Bud Light, Target and the Role of Business

Bud Light, Target, and the Role of Business

– By Howard Sierer –

Budweiser and Target Stores took public positions on controversial social issues in the last several months. Both received major pushback from those who disagreed with those positions. Both pulled back at least in part, but not before damage to sales and stock prices took their toll.

The resulting firestorm in the media, both pro and con, begs the question: should businesses take public positions on any social or political issue, contentious or not?

In 1970, Nobel Prize-winning economist Milton Friedman wrote an article in the New York Times titled, “The Social Responsibility of Business Is to Increase Its Profits.” The article was, and still is, controversial.

Liberals then and now argue that since businesses play such a prominent role in society, they have “social responsibilities” beyond simply making a profit. Count me among those who agree with Friedman that “the role of business is business.”

Competent business managers realize that they need to look beyond today’s sales or the current quarter’s profit. To increase profits over time, they need to provide quality goods and services, to treat all employees fairly and equitably, to provide a safe and productive workplace and to foster goodwill and a positive relationship with their customers and the communities in which they are located.

All those things can and should be done without advocating or supporting controversial causes that have nothing to do with the company’s product or services or are only tangentially involved. Here’s why.

All but the smallest and niche-oriented businesses have employees with a wide variety of social and political views, none of which have direct bearing on their performance as employees. Likewise, a business serves customers whose social and political views run the gamut.

When management uses business resources to support or oppose any social or political issue, it is almost certain to misrepresent a significant fraction of its employees while placing the company’s reputation and goodwill in jeopardy among segments of its customers.

Budweiser and Target discovