored initiatives that simultaneously address a social or environmental concern while benefiting an organisation’s image, corporations engage in CSA recognising it may not be received well by all stakeholders. Whereas CSR strategy is designed to address largely non-controversial social issues that are likely to generate uniformly positive responses from consumers, CSA involves a company commenting publicly on divisive political topics. Additionally, where CSR initiatives are characterised by planned efforts that contribute both to the company’s business objectives and its social responsibilities, CSA is often reactive and sometimes unrelated to the company’s core business. Korschun et al. (2019) argue that CSA therefore goes against conventional business wisdom that advises companies to remain neutral on controversial issues for fear of alienating customers or potential customers.
Gaines-Ross (2017) equates the rise in corporate political activism with the Trump administration in the US, adding that activist CEOs represent a small, although vocal, group. Gaither et al. (2018) highlight the importance of social media in this rise, which has made the role of business in politics increasingly visible. Austin et al. (2019) agree that the increase in popularity of social media has made it easier than ever for a range of issues to receive extensive media coverage, while also allowing both activists and corporations to participate in the debate.
Why do companies and CEOs get involved in politics?
Chatterji and Toffel show CEOs weighing in on controversial topics for several reasons. Some point to their corporate values, as Bank of America’s Brian Moynihan and Dan Schulman of PayPal did when taking a stand against a North Carolina law requiring people to use the bathrooms corresponding with the gender on their birth certificates. Other CEOs claim that speaking out is a matter of personal conviction, and other leaders have identified a growing demand from customers and other stakeholders.
Other writers have been more cautious on the motivations of organisations. Austin et al. propose that organisational motives for CSA is an area requiring further research. Branicki et al. (2020) argue that, to date, only Hambrick and Wowak (2021) have provided a robust theorisation of the factors that influence CEO activism, where they propose that, ‘CEO activism stems foremost from a CEO’s personal values, but that it is facilitated (or suppressed) by the CEO’s expectation of support from stakeholders, particularly employees and customers.’ Branicki et al. argue that the origins of activism among the current ‘Baby Boomer’ generation of CEOs might lie in the general activism of that generation, accompanied by the expansion of higher education the US in the 1950s and 1960s. However, they also concede that CEO activism might serve a more instrumental purpose for companies, by strengthening their competitive position or improving relations with key stakeholders. At worst, Branicki et al. consider that CEO activism could simply be an attempt to glorify the CEO, his or her corporation, or even capitalism itself. They add that CEO activism needs to be viewed in the context of a sociopolitical landscape where CEOs are increasingly prominent, respected, or adulated actors in society, where, as the distinction between public and private spheres blurs, CEOs might be expected to step in to take on civic responsibilities previously seen as outside their domain of interest. Gaines-Ross (2017) agrees that activism reveals CEOs holding themselves accountable in supporting the values of their organisations at a time when employees, customers and other stakeholders are demanding more from business leaders as distrust in government mounts. She adds that many companies have invested substantial time and money in establishing core values such as diversity and inclusion, so that when government policies undercut such values, companies feel obliged to speak up. Referencing a survey of Millennials, she contends that not speaking out on certain issues may adversely threaten an organisation’s ability to hire and retain talent.
From a brand perspective, Iqbal (2019) quotes Dan Cullen-Shute, chief executive and co-founder of independent advertising agency Creature London; ‘We live in a world where brands think they need “purpose”…Research continually shows that millennials want brands that do and mean something.’ In the same article, Eliza Williams, managing editor of Creative Review adds that, ‘They’re [companies] taking the view that being politically divisive is worth a risk and being at the heart of a debate where you come out as the good guys is positive.’
As we will see later, commentators on CSA argue that companies are willing to risk alienating some customers and other stakeholders, but nevertheless will make a calculation that their bottom line will at worst not be impacted negatively.
Some scholars have attempted to categorise the motivations for CSA. Kim et al. (2020), applying arguments from attribution theory, identify values-driven, egoistic-driven, strategic-driven, and stakeholder-driven motives. Kotler and Sarkar (2017) distinguish between marketing-driven, corporate-driven, and values-driven initiatives.
Who is behind corporate activism?
