Do Religion and Politics Belong in Business?
These days, hot button social issues in the United States -- religion, same-sex marriage, gun control, and abortion -- are more polarizing than ever.
These social issues have widened the gap between the left and the right, and have become a rallying cry for both liberals and conservatives. That rift doesn't appear to be closing anytime soon, either, according to recent surveys by Gallup.
support same-sex marriage
support stricter gun control laws
oppose all forms of abortion
If you've ever wondered why presidential candidates from both parties always declare their Christianity and take a moderate, vague stance on same-sex marriage and gun control, that chart explains it all -- America is a country split straight down the middle.
United we stand, divided we fall
A poll from The Atlantic/Aspen institute showed that Americans believe that the country today is more divided than any era in recent history -- including The Great Depression and 9/11 -- with the exception of the Civil Rights era. The poll also revealed that the top five divisive issues in America today are gun control, gay marriage, immigration, abortion, and homosexuality -- in that order.
Despite all this bickering over social issues, however, the same poll revealed that only 5% of respondents believed that moral and family value issues were the most important problems facing the country; this was the same percentage as the previous year. Meanwhile, concern for the economy as the top issue fell from 52% to 33% -- a huge drop reflecting the economy's improvement over the past year.
Do moral issues and businesses mix?
This raises an interesting question -- is it wise for corporate leaders, like politicians, to voice their personal opinions on these controversial issues?
In a market as deeply divided as America, it would seem to be more prudent for business leaders to simply keep their heads down and stay quiet.
However, that hasn't stopped the leaders of some major companies such as Chick-fil-A, Starbucks , and J.C. Penney from vocally voicing their opinions on faith, gun control, and gay marriage. Is this boldness to be admired or to be avoided?
Let's meet the conservatives
Chick-fil-A caused quite a stir in June 2012 when its president, Dan Cathy, openly discussed his Christian beliefs and his opposition to gay marriage. The comments led to LGBT groups calling for boycotts against the company, which eventually led to the company issuing this statement: "Going forward, our intent is to leave the policy debate over same-sex marriage to the government and political arena."
After the Supreme Court's decisions on gay marriage this past June, however, Cathy again voiced his discontent on Twitter, stating that it was a "sad day for our nation." The tweet was deleted afterwards, but led to a second wave of bad press for the company. Despite those PR setbacks, annual revenue at the privately held company rose 12% year-over-year to $4.6 billion in 2012, possibly due to the overwhelming concentration of its stores across America's "Bible Belt."
A protest at a Chick-fil-A location. Source: Nydailynews.com
However, Chick-fil-A is not the only openly Christian company in America.
Forever 21 is one of the fastest-growing retail apparel chains in the country. The company's founders, Don and Jin Chang, are devout Christians who immigrated to the United States from South Korea in 1981. At the bottom of Forever 21's bags, shoppers can find the words "John 3:16" -- referring to the popular biblical verse: "For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life." Rapidly growing fast food chain In & Out also prints John 3:16 on its packaging to promote its faith.
Hobby Lobby is even funding the construction of a Bible Museum in Washington, D.C. Yahoo! CEO Marissa Mayer has openly discussed her faith and stated that her top priorities were "God, family and Yahoo! -- in that order."
Forever 21, Hobby Lobby, and Yahoo! have not been caught in the storm of controversy that Chick-fil-A sailed headfirst into, however. This is mainly because they have kept quiet on polarizing issues such as same-sex marriage.
Let's meet the liberals
Starbucks' founder and CEO, Howard Schultz, caused a huge stir with his continuing support of the legalization of gay marriage. This led to evangelicals claiming that "righteous Christians" could not drink Starbucks coffee anymore, and a widely publicized confrontation with Corporate Military Action Center founder Thomas Strobhar, who voiced opposition to Schultz's support of gay marriage.
During a shareholders' meeting, Schultz told Strobhar, "If you feel, respectfully, that you can get a higher return than the 38% you got last year, it's a free country. You can sell your shares of Starbucks and buy shares in another company."
Schultz has not shied away from other controversial issues. After gun rights activists attempted to organize a "Bring Your Gun to Starbucks Day" in August, Schultz requested gun owners to leave their guns at home out of "civility and respect." Schultz stopped short of issuing a gun ban in his stores nationwide, though -- a tactful move considering that over half of Americans still support gun ownership.
Over the past 12 months, Starbucks shares have risen 74% -- and just like Chick-fil-A, Starbucks' growth hasn't been slowed by tackling controversial issues.
Starbucks' success is a stark contrast to the failure of J.C. Penney, which clumsily attempted to support gay marriage through a series of polarizing ad campaigns for Mother's Day and Father's Day.
J.C. Penney's controversial ads. Source: Outsmartmagazine.com.
Those ad campaigns were part of former CEO Ron Johnson's radical rebranding initiative, in which the company became simply known as "JCP," stores were reorganized into "boutiques," and sales were eliminated in favor of "everyday low prices." Those confusing, expensive initiatives ended in disaster, with same-store sales plunging 25% and e-commerce sales falling from $1.5 billion to $1.0 billion by the time he was finally fired.
Johnson's same-sex ad campaign in the middle of that slump was a foolish move that showed a fundamental lack of understanding of the conservative nature of J.C. Penney's core demographic -- older, lower to middle-income shoppers in middle America.
By comparison, Schultz's opinions on same-sex marriage played well with Starbucks' more urban demographic. Unlike Johnson, Schultz didn't fan the flames by launching a dedicated advertising campaign for his own political views.
A final thought
American politics and business have always been intertwined. In recent years, however, companies have started taking sides on the left and the right. Although it's admirable that many business leaders are now standing up for their principles, they can lead their companies straight into a minefield if the risk is not properly calculated.
Although the opinions of Cathy and Schultz represent the polar opposites of American popular opinion, they were shrewdly calculated risks. Cathy and Schultz both knew that many of their customers at Chick-fil-A and Starbucks, respectively, would support their views. Johnson, on the other hand, failed to think things through, and instead alienated J.C. Penney's core consumers to attract a new, younger demographic that rarely shopped at his stores.
It takes a bold business leader to make a bold statement about the fractured state of American politics -- but there's a fine line between a bold move and a foolhardy one.
Investors on the left and the right can agree
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