When did Che Guevara become CEO? How corporations are increasingly taking progressive stands

Target recently staked out a position in the culture wars by announcing that it will build private bathrooms in all its locations, after earlier allowing transgender customers to use whichever room corresponds with their gender identity – both actions sparking anger from many conservatives.

While big business hasn’t always been on the vanguard of social justice, in recent years companies like Target, Apple and even Wal-Mart have increasingly taken positions that put them squarely on the side of socially progressive activists. So how did Che Guevera – the face of the Cuban Revolution – become CEO of corporate America?

When I first began studying the interactions between social movements and corporations 25 years ago, it was rare to see business take a public stand on social issues. Yet today we see organisations ranging from General Electric to the NCAA weighing in on transgender issues, something that would have been hard to imagine even a decade ago.

From custom abiders to bullies

Traditionally, corporations aimed to be scrupulously neutral on social issues. No one doubted that corporations exercised power, but it was over bread-and-butter economic issues like trade and taxes, not social issues. There seemed little to be gained by activism on potentially divisive issues, particularly for consumer brands.

A watershed of the civil rights movement, for example, was the 1960 sit-in protest by students that began at a segregated lunch counter in a Woolworth store in Greensboro, North Carolina, and spread across the South. Woolworth’s corporate policy had been to “abide by local custom” and keep black and white patrons separated. By supporting the status quo, Woolworth and others like it stood in the way of progress.

But negative publicity led to substantial lost business, and Woolworth eventually relented. In July, four months after the protest started – and after the students had gone home for the summer – the manager of the Greensboro store quietly integrated his lunch counter.

In general, companies were more worried about the costs of taking a more liberal stand on such issues, a point basketball legend and Nike pitchman Michael Jordan made succinctly in 1990. Asked to support Democrat Harvey Gantt’s campaign to replace segregationist incumbent Jesse Helms as a North Carolina senator, Jordan declined, reportedly saying “Republicans buy sneakers, too”.

And companies presumed that taking controversial positions would lead to boycotts by those on the other side. That’s what happened to Walt Disney in 1996 as a result of its early support for gay rights, such as “gay day” at its theme parks. Its stand prompted groups including America’s largest Protestant denomination, the Southern Baptists, to launch a boycott, calling Disney’s support for gay rights an “anti-Christian and anti-family direction.” The eight-year boycott, however, was notably ineffective at changing Disney policy. It turns out that too few parents had the heart to deny their children Disney products to make a boycott effective.

Since then, some of the biggest US companies have taken similar stands, in spite of the reaction from conservatives. For example, when the Arkansas legislature passed a bill in March 2015 that would have enabled LGBT discrimination on the grounds of “religious freedom”, the CEO of Wal-Mart urged the governor to veto the bill.

Not surprisingly, given Wal-Mart’s status in the state and the corporate backlash that accompanied a similar law in Indiana, the governor obliged and eventually signed a modified bill. That din’t sit well with Louisiana Governor Bobby Jindal, however, who argued in The New York Times that companies in those states were joining “left-wing activists to bully elected officials into backing away from strong protections for religious liberty.” He warned companies against “bullying” Louisiana.

Why have corporations shifted from “abiding local custom” around segregation and other divisive social issues to “bullying elected officials” to support LGBT rights?

Changing environment

In my view, there are two broad changes responsible for this increased corporate social activism.

First, social media and the web have changed the environment for business by making it cheaper and easier for activists to join together to voice their opinions and by making corporate activities more transparent.

The rapid spread of the Occupy movement in the fall of 2011, from Zuccotti Park in New York to encampments across the country, illustrates how social media can enable groups with a compelling message to scale up quickly. Sometimes even online-only movements can be highly effective.

When the Susan G Komen Foundation cut off funds to Planned Parenthood that were aimed at supporting breast cancer screenings for low-income women, a pop-up social movement arose: Facebook and Twitter exploded with millions of posts and tweets voicing opposition. Within days the policy was walked back.

Mozilla’s appointment of a new CEO who had supported a California ballot proposal banning same-sex marriage also generated outrage online, both inside and outside the organisation. He was gone within two weeks.

More recently, Mylan’s exorbitant price hikes on its EpiPen took place over several years, but an online petition fueled by social media this summer turned it into a scandal and a talking point for presidential candidates.

In each case, social media allowed like-minded “clicktivists” to draw attention to an issue and demonstrate their support for change, quickly and at very little cost. It’s never been cheaper to assemble a virtual protest group, and sometimes (as in the Arab Spring) online tools enable real-world protest. As such, activism is likely to be a constant for corporations in the future.

Millennials don’t like puffery

Second, as consumers and workers, millennials are highly attuned to a company’s “social value proposition.”

Companies targeting the sensibilities of the young often tout their social missions. Tom’s Shoes and Warby Parker both have “buy a pair, give a pair” programmes. Chipotle highlights its sustainability efforts. And Starbucks has promoted fair trade coffee, marriage equality and racial justice more or less successfully. In each case, transparency about corporate practices serves as a check on puffery.

Social mission is even more important when it comes to recruiting. At business school recruiting events, it is almost obligatory that companies describe their LEED-certified workplaces, LGBT-friendly human resource practices and community outreach efforts.

Moreover, our employer signals something about our identity. Value alignment is part of why people stay at their job, and among many millennials, socially progressive values – particularly around LGBT issues – are almost a given.

In this situation, corporate activism may be the sensible course of action, at least when it comes to LGBT issues. According to the Pew Research Center, for example, support for same-sex marriage has increased from 31% in 2004 to 55% today, and there is little reason to expect a reversal.

Risks remain

Even as trends lead to more corporate activism, the reaction hasn’t always been as the businesses expected. Businesses on the vanguard of social issues themselves can become targets if and when they slip up.

When Starbucks attempted to promote a dialogue about race after the killings of Michael Brown and Eric Garner by police in 2014, its method – asking baristas to write “race together” on cups to encourage conversations – was widely ridiculed. Some even regarded the effort as a misguided marketing ploy rather than a sincere effort to promote understanding.

In 1998, William Clay Ford Jr. became chairman of Ford Motor and aimed to turn the company green by improving fuel economy and “greening” its production processes. The company even put an energy-efficient “living” roof on a truck assembly plant. Its continued reliance on its profitable line of gas-guzzling SUVs, however, prompted some to accuse Ford of hypocrisy.

Red and blue companies?

While prominent companies like Starbucks and Target have taken stances associated with liberal causes, some businesses have gone the other direction.

Chick-fil-A aimed to implement “biblical values” and supported anti-gay groups in the 2000s. Those groups returned the favour by encouraging like-minded people to dine there on “Chick-fil-A appreciation day”.

Hobby Lobby famously sought to abstain from providing funding for birth control for employees on religious grounds. Koch Industries, overseen by the famous Koch Brothers, has long been a lightning rod for boycotts due to the right-wing proclivities of its dominant owners. And small businesses across the country are not always shy in advertising their conservative political orientations.

As states have seemingly divided into red (for conservative) and blue (for liberal), might we expect the same thing from corporations, as consumers and employees drift toward the brands that best represent their views – red companies and blue companies?

It is already easy to look up political contributions by companies and their employees. For example, Bloomberg, Alphabet and the Pritzker Group lean Democratic; Oracle, Chevron and AT&T tend Republican.

In the current electoral climate, it is not hard to imagine this continuing.

Jerry Davis, Professor of Management and Sociology, University of Michigan.

This article first appeared on The Conversation.