Branacki et al. note that, although the focus of CSA tends to be on individual CEO’s, other organisational actors, often other senior leaders, can also be prominent in responding to moral episodes. Chatterji and Toffel argue that, although CEOs have to decide whether they’re speaking for themselves or their organisations, they need to recognise that any statements they make will nonetheless be associated with their companies. They note that it is rare for CEOs to successfully separate their own advocacy from their firms. In the example of DICK’s Sporting Goods (see below), Gaither et al. note that the president acknowledged that the new policies were not well-received by some employees, with some resigning in protest, so that no internal homogeneity of views was assumed by the company. Activism may also be driven from the bottom up, for example a campaign by Proctor and Gamble employees ultimately led to the company becoming one of the first Fortune 500 companies to add sexual orientation to its equal employment opportunity statement of diversity. In terms of the types of company at the forefront of CSA, Gaines-Ross notes that the technology sector has tended to take the lead.
Tactics used by companies
Chatterji and Toffel propose that activist CEOs generally employ two types of tactics in promoting social and political change: raising awareness and leveraging economic power. Raising awareness mostly involves making public statements, generally on Twitter (although Gaines-Ross contends that Twitter hasn’t yet replaced traditional channels). In some cases, CEOs represent themselves or their companies, and in others several CEOs might work together to raise awareness of an issue. In terms of leveraging economic power, CEOs have sought to put economic pressure on states to reject or overturn legislation, for example, in response to Indiana’s Religious Freedom Restoration Act (RFRA), which some viewed as anti-LGBTQ, Bill Oesterle, then the CEO of Angie’s List, cancelled his firm’s planned expansion in Indianapolis.
Does corporate activism work?
A central question in this discussion is whether the political activism of companies actually benefits them and, if it doesn’t, whether this proves that they are following a selfless moral line, or simply that they are incompetent in the execution of their activism. A second question is whether corporate activism contributes to effecting real change in society.
Chatterji and Toffel conclude that there is, so far, little empirical evidence of the impact of CSA. But they do cite evidence of it shaping public policy, in the case of Indiana’s Religious Freedom Restoration Act (RFRA), and in the passing of a similar religious freedom bill in Georgia, where threats to stop filming in the state from leaders of many studios and networks, and similar warnings from other CEOs, were seen as instrumental in moving the governor to veto it. They also argue that, although affiliations with causes can be risky, the risk of silence is also present, for example where a group of workers from Oracle launched a petition urging their employer to join other companies in opposing Trump’s immigration ban.
In an attempt to weigh up the potential impact of activism, Chatterji and Toffel, taking the example of Apple CEO Tim Cook’s stand on LGBTQ rights, conducted an experiment that found that US consumers exposed to Cook’s activism expressed significantly higher intent to buy Apple products where they were supporters of same-sex marriage, but intent to purchase wasn’t eroded amongst its opponents, indicating that CEO activism can generate goodwill for a company but need not alienate those who disagree with the CEO’s stance, although they caution that this most likely does not apply to all companies and all causes, as the chart below indicates. In another set of experiments with consumers, Korschun et al. (2019) found that for companies considered to be values-oriented (as opposed to results-oriented) by consumers, it was seen as more important for them take a stand, even when this didn’t accord with the views of the consumer. Gaither et al. agree that consumers may be quite tolerant of diverse viewpoints, so long as they are not seen as hypocritical to who they say they are as a company.
In a survey, Austin et al. (2019) found overall public support for corporate efforts to better society, including advocating for social issues, noting that their survey sample, in line with US public opinion polling, skewed conservative. Unsurprisingly, liberal and younger respondents were more likely to support corporate involvement in social issues, whereas conservatives and older respondents were likely to support the idea that businesses should only advocate for issues related to their own products and services.
Kim et al. note that literature has focused on the financial outcomes of CSA, such as consumers’ purchase intent and corporations’ financial performance, as well as arguments that CSA can help to rebuild and strengthen relationships with different stakeholder groups through collective actions, a higher positive attitude toward the corporation and higher positive word-of-mouth (PWOM) intentions about the company. They cite evidence that not all campaigns are successful, for example Starbucks’ campaign #RaceTogether led to negative stakeholder perceptions of the company’s motives, with scepticism resulting in a decline in the company’s reputation.
Korschun et al. (2019), find that CEO activism is viewed positively by consumers only in circumstances where evaluators perceive that the company’s activism is driven by values related to its core business activities. Finally, Voegtlin et al., (2019), examining the effect of CEO activism on potential employees’ interest in seeking employment with the CEO’s company, found that activism signalling companies’ values enhances potential employees’ job pursuit intentions.
