More companies in recent years have taken a stance on socio-political issues. While research has shown that people prefer brands that align with their values — often illustrated through corporate social responsibility reports — it wasn’t clear how people were responding to firms taking political stances.
A team of researchers chose to dive into the topic, and a new study published in Strategic Management Journal focuses on how individuals react to the ways in which a firm communicates around polarizing political issues. The team — Tommaso Bondi of Cornell University, Vanessa C. Burbano of Columbia University, and Fabrizio Dell’Acqua of Harvard Business School — explored firms that take an apolitical stance, say nothing, or choose an ideological stance. They were careful to delineate the strategic options of staying silent versus vocalizing an apolitical position, which prior research hadn’t explored.
The research focused on three questions:
- How does a firm’s expected political leaning influence individuals’ responses to its political communication?
- Do people react differently to the communication of a stance that is backed by the promise of a monetary commitment versus not?
- Do individuals prefer communication of an apolitical stance to either communication of an ideological stance or remaining silent, and if so, under what circumstances?
They conducted two survey-based vignette experiments between November 2020 (prior to the U.S. presidential elections) and January 2021 (right after the storming of the U.S. Capitol building), a time period when CEOs were actively communicating stances on political issues. In the first study, the researchers manipulated the information provided to survey respondents about a hypothetical firm’s stance regarding an issue, as well as firm characteristics likely to influence individuals’ expectations about the firm’s positioning (i.e., whether the firm is left-leaning, right-leaning, or centrist). In the second study, the team also manipulated whether the firm’s communication of a partisan stance is backed by the promise of monetary support.
The results showed that, for an issue with split opinions, a CEO’s partisan communication in either direction will result in negative perceptions of the firm on average. Although individuals who agree with the stance respond positively and individuals who disagree with the stance respond negatively, the negative effects generally outweigh the positive. In addition, the negative average effect is even stronger for firms that are expected to be neutral in their positioning.
They also found that communicating an apolitical stance actually increases individuals’ perceptions of the firm on average, in particular among Republicans and Independents, when the firm is otherwise expected to lean in one ideological direction or another.
“You could benefit from being perceived as apolitical,” Burbano says. “If there is a way to adjust people’s perceptions from viewing you as a partisan, ideologically aligned company to one that is apolitical and focused on doing what’s best for its customers, our study suggests that that’s probably the best path forward.”
Lastly, the research showed that for a less polarizing political issue about which opinion is largely homogeneous, communicating a political stance that aligns with the prevailing opinion on the issue increases positive opinion of the firm on average, compared to either silence or communicating an apolitical stance. Additionally, referencing monetary backing of the political stance serves to strengthen the effects of the stance, whether positive or negative.
Overall, the big takeaway is that being neutral may be best.
“The overall message is that there seems to be more to lose than there is to gain,” Bondi says. “Polarizing individuals, overall, doesn’t benefit firms — at least for issues that are close to 50-50.”
