Controversy is no stranger to politics. 2015 saw a number of issues polarize and deadlock Washington — and the country — on many levels. Entering into the 2016 presidential election looks to be no different. A handful of controversial candidates with backgrounds that buck the traditional presidential candidate pedigree and hardline stances on issues that already polarize Americans have so far driven the storyline of this election.
This polarized political environment has created an opportunity for others to step up and lead on issues of importance. Over the past several years, corporations have become increasingly more involved in political and social issues — taking public stances on a variety of issues such as immigration, minimum wage, same-sex marriage, the environment, and race relations.
Global Strategy Group (GSG) has closely monitored this trend over the past three years in our annual Business & Politics study, which asks Americans their opinions about the role that businesses should play in political discourse.
In our third-annual study, we learned that, as in the last two years, the public still has a clear opinion about how businesses weigh in on political issues, and the positions they take. Today, Americans are overwhelmingly supportive of corporate political engagement — 88 percent of respondents agree that corporations have the power to influence social change, and 78 percent agree that companies should take action to address important issues facing society. (See Figure 1).
As the Presidential campaign captures the nation’s attention, the sheer quantity of news coverage will ensure that any corporate stance or response will be heard by a national audience. But in today’s highly politicized environment, how are these corporate stances perceived? Could wading into the political fray put a corporation at odds with half the country?
This year’s study examines how brand stances on a range of issues are perceived differently by Democrats and Republicans and how this affects brand favorability. What we found has significant implications for corporate reputation and the approach corporations should take when determining whether or not to weigh in on political and social issues.
With all eyes on the race for the White House, we took a look at how the divisions in the electorate intersect with stances corporations take. We tested the impact on their respective brands of nearly 20 different stances taken by companies in the past year. The amount to which the impact is different between Democrats and Republicans, we call the GSG Polarization Score. The higher the number, the more polarizing the issue is for the brand.
Not surprisingly, of all the stances we tested, the most polarizing one involves the most controversial figure in American politics today: Donald Trump.
In July 2015, the Professional Golf Association (PGA) moved its Grand Slam of Golf from Donald Trump’s golf course following Trump’s controversial comments calling Mexican immigrants “rapists” and “killers.”
The public’s reaction to the PGA’s decision is split. The PGA’s stance scores highly with Democrats (improving the PGA brand by 28 points), but does poorly among Republicans (hurting the PGA brand by 27 points). That produces a polarization score of 55 — the highest of any position we tested.
Other hot-button issues follow closely behind. The next most polarizing stances represent a laundry list of topics that have divided Democrats and Republicans over the past year — guns, same-sex marriage and LGBT equality, the Confederate flag and race relations.
Like Trump and the PGA, some of these divisions are obvious. Democrats and Republicans have distinctly different reactions to Apple CEO Tim Cook’s public denunciation of the Indiana law giving businesses the right to refuse service to a customer based on their religious beliefs — producing a polarization score of 51 points.
But responses to other stances are more nuanced, like Delta’s announcement that the company would no longer transport big game animal trophies in the wake of Cecil the Lion’s death. To those on the Left, this is an appropriate response to a big news story (producing a positive brand impact score of 36 points with Democrats). But to some Republicans, it is perceived as an infringement on the rights of hunters and produces a negative brand impact score of 6 points — a 42-point gap between the parties.
Meanwhile, some issues that polarize our politicians tend to have a less polarizing effect when framed by business. For example, IKEA’s and McDonald’s positions on the minimum wage are less divisive, as the distance separating Democrats and Republicans is much smaller. This is in part because the minimum wage is a less polarizing issue among the public. But it is also because Americans feel it is much more appropriate for businesses to take positions on economic issues than social issues — especially when the issues affect their business. (See Figure 3 below.)
This year’s study found that the public is more aware of corporate stances on a wide range of issues than in previous years. While last year the average percentage of adults who had previously heard about the corporate stances we tested was less than 15 percent, this year that figure nearly doubled, to 29 percent.
But that 29 percent figure is still quite low. So how do companies get attention? The two companies with — far and away — the highest awareness of their positions were CVS with its ban on the sale of tobacco products (61% report having knowledge of this position)and the NFL with its domestic violence prevention campaign (59% report knowledge). Both companies drove this awareness with substantial paid media advertising campaigns, which also generated significant earned media.
Short of paid advertising, how can a company get noticed for its stances? Simply put, the higher the polarization score, the more likely it is to spark awareness. For example, NASCAR’s Confederate Flag policy has a much higher level of awareness than Pfizer’s climate change initiative. Perhaps the most well-known example of corporate polarization from recent years — Chick-fil-A’s position on same-sex marriage — has an awareness level higher than CVS and the NFL without the million-dollar ad campaign.
Certainly corporations take positions on political and social issues for a number of reasons — not always with corporate reputation in mind.
But if well managed from a communications perspective, taking these stands — no matter the reason — can provide an opportunity for companies and organizations to build their reputation with their audiences.
For information on each of the stances see our extended Appendix here.