What's Up with Businesses Taking Political Stances?

Emory Business Ethics
Sep 24, 2020
5 min read

Nowadays, many businesses have begun to take political stances, whether they are related to the Black Lives Matter movement, LGBTQ+ rights, etc. But what causes businesses to do this? Does it come from a genuine desire to advocate for societal issues? Or is it just another way to build profits for a business? We dive deeper into this phenomenon below.

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Context

COMPANIES TAKING POLITICAL STANCES

Businesses have not always dipped their toes into the political arena. In fact, before the 1980s, businesses shied away from partisan politics. Whenever businesses contributed to political campaigns, they contributed equally across both parties, hoping to build relationships with the party that would eventually be in power.

In the 1980s, the landscape changed slightly. The Corporate Social Responsibility movement increased in popularity, and companies were forced to consider the impact that their actions had on society. Even then, the solutions were mostly focused on improving ethical practices within the company, and not taking political positions of any kind.

Interestingly enough, the shift to businesses taking political stances has coincided with the increased polarization of politics. Companies have taken on political stances, and the number of companies that do so has increased over the years.

Businesses may just be responding to what the consumers want when they support some political positions. A whopping 70% of consumers now say that it is important for brands to take a stand on social and political issues. So, ask yourself this: How much would a company's political stance influence your buying decisions?

A RELEVANT STUDY: HARVARD BUSINESS CASE SUMMARY (2020)

168 managers and advanced MBA students participated in this study and asked to review companies with conservative and liberal values. Participants who were told that the company had more conservative values held it in a significantly worse light. When companies that had more liberal values were reviewed, the participants held the company as neither good nor bad.

Furthermore, they generally acknowledged that political advocacy is both a way for companies to connect with customers and promote their brand, and that using advocacy to target audiences is not seen as manipulative pandering. Rather, they saw it as a common practice. Although this sample is not representative of society as a whole, it can still be an important factor to consider.

The Debate

SHOULD COMPANIES TAKE POLITICAL STANCES? THE ARGUMENTS FOR YES AND NO:

Yes: Taking a political stance helps build a company's brand. If people can recognize a company's brand, then that could make them relate to the company more and have a connection with a company. Also, companies, like individuals, have every right to expressing their opinion. Continuing on, companies should play an essential role in advocating for rights and show solidarity with underrepresented and discriminated groups, especially with the power that companies have in society.

No: First of all, it is a risky business move. People can get offended by political messaging that a company puts out and stop buying from the company, which is a loss that the company could have prevented. In addition, companies can risk imposing their beliefs on their employees, and their employees can be associated with the company's political stance. Because large businesses already have great societal power, businesses should not have any role in influencing politics. Besides, businesses entering politics could create division among the general public.

DEMOCRATIC POLITICAL STANCE: BEN AND JERRY'S

Ben and Jerry's is an ice cream company based in Burlington, VT that clearly has a more Democratic-leaning stance when it comes to politics. At times, they create unique flavors of ice cream specialized for political campaigns and stances. One example of this is their Barack Obama-inspired flavor "Yes We Pecan", which is a play of his campaign slogan "Yes we can". They did the same with Vermont senator and former presidential candidate Bernie Sanders, creating a flavor called "Bernie's Yearning".

The founders of the company are also outspoken about their political views. One of the founders mentioned how it was important to "send progressive champions to Congress who will fix our healthcare system with Medicare for All, protect clean air and water, and get big money out of politics."

In practice, the company also supports local farmers and senior centers, which is not partisan in nature, but is an example of corporate social responsibility. A more partisan move that they made was to publicly voice support for Black Lives Matter after the death of George Floyd. On their Instagram account, they notably posted a graphic on how police funding can be re-allocated to other programs. They also pay their factory workers in Vermont a minimum wage that they deem to be livable, ringing in at $18.13/hour, which is fairly high for a less expensive state like Vermont.

Ben and Jerry's has a younger, slightly wealthier target demographic. Younger voters tend to be more left-leaning, so Ben and Jerry's can afford to support stances that are associated with the left without losing much business. Another factor that could potentially come into play is that it is based in Vermont, which is quite a left-leaning state. It is possible that being headquartered in one of the most liberal states in the United States could influence their political actions.

REPUBLICAN POLITICAL STANCE: CHICK-FIL-A

Chick-Fil-A is a fast-food restaurant headquartered in Atlanta, GA. They have a more right-wing stance on political issues, an example of this being their donations to Anti-LGBTQ+ charities until late 2019. After these donations were brought to light, celebrities such as Aziz Ansari boycotted the brand, and they became embroiled in controversy as a result.

Also, they are closed on Sundays, in accordance with Christianity, which declares that Sunday is assigned as a day of rest. Because Chick-Fil-A's are spread throughout the Bible Belt, many of their customers are church-goers and can relate to Chick-Fil-A's stance on being closed on Sundays. This decision has resulted in lower revenues for many years, especially because their competitors make the most money on weekends.

After the backlash Chick-Fil-A received, they have started to focus on more well-rounded giving policies, dropping those Anti-LGBTQ+ charities from their giving list. This decision angered several prominent conservatives, such as Ted Cruz. They now donate to causes deemed to be less partisan, such as preventing homelessness and childhood hunger. In the end, profit drives motives; because a lot of their base are teenagers who lean to the left, they have changed their political stance.

SHOULD CONSUMERS CHOOSE A COMPANY BASED ON THEIR POLITICAL STANCE? THE ARGUMENTS FOR YES AND NO

Yes: Levi's, a jean company, demonstrated their brand's authenticity by standing up for the values that they believe in. In 2018, they took a firm stance on gun control, setting up a $1 million fund to support organizations that are working to put "common sense [gun] regulations" in place. Also, in July 2020, the CEO of Goya Foods, whose products are often used in Latin American dishes, praised President Trump. This caused a backlash and a boycott of Goya products. People should keep their values in mind when buying products.

No: Consumers should not have to sacrifice quality simply based on a company's political stance, such as in the example of Chick-Fil-A, which is commonly regarded to be high-quality in the fast food realm. Also, the price of some products are better than others, regardless of their political stance. Low-income consumers may not have the luxury to buy a product based on their political stance. Some products are simply essential for life, such as pharmaceutical products. People inflicted with diseases and conditions do not have much of a range of choices in medicine. On the other hand, companies that are substitutable can be boycotted because of their political stance.