Welcome to politically speaking.

I'm Elizabeth Bennion chancellor's professor of political science and director of community engagement at Indiana University, South Bend.

Today we're joined by doctor Wayde Marsh, professor of political science at the University of Tennessee, Knoxville.

We'll be discussing the so-called corporate culture wars, including how companies navigate politically charged issues, why some firms slash their diversity initiatives while others expand them, and the impact of public pressure on corporate decision making.

Thanks so much for being here.

Thank you so much for having me.

Now, this is a sort of a homecoming for you as a Notre Dame PhD who's come back to talk with professors and grad students about your research.

Yes it is.

It's very good to be back.

I love South Bend, love Notre Dame, and so I'm happy to be here.

Well, let's talk about the so called corporate culture wars.

What does this term mean.

How do you think about it and why should we care.

How does it affect sort of ordinary consumers or employees?

Sure, sure.

So in the business literature or the organizational behavior literature, they may have a different concept of the corporate culture wars as, being a contest between different corporate cultures or structures.

Right.

In political science.

My colleague Jordan Peterson at the University of Tennessee and I and, my coauthor on a series of projects in this area, we think of the a bit more in terms of corporate culture warriors.

The culture wars have been raging for decades now.

Or what?

We've seen them.

We're familiar, with them.

But we're interested in is the growing role of corporations, in this space and taking stances, and enacting policies that really engage in the culture wars in, in new, and bigger ways.

And so when we think about such engagement, what would be an example of something, corporation might take a position on that would fall into this category?

Sure.

So, you know, we, we, had a big example after the Dobbs case, where Amazon came out and said, well, we think, that that our employees deserve access to abortion.

So we're going to pay up to X amount of dollars for our employees who need access to abortion to go to states where abortion access is legal.

To, to get the care that, that they need.

More recently, just last year, we saw chick fil A, sort of fall into this for years.

They, sort of fielded attacks from the left for donations to anti-LGBTQ organizations, and taking stances that were seen as much more socially conservative.

Now they're on the other side of it.

They introduce a new culture of belonging model, that talked about how, as, a Christian company, God's love was for everyone.

And so, they wanted everyone to feel safe and comfortable at Chick-Fil-A, which they had them labeled as a woke company, which is sort of, ironic to think of chick fil A now as a, as one of these woke culture warriors, in a sense.

But there are others who maybe do a little more.

So they're effort to say our new policy is to welcome everybody, including LGBT, employees, into our company doesn't so much appeal to everyone.

It just makes a different set of people upset.

Exactly, exactly.

Yes.

Yeah.

So, you know, and in any sort of statement that they make about any of these sorts of issues, they're going to, sort of have some cost imposed.

Right?

And not taking an issue.

Right.

So this is why a lot of companies change their logos to a rainbow during Pride Month to signal that they're, you know, welcoming to LGBTQ plus individuals.

And, that imposes a cost, but also not changing the logo because the cost, as we saw, a number of articles talking about how well AT&T and this other company didn't change their logos to a rainbow this year, are they anti LGBTQ?

And they said, well, no, we just, don't think that that's the best way to go about showing, our, our corporate values.

Right.

And that's ultimately some of the origins of this coming from corporate social responsibility and a corporation's sense that they owe something to their employees and to their communities, to signal the values of those groups.

So given the possible risks involved in taking a stand on any controversial issue, why do it at all?

Does it get back to the sense that there are certain leaders at the top of that company who feel that it is their social responsibility?

Certainly.

So, there's some really interesting work, by Michael Lerner, who's, over in the UK that looks at how, board members, on different corporate boards impact the implementation of different green energy policies.

So these, high powered, influential individuals get on different boards and they bring with them a set of values and priorities and goals for this new company, and they sort of network and talk to other people.

And sooner or later, the companies start to adopt some of these policies.

So we often think of it in this sort of top down sense.

But something that I think is increasingly important is thinking about how corporations think about corporate social responsibility, not just as sort of signaling to the outside world, but also communicating with their employees at various levels.

So a lot of companies have developed whole corporate social responsibility infrastructures.

They're doing surveys.

They have people whose whole jobs are making sure that these companies are attending to, the norms and values and preferences of their employees, at least to some degree, making them feel heard.

They're doing surveys and they're implementing policies that, hopefully reflect some of those values.

So is this really then in many ways, not just an effort to shape the corporate culture or reflect what particular stakeholders or board members think, but a recruitment and retention effort?

Yeah, I definitely think that's a part of it.

Right.

And there's certainly a tension there.

And we see companies, especially right now, we have a new administration and we see companies sort of swinging in a different direction than they may be swung before.

Right.

So you had all these companies, adopting Green New Deal policies and doing those sorts of things and adopting, racial justice and LGBTQ rights, policies.

And then now we're seeing a lot of that chip away and they're getting rid of different programs.

And so there is a tension there, right?

Because, as going back to some of the original corporate theory of the Friedman in the 60s and 70s, saying, well, the ultimate job of a corporation is to make money for its stock.

It's, I don't mind right off it.

The bottom line profit matters.

And you had all this corporate social responsibility, theory come in saying, well, corporations extract a lot from their communities physically and also socially.

And they have a responsibility to pay that back to the community.

And so, you see them now trying to navigate this space of trying to maximize profits for their stockholders, but also, think about the other stakeholders, in their communities that really matter to them.

So, it's a little bit of both, I think.

All right.

And I want to follow up on that point in just a minute.

But first, I want to ask your thoughts on what is driving companies to make changes, particularly in terms of downsizing or eliminating diversity programs.

We saw McDonald's, Walmart, meta among the, places, in addition to state governments.

Governor Braun here in Indiana get rid of the de I office and policies for state agencies.

But we've seen this for many corporations as well.

Is that a reflection of the new administration and what signals they're sending to corporate America?

It seems like a rather abrupt shift of of their policies.

Certainly, certainly.

I think there is a lot of research to be done to, to disentangle some of these things in some of, our recent work that actually be presenting here, to, to some of, my former colleagues at, at Notre Dame.

That's largely what we're thinking about is what is the power of the woke framing, and the way that people interpret what companies have been doing in this space.

Right.

And I think what is becoming sort of clear, as more research comes out and there's plenty more to, to be done.

So I may be putting my foot in my mouth here, but it looks like the values are there.

But the way that people are understanding how these policies are enacted is what a lot of people have.

Some concerns about.

And certainly the new administration has concerns about.

Right.

So people, I think, value an equitable and safe working environment.

Right.

That that increases opportunities for, for diversity.

But there's been a whole infrastructure of framing around how do initiatives operate.

And, and the costs of those, programs, that are really concerning to a lot of people.

Right.

And, and so I definitely think we're seeing a backlash here on this where companies, really quickly tried to catch up, especially after, the murder of George Floyd and the Black Lives Matter protests and the MeToo movement.

And, and a number of other social movements.

We saw companies say, oh, we need to catch up.

Our infrastructure is not built for this world.

That's asking us to be a little bit more responsible on these fronts.

But now we've come back to a place where, companies and the government are saying, are those working the way that they're supposed to be or are they causing other problems?

So, I think it's largely, a feature of the new administration.

But I think what's interesting, to me at least, is, you know, the Democratic Party, for years now has been trying to build coalitions with these tech billionaires and tech companies.

Right.

Those are some of the first ones to abandon this mission.

Right.

Costco.

However, so is this maybe not someone that we would have expected, to say?

No, we are.

We are sticking by our, our model here for de.

So, a lot of questions.

But I think largely it's, trying to appease, the values of a new administration and also what we said before is sort of coming back to the bottom line.

They see some places where they can cut some costs.

When you talk about costs, is that cost in terms of people feeling that the programs are implemented in a way that alienates some employees, especially white male employees, that cause more division and that they're not communicated well or what kind of costs.

Yeah, I think all of that.

Right.

I think that, you know, people want to believe that our institutions hire and create opportunities for the best people.

We have lots of sociologists and education scholars and others and economists telling us that that doesn't always happen.

Right?

It's not always the best.

The, the, the meritocracy model is a little more complicated, right?

And so unfortunately, that message gets warped and manipulated, and people see things the way that they experience those programs may not be in line with how they're hoping that they actually operate.

Right.

And so I think that, yeah, the cost is measured in a, in a zero sum view of the world.

Right.

But if someone else gets this job, I don't or my family member doesn't.

Right.

Or we have to fire these people to make room for some other group of employees.

Right.

And I think that that's how people are thinking about these programs, even though that's often not at all how they're operating.

That's the mindset that's been community.

You're going to have a focus on diversity, equity, inclusion or a meritocracy.

And you couldn't be writing the net.

And and both are both and and oftentimes the that diversity equity inclusion ends up being closer to the meritocracy that we want.

But that's I think you know, that is an interesting point.

You were talking about balancing, sort of bottom line profit and, some of these different social values, including perhaps this idea of a diverse workforce.

So one of the things I find fascinating about studies done by various corporations and businesses is how a more diverse board actually tends to do better in terms of profit margins, opening up new markets, their their bottom line.

