None of my business?
Big businesses used to shy away from speaking up for social justice. Now they are seizing every opportunity to speak and be heard.
Economics
Seth Loo
Earlier this year Starbucks promised to hire 10,000 refugees in protest against Donald Trump’s executive order banning refugees from six Muslim-majority countries. CEO Howard Schultz, with “a heavy heart”, expressed “deep concern” in his open letter voicing concerns against the xenophobic immigration orders. But Schultz is not the first to spearhead a movement for social justice with corporate influence.
In 2016, PayPal revoked plans for an expansion in Charlotte after House Bill 2(HB2) was signed. The controversial bill mandates transgender people to only use washrooms that match the gender on their birth certificates, which CEO Dan Schulman denounced as a law that “perpetuates discrimination”. Since then, opposition against HB2 has been snowballing, with the likes of Apple, Microsoft and eBay joining the fight.
For decades big companies have abided by a rule of thumb: be neutral on social issues. It is better to be seen than to be heard, so to speak. Taking a stand in a growing chasm of opinions inevitably reels in backlash from the public, regardless of the stance being liberal or conservative. Taciturnity was the best option to maintain sales, a point Michael Jordan concisely made back in the 1990s. Even for the outspoken outliers like Rawleigh Warner Jr (Chief of Mobil), discussions were strictly about bread-and-butter economic issues. After all, corporate taxes and minimum wage policies do affect company revenue significantly; but race relations seem to have little effect on sales or profit. So to what, or whom, do big companies owe this novel forthrightness?
Rather than deterring companies, customers are now compelling them to assume corporate social responsibility. Gone were the times where protesting on the streets would seal one’s fate with police arrests. Activism is now a norm for the masses: it has become a right, a responsibility for some even. Not only has social media bestowed consumers with a louder and stronger voice, it has also provided a platform for opinions to resonate effortlessly. But at the same time the past two decades has taught us that demonstrations can be futile and ineffectual. To effect change people needed to translate the principles they hold dear into tangible actions; and in this context it means consumer boycotts and drastic changes in expenditure patterns for the customers.
By speaking on divisive issues, corporate leaders are putting their companies at risk as previously mentioned. But as risky that can be, the potential benefits are just as lucrative, if not more so: brand loyalty and consumer solidarity. With how politically conscious people have become, customers are willing to walk the extra mile for companies which moral codes and principles align with theirs. Whether it’s splurging more on certain products or recommending it to friends and family, consumers will contribute however they can to ensure these companies strive and thrive. Though boycotts on Starbucks’ plan to hire refugees generated bad publicity, sales have also increased — courtesy of the protesters, ironically. This is a gambit corporates are willing to invest in.
Perhaps company employees encourage corporate activism more than any other community because unlike customers, they have a sustained interaction with the firm they work for. When who you work for defines who you are, companies are no longer a mere source of livelihood; there is much more than just one’s income that is at stake. By providing their labour workers are also putting their reputation on the line, hence for millennials especially workplace values must to a certain extent reflect those of their own. Being amenable to employees’ opinions and principles could solve the principal-agent problem in a corporate context. Speaking up on behalf of the workers empowers them and grants them a sense of belonging at work, which in turn improves employee efficiency and effectiveness.
In the midst of this newfound heroism, we are also witnessing a transition in marketing strategies. By assimilating the element of advocacy advertising, corporates are now marketing their goodwill to indirectly advertise their products. While altruism for the needy is lauded, this also gives way to an unsettling notion on product innovation. Instead of which goods to innovate and market, brainstorming sessions will be tackling on which social justice to fight for. Take clothing brand Patagonia as an example: it has pledged to donate one per cent of its sales to support environmental organisations around the world. From a financial standpoint, the latter is more economical and takes less effort to accomplish. Is product innovation moving into a new direction, or could it be stagnating and losing its direction altogether?
In a world of post-truth politics and fake news, people yearn the audacity to voice up with undaunted candour. Traditionally corporations have been opting for the easy and safe way out — silence. But as people begin to interpret the silence as an act of cowardice, they are calling out corporations for turning a blind eye on issues that matter. Corporations are now adopting a refreshing sense of valor for a change because if they continue dismissing social issues as being none of their business, it’s going to be bad for business.
