Social Responsibility: Corporate America Under Fire
07/01/2005
Fox 6 News
Estha Trouw: A conservative Christian organization is boycotting the Ford Motor Group. The American Family Association wants consumers to steer clear of the auto maker because it supports gay rights. Fox 6 news reporter Eric Collin joins us now to explain why more and more companies are caught in the cultural wars.
Eric Collins: Estha, Corporate America is under fire. Kraft foods faces a boycott for supporting the Gay Olympics. Home Depot was recently pressured to grant domestic partner health benefits. Well, tonight we ask two local professors if it's wise for companies to support certain social issues.
American companies caught in the cross-fire for taking a stand on volatile social issues; issues like gay rights, stem cell research and abortion.
Businesses that stake a position risk the wrath of special interest groups that may boycott their products. It begs the question, should corporations weigh in on the cultural war?
Peter Gourevitch: There is no one size fits all answer to this.
Collins: Peter Gourevitch is at UCSD Political Science professor. He says some CEOs walk a tightrope.
Gourevitch: Which is the greater obligation, the social obligation, or shareholder obligation?
Collins: Shareholders obviously want a return on their investment. But concerned consumers can easily spend their dollars on other products or services.
Gourevitch: A lot of this depends upon the firm, its internal dynamics, its customer base. For example, firms with strong brand names and strong customer loyalty and stuff like that are more sensitive to them than somebody who makes products that you've never heard of.
Collins: Religious conservatives recently urged consumers to boycott Proctor & Gamble products. The company was targeted for its gay-friendly policies and for advertising on shows like Will and Grace and Queer Eye for the Straight Guy.
The American Family Association declared victory stating, "P&G stopped sponsoring TV programs that promote the homosexual lifestyle." Proctor and Gamble insists there has been no change in the company policy.
Craig Dunn: When you look at a boycott you have to assess how interested are consumers in the issue.
Collins: Craig Dunn is the Executive Director of the Corporate Governance Institute and he's a professor of Business and Society at SDSU. He says boycotts can backfire.
Dunn: You may find the gay community ramping up their investment in those companies and buying more products.
Collins: And he says companies that weigh in on hot-button issues also risk losing valuable employees. Earlier this year, Microsoft stopped supporting a gay rights bill in Washington State after receiving pressure from a conservative religious leader. The company then back-pedaled after gay employees raised hell.
Dunn: The danger is that you alienate your employees, and that's what we saw at Microsoft - where you have employees who quit the company because they felt disenfranchised.
Gourevitch: There is a strategic choice for each individual firm.
Collins: The choice to take a stand in the on-going social debate will likely anger some consumers, shareholders and employees. Yet some people ask, are boycotts such a bad thing?
Gourevitch: In a way we've gotten more awareness and more realization. Firms are players in the democratic process, so as they are players in the democratic process they're going to become, you know, vulnerable to criticism.
Collins: Some companies find it beneficial to take a stand on social issues. For example, there is long distance phone carrier called Working Assets that has gained a lot of business for donating some of its profits to progressive groups like Greenpeace, Planned Parenthood and the ACLU.
Estha: And a boycott can fail depending on the type of company that's being targeted.
Collins: It all depends on the company. Say you're upset with a company like the Boeing Corporation. You're really not going to launch a successful boycott of a company that builds airplanes.
Estha: Exactly.
Collins: Depends on the company, depends on the product.
Brian Christie: Why would a successful company, successful, profitable company want to get involved? Why would they just . . . .
Collins: Depends on the issue. You know, Ben & Jerry's has made a lot of money on people, you know, people that are interested in the environment and their causes - they want to go there because they like the ice cream but they also like what they stand for. Just depends on the company.
Estha: Thanks, Eric. We appreciate it.