And so these things are seen very much as being, zero sum game.

You can have one or the other, but we're seeing some pushback, I think, from some shareholders, who are saying, wait, we still want these reports because we're concerned what will happen with our company if if we become less diverse?

Sure, sure.

Absolutely.

And we've seen this in other countries to to have enacted legislation that say, you know, by this date, this percentage of corporations have to have, women CEOs, right?

Or this percentage of, some, group represented in, in the leadership.

Right.

And in those countries that have done that, they've experienced record growth and development.

Right.

And so we have evidence that these things aren't always in economic cost.

I think, part of the conversation, too, though, is for both the companies and for the, the American people thinking about short and long term trade offs.

Right.

And companies often operate, in, in this space, I think in short term, ways because they sort of know in the long term it'll shake out for them.

But I think that that's happening with the, with the public to where they're, they sort of see this happening, they see the benefits, but they're worried about the short term trade off.

That that might happen before we get there.

Now, when companies make these decisions.

You mentioned Costco, and Costco, of course, as long as are prided itself on having a higher wage than other companies and trying to be pro-worker within their workforce, is this driven, do we know sort of top down sense of company identity?

Is it, let's get a certain market share.

You know, the very successful approach that Rupert Murdoch took with Fox News, for example, if we can split liberals and moderates among all the other stations and get as many consumers as possible will be number one, which is very, very successful, if you so are some like playing to a particular group or.

We don't know yet.

Yeah, I think, I think we don't totally know yet.

And that's something that we're hoping to do is sort of get get into some of those offices where some of those conversations are happening.

But I do think that they're they're taking a little bit of a gamble here.

They have high brand loyalty.

And I think there's, a sense that people will respect them for sticking to their, their morals.

Right?

And their values that it's not oh, we did this thing because the previous administration told us we had to and now we don't have to.

So we're not going to do it.

They're saying, no, we did this because we think it's the right thing to do for our customers, for our employees, for our suppliers, and for our stockholders.

And we're going to keep doing it, until we get evidence that it's not working for us.

And so I think that's something that, could benefit them.

Maybe not even in ideological terms, but just sort of across the board sort of corporate values and, consistency.

Which is an interesting thing.

And, you know, we've seen, an erosion in trust in public and private institutions basically across the board, in the American people.

And there's a lot of reasons for that.

And, and polarization is a big piece of it.

And what's interesting, is that corporations, certain corporations and banks are doing fine.

The most trusted institution among Democrats in a 2018 poll was Amazon, which is sort of interesting, since the Democratic Party is the party of labor or was and, you know, it's an interesting picture.

Sure.

That they have no hassle returns.

Exactly.

And it's the third most trusted institution among Republicans behind the military and local police.

Right.

So way more trusted than local or than state or federal government branches.

Right.

So, I think this is something that's happening is that as trust erodes in political institutions, people may be more open to listening to what companies have to say on some of these contentious questions.

So what about political endorsements by CEOs?

How does that affect corporate culture?

Employee vs consumer decisions?

What do we know about that?

Yeah, there's, a whole endorsement literature.

That actually another one of my colleagues, at, Tennessee, Tony Downs, has some really fascinating work on celebrity endorsements.

And it's a little bit of a mixed bag.

And some of it depends on, certain cultural context and what's happening and what type of election and what are the issues at play.

And I think it's hard to tell, especially, in an election where the economy is such a big feature, it's hard to disentangle some of that.

I mean, former Vice president, Kamala Harris had Mark Cuban on the campaign trail with her.

He is someone who's hugely popular across the political spectrum, and very successful, in terms of his, wealth, and building businesses.

And a lot of billionaires and CEOs sort of stayed out of it and just said, well, we'll just let them off and then we'll figure out who we need to go to after and donate to it.

Right.

I think it's been really surprising, to everyone, Democrats and Republicans and independents, how quickly so many of the CEOs sort of crowded around, Trump after he won the election.

There's maybe something going on there, but I think it's largely just that, they're doing what a lot of corporations have always done.

It's just because they've been drawn into the culture wars and because we have social media.

Ironically, many of them have helped produce and grow social media.

We see a lot of it more.

Right.

So so we're exposed to, to a lot of this, more so than seats at inauguration.

That's right.

Exactly.

We see them sitting in front of the cabinet, right in front of the secretary, the sort of nominees for for the cabinet, which is a first, as far as I know.

So, you know, in terms of how the endorsements matter, I think they can they can mobilize.

But I think it's at the margins, at least for now.

And that may change, especially as some of these trust dynamics and institutions, continue on their course.

