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MBE400ResearchPaper

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Bethany Crowder

The document discusses whether publicly traded companies should take public stances on social and political issues. It notes that consumer demand is pushing companies to take stances as research shows many consumers are more likely to purchase from companies that share their views. However, taking a stance also risks alienating shareholders or customers with differing views. The document examines how stances can impact sales, share prices, and the "vote with your dollar" movement. It also discusses how business ethics are transforming to focus more on social issues and prosocial stances through high-profile examples like Starbucks supporting LGBTQ rights.

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1 Is it ethical for publicly traded companies to take a public stance on social/political issues? Bethany Crowder Dr. Salek MBE 400 Virginia Wesleyan College December 13th, 2016
2 Table of Contents Introduction…………………………………………………………….. 3 The Changing Political/Social Climate…………………………… 3 Shareholder Impact………………………………………………….. 4 Vote Your Dollar Approach………………………………………… 5 Transformation of Business Ethics………………………………. 6 Examples of Companies Taking Public Stance………………… 7 Conclusion……………………………………………………………… 11 Bibliography…………………………………………………………… 12 Topic…………………………………………………………………….. 13 Research Abstract…………………………………………………… 13 Research Outline…………………………………………………….. 14
3 Introduction Business ethics can be defined as the collective values of a business organization that can be used to evaluate whether the behavior of the organization’s collective members are considered acceptable or appropriate. (Stanwick & Stanwick, 4) Although companies have their own sets of business ethics that are constructed and members of these organizations must abide by them, but do these companies think about how their public decisions and statements will affect their shareholders and customers? Changing Social and Political Climate The changing political and social climate is forcing companies into taking public stance on social and political issues by consumer demand. Forbes ran a study, which came out with the result that 8.1% of Americans are more likely to purchase from a company if they have the same or similar stances on issues, while Americans are 8.4% less likely to purchase from a company if their views differ. In today’s society the product or service being offered aren’t the only things that matter, consumers are making decisions based on things far deeper. (Dodd, Forbes) Global Strategy Group conducted a similar study, which indicates that 56% of Americans believe that companies should be engaging in this type of controversial dialogue about social and political issues. (Dodd, Forbes) Many consumers no longer see companies speaking out about these issues as taboo or unprofessional. Research shows that there is direct correlation between certain age demographics and their purchase decisions based on company stance on controversial issues. Age demographics 18-25 and 26-35 are most
4 likely to intentionally purchase from companies with stances aligned similar to their own. (Dodd, Forbes) When considering the age demographics of people 56 years or older they are 16.2% less likely to purchase from a company that has stances inconsistent from their own. (Dodd, Forbes) A misalignment of views can really affect a brand negatively in these age demographics. The other two age demographics 36-45 and 46-55 are the least likely to be persuaded by corporate advocacy in regards to impacting their purchasing decisions. (Dodd, Forbes) Shareholder’s Impact Shareholders across the board are pushing for transparency from company C- Suites. Major shareholders may not agree with the public stance a certain company is taking and that company risks the chance of isolating their shareholders. (AdWeek, 2014) “When organizations risk the isolation of stakeholder groups and diminished returns, it seems that a higher-level goal is in place than financial return-on-investment. And, research surrounding corporate social responsibility reasons that voluntary actions taken by corporations may be aimed at the “betterment of society” as an overarching goal. “ (AdWeek, 2014) Taking public stance on social and political issues can impact the financial sector for a company in multiple ways. It could increase sales in regards to people who want to support a business based on their views, but it can also have the adverse effect. Companies must also be sensitive to the potential rise and fall of stock prices after publicly announcing their viewpoint on a major social or political issue.
