The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Tuesday, February 20, 2024

Strategic CSR - LGBTQ+

The article in the url below frames one of the most challenging issues in implementing strategic CSR – how does a company know what their stakeholders truly care about? In other words, how can company leaders better understand the real interests and demands of the firm's stakeholders. There are certainly plenty of examples to demonstrate that what stakeholders say and what they do are different (and potentially diametrically opposed – see Strategic CSR – Uber, Strategic CSR – United, and Strategic CSR – Accountability):

"Most consumers want brands to support inclusion. But when they do, they face a potentially negative backlash. … Just ask Bud Light."

Social response bias tells us that, when asked, we will say what we think is the socially appropriate thing to say. What we do when the spotlight is off, however, could easily be something completely different. This makes it challenging for leaders to create value for those stakeholders, as noted by the author of the article, the CEO and president of "the LGBTQ advocacy group Glaad":

"Reading the headlines in 2023, it may have seemed as if consumer brands lost big when it came to LGBTQ issues. Dozens of companies faced social-media attacks—in some cases boycotts—over their support for Pride month, among other things. And some of those corporations took a sales hit during the furor."

When the reality is quite different:

"But that's just the headlines. The real picture shows that corporations are continuing their support for LGBTQ inclusion and representation in marketing—despite threats and boycotts. More than 60 companies from a variety of industries, for instance, signed Glaad's joint statement of support for LGBTQ people at the end of June."

In spite of broad support throughout the U.S. for LGBTQ+ rights, there remains a significant amount of institutional resistance:

"[In 2023], the ACLU reported that more than 500 bills targeting the LGBTQ community were introduced in 47 states. Most of those bills singled out transgender youth."

The other part of this that is so challenging is that, if a leader fails to respond to stakeholders who say they want to see a certain kind of behavior, they are criticized. Equally, if they implement behavior that stakeholders say they want (but really don't), then they get punished in the market. By resisting or parrying all social pressure, therefore, leaders can avoid some of the backlash, but no one was ever rewarded for avoiding a disaster. In our society, we reward people who clean up after a disaster, and we criticize those who don't do what we say – what we do not do is reward someone for preventing a crisis, since we can never be sure the crisis was guaranteed to happen. Much better to stand for something, therefore, rather than against that thing (or attempt to ignore the issue altogether). The danger for firms who misjudge their stakeholders' position on sensitive topics, of course, can be severe – just ask Anheuser-Busch and Target. Similarly, due directly to stakeholder criticism:

"Bud Light dropped from its position as top-selling beer in the U.S. by dollar sales. For the year, Bud Light says, it remains the No. 1 brand in the U.S. nationally by volume. Target removed some items from its Pride selection and in some cases moved the displays from the front of the store. The retailer's sales dropped due to the controversy."

The only answer that makes sense is to build strong, trust-based relationships with all stakeholders, based on genuine commitments by the firm. Doing so ensures that (a) the firm has a better idea about what stakeholders truly care about and (b) if a disaster happens, you have a well of trust for those stakeholders to draw from, so they are much more likely to give you the benefit of doubt. The problem with that, of course, is that building trust-based relationships with all stakeholders takes a huge amount of commitment and runs counter to the way that capitalism has been practiced in the West for so long.

Take care

David Chandler
© Sage Publications, 2023

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The Challenge Facing Companies When Dealing With LGBTQ Issues
By Sarah Kate Ellis
December 10, 2023
The Wall Street Journal
Late Edition – Final