Brands Risk Consumer Wrath Regardless Of Corporate Social Policy

Companies are developing a set of social values to address more informed consumers who bestow brand loyalty on products from companies that share their views.

These are often not easy decisions for corporate boards that are unfamiliar with goals other than profit maximization. As social issues creep into the boardroom, any policy involving corporate social responsibility will be seen by some as a calculated political directive designed to alienate a segment of the public. Voluntarily turning away customers is not seen as good business.

The best recent example of 'corporate personality' occurred when Dick's Sporting Goods halted the sale of assault-style weapons and high capacity magazines in all stores and instituted a policy refusing gun sales to anyone under 21 after the 2018 massacre at Marjory Stoneman Douglas High School in Parkland, Florida.

The move resulted in $150 million in lost sales and has led to other larger questions about product assortment in stores and merchandising of new categories like team sports instead of shooting sports. However the stock price has not been affected.

The issue of corporate social responsibility ratcheted up last week with the sale by furniture retailer Wayfair of beds to a migrant detention camp for children along the U.S. Southern border. Employees protested the sale. Unlike Dick's, which saw protests after changing a policy, the protests against Wayfair occurred because they were following policy, namely, selling their product to people who want to pay for it.

The Wayfair situation highlights a new twist in the practice of corporate social responsibility. In clarifying their positions on social issues, companies are exposing rifts within their own work forces that may affect financial performance.

We have reached the stage where every corporate decision is also a personal one for workers and consumers, whether or not it involves a change in company policy. We seem to be sliding headlong down a slippery slope that will engulf other corporate initiatives including blood drives, support for community organizations, food drives, charitable contributions and causes.

Company-wide initiatives to help the 'less fortunate' are becoming a judgement call where what was once universally accepted practice throughout an organization is today not so absolute.