5 Vote Your Dollar Approach Companies should also consider that potential shareholders and customers may begin using the “vote with your dollar” approach. This is the concept of spending money or investing in a company that has similar viewpoints on social and political issues as a specific consumer. The point is to show support to a business as well as their decisions and beliefs through monetary imbursement. The “vote with your dollar” culture has changed in recent years from consumers supporting non-profit causes with monetary donations to consumers supporting socially responsible companies in exchange for products or services. (Kumar, SeedStock) There’s a push for companies to be more socially and environmentally friendly, consumers are looking for companies to behave better publicly and to do more good things for the community as well as the environment. Due to the fact that consumers are pushing for these changes most businesses are adopting socially conscious business models. (Kumar, SeedStock) “ More companies are figuring out innovative ways to build social responsibility into their business model to present customers with a strong incentive to “dollar vote” for them.” (Kumar, SeedStock) Transformation of Business Ethics “Pro-social brands are the next step for companies looking to morally engage with consumers. Driven by marketers who are moving beyond claims of sustainability and into strong stands on relevant social issues.” (Sachs, The Gaurdian) Sustainable
6 brands were the first to begin the transformation of business ethics, but the concept has grown into pro-social brands. There’s little room for controversy when investing in or purchasing from sustainable brands due to their charitable donations and emphasis environmental issues. The highly educated consumer tends to care about issues concerning sustainability such as cleaner supply chains, fair trade and carbon offsetting, but the average consumer tends not to notice. (Sachs, The Guardian) Increasing pro- social and pro-political trends are increasing the need for public ethical behavior from companies. These trends change how companies display their ethical decisions to the public as well as how consumers react to their behavior. “Pro-social brands are more politically disruptive and inspiring than basic sustainable brands. Instead of focusing on what a brand has done internally to drive a better world, pro-social brands look outward to take a stand on key moral issues.” (Sachs, The Guardian) Consumers view companies weighing in on social issues as reaching the tipping point and these companies increase the rate of change regarding the issues they showcase. Depending on the social issue being addressed, companies taking public stance could go viral and potentially bring in new business from consumers with similar moral ideals. Companies taking controversial public stance can be considered as adding fuel to the fire, but they’re really challenging their customers to rally behind them. The main idea of transforming business ethics stems from “The pro-social brand doesn’t say: “Look what we’ve done. Now buy our stuff.” Instead it says: “We’re willing to take a stand. Stand with us.”” (Sachs, The Guardian) This theory creates a connection between beliefs and consumption in modern society.
7 Examples of Companies Taking Public Stance Many American companies have taken part in the pro-social trends in recent years. These companies have seen their fair share of backlash from a certain consumer demographic, but the CEOs believe in the causes they’re standing for. Howard Schultz, CEO of Starbucks has been extremely vocal about his support for the legalization of LGBTQ marriages. On June 26th, 2015 in an extremely divided courtroom, the Supreme Court decided to grant the LGBTQ community their right to participate in the union of marriage. This day was a very important day in American history and Starbucks was one of the first companies to make comments about the controversial decision. Starbucks posted an article on their own personal news website the same day the decision was made. The article is titled “Starbucks Applauds Supreme Court’s Ruling on Marriage Equality.” The headline alone gives insight to Starbucks public stance on the hot button issue of marriage equality. “Today’s Supreme Court ruling supporting marriage equality makes me proud to be an American, and especially proud of Starbucks legacy of advocating for equality and inclusion for all our partners for the last 44 years.” (Schultz, Starbucks Newsroom) Starbucks has been a long time advocate for marriage equality and Schultz continued to publicly support the cause regardless of shareholder opinion. At the 2013 Starbucks shareholders meeting in Seattle, Washington, shareholder Tom Strobhar said that Starbucks sales and earnings were disappointing after the National Organization for Marriage announced that they would boycott Starbucks. (Stuart, Huffington Post) Schultz did not back down from what he
8 believed to be the morals of Starbucks as a company. His vision for the company is about diversity and inclusivity. Schultz responded to the disgruntled shareholder by saying “Not every decision is an economic decision. The lens in which we are making that decision is through the lens of our people.” (Schultz, Starbucks Newsroom) Howard Schultz’s statement aligns with the theory that business ethics are transforming into the betterment of our communities by public stance and not necessarily by increased sales. Starbucks shareholder Tom Strobhar, who is extremely conservative and prides himself on fighting corporate involvement in gay marriage, abortion and other controversial issues at major U.S. companies like Starbucks, Microsoft and Pfizer. (Stuart, Huffington Post) At the shareholders meeting, Strobhar continued to ask Schultz to stop endorsing liberal issues because they’re bad for business. Schultz replied to Strobhar’s request by saying “If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company. Thank you very much.” (Stuart, Huffington Post) Starbucks continues to make LGBTQ rights a part of their corporate policy by adding coverage of transgender reassignment surgery to the list of their company health benefits. Starbucks already covered prescription drugs for hormone replacement therapy and mental health care. (Schultz, Starbucks Newsroom) Due to Schultz’s relentless fighting for what he thinks is right, Starbucks earned a 100 on the Human Rights Campaign’s 2015 Corporate Equality Index. (Schultz, Starbucks, Newsroom) In 2014, Coca Cola released their annual Super Bowl commercial, but this one
9 differed from others. The commercial titled “America the beautiful” showcases the many different types of families from multiple different backgrounds. The song “America the beautiful” was sung in English as well as multiple other foreign languages to showcase that immigrants are the backbone of America. Apart from Native Americans, this nation is made up of people from all over the world. After the commercial aired on Super Bowl Sunday there was a huge backlash from consumers on twitter, but Coca Cola stood by their message. Many people were offended that the patriotic anthem was sung in other languages other than English. Coca Cola is famous for their advertising, which focuses on the idea that all people are different, but we are one. This commercial shows just that. The commercial celebrates different colors, lifestyles and origins of Americans who at the end of the day are Americans. (Poniewozik, Time) The commercial can be described as “Over a scene of these many Americans, it played a patriotic song: not the National Anthem, but the more accessible, singable “America the Beautiful.” It showed us panoply of American faces, young, old, brown, white, straight, gay (it included what are said to be the first gay parents depicted in a Super Bowl ad), in cowboy hats and hijabs, playing, eating, and exploring all-American vistas.” (Poniewozik, Time) Coca Cola stood by their decision to release the commercial and responded to controversial comments by saying “It's Beautiful' provides a snapshot of the real lives of Americans representing diverse ethnicities, religions, races and families, all found in the United States. All those featured in the ad are Americans and 'America the Beautiful' was sung by bilingual American young women." (Vega, ABC News) Coca Cola will continue to display their message of
10 diversity of life, but we are all one regardless of consumer backlash. Coca cola appeals to the majority using this tactic rather than appeasing a small demographic of Americans offended by the commercial. A current hot button issue in the United States is police violence against minorities specifically African Americans. Ben & Jerry’s came out with their support of the Black Lives Matter movement in late 2016. The Vermont based ice cream company posted about the movement on their company website to educate their customers. The page starts with “Why Black Lives Matter”, which is followed by a statement about systematic and institutionalized racism defining civil rights and social justice issues in today’s society. “Black lives matter. They matter because they are children, brothers, sisters, mothers, and fathers. They matter because the injustices they face steal from all of us — white people and people of color alike. They steal our very humanity.” (Ben & Jerry’s) Following the introduction to the movement Ben & Jerry’s posts a news release asking consumers to join them in not being complicit to racism and social injustices of minorities. The statement goes into detail about the hundreds of unarmed Black Americans killed by law enforcement in recent years, explaining that supporting the Black Lives Matter movement is not to say that the lives of law enforcement are not important and that Ben & Jerry’s believes they we have a moral obligation to take a stand for justice and for black lives. (Ben & Jerry’s) Ben & Jerry’s is famous for making their stance on issues known by releasing limited edition ice cream flavors such as Empower Mint, encouraging Democrats to get out to vote and Save Our Swirled, informing consumers of the reality that is climate change. The company has never
11 been shy about sharing their views on social and political issues. Ben & Jerry’s involvement in the Black Lives Matter movement began with a tweet from the company saying “Black Lives Matter. Choosing to be silent in the face of such injustice is not an option.” (Fox News) The ice cream company is openly liberal and their consumers clearly appreciate their transparency with their views as they stand behind them supporting the Black Lives Matter movement. Conclusion Social and Political issues in this day and age are changing the way we think of what is ethical. Companies using their wide audiences to spread awareness for certain causes and social issues can be a positive thing. In recent year it is no longer taboo for companies to take public stance on trending social and political hot button issues. In fact, the younger generation of consumers prefers that they do take stance. As long as there is transparency within the organization and the right steps are taken in discussing these issues with shareholder then it is completely ethical and up to the discretion of the company to share their opinions.
