By Ysabella Chua, JMU Graduate Student, Accounting
Millennials have a unique opportunity that doesn’t come around very often: we have the ability to affect change in businesses.
From Corporate America to local stores, our generation is carefully reshaping the way that businesses operate and we’re doing it in a huge way–we are forcing businesses to step out of their comfort zone and actually voice an opinion.
Traditionally, business ideology was just that: business. “Don’t take it personally,” the common phrase would go. “It’s just business.” But what happens when business isn’t ‘just business’ anymore? What happens when businesses when businesses get political?
This is more than just donations to political action committees. Although not subjected to the intense media scrutiny it deserves, corporations contribute substantial sums of money to influence politics and politicians. Just take a look at OpenSecrets.org.
To be a force for the common good, businesses could take bold and unapologetic stances on pressing issues, and use their sway to draw media attention. Instead of just making a donation to a worthy cause, let’s say homelessness, a CEO might talk about homelessess and put their money where their mouth is to address the underlying causes of the issue, including structural, policy and political processes.
Of course, in a time in which society is so polarized and eager to fight, this could be potentially divisive and pose risks for a brand. So, should businesses take stances on issues? The majority says yes. One study found that 88% of the public believed that corporations can affect social change and 84% said that corporations have the responsibility to do so. And that’s a pretty large majority. It means that more consumers are willing to mindfully choose their brands; they are willing to consider what a logo stands for and what belief their purchase might support. The term for this in scholarly literature is buycotting and it’s difficult to measure how much buycotting happens in the public, but we know it does.
Like every other issue in the world, this question of advocacy isn’t as simple as it sounds; companies don’t just share their opinions and automatically garner higher sales for that specific reason. Like your drunk uncle who likes to post political statuses on Facebook just in time for the holiday season, there is bound to be backlash.
Companies, particularly public companies, tread a very delicate line.
This apprehension is mirrored within businesses. When asked if “big brands” should participate in political activism, 78.6% of marketers believed that companies should not take stances on political issues. The resounding ‘nays’ from industry professionals can be summarized in the uncertainty of how the business’ opinion will settle with their customers. Afterall, there are two sides to every story, and the opposition to a company’s belief might be larger than its support.
It’s the risk that businesses undertake when they step into the political arena; it’s the risk that everyone assumes when they say anything opinionated. A 2018 CMO survey reports that Mid-sized companies (companies worth $500M-$999M) are most likely to be politically active, with larger corporations (companies worth more than $10M) and smaller companies less likely to be. In other words, companies that perceive they have too much to lose are less likely to put their business in jeopardy with a potential divisive stance.
There are recent examples of companies that have taken a stand on divisive issues with mixed results. When Dick’s Sporting Goods pulled its assault rifles from its shelves, it received praise from anti-gun groups, but its stock price slowly decreased over the proceeding month. When Nike released its Colin Kaepernick ad in support of football players kneeling during the national anthem, its revenues soared while disagreeing customers literally burned their own Nike products. It’s impossible to please everyone, especially when you have a number of stakeholders fully invested into your business. It boils down to a company’s morale and its executives’ values.
The CEO of Chick-Fil-A is as unapologetic about its religious beliefs, as Patagonia is fearless about taking the offensive and suing the Trump administration over environmental rollbacks. Each business received its fair share of backlash and each business still stands.
Consumers want transparency, and Millennials specifically believe that business advocacy is a means for change. A 2018 study showed that people believe that corporations are the third most powerful group that can influence social change in the United States (just behind Congress and the President, in that order). And that social pressure is showing. It is becoming more and more difficult for business to “just be business.”
At the end of the day, it’s up to businesses if they want to wade in the political arena. It is a risky and dangerous move that could result in mean tweets, outraged Facebook posts and potential dips in stock price. However, it is important to note that customers hold the reins of this new era of social-business action. This generation has a unique opportunity to reshape Corporate America to our liking. The things we purchase are a form of support. In addition to signing petitions or marching, we can take a stand every single day through the things we buy. For the first time in a long time, we have the opportunity to make a difference that echoes from the streets of Mom and Pop shops to Wall Street’s mass corporations. And while our income as students doesn’t exactly mirror this total ability to pick and choose between businesses, it’s definitely something to take into consideration.
So, what do you care about? Who do you support?