Taking a Stand: Consumer Responses to Corporate Political Activism

Abstract

Corporations are taking public positions on divisive political issues with remarkable frequency. We call this corporate political activism, a largely recent phenomenon that highlights the widening role that corporations have in modern society. While the conventional wisdom suggests that companies should avoid political activism at almost any cost, we find evidence in the consumer context that this may not always be true. Over three experiments, we find that consumer reactions depend in part on the orientation of the company. Consumers have heightened expectations that values-oriented companies (i.e., those which describe themselves as being guided by core beliefs and values) will take a stand, while expectations are lower that results-oriented companies (i.e., those that describe themselves as making decisions purely on how it will affect performance) will take a stand. Our findings reveal that companies which violate these expectations run the risk of losing customers.