12 Bibliography AdWeek. "The New Corporate Social Responsibility: Company Stances on Controversial Issues." PRNewser. AdWeek, 17 Nov. 2014. Web. 12 Dec. 2016. Ben & Jerry's. "Why Black Lives Matter." Http://www.benjerry.com. Ben & Jerry's, 06 Oct. 2016. Web. 13 Dec. 2016. Dodd, Melissa D. "Brands Take a Stand: When Speaking Up About Controversial Issues Hurts Or Helps Business." Forbes. Forbes Magazine, 12 Mar. 2015. Web. 12 Dec. 2016. Fox News. "Ben & Jerry's Declare Support for Black Lives Matter, Calls for Ice Cream Boycott Ensue." Fox News. FOX News Network, 07 Oct. 2016. Web. 13 Dec. 2016. Kumar, Ro. "4 Ways the Growing Vote-with-Your-Dollar Culture Is Affecting Sustainable Businesses." SeedStock. SeedStock, 14 Apr. 2013. Web. 12 Dec. 2016. Poniewozik, James. "Coca-Cola's "It's Beautiful" Super Bowl Ad Brings Out Some Ugly Americans." Time. Time, 2 Feb. 2014. Web. 13 Dec. 2016. Sachs, Jonah. "2015 Will Be the Year Brands Take a Public Stand on Social Issues." Reflections and Predictions 2015. Guardian News and Media, 02 Jan. 2015. Web. 12 Dec. 2016. Schultz, Howard. "Starbucks Applauds Supreme Court's Ruling on Marriage Equality." Starbucks Newsroom. Starbucks, 02 July 2015. Web. 13 Dec. 2016. Stuart, Hunter. "Starbucks Gay Marriage Stance: CEO Puts Smackdown On Anti- Marriage Equality Shareholder." The Huffington Post. TheHuffingtonPost.com, 22 Mar. 2013. Web. 13 Dec. 2016. Vega, Cecilia. "Coke Defiantly to Air Longer Version of 'America the Beautiful' Ad." ABC News. ABC News Network, 07 Feb. 2014. Web. 13 Dec. 2016.
13 Topic Is it ethical for publicly traded companies to take a public stance on social/political issues? Research Abstract This research discusses the ethical standards of publicly traded companies taking public stance on social and political issues. The research also looks at the inner- workings of business and personal ethics in regards to these companies taking public stances. The aspects explored are the changing political/social climate, how social issues are transforming business ethics, why companies taking public stance is now no longer seen as taboo or unprofessional in the eyes of consumers, shareholder opinion and how taking public stance on issues has affected companies who have decided to go with the trend. Shareholder viewpoint is an integral part of the research due to the need for transparency in situations where a large company is taking a controversial stance because it can affect the business financially as well as change their reputation. The opinions and ethical practices of the modern consumer involving the presence of social media, social activism and the classic beliefs/consumption correlation will be dissected to tie together key aspects of the research.
14 Research Outline I. All companies have their own set of business ethics that they abide by, but do these companies think about how their public decisions and statements will affect their shareholders/customers? A. Key points 1. Changing political/social climate forcing companies to take stance on issues by consumer demand. 2. What do shareholders think and does it affect company stock prices? 3. “Vote with your dollar” approach. 4. How social issues are transforming business ethics. 5. Examples of companies taking public stances on political/social issues. B. Body of paper 1. How the changing political/social climate is forcing companies to take stance on issues by consumer demand
15  8.1 % of American are more likely to purchase from a company if they have the same or similar stances on issues, while Americans are 8.4% less likely to purchase from a company if their views differ.  Global Strategy Group indicates that 56% of Americans believe that companies should be engaging in this dialogue.  It is no longer taboo or unprofessional in the eyes of many consumers.  Research shows that there is direct correlation between certain age groups and their purchase decisions based on company stance on controversial issues. 2. What do shareholders think and how is it affecting company stock prices?  Transparency efforts between C-Suite and shareholders of any given company.  Board meetings discussing the benefits and losses of taking stance of these issues.  Shareholder opinion based on increased/decreased sales in direct correlation to public stance of social/political issues/  Rise and fall of stock prices. 3. The “Vote Your Dollar” Approach
16  The concept of spending money or investing in a company that has similar viewpoints as a specific consumer.  Showing support to a business and their decisions/beliefs through monetary imbursement. 4. How social issues are transforming business ethics  The increasing pro-political/social trends are increasing the need for public ethical behavior from companies.  Change of how companies display their “ethical” decisions to the public.  Companies have reached the tipping point of acceptability on taking stances on moral issues.  Viral stances could bring in business.  “The pro-social brand doesn’t say: “Look what we’ve done. Now buy our stuff.” Instead it says: “We’re willing to take a stand. Stand with us.””  Connection between beliefs and consumption 5. Examples of companies taking public stance/public reaction  Ben & Jerry’s stance on Black Lives Matter (discussion with shareholders/public reaction)
17  Starbucks stance on gay marriage (discussion with shareholders/public reaction)  Coca Cola’s 2014 superbowl commercial “America The Beautiful” on immigration/personal tolerance (discussion with shareholders/public reaction) C. Conclusion  Political/Social issues this day and age are changing the way we think of what is ethical. In the recent years it is no longer taboo for companies to take public stances on political/social issues. In fact, the younger generations of consumers (18-35) prefer that they do. As long as there is transparency within the organization and the right steps are taken in discussing these issues with shareholders then it is completely ethical and up to the discretion of the company to share their opinions.