It seems like so many consumers, they have certain values across the political spectrum.

And they'd somewhat like to shop those values.

But it can be challenging if a company is more convenient and cheaper.

And, so perhaps the companies don't feel as much, pushback as we might expect?

Or is there a real commercial danger to boycotts or changing where you shop?

Sure, sure.

So so there's two examples that come to mind for me.

The first is Walmart.

In the mid 20 tens, 20 tens made a, had a statement about guns selling guns and, introduced a new policy.

It angered a lot of Republican elites and Republicans in the electorate, and Democrats were largely happy about it.

A political scientist at, Saint Louis, or, sorry, a business professor and finance professor at Saint Louis University, found that, Republican majority districts shopping and Walmart like foot traffic by tracking cellphones dropped almost eight percentage points.

And in Democratic, majority districts, it increased about four percentage points.

I think that's right.

So we do see some you know, maybe you say that's not huge, but maybe the CEOs think that's a big jump and they maybe then want to lean even heavier to get those Democratic districts or sort of come back to get some of those, Republican shoppers.

The other one is, Bud Light.

They had an ad, a couple of years ago featuring a chante, a transgender woman.

They lost.

They had significant losses, I think $300 million in losses that quarter.

The next quarter, they more than made up for all of their losses.

So in the short term, they lost.

But in the long term, they ended up recovering.

Now after that, they pulled that ad and they had an ad of a fisherman and people at the beach and that sort of thing playing on traditional Americana sort of ad so I think there is a cost that they can incur.

But they know long term brand loyalty.

They can often recover, or pivot, and sort of reframe or shift the conversation.

It may be good, I suppose, for the corporations that the country is fairly equally divided.

Right.

They have the one that start boycotting and then the other one to double down and only drink.

But.

And then.

That's right.

Yeah.

Until everyone forgets it.

Exactly, exactly.

Right now, how much sort of social media pressure and public pressure, how much role does that play in the decision to wade into an issue at all?

Because it does seem in some ways, like the least risky thing is just don't ever take a position.

But it sounds like that's a risk too, because people can get upset that you didn't say something.

Absolutely, absolutely.

So, there this is this is a huge concern, right?

That if companies miss an opportunity, to, to address a concern for people.

Right.

And, and I think we see this with politicians, too, that politicians are worried about incurring some cost, usually electoral or donation wise.

If they don't at least address an issue.

Right.

So, another shout out here to, to some of, Notre Dame, colleagues, Rachel Porter, Ben Francis and, Bill Callahan, kicking us or have a paper, where they look at, Republican and Democratic members of the House and Representatives who live in areas, districts that are more likely to experience, climate change related disasters, extreme weather events are more likely to talk about those events as related to anthropogenic climate change.

Human, caused climate change.

Republican or Democrat.

Right.

So we see that, the political elites are willing to, to do this right, to maybe incur costs on the national scene to better attend to the community identity, of the people that they represent.

Right.

And so I think similarly, corporations are thinking about this.

They're trying to figure out how to respond to the different needs.

And we often think about this in generational terms.

Right.

We think that younger people are maybe expecting, more, of a response.

But on the flip side, younger people still are less likely to participate in politics, right?

And so is that the gamble that they want to take?

And so maybe that's why it's easier for them to change the, the logo to a rainbow for the month and, and not actually change any policies.

Because there is, sort of small gains to be made on, on the younger end and more losses to, to incur at the, upper end of the age spectrum.

But there's also dynamics of that too.

That's a overgeneralization for sure.

Right.

So much going on.

And they're constantly looking at every single slice of the consumer base as well as the potential consumer base.

Sure.

I mean, this is what really kicked off, Doctor Peterson and my interest in this is we were sort of looking at where like, why is IBM, making a statement about transgender high school athletics policies?

I don't I don't go to IBM for that.

I gotta I thought, I, I don't go to IBM at all because that's above my pay grade.

But every company seems to be feeling this pressure to have to just release statements.

Now, what are the effects of those statements?

We find in some of our experiments?

It doesn't actually move people's opinions, but it does make them feel positively or negatively towards the company and corporate engagement and politics in general, depending on if it, aligns with their preconceived, preferences on this.

Right.

So, I think, yeah, as we said, there's costs on both ends of this, but they're definitely feeling the pressure for sure.

Pressure to engage, but at some risk.

Well, we will have to chat another time because we are all out of time for this week's Politically speaking.

But I do want to thank our guests, doctor Wade Marsh, for joining us today.

I'm Elizabeth Feeney and reminding you that it takes all of us to make democracy work.

We'll see you next time.