Some examples of corporate activism
In 2018, Nike launched its 30th anniversary ‘Just Do it’ campaign, featuring American football player Colin Kaepernick, who had become famous for refusing to stand for the US anthem, as the face of the campaign, with text reading, ‘Believe in something. Even if it means sacrificing everything.’ Kim et al. note that the political nature of the campaign was quickly picked up by the press, with Shah (2018) identifying a number of trending hashtags on social media, including #BoycottNike, #boycottNFL, #TakeaKnee, #MAGA, #NikeAd, #JustDoIt, reflecting the polarised public response to the campaign. Such reactions are not surprising, given the public’s mixed reactions to the original NFL protest, with those not supporting Kaepernick’s protest arguing that he had disrespected American values.
Kim et al. argue that Nike’s campaign very carefully calculated risk and targeted its appropriate audiences – those Gen Z, Millennials and Gen X consumers keen for companies to take a stand on important issues in society – noting that two-thirds of Nike’s customers are under 35 years old and more racially diverse than the baby boomer population. In the wake of the campaign, the company saw a $6 billion increase in sales and an all-time high stock price of $85 per share in mid-September of that year.
Iqbal (2019) quotes Eliza Williams, managing editor of Creative Review; ‘By being bold and divisive and taking on a subject they knew would be politically conflicted, it’s become the gold standard.’ Charles Olive, a cultural strategist who had worked at Grey London added that, ‘It was an elegant way of tapping into the conversation…And companies now are continually asking: “How can we be meaningful, effective and impact change?” They have a bottom line to protect but it’s interesting and positive that that now means there is money to be made in being socially responsible.’
Moss (2018) discusses clothing firm Patagonia’s anti-consumerist marketing campaigns. Rose Marcario, CEO of Patagonia, published a LinkedIn article titled ‘The End of Consumerism,’ arguing that consumers should buy the ‘well-made, the long-lasting and the responsible. And leave the rest on the shelf,’ echoing the company’s 2011 Black Friday ad that instructed, ‘Don’t buy this jacket.’ Despite this seemingly self-destructive stance, Moss notes that Patagonia’s revenue had grown by $250 million since the 2011 ad, concluding that the company successfully calculated that consumers will increasingly demand longer-lasting products less destructive to the planet, and will be willing to pay extra for them.
DICK’s Sporting Goods
Gaither et al. examine the decision of DICK’s Sporting Goods to stop selling assault-style rifles and only sell firearms to those over 21, following the February 2018 shooting at Marjory Stoneman Douglas High School, in Parkland, Florida, where 17 people died. They note that the move was partly driven by secondary stakeholders, but that the firm presented it in terms of a moral imperative aligned to their existing corporate values. The company’s initial media statement explained that, ‘As the kids in Parkland got more and more vocal and were being so brave, we just felt like we were letting them down if we took a quiet action…Once we decided what we wanted to do, we felt a great sense of urgency, both to support the kids and also to get out and sort of lead this debate…We believe this country’s most precious gift is our children. They are our future. We must keep them safe.’ According to DICK’s President Lauren Hobart, the changes reflected the fact that ‘we [DICK’s] are all about kids…While we’ve never come out like this and made a statement, especially with a topic this politically charged, it actually felt very similar to our values in that we support communities and we are all about kids.’
Austin et al. (2019), comparing DICK’s to the Nike and Gillette examples also featured here, found that DICK’s stand was perceived by consumers as the most driven by values, with stakeholders the second strongest motivator, and the least driven by egoistic motives. They note that of the three initiatives, DICK’s moved the most into significant action and activism, by changing store policies and working to drive policy change through lobbying, and propose that this influenced respondents to view them as more sincere.
Iqbal (2019) recounts that in 1989 Gillette launched its ‘Best a Man Can Get’ campaign during the US Superbowl. The slogan was projected onto vignettes of male American life: strong men playing sport, brave men hurtling into space, dashing men kissing beautiful women, propping up a fantasy vision of manhood. Thirty years’ later, Gillette aired a very different campaign in response to #MeToo that challenged men to be better, less macho and to stop excusing bad behaviour. The ad showed a father intervening in a fight, a friend stopping the street harassment of a woman, and a woman being mansplained to in a meeting. In co-opting a social movement, Gillette attracted thousands of complaints and threatened boycotts, and industry experts interviewed by Iqbal thought the campaign ill-judged and clumsy, however 63% of tweets to @Gillette following the ad were evaluated as positive.
Screenshot from We Believe: The Best Men Can Be, a short film by Gillette addressing toxic masculinity.
