“Sign the petition telling Amazon CEO Jeff Bezos to reject Trump’s sexism, racism, and xenophobia. Stop selling Trump products,” reads the message in my inbox from women’s rights group UltraViolet. The message goes on to note that Macy’s, Serta, NBC, and NASCAR have all done the right thing; that is, “Dump Trump.”
Reading this message returned me to an age-old question: What is the responsibility of business to society? In 1970, Milton Friedman famously argued that the only responsibility of business to society is to increase profits. Yet, by the 1980s, the focus had shifted to how corporate social responsibility should be practiced, not if it should be practiced. This change symbolized the move from reactive to proactive corporate practices on issues such as environmental responsibilities and coincided with the development of public relations as a profession. Modern corporate practices encourage the demonstration of a triple bottom-line: people, profit, and planet. Corporate social responsibility is no longer an option, but a public expectation. CSR programs and campaigns often defined as voluntary initiatives are central to the public relations efforts of companies, although they may be publicly characterized as inauthentic “green-washing” or “pink-washing.”
Today, 46 years later, the context in which Friedman’s argument was made has changed greatly, but the question of responsibility remains. The context of corporate responsibility to society today is one where public pressure occurs with the click of a button from my inbox; one where corporate personhood doctrines exist via Citizens United; and one where the public role of corporations as contributors to societal outcomes has become increasingly complex and important to our democratic processes.
Corporate engagement in controversial social-political issues continues to become more commonplace with business leaders collectively flexing their muscles in promotion and protest of issues that have included climate change, health care reform, gun control, race relations, LGBTQ discrimination, gender and marriage equality, and reproductive rights, among others. Whether intentional or not, when corporate leaders express stances toward controversial issues, their companies and brands become aligned with those views. Consider the headlines that read “Barilla earns gay boycott, learns taking sides is bad for business,” “Chick-fil-A’s controversial gay marriage beef,” or “Starbucks enters same-sex marriage boycott wars.” Within this growing phenomenon, the outcomes of corporate activism on public policy and consumer behaviors to-date have been considerable.
Recent discussions in the mainstream media highlight corporate engagement in protesting discrimination toward the LGBTQ community in particular. The National Basketball Association (NBA) released a statement saying it may move its 2017 All-Star Game from Charlotte, NC after the recent passage of an anti-LGBTQ law known as House Bill 2. As a result of the bill, PayPal cancelled plans to open a global operations center that would create 400 jobs in Charlotte, and Deutsche Bank cancelled expansion plans into the state. According to an article in The Washington Post, “The Deutsche Bank expansion would have employed enough people for the combined payroll of these new jobs to be worth more than $21 million before benefits.”
More than 90 executives –from behemoths like American Airlines, Apple, Airbnb, Bank of America, Barnes and Noble, The Coca-Cola Company, Facebook, Goldman Sachs, Google, Kellogg’s, Levi Strauss & Co., Marriott International, Microsoft, Pinterest, Salesforce, Starbucks, Twitter, Uber, and Yelp –have since signed an open letter calling on North Carolina’s legislature to overturn the law.
Corporate pressure surrounding similar anti-LGBTQ rights legislation resulted in the recent announcement that Georgia Gov. Nathan Deal would veto a similar bill. In 2015, Indiana Gov. Mike Pence ultimately signed a revised version of the “Religious Freedom Restoration Act” (RFRA) after CEOs from Angie’s List, Anthem, Eli Lilly & Company, Salesforce and others protested. Angie’s List cancelled talks about the company’s $40 million expansion into the state, and Salesforce declined to hold meetings in Indiana. In 2013 Apple, Google, Facebook, and others filed a Supreme Court brief arguing against the Defense of Marriage Act (DOMA). Also at this time, Starbucks CEO Howard Schultz and Chick-fil-A CEO Dan Cathy went head-to-head with pro- and anti-marriage equality stances, respectively. Politicians and activist groups (both pro- and anti-) surfaced on both sides of the issue, provoking petitions, boycotts, online activism, and public demonstrations from both supportive and unsupportive publics.