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MBE400ResearchPaper

  • 1. 1 Is it ethical for publicly traded companies to take a public stance on social/political issues? Bethany Crowder Dr. Salek MBE 400 Virginia Wesleyan College December 13th, 2016
  • 2. 2 Table of Contents Introduction…………………………………………………………….. 3 The Changing Political/Social Climate…………………………… 3 Shareholder Impact………………………………………………….. 4 Vote Your Dollar Approach………………………………………… 5 Transformation of Business Ethics………………………………. 6 Examples of Companies Taking Public Stance………………… 7 Conclusion……………………………………………………………… 11 Bibliography…………………………………………………………… 12 Topic…………………………………………………………………….. 13 Research Abstract…………………………………………………… 13 Research Outline…………………………………………………….. 14
  • 3. 3 Introduction Business ethics can be defined as the collective values of a business organization that can be used to evaluate whether the behavior of the organization’s collective members are considered acceptable or appropriate. (Stanwick & Stanwick, 4) Although companies have their own sets of business ethics that are constructed and members of these organizations must abide by them, but do these companies think about how their public decisions and statements will affect their shareholders and customers? Changing Social and Political Climate The changing political and social climate is forcing companies into taking public stance on social and political issues by consumer demand. Forbes ran a study, which came out with the result that 8.1% of Americans are more likely to purchase from a company if they have the same or similar stances on issues, while Americans are 8.4% less likely to purchase from a company if their views differ. In today’s society the product or service being offered aren’t the only things that matter, consumers are making decisions based on things far deeper. (Dodd, Forbes) Global Strategy Group conducted a similar study, which indicates that 56% of Americans believe that companies should be engaging in this type of controversial dialogue about social and political issues. (Dodd, Forbes) Many consumers no longer see companies speaking out about these issues as taboo or unprofessional. Research shows that there is direct correlation between certain age demographics and their purchase decisions based on company stance on controversial issues. Age demographics 18-25 and 26-35 are most
  • 4. 4 likely to intentionally purchase from companies with stances aligned similar to their own. (Dodd, Forbes) When considering the age demographics of people 56 years or older they are 16.2% less likely to purchase from a company that has stances inconsistent from their own. (Dodd, Forbes) A misalignment of views can really affect a brand negatively in these age demographics. The other two age demographics 36-45 and 46-55 are the least likely to be persuaded by corporate advocacy in regards to impacting their purchasing decisions. (Dodd, Forbes) Shareholder’s Impact Shareholders across the board are pushing for transparency from company C- Suites. Major shareholders may not agree with the public stance a certain company is taking and that company risks the chance of isolating their shareholders. (AdWeek, 2014) “When organizations risk the isolation of stakeholder groups and diminished returns, it seems that a higher-level goal is in place than financial return-on-investment. And, research surrounding corporate social responsibility reasons that voluntary actions taken by corporations may be aimed at the “betterment of society” as an overarching goal. “ (AdWeek, 2014) Taking public stance on social and political issues can impact the financial sector for a company in multiple ways. It could increase sales in regards to people who want to support a business based on their views, but it can also have the adverse effect. Companies must also be sensitive to the potential rise and fall of stock prices after publicly announcing their viewpoint on a major social or political issue.
  • 5. 5 Vote Your Dollar Approach Companies should also consider that potential shareholders and customers may begin using the “vote with your dollar” approach. This is the concept of spending money or investing in a company that has similar viewpoints on social and political issues as a specific consumer. The point is to show support to a business as well as their decisions and beliefs through monetary imbursement. The “vote with your dollar” culture has changed in recent years from consumers supporting non-profit causes with monetary donations to consumers supporting socially responsible companies in exchange for products or services. (Kumar, SeedStock) There’s a push for companies to be more socially and environmentally friendly, consumers are looking for companies to behave better publicly and to do more good things for the community as well as the environment. Due to the fact that consumers are pushing for these changes most businesses are adopting socially conscious business models. (Kumar, SeedStock) “ More companies are figuring out innovative ways to build social responsibility into their business model to present customers with a strong incentive to “dollar vote” for them.” (Kumar, SeedStock) Transformation of Business Ethics “Pro-social brands are the next step for companies looking to morally engage with consumers. Driven by marketers who are moving beyond claims of sustainability and into strong stands on relevant social issues.” (Sachs, The Gaurdian) Sustainable
  • 6. 6 brands were the first to begin the transformation of business ethics, but the concept has grown into pro-social brands. There’s little room for controversy when investing in or purchasing from sustainable brands due to their charitable donations and emphasis environmental issues. The highly educated consumer tends to care about issues concerning sustainability such as cleaner supply chains, fair trade and carbon offsetting, but the average consumer tends not to notice. (Sachs, The Guardian) Increasing pro- social and pro-political trends are increasing the need for public ethical behavior from companies. These trends change how companies display their ethical decisions to the public as well as how consumers react to their behavior. “Pro-social brands are more politically disruptive and inspiring than basic sustainable brands. Instead of focusing on what a brand has done internally to drive a better world, pro-social brands look outward to take a stand on key moral issues.” (Sachs, The Guardian) Consumers view companies weighing in on social issues as reaching the tipping point and these companies increase the rate of change regarding the issues they showcase. Depending on the social issue being addressed, companies taking public stance could go viral and potentially bring in new business from consumers with similar moral ideals. Companies taking controversial public stance can be considered as adding fuel to the fire, but they’re really challenging their customers to rally behind them. The main idea of transforming business ethics stems from “The pro-social brand doesn’t say: “Look what we’ve done. Now buy our stuff.” Instead it says: “We’re willing to take a stand. Stand with us.”” (Sachs, The Guardian) This theory creates a connection between beliefs and consumption in modern society.
  • 7. 7 Examples of Companies Taking Public Stance Many American companies have taken part in the pro-social trends in recent years. These companies have seen their fair share of backlash from a certain consumer demographic, but the CEOs believe in the causes they’re standing for. Howard Schultz, CEO of Starbucks has been extremely vocal about his support for the legalization of LGBTQ marriages. On June 26th, 2015 in an extremely divided courtroom, the Supreme Court decided to grant the LGBTQ community their right to participate in the union of marriage. This day was a very important day in American history and Starbucks was one of the first companies to make comments about the controversial decision. Starbucks posted an article on their own personal news website the same day the decision was made. The article is titled “Starbucks Applauds Supreme Court’s Ruling on Marriage Equality.” The headline alone gives insight to Starbucks public stance on the hot button issue of marriage equality. “Today’s Supreme Court ruling supporting marriage equality makes me proud to be an American, and especially proud of Starbucks legacy of advocating for equality and inclusion for all our partners for the last 44 years.” (Schultz, Starbucks Newsroom) Starbucks has been a long time advocate for marriage equality and Schultz continued to publicly support the cause regardless of shareholder opinion. At the 2013 Starbucks shareholders meeting in Seattle, Washington, shareholder Tom Strobhar said that Starbucks sales and earnings were disappointing after the National Organization for Marriage announced that they would boycott Starbucks. (Stuart, Huffington Post) Schultz did not back down from what he
  • 8. 8 believed to be the morals of Starbucks as a company. His vision for the company is about diversity and inclusivity. Schultz responded to the disgruntled shareholder by saying “Not every decision is an economic decision. The lens in which we are making that decision is through the lens of our people.” (Schultz, Starbucks Newsroom) Howard Schultz’s statement aligns with the theory that business ethics are transforming into the betterment of our communities by public stance and not necessarily by increased sales. Starbucks shareholder Tom Strobhar, who is extremely conservative and prides himself on fighting corporate involvement in gay marriage, abortion and other controversial issues at major U.S. companies like Starbucks, Microsoft and Pfizer. (Stuart, Huffington Post) At the shareholders meeting, Strobhar continued to ask Schultz to stop endorsing liberal issues because they’re bad for business. Schultz replied to Strobhar’s request by saying “If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company. Thank you very much.” (Stuart, Huffington Post) Starbucks continues to make LGBTQ rights a part of their corporate policy by adding coverage of transgender reassignment surgery to the list of their company health benefits. Starbucks already covered prescription drugs for hormone replacement therapy and mental health care. (Schultz, Starbucks Newsroom) Due to Schultz’s relentless fighting for what he thinks is right, Starbucks earned a 100 on the Human Rights Campaign’s 2015 Corporate Equality Index. (Schultz, Starbucks, Newsroom) In 2014, Coca Cola released their annual Super Bowl commercial, but this one