The wider social impact of corporate activism
Branicki et al. argue that the apparently moral positions taken by CEOs and firms belie a political reality that blurs private and public interests to reinforce the power of the CEO and the corporation, as well as justifying the morality of market capitalism itself, where any positive effects of activism may be secondary. In their research, they find no examples of CEO activism that harm the primary business interests of the corporation, arguing a corporation’s commercial interests will always dictate the limits within which any form of morality can be expressed. They add that this boundary would likely exclude ethical issues such as corruption, tax evasion, excessive executive remuneration, increases to minimum wages, and trade union power. Ultimately, they argue that CEO activism is potentially a dangerous reversal of the democratic primacy of the public, where, if CEOs continue to expand their forays into matters of public political concern, the extent to which democratic debates can exist outside of corporate-friendly issues could be jeopardised. Dodd (2018) agrees that corporations have ‘emerged as protector and promoter of the political agendas of the public on a large scale…the power of nation-states and traditional institutions is eroding, leaving private actors (i.e., corporations) and civil society actors (e.g., NGOs and activists) to pick up the slack.’
Austin et al., however, suggest that activism necessarily exists as a shared dialectic between organisations and wider society, where the two are not necessarily in opposition. Although the relatively greater power of organisations cannot be ignored, individuals and activist groups have access to platforms that allow them to be heard. Moreover, even where organisations have the power to shape dialogue, how positively that dialogue is perceived depends on their ability to build trust with the public. For Hoffmann et al. (2020), however, using the example of Nike, the balance of power favours the corporation, ‘…engaged in unchallenged communication praising the hyper-individualism of a market ideology’ which ultimately ‘undermines the social cause ostensibly at the heart of the campaign: the fight against racial discrimination.’
Activism and the shaping of corporate, consumer and stakeholder identity
Corporate social advocacy involves efforts to shape the identity of companies, both by the corporations themselves and by consumers and other stakeholders. Capizzo (2020) examines how corporations strive to position themselves as protagonists in a larger story of social change. This, he argues, encourages them to engage more like individuals, participating in discussions as both property owners and as personified brands. Corporations and brands are not individuals, however, and this central myth is sometimes exposed, for example in the case of DICK’s, where the leadership acknowledged that some employees took a very different stance on their policy of removing guns from sale. At the same time, it is becoming increasingly clear to both to organisations and to scholars that consumers and other stakeholder groups cannot be easily categorised as possessing homogeneous or settled identities, where polarisation across political lines is only one aspect of this fragmentation.
Social activists are unlikely to often reject the support of corporations and high-profile CEOs. However, even where their activism is motivated by moral concerns, few corporations will act against their own self-interest. Moreover, the areas where they are willing to intervene are likely to continue to be tightly circumscribed. Where corporations do support causes, their primary motivation will often be the furthering of their own brand, with the cause itself secondary, potentially damaging the cause itself by associating it with naked commercialism.
What is perhaps most concerning, however, is that corporations, in their pursuit of ever more nuanced market segments, might, through their activism, increase the polarisation of political debate and social division. For example, in co-opting and amplifying Colin Kaepernick’s protest, Nike might delight its target demographics at the cost of alienating many NFL fans who tend to be older and whiter than Nike’s demographic. If the activism of corporations focuses on the preoccupations of the younger and richer, the older and poorer sections of society might feel increasingly marginalised from the mainstream, and more open to extreme rhetoric from popularist politicians.
Corporations have always involved themselves in politics, and it can be argued that their public involvement in debates at least makes this more transparent. Moreover, if we challenge corporations to accept their social responsibilities, for example in relation to the environment and global supply chains, then is it not unreasonable for them to view broader social issues as legitimate areas for them to comment on?
In terms of identity, treating companies as individuals tends to mask their huge economic and social power, the reach of their communications, and their lack of accountability beyond their own shareholders. It places them at the same level as everyone else in debates, obscuring their disproportionate power. It also serves to gloss over any diversity of opinion within organisations, marginalising opportunities for dissent from their employees.
A final question to ask is whether CSA will remain a largely a US phenomenon, reflecting the distinctly polarised and divisive politics in that country, or is it likely that the rest of the world will follow? In the UK, a recent example of CSA saw the cosmetics retailer Lush launch a campaign highlighting police infiltration of environmental groups. However, that fell flat quite quickly, with accusations that the company was anti-police, perhaps indicating that the UK is not quite ready for this level of political activism from companies. However, Chatterji and Toffel believe that there is little reason to doubt that it could develop into a global force, arguing that the more CEOs speak up on social and political issues, the more they will be expected to do so, adding that, in the Twitter age, silence is more conspicuous—and more consequential.
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