Nooshin Warren, University of Arizona assistant professor of marketing, was the co-lead author of the study “Corporate Sociopolitical Activism and Firm Value,” published in Sage Journals.
The Daily Wildcat had the opportunity to interview Warren about the study.
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Daily Wildcat: Could you explain your study?
Nooshin Warren: So, this study, basically we focused on how when firms like Nike do an advertisement or any other type of activity that is in favor of or against a societal, sociopolitical cause that is partisan what will happen? So, examples of those things can be all sorts of advertisements and promotions or statements that firms have made about LGBT community and the pride month and when Supreme Court was ruling for marriage equality. The same goes for racial inequality, both at the Ferguson time, which is in my data, and now in terms of Black Lives Matter movement, gun control, pro-choice or life — basically abortion issues and women issues.
Most issues that we have, we have a very partisan perspective on them in our country. The question that we had was, when firms get involved in such kind of activities, obviously a group of people are up for it they are going to support them, but a group of people are also going to be upset and backlash and boycott or threaten to boycott. So, we wanted to see in the long run what will happen to firms, how do their investors, who their money is involved in this firm, will react to it and how will their consumers who are going to buy or not buy their products going to react to it?
DW: What interested you to get involved with this study?
NW: I think some of it is personal and some of it isn’t. The parts that’s personal is, well, I’m a woman and I’m an immigrant. So, I kind of at least cover two of the minority groups and to me it was always very heartwarming to see firms that stand up for issues for minorities and then I would think but okay they are sacrificing something and is it worth it as a firm so looking at it with a lens of just a marketer. Will that help or hurt the firm? But, on the other hand, as a marketing researcher what you are seeing is that generally their marketing activities are evolving through time.
We had times that the best that firms came up [with] were sales people. People would come to your house, come to your door. It went to become customization, you could go online and customize your shoes to the teeth from the sole and color to everything, even your car. So, that was the big issue. It became sustainability, being able to have a business that is not going to hurt the environment and that became a big issue and then it evolved to now the climate is hyper political and people are every attuned to political matters.
It got to a point where consumers actually expected you to say something. If you were silent that’s an issue, as before that was not an issue that was actually normal. Firms were supposed to not mix business and politics, but now it seems to be exactly the opposite. So, it is time, as marketing researchers, that we can actually tell firms and tell managers ‘Okay, how should you deal with this pressure that you are having from the environment,’ and on the other hand tell consumers how you should react to this or how you should detect the type of activism that you think should or should not happen.
DW: Is this the first time we’re seeing corporations interact with social justice like this or have corporations been doing this for a long time?
NW: Corporations were doing this, but not all of them and not at this publicized version of it and it certainly was not expected from them. In 1993, when Apple had support for LGBT, it was a rare thing, it was odd, it was something that mostly society was looking at it as okay these are a bunch of young kids that started this firm in their garage so they are reacting different than other firms that are normal firms. So, traditional businesses wouldn’t do that. Little by little, we got more and more and I think this decade has been, up to this point, the peak of this sort of woke marketing. What Millennials and then Generation Z are basically expecting firms to be.
DW: How do you think corporations get it wrong or right when interacting with social justice issues?
NW: So, this is the core of the study we are doing because when we were looking at it, we thought at the first glance activism is risky so investors will not like it, that’s what we thought. ‘My money is in your firm I don’t like you taking risks, I don’t like you doing something that people will burn your products in or throw it in the toilet or boycott you.’ But, then when you looked closer, we saw that actually some firms really flourished when doing this and some don’t and then the question is why?
When Nike did this their stock price surged, when they had that Colin Kaepernick [advertisement], although people started threatening and putting pictures of burned shoes on social media their sales actually also surged. So, then our question was how do these firms get it right and how did the other firms didn’t, and what we concluded in our study is that it really depends on how much you know your stakeholders and the ones we focused on was the main ones, your consumers, your employees and then your state legislators. So, where your firm is headquartered at that is the place that sets your taxes, it sets your subsidies, it sets a lot of rules that basically can make or break your business.
A very good example of that is when Delta, after mass shootings, Delta Air Lines decided that they would take out the discount they had for [the National Rifle Association]. And immediately after, because Delta is in Georgia — their headquarters are in Georgia and it’s a very conservative state — [Georgia] took out a tax cut they had which cost them 40 million dollars. So, a state legislator can be really important. On the other hand, obviously your consumers are very important. Are they on board or not? And employees also.
An example of that would be when Wayfair responded to the auction that was set for immigration camps that are now on our Mexican border. Wayfair started contracting with the government to furnish these camps and their employees were so upset about this they stopped working, they interrupted sales, they were striking in the streets that we won’t work for this company if they want to do this.
So, three things that were important to see was: how much what you’re doing is in line with your core consumers, how much is it in line with your employees and how much is it in line with your state legislators? If it is not in line with any of the three, then it is a horrible decision to make.
JC Penney did that, that was a mistake they made in 2012. They had these ads for Father’s Day and Mother’s Day that were lesbian moms or gay fathers and this ad was so not appropriate for their core business because their employees are conservative, their consumers are conservative, their state legislators are conservative and eventually what happened is that they lost so much on their stock price that they had to fire their CEO.
So, when everyone is against you doing that, we don’t suggest you do it, but if you are really for that cause and you just want to do it purely as an activism then just be ready for the sacrifices. On the other hand, if everyone’s on board great and then in the middle there are so many mix and matches which what we figured out is your consumers are the most important.
As long as you have your consumers, everything will finally pan out for you because the consumers interestingly, our data shows that boycotts die down soon whereas the reward that people give you for what you’re doing, the ones that are supporting your cause, don’t forget. They will keep rewarding you and buying from you whereas people who are angry are angry today but tomorrow, if I want to go running even if I’m mad at Nike I still want their shoes so I buy it. Therefore, consumers are the most important.
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