  • 9. 9 differed from others. The commercial titled “America the beautiful” showcases the many different types of families from multiple different backgrounds. The song “America the beautiful” was sung in English as well as multiple other foreign languages to showcase that immigrants are the backbone of America. Apart from Native Americans, this nation is made up of people from all over the world. After the commercial aired on Super Bowl Sunday there was a huge backlash from consumers on twitter, but Coca Cola stood by their message. Many people were offended that the patriotic anthem was sung in other languages other than English. Coca Cola is famous for their advertising, which focuses on the idea that all people are different, but we are one. This commercial shows just that. The commercial celebrates different colors, lifestyles and origins of Americans who at the end of the day are Americans. (Poniewozik, Time) The commercial can be described as “Over a scene of these many Americans, it played a patriotic song: not the National Anthem, but the more accessible, singable “America the Beautiful.” It showed us panoply of American faces, young, old, brown, white, straight, gay (it included what are said to be the first gay parents depicted in a Super Bowl ad), in cowboy hats and hijabs, playing, eating, and exploring all-American vistas.” (Poniewozik, Time) Coca Cola stood by their decision to release the commercial and responded to controversial comments by saying “It's Beautiful' provides a snapshot of the real lives of Americans representing diverse ethnicities, religions, races and families, all found in the United States. All those featured in the ad are Americans and 'America the Beautiful' was sung by bilingual American young women." (Vega, ABC News) Coca Cola will continue to display their message of
  • 10. 10 diversity of life, but we are all one regardless of consumer backlash. Coca cola appeals to the majority using this tactic rather than appeasing a small demographic of Americans offended by the commercial. A current hot button issue in the United States is police violence against minorities specifically African Americans. Ben & Jerry’s came out with their support of the Black Lives Matter movement in late 2016. The Vermont based ice cream company posted about the movement on their company website to educate their customers. The page starts with “Why Black Lives Matter”, which is followed by a statement about systematic and institutionalized racism defining civil rights and social justice issues in today’s society. “Black lives matter. They matter because they are children, brothers, sisters, mothers, and fathers. They matter because the injustices they face steal from all of us — white people and people of color alike. They steal our very humanity.” (Ben & Jerry’s) Following the introduction to the movement Ben & Jerry’s posts a news release asking consumers to join them in not being complicit to racism and social injustices of minorities. The statement goes into detail about the hundreds of unarmed Black Americans killed by law enforcement in recent years, explaining that supporting the Black Lives Matter movement is not to say that the lives of law enforcement are not important and that Ben & Jerry’s believes they we have a moral obligation to take a stand for justice and for black lives. (Ben & Jerry’s) Ben & Jerry’s is famous for making their stance on issues known by releasing limited edition ice cream flavors such as Empower Mint, encouraging Democrats to get out to vote and Save Our Swirled, informing consumers of the reality that is climate change. The company has never
  • 11. 11 been shy about sharing their views on social and political issues. Ben & Jerry’s involvement in the Black Lives Matter movement began with a tweet from the company saying “Black Lives Matter. Choosing to be silent in the face of such injustice is not an option.” (Fox News) The ice cream company is openly liberal and their consumers clearly appreciate their transparency with their views as they stand behind them supporting the Black Lives Matter movement. Conclusion Social and Political issues in this day and age are changing the way we think of what is ethical. Companies using their wide audiences to spread awareness for certain causes and social issues can be a positive thing. In recent year it is no longer taboo for companies to take public stance on trending social and political hot button issues. In fact, the younger generation of consumers prefers that they do take stance. As long as there is transparency within the organization and the right steps are taken in discussing these issues with shareholder then it is completely ethical and up to the discretion of the company to share their opinions.
  • 12. 12 Bibliography AdWeek. "The New Corporate Social Responsibility: Company Stances on Controversial Issues." PRNewser. AdWeek, 17 Nov. 2014. Web. 12 Dec. 2016. Ben & Jerry's. "Why Black Lives Matter." Http://www.benjerry.com. Ben & Jerry's, 06 Oct. 2016. Web. 13 Dec. 2016. Dodd, Melissa D. "Brands Take a Stand: When Speaking Up About Controversial Issues Hurts Or Helps Business." Forbes. Forbes Magazine, 12 Mar. 2015. Web. 12 Dec. 2016. Fox News. "Ben & Jerry's Declare Support for Black Lives Matter, Calls for Ice Cream Boycott Ensue." Fox News. FOX News Network, 07 Oct. 2016. Web. 13 Dec. 2016. Kumar, Ro. "4 Ways the Growing Vote-with-Your-Dollar Culture Is Affecting Sustainable Businesses." SeedStock. SeedStock, 14 Apr. 2013. Web. 12 Dec. 2016. Poniewozik, James. "Coca-Cola's "It's Beautiful" Super Bowl Ad Brings Out Some Ugly Americans." Time. Time, 2 Feb. 2014. Web. 13 Dec. 2016. Sachs, Jonah. "2015 Will Be the Year Brands Take a Public Stand on Social Issues." Reflections and Predictions 2015. Guardian News and Media, 02 Jan. 2015. Web. 12 Dec. 2016. Schultz, Howard. "Starbucks Applauds Supreme Court's Ruling on Marriage Equality." Starbucks Newsroom. Starbucks, 02 July 2015. Web. 13 Dec. 2016. Stuart, Hunter. "Starbucks Gay Marriage Stance: CEO Puts Smackdown On Anti- Marriage Equality Shareholder." The Huffington Post. TheHuffingtonPost.com, 22 Mar. 2013. Web. 13 Dec. 2016. Vega, Cecilia. "Coke Defiantly to Air Longer Version of 'America the Beautiful' Ad." ABC News. ABC News Network, 07 Feb. 2014. Web. 13 Dec. 2016.
  • 13. 13 Topic Is it ethical for publicly traded companies to take a public stance on social/political issues? Research Abstract This research discusses the ethical standards of publicly traded companies taking public stance on social and political issues. The research also looks at the inner- workings of business and personal ethics in regards to these companies taking public stances. The aspects explored are the changing political/social climate, how social issues are transforming business ethics, why companies taking public stance is now no longer seen as taboo or unprofessional in the eyes of consumers, shareholder opinion and how taking public stance on issues has affected companies who have decided to go with the trend. Shareholder viewpoint is an integral part of the research due to the need for transparency in situations where a large company is taking a controversial stance because it can affect the business financially as well as change their reputation. The opinions and ethical practices of the modern consumer involving the presence of social media, social activism and the classic beliefs/consumption correlation will be dissected to tie together key aspects of the research.
  • 14. 14 Research Outline I. All companies have their own set of business ethics that they abide by, but do these companies think about how their public decisions and statements will affect their shareholders/customers? A. Key points 1. Changing political/social climate forcing companies to take stance on issues by consumer demand. 2. What do shareholders think and does it affect company stock prices? 3. “Vote with your dollar” approach. 4. How social issues are transforming business ethics. 5. Examples of companies taking public stances on political/social issues. B. Body of paper 1. How the changing political/social climate is forcing companies to take stance on issues by consumer demand
  • 15. 15  8.1 % of American are more likely to purchase from a company if they have the same or similar stances on issues, while Americans are 8.4% less likely to purchase from a company if their views differ.  Global Strategy Group indicates that 56% of Americans believe that companies should be engaging in this dialogue.  It is no longer taboo or unprofessional in the eyes of many consumers.  Research shows that there is direct correlation between certain age groups and their purchase decisions based on company stance on controversial issues. 2. What do shareholders think and how is it affecting company stock prices?  Transparency efforts between C-Suite and shareholders of any given company.  Board meetings discussing the benefits and losses of taking stance of these issues.  Shareholder opinion based on increased/decreased sales in direct correlation to public stance of social/political issues/  Rise and fall of stock prices. 3. The “Vote Your Dollar” Approach
  • 16. 16  The concept of spending money or investing in a company that has similar viewpoints as a specific consumer.  Showing support to a business and their decisions/beliefs through monetary imbursement. 4. How social issues are transforming business ethics  The increasing pro-political/social trends are increasing the need for public ethical behavior from companies.  Change of how companies display their “ethical” decisions to the public.  Companies have reached the tipping point of acceptability on taking stances on moral issues.  Viral stances could bring in business.  “The pro-social brand doesn’t say: “Look what we’ve done. Now buy our stuff.” Instead it says: “We’re willing to take a stand. Stand with us.””  Connection between beliefs and consumption 5. Examples of companies taking public stance/public reaction  Ben & Jerry’s stance on Black Lives Matter (discussion with shareholders/public reaction)
  • 17. 17  Starbucks stance on gay marriage (discussion with shareholders/public reaction)  Coca Cola’s 2014 superbowl commercial “America The Beautiful” on immigration/personal tolerance (discussion with shareholders/public reaction) C. Conclusion  Political/Social issues this day and age are changing the way we think of what is ethical. In the recent years it is no longer taboo for companies to take public stances on political/social issues. In fact, the younger generations of consumers (18-35) prefer that they do. As long as there is transparency within the organization and the right steps are taken in discussing these issues with shareholders then it is completely ethical and up to the discretion of the company to share their opinions.