In the wake of the school shootings in Parkland, Fla., companies like Delta, Hertz and Symantec distanced themselves from the National Rifle Association by eliminating benefits to their members.
Dick’s Sporting Goods, which owns 35 Field and Stream stores (which feature hunting gear and supplies), took it a step further: The company announced that it had unilaterally raised the age limit for firearms sales and stopped selling the AR-15, the weapon used in Parkland and other recent mass shootings. The chief executive, Edward Stack, said that the company was “going to take a stand and step up and tell people our view and, hopefully, bring people along into the conversation.” Less than 24 hours later, Walmart joined Dick’s in raising the age limit on firearm sales (Walmart stopped selling AR-15s years ago).
They exemplify a recent phenomenon, “C.E.O. activism,” in which corporations and their chief executives pick a side in the culture war.
Some companies have benefited, through gains in popularity or even sales, by taking such stands. Patagonia reportedly saw a revenue surge after announcing its lawsuit against the Trump administration’s efforts to slash the size of Bears Ears National Monument in Utah. My research with Michael Toffel of Harvard Business School finds that consumers were more likely to buy Apple products after hearing Tim Cook’s statement opposing Indiana’s religious freedom bill.
But other firms have faced angry consumers and had to retrench, as Target did when hundreds of thousands of people signed a petition in protest of its trans-inclusive bathroom policy. The chief executive of Papa John’s, who blamed the National Football League’s handling of the national anthem controversy for his company’s declining sales, stepped down after he was criticized for his comments.
What has not happened in any of these cases is a cooling of partisan tensions. Even in rare cases when pragmatic business leaders helped to broker agreements, which was reportedly the case in North Carolina with the repeal of the so-called bathroom bill, a culture war still festers.
C.E.O. activism has typically not brought people together, working from the middle out. Instead, this type of activism, largely from the progressive side, has begun to galvanize conservatives. For example, in Georgia, lawmakers stripped tax breaks for Delta over its decision to cut ties with the N.R.A.
In the short term, Dick’s will become another corporate poster child for how political polarization and so-called negative partisanship — an automatic rejection of members of the opposing party — are infecting our society. There will be a rash of news stories about increased sales from liberal consumers rushing into Dick’s stores to vote with their wallets. Conservative media will point to boycotts and highlight other retailers that are stepping in to serve disaffected consumers.
But the real story will be the long game. C.E.O. activism represents a historic shift in the way corporations intersect with national politics. Rather than chief executives shaping political discourse, however, our toxic political environment is dictating corporate strategy. Instead of being cast as practical technocrats who could unite us, chief executives will be swept up in our cultural war, just like university presidents, celebrities, professional athletes and religious leaders before them.
Brands are likely to become even more segmented into red and blue, strengthening the association between liberals and Priuses and conservatives and Cracker Barrel. Corporate brand campaigns could soon resemble political campaigns, with efforts to identify the most intensely loyal consumers for repeat purchases as opposed to attracting new ones.
Mainstream brands may become as common as moderate politicians — that is, a rare, perhaps extinct, species in today’s political environment. Twitter and PayPal serve diverse customers today, but their recent efforts to regulate their own platforms have led to allegations of political bias and incited competitors.
Most companies are not prepared for this new world of politics. Pepsi and Starbucks have already been victims of orchestrated fake news campaigns; there will be many more. As more companies take stands, those remaining will be named and shamed on social media, creating impossible choices in an environment where neutrality is not an option.
Like our politicians, corporate chiefs will have to quickly figure out what stand they should take on the issue of the day by reflecting on their core convictions and estimating how their (customer) base will react. Like pollsters, they will have to assess which kind of consumers they can write off and which ones to curry favor with. The right answer will vary by a company’s geographic location, who their employees are and how much they depend on favorable government regulation.
by Aaron K. Chatterji, NY Times | Read more:
Image: Niv Bavarsky
Dick’s Sporting Goods, which owns 35 Field and Stream stores (which feature hunting gear and supplies), took it a step further: The company announced that it had unilaterally raised the age limit for firearms sales and stopped selling the AR-15, the weapon used in Parkland and other recent mass shootings. The chief executive, Edward Stack, said that the company was “going to take a stand and step up and tell people our view and, hopefully, bring people along into the conversation.” Less than 24 hours later, Walmart joined Dick’s in raising the age limit on firearm sales (Walmart stopped selling AR-15s years ago).
They exemplify a recent phenomenon, “C.E.O. activism,” in which corporations and their chief executives pick a side in the culture war.
Some companies have benefited, through gains in popularity or even sales, by taking such stands. Patagonia reportedly saw a revenue surge after announcing its lawsuit against the Trump administration’s efforts to slash the size of Bears Ears National Monument in Utah. My research with Michael Toffel of Harvard Business School finds that consumers were more likely to buy Apple products after hearing Tim Cook’s statement opposing Indiana’s religious freedom bill.But other firms have faced angry consumers and had to retrench, as Target did when hundreds of thousands of people signed a petition in protest of its trans-inclusive bathroom policy. The chief executive of Papa John’s, who blamed the National Football League’s handling of the national anthem controversy for his company’s declining sales, stepped down after he was criticized for his comments.
What has not happened in any of these cases is a cooling of partisan tensions. Even in rare cases when pragmatic business leaders helped to broker agreements, which was reportedly the case in North Carolina with the repeal of the so-called bathroom bill, a culture war still festers.
C.E.O. activism has typically not brought people together, working from the middle out. Instead, this type of activism, largely from the progressive side, has begun to galvanize conservatives. For example, in Georgia, lawmakers stripped tax breaks for Delta over its decision to cut ties with the N.R.A.
In the short term, Dick’s will become another corporate poster child for how political polarization and so-called negative partisanship — an automatic rejection of members of the opposing party — are infecting our society. There will be a rash of news stories about increased sales from liberal consumers rushing into Dick’s stores to vote with their wallets. Conservative media will point to boycotts and highlight other retailers that are stepping in to serve disaffected consumers.
But the real story will be the long game. C.E.O. activism represents a historic shift in the way corporations intersect with national politics. Rather than chief executives shaping political discourse, however, our toxic political environment is dictating corporate strategy. Instead of being cast as practical technocrats who could unite us, chief executives will be swept up in our cultural war, just like university presidents, celebrities, professional athletes and religious leaders before them.
Brands are likely to become even more segmented into red and blue, strengthening the association between liberals and Priuses and conservatives and Cracker Barrel. Corporate brand campaigns could soon resemble political campaigns, with efforts to identify the most intensely loyal consumers for repeat purchases as opposed to attracting new ones.
Mainstream brands may become as common as moderate politicians — that is, a rare, perhaps extinct, species in today’s political environment. Twitter and PayPal serve diverse customers today, but their recent efforts to regulate their own platforms have led to allegations of political bias and incited competitors.
Most companies are not prepared for this new world of politics. Pepsi and Starbucks have already been victims of orchestrated fake news campaigns; there will be many more. As more companies take stands, those remaining will be named and shamed on social media, creating impossible choices in an environment where neutrality is not an option.
Like our politicians, corporate chiefs will have to quickly figure out what stand they should take on the issue of the day by reflecting on their core convictions and estimating how their (customer) base will react. Like pollsters, they will have to assess which kind of consumers they can write off and which ones to curry favor with. The right answer will vary by a company’s geographic location, who their employees are and how much they depend on favorable government regulation.
by Aaron K. Chatterji, NY Times | Read more:
Image: Niv Bavarsky
