Research in Progress: How and when should corporations engage in social issues?

By Lucinda Austin, University of North Carolina at Chapel Hill, and Barbara Miller Gaither, Elon University

Should companies take a stand on social issues? What about when these issues are contentious and corporate stakeholders are divided on the topic?

The last few years have included numerous examples of corporate and CEO advocacy on divisive social-political issues including support for both conservative and liberal positions and representing a range of issues.

Examples include Dick’s Sporting Goods public statements and policy changes on gun sales following the Parkland, Florida school shooting, the president of Chick-fil-A’s public opposition to gay marriage, and Patagonia’s opposition to President Trump’s order to reduce the size of two national parks by nearly 2 million combined acres in which the company replaced its website homepage with a black screen with white letters stating, “The President Stole Your Land.”

Conventional wisdom suggests that companies should avoid contentious political issues that may alienate stakeholder groups. It certainly makes sense that, with the current political polarization of the American public, many businesses may hesitate to tread in the controversial waters of corporate social advocacy. Although, avoiding social and political issues may no longer be a “safe” course of action for companies.

Research from APCO Worldwide suggests that over 90 percent of U.S. consumers expect companies to take an active role in addressing pressing social concerns. And consumers across all age groups globally are expecting businesses to fill the gap in social action when governments fail.

This is especially true for younger consumers. A global survey from integrated marketing firm Havas Worldwide, in fact, found that almost two-thirds of millennials agreed that companies have a more important role than governments in driving positive social change. In addition, business leaders at 181 of the top global companies—from Apple to Walmart—are now suggesting that businesses have a purpose beyond profit alone, including supporting communities and protecting the environment.

As U.S. politics have become further polarized, consumers are increasingly expecting businesses to respond to a range of social and environmental concerns, government policies, and presidential announcements. Moreover, emerging research suggests that not taking a stand on controversial issues can have negative consequences for some types of companies, especially those that are known for their values.

As companies face increasing pressure to comment on divisive political and social issues, understanding how businesses should do so remains limited. Given this gap in knowledge, our study seeks to better understand this issue and examine under what conditions companies should consider taking social action, and how to best do so.
Our research will be twofold:

As one phase of the project, we will examine recent cases of high-profile corporate social advocacy through an analysis of social media, selecting a range of cases that vary in terms of how well the issue fits with the company, the company identity as either values-based or results-oriented, and the level of company involvement in the social advocacy.

A second phase will include a nationally representative survey to understand when and under what conditions companies are expected to engage in advocacy and how this advocacy will affect public response to the company. Based on the results from both phases, recommendations will be provided for how companies may serve as social actors on important social, environmental, and political issues while balancing a range of company goals and objectives.

For further information on this study, please email Austin lucinda.austin@unc.edu at or Miller Gaither at bmiller9@elon.edu. Results from the study will be available next year. This project is supported by a Page/Johnson Legacy Scholar Grant from the Arthur W. Page Center