{"id":28921,"date":"2022-03-09T23:39:00","date_gmt":"2022-03-09T23:39:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=28921"},"modified":"2022-03-09T23:47:47","modified_gmt":"2022-03-09T23:47:47","slug":"why-apple-disney-ikea-and-hundreds-of-other-western-companies-are-abandoning-russia-with-barely-a-shrug","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/why-apple-disney-ikea-and-hundreds-of-other-western-companies-are-abandoning-russia-with-barely-a-shrug\/","title":{"rendered":"Why Apple, Disney, IKEA and hundreds of other Western companies are abandoning Russia with barely a shrug"},"content":{"rendered":"\n

Douglas Schuler<\/a>, Jones Graduate School of Business at Rice University<\/a><\/em> and Laura Marie Edinger-Schons<\/a>, University of Mannheim<\/a><\/em><\/p>\n\n\n\n

Many companies in the U.S. and elsewhere have been quick to sever ties to Russia \u2013 going well beyond applying the sanctions ordered by their governments<\/a>.<\/p>\n\n\n\n

IKEA, Nike and H&M are temporarily closing their Russian stores<\/a>. Disney, Sony and Warner Bros. paused the release of new films<\/a> in Russia. Apple, Samsung and Microsoft stopped selling their products there<\/a>. McKinsey, Ernst & Young and many other top accounting<\/a> and consulting firms<\/a> said they are leaving the Russian market \u2013 possibly for good.<\/p>\n\n\n\n

In all, over 300 companies have announced plans<\/a> to close stores, reassign staff or stop selling products in Russia since the invasion began on Feb. 24, 2022, according to a running tally by Yale management professor Jeffrey Sonnenfeld. Most recently, McDonald\u2019s<\/a>, Starbucks<\/a> and Coca-Cola joined the list on March 8, 2022, announcing they would close stores and cease sales.<\/p>\n\n\n\n

In some ways, these decisions fit in with a recent trend in which companies have increasingly staked out<\/a> public positions on often controversial social and political issues, such as restrictions on trans rights and ability to vote. As business professors<\/a> who study why<\/a> companies engage in activism, we feel the same factors that have driven those decisions to speak out are at work over Ukraine.<\/p>\n\n\n\n

But we also believe Ukraine stands out for one important reason: For many of these companies, it may have been one of the easiest stands they\u2019ve ever taken \u2013 even if there is a financial cost.<\/p>\n\n\n\n

Taking a stand<\/h2>\n\n\n\n

Corporate sociopolitical activism<\/a> \u2013 the technical term we use \u2013 entails companies making public declarations or taking actions about significant social or political issues that extend beyond their core business.<\/p>\n\n\n\n

Until relatively recently, companies rarely took stands<\/a> on social or political issues.<\/p>\n\n\n\n

That didn\u2019t really change until the 2000s, when LBGTQ rights were under attack and major companies such as Walmart spoke out<\/a> against bills that would have allowed discrimination.<\/p>\n\n\n\n

Since then, there\u2019s been a surge in companies taking proactive stands<\/a> on issues ranging from climate activism and racism to abortion and voting rights.<\/p>\n\n\n\n

For example, in the wake of the murder of George Floyd by police in Minneapolis in 2020, hundreds of CEOs signed a pledge<\/a> against racial discrimination and created an organization dedicated<\/a> to diversity, equity and inclusion. In 2021, the CEOs of Dell, American Airlines, Southwest Airlines and AT&T spoke out against a Texas bill<\/a> aimed at making it more difficult for citizens to vote.<\/p>\n\n\n\n

Others have taken more decisive action. Uber and Lyft<\/a> said they would pay to defend their drivers if they got sued under a Texas law that allows anyone to sue a person who helps someone get an abortion. And in 2016, PayPal and the NCAA pulled business<\/a> from North Carolina after the state passed a bill limiting LGBTQ protections.<\/p>\n\n\n\n

Surveys show<\/a> today\u2019s consumers expect<\/a> companies to live up<\/a> to the values they espouse<\/a> in their press releases, and big corporate groups such as the Business Roundtable even began urging companies<\/a> to focus on creating value for everyone \u2013 not just shareholders.<\/p>\n\n\n\n

\"a
Many companies spoke out against racism after George Floyd\u2019s murder inspired months of protests, like this one on the first anniversary of his death. AP Photo\/Christian Monterrosa<\/a><\/figcaption><\/figure>\n\n\n\n

