{"id":21404,"date":"2020-07-20T19:12:41","date_gmt":"2020-07-20T19:12:41","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=21404"},"modified":"2020-07-24T13:50:11","modified_gmt":"2020-07-24T13:50:11","slug":"black-lives-matter-lgbtq-rights-trump-the-risks-and-rewards-of-corporate-activism","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/black-lives-matter-lgbtq-rights-trump-the-risks-and-rewards-of-corporate-activism\/","title":{"rendered":"Black Lives Matter, LGBTQ rights, Trump: The risks and rewards of corporate activism"},"content":{"rendered":"

Joshua T. Beck<\/a>, University of Oregon<\/a><\/em><\/p>\n

The Research Brief is a short take about interesting academic work.<\/em><\/p>\n

The big idea<\/h2>\n

Companies and CEOs are increasingly wading into political issues<\/a>. My latest research<\/a> suggests that such corporate activism can come with high costs if it doesn\u2019t align with the political values of a company\u2019s customers, employees and local lawmakers \u2014 or big gains when it does.<\/p>\n

In what we think is the first study to examine how corporate activism affects financial performance, three co-authors and I built a database of decisions by publicly traded companies that took a stand on polarizing issues<\/a> such as LGBTQ rights, abortion, immigration and gun control over a five-year period. We then looked at the relationships between activism and immediate changes in a company\u2019s stock price and subsequent changes in its sales. We found that the impact depended on how well the company\u2019s activism aligned with the political values of the people the company represents. On average, well-aligned activism boosts a stock price by approximately 1% and sales by approximately 10%. Misaligned activism lowered a stock price by over 2% and reduced sales by over 4%.<\/p>\n

The impact on stock prices depends on whether investors think the activism will strengthen or weaken long-term relationships with customers, employees and lawmakers \u2014 who may retaliate by rescinding tax breaks<\/a> or making other policy changes. We found that companies can avoid or mitigate stock drops when they explain to investors how activism is good for business.<\/p>\n

Why it matters<\/h2>\n

Companies and their executives are increasingly moving into political terrain. Recently Amazon, Walmart and other companies expressed support for Black Lives Matter<\/a>. Goya Foods CEO Bob Unanue praised<\/a> President Donald Trump\u2019s leadership during the pandemic.<\/p>\n

This trend began in the 1990s and early 2000s as human rights activists and environmentalists pressured companies to be \u201cresponsible\u201d members of society. Today consumers, employees and local citizens are pressuring companies to take actions that support their own political views<\/a>.<\/p>\n

Currently, nearly every major company<\/a> promotes its efforts to protect the environment and ensure workers\u2019 rights. As more companies take political positions<\/a>, our research shows companies may want to ensure its views reflect those of its employees and customers. Unanue\u2019s comments about Trump, for example, drew an immediate backlash and calls for a boycott by its largely Latino customer base<\/a>. This reaction also drew calls for a \u201cbuycott\u201d<\/a> of Goya\u2019s products, suggesting companies might also gain new customers even while losing others.<\/p>\n

What still isn\u2019t known<\/h2>\n

We are only beginning to understand how corporate activism affects profits, brand perceptions, competitive reactions and \u2013 importantly \u2013 public attitudes toward the issues at hand.<\/p>\n

Future research may evaluate how corporate activism affects a brand\u2019s market position. For example, certain activist brands like Nike<\/a> and Ben & Jerry\u2019s<\/a> have a reputation for taking political stances. Does having an activist reputation reduce competitive threats? How does it affect the way customers view the brand and its products?<\/p>\n

What other research is being done<\/h2>\n

A small but growing field of researchers is examining activism from a variety of perspectives. For example, in the recent \u201cFuture of Brands<\/a>\u201d conference at Columbia University, scholars presented work<\/a> examining how corporate activism shapes consumers\u2019 moral decision making. More broadly, we need more research<\/a> to understand how people\u2019s political views shape what they buy.<\/p>\n

[Get the best of The Conversation, every weekend.<\/em> Sign up for our weekly newsletter<\/a>.]\"The<\/p>\n

Joshua T. Beck<\/a>, Assistant Professor of Marketing, University of Oregon<\/a><\/em><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Joshua T. Beck, University of Oregon The Research Brief is a short take about interesting academic work. The big idea Companies and CEOs are increasingly wading into political issues. My latest research suggests that such corporate activism can come with high costs if it doesn\u2019t align with the political values of a company\u2019s customers, employees […]<\/p>\n","protected":false},"author":44,"featured_media":21405,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[650,2763,8338,8374,4100,479,2591,2071,4095,2197,7727,3231,3019],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/21404"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=21404"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/21404\/revisions"}],"predecessor-version":[{"id":21454,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/21404\/revisions\/21454"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/21405"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=21404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=21404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=21404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}