Noticing this trend early on, Dodd & Supa (2014) questioned to what end were corporations engaging in activist efforts? – termed corporate social advocacy. Couched in public relations theory and research surrounding strategic issues management and CSR, we conceptualized the phenomenon as unique because the companies’: (1) addressed controversial issues divorced from particular areas of relevance; and (2) had the potential to simultaneously isolate stakeholder groups, while attracting activist groups. Therefore, we concluded that a necessary emphasis should be placed on understanding the outcomes that result from engagement in corporate social advocacy.
Subsequent studies have found that corporate social advocacy or corporate activism on behalf of CEOs, whether intentional or not, impacts bottom-line organizational outcomes and public opinion toward these issues (Chatterji & Toffel, 2016; Dodd & Supa, 2015, 2014). Writing for Forbes, Dodd (2015) detailed how alignment (or lack thereof) with corporate activist stances resulted in significant increases or decreases in purchase intentions dependent upon demographic groups. In their working-paper, referenced in a recent New York Times article, Chatterji and Toffel also found that corporate activism could sway public opinion toward issues. Golan (2016) explained that despite a history of abuses (e.g., Enron, Lehman Brothers), corporations that engage in advocacy may restore public trust and ultimately have an important role to play in shaping public debate and democracy.
Corporate activism is expected to continue growing as business leaders take note of how stakeholders — governments, legislators, consumers, employees, activist groups — respond. As legislators bend to the weight of corporate demands toward social-political issues and the public intensifies their expectations of corporate responsibility to society, the pressure to engage or become obsolete may be greater than ever. Chatterji and Toffel (2016) stated, “In an era of political polarization, in which we are increasingly cloistered in neighborhoods, social networks and workplaces that serve as echo chambers for our ideological beliefs, corporate neutrality may be outdated. […] Perhaps it is better in 2016 to be intensely loved by a few than inoffensive to many.”
Indeed, recent industry reports suggest “a majority of Americans now believe companies should stand up for what they believe politically, regardless of whether or not it is controversial” (Global Strategy Group, 2014). During this age of corporate personhood doctrine where companies are granted First Amendment rights allowing for practically unlimited campaign finance contributions, perhaps it is also time for companies to “put their mouth where their money is,” so to speak. Corporate social advocacy seems to be going the way of CSR as a voluntary behavior that may be evolving into a public expectation. Robert Heath has long argued that in order for companies to be effective, they must contribute to a fully functioning society by solving collective problems. He positions CSR as core to this mission, adding that antagonistic relationships may be “more predictive of the kind of change that has led to higher standards of CSR.”
It’s true, some issues may be less controversial than others and dependent upon the demographic group, potentially making it easier for companies to “excite the base” when issues are aligned with a lower risk of isolating stakeholders. Even capitalists like Friedman argued that engaging in “social welfare” was justifiable when it served the company’s economic self-interest (Park & Dodd, in-press). However, the fact remains that when companies are willing to contribute (often) millions in profits to relevant advocacy groups, all while publicly espousing beliefs that could both isolate stakeholders while attracting activist groups, perhaps there is an actual perceived betterment of society that motivates corporate leadership to engage in corporate activism.
Public relations leaders Richard Edelman, Gary Sheffer, and Roger Bolton seem to agree. Bolton writes, “CCOs are well positioned to help CEOs navigate the controversial landscape of social activism, where taking a stand may be not only the right thing to do, but also may provide an opportunity to strengthen corporate reputation.”
Corporate social advocacy may be both meaningful in its aim and strategic in its impact on corporate performance. It may be publicly perceived as more authentic, especially as linked to leadership and corporate values. Corporate activism reflects a responsiveness by businesses for the challenges of the modern activist landscape where companies are able to increasingly engage in the democratic process and influence societal change. Further research and professional guidance are necessary to navigate the new challenges of today – all of which may be linked back to that age-old question about the public expectations of businesses and responsibilities of corporations to society. Public relations researchers and professionals are ideally positioned to make meaningful and substantial contributions in this arena.
Melissa D. Dodd, Ph.D., APR, is an assistant professor at the University of Central Florida. She is also a research fellow for IPR’s Behavioral Insights Research Center. Follow her on Twitter @mellydodd.