Why companies speak out<\/h2>\n\n\n\n

More specifically, research<\/a> has identified three major factors<\/a> that typically drive a company\u2019s decision to pursue corporate activism: employee beliefs, consumer pressure and the CEO\u2019s personal involvement<\/a> or conviction.<\/p>\n\n\n\n

It\u2019s not always clear what is driving corporate decisions to suspend operations in Russia, but it seems as if all three factors are at play.<\/p>\n\n\n\n

IKEA, for example, cited the support and security<\/a> of its workforce in announcing its \u201cpause\u201d in Russia and a donation of 20 million euros for humanitarian assistance for those displaced by the war. After a #BoycottMcDonald\u2019s began trending on Twitter<\/a> to protest its presence in Russia, the fast-food chain said it was temporarily closing its stores there. And Tesla CEO Elon Musk agreed to provide Ukraine<\/a> with free satellite internet after a Ukrainian official requested it on Twitter.<\/p>\n\n\n\n

\"People
McDonald\u2019s has been in Russia since it opened its first store in Moscow in 1990. AP Photo<\/a><\/figcaption><\/figure>\n\n\n\n

A corporate no-brainer<\/h2>\n\n\n\n

But ultimately, the decision whether or not to sever a relationship with a country \u2013 even if temporarily \u2013 is very different from taking a stand on an anti-trans measure.<\/p>\n\n\n\n

Even so, the speed with which U.S. and other Western companies have abandoned Russia is something we\u2019ve never seen in our lifetimes. And it suggests the decision was likely a no-brainer.<\/p>\n\n\n\n

For one thing, Russia\u2019s invasion has been met with widespread revulsion in the West. And even before the war, the public\u2019s perception of Russia in Western countries was very low<\/a>.<\/p>\n\n\n\n

[Over 150,000 readers rely on The Conversation\u2019s newsletters to understand the world.<\/em> Sign up today<\/a>.]<\/p>\n\n\n\n

One post-invasion poll found that 86% of Americans saw the invasion as unjustified<\/a> \u2013 with broad bipartisan agreement \u2013 and another showed that half of the respondents would compare the actions of Vladimir Putin<\/a> with those of Adolf Hitler.<\/p>\n\n\n\n

And governments including those like Germany<\/a> that have close commercial ties to Russia have strongly condemned its actions and joined unprecedented sanctions. About 80% of Germans said they approved of their government\u2019s decision to sanction Russia and export weapons to Ukraine \u2013 or said it didn\u2019t go far enough.<\/p>\n\n\n\n

Ultimately, the Russian market is just not that big for companies in the U.S, such as Apple<\/a> and Disney<\/a>. For others, such as McDonald\u2019s, which has been in Russia since 1990 and has about 850 locations there<\/a>, days of pressure finally persuaded company officials they had to pull out.<\/p>\n\n\n\n

On many hot-button social issues like trans rights<\/a> and gun control<\/a>, the general public is split almost right down the middle, meaning taking a stand could alienate a lot of consumers.<\/p>\n\n\n\n

But on the issue of Russia\u2019s invasion of Ukraine, many companies likely were more worried about the risks to their reputation<\/a> were they to do nothing. With so many other companies pulling out, it likely seemed better to explain to shareholders and customers back home why they\u2019re leaving<\/a> than why they\u2019re staying<\/a>.<\/p>\n\n\n\n

Douglas Schuler<\/a>, Associate Professor of Business and Public Policy, Jones Graduate School of Business at Rice University<\/a><\/em> and Laura Marie Edinger-Schons<\/a>, Professor of Sustainable Business, University of Mannheim<\/a><\/em><\/p>\n\n\n\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":"

Douglas Schuler, Jones Graduate School of Business at Rice University and Laura Marie Edinger-Schons, University of Mannheim Many companies in the U.S. and elsewhere have been quick to sever ties to Russia \u2013 going well beyond applying the sanctions ordered by their governments. IKEA, Nike and H&M are temporarily closing their Russian stores. Disney, Sony […]<\/p>\n","protected":false},"author":44,"featured_media":28922,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[4692,307,4087,8338,4100,7719,4694,1803,11466,2071,579,6840,11465,275,4186,4095,6962,11468,1664,1454,6403,11467,506,949,11411,11438],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/28921"}],"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=28921"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/28921\/revisions"}],"predecessor-version":[{"id":28923,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/28921\/revisions\/28923"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/28922"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=28921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=28921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=28921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}