CSR 2.0 Politically Charged Causes and the Stock Market: An Abstract

Abstract

Recent developments in business practices have led marketing experts and practitioners to expect more focused action on social causes in marketing communications and corporate social responsibility (CSR), with businesses interested in areas where they can make the most impact (McPherson 2018). At the same time, studies have shown that most consumers want brands to take a stand on social and political issues (Oster 2018). Specialists have underlined that corporate America has gotten involved in causes such as gay rights, gun control, gender equality, civil rights, immigration, climate change, and the minimum wage (Shephard 2018). The purpose of this paper is to study the changes in corporate social responsibility that have occurred in recent years, their implication for organizations that take social causes, as well as their micro and macro level effects. First, in a qualitative study, we analyze the recent evolution of corporate social responsibility and its relationship with major social and political events on the national (US), and international scene. Second, in an event study, we assess the effect of marketing based on social causes and its relationship with the business’ bottom-line. We started first with a case study and analyzed the Twitter posts from Nike during the period June 2017 – September 2018 and created Nike’s sociogram using NVivo. We then extracted 7133 consumer tweets posted 2 weeks after the launch of the Collin Kaepernick campaign in September 2018, focused on promoting civil rights and protesting police brutality. We performed a qualitative analysis of consumer tweets to identify the main themes present in consumer messages and to create a conceptual map. Results emphasized the high polarization and widespread support that Nike’s decision to take one side of the politically charged topic has created. Unlike typical CSR examples, meant to gain a positive reaction, the implication of the business in this social cause has created both significant positive and negative reactions from consumers, with overwhelming positive effects on sales and stocks (Creswell et al. 2018). For the quantitative part of this paper, we performed an event study to analyze the effect on the share prices of businesses that endorse or promote polarizing social and political issues. Some of the events analyzed, representing some of the most debated events, showed that under certain circumstances financial markets do react significantly to the asset prices of organizations that have taken a stand on social causes. The study of recent CSR events has shown a trend toward CSR 2.0, in which global corporate responsibility is completed with the involvement of business organizations in highly polarizing political causes, helped by the use of the digital platform.