White Paper
When Silence is Golden: The Risks of Corporate Activism for Employee and Consumer Response
By: Margaret Gorlin, Nirajana Mishra, Jennie Liu and Nathan Novemsky
April 2024
Abstract:
Increasingly, consumers and employees say they want companies to take action on social issues. However, corporate activism - taking a public stance on socio-political issues – can provoke significant backlash and polarization, leaving companies uncertain when activism supports or hinders organizational goals. This research, conducted in Spring 2024, examines stakeholder responses through five studies involving over 9,500 liberal and conservative participants.
Through hypothetical employee and consumer scenarios, the findings reveal that corporate stances on polarizing issues consistently generate stronger negative reactions from opponents than positive support from advocates, resulting in net negative impact on stakeholder engagement. While remaining silent often proves beneficial, companies with a history of activism face reduced stakeholder interest when choosing not to engage on similar issues. Additionally, attempts to justify corporate positions - whether through appeals to customer preferences, employee values, or company history - failed to significantly mitigate opposition.
These results indicate that optimal approaches vary based on stakeholder composition. Organizations with ideologically aligned stakeholders may have greater latitude for activism, while those with diverse stakeholder bases benefit from carefully tracking issue polarization and maintaining consistency with past patterns of engagement.