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Tuesday, February 14, 2017

Strategic CSR - Nordstrom

The article in the url below describes how nervous companies in the U.S. are at the moment. CEOs and executives in prominent companies (and also some pretty obscure ones) apparently dread drawing the wrath of the Twitter monster. The example given was Nordstrom (a high-end department store), which was boycotted by customers when it stocked Ivanka's line of clothing and jewelry, and then boycotted again (by a different set of customers) when it removed the brand:
"These days, a shirt is not always just a shirt, and a store is not always just a store. Handbags, dresses and other ordinary items — and where they are bought — have become politicized, turning shopping decisions into acts of protest for the millions of people in pro- and anti-President Trump camps. Under Armour, L.L. Bean, T.J. Maxx and many other companies have already been pulled into a sort of ideological tug of war. But perhaps no retailer has been in the hot seat like Nordstrom."
The article's angle was that companies cannot win in this new reality:
"The sharp reaction before and after Nordstrom's decision — made quietly, with no announcement — highlights the tightrope companies must walk in this hyper-politicized environment. 'Companies are nervous,' said Andrew Gilman, chief executive of the crisis communications firm CommCore Consulting Group. 'I know several companies that have war rooms set up.' 'They have playbooks on what to do if there is a product recall or if the C.E.O. has a heart attack,' he added. 'Now they have a different chapter on how to deal with a tweet from the president.' Many retailers and brands would clearly prefer to fly below the political radar and stay away from the outrage on Twitter and Facebook."
My take on this, however, is that companies are feeling nervous mostly because they are being forced to take a position on issues. In other words, they are having to inject values into their business decisions in a way that makes them uncomfortable because they might make the 'wrong' decision and be blamed for doing so. CEO accountability – what a wonderful concept! The story unfolding around Under Armour is a great example of the fine line executives are being forced to walk:
"The athletic-gear maker Under Armour also encountered the perils this week, when its chief executive, Kevin Plank, called Mr. Trump a 'real asset' for the country. Within hours, the hashtag #boycottunderarmour emerged on social media."
I think this is great. Business is a force for economic, social, and moral change, even if executives try and pretend otherwise. Granted, it is just a bit more blatant at the moment because the atmosphere is so charged and the issues so contentious. The more companies take a stand, however, and I am thinking about companies on both sides of any debate (think Patagonia on the environment, but also Chick-fil-A on religion in the workplace), then the more the market can begin to help solve some of our most intractable problems. If stakeholders are aware of companies' positions on these issues, then they can choose which ones to support and the chance for progress is increased. In all likelihood, taking a stand on an issue that is of concern for stakeholders will be good for business. At a minimum, there is evidence (according to the article in the second url below) to suggest that firms are worrying too much about the consequences of being caught on the wrong side of Donald:
"The Financial Times has crunched data on 30 cases in which companies have been targeted by that @realDonaldTrump account. The sample size is small and the data only start on January 1. However, this limited analysis shows that Mr Trump's tweets have had surprisingly little effect on share prices so far, irrespective of the media hullabaloo."
Take care
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In the Era of Trump, Shopping is Political
By Julie Creswell and Rachel Abrams
February 11, 2017
The New York Times
Late Edition – Final
The corporate benefits of a Trump tweet
By Gillian Tett
February 10, 2017
The Financial Times
Late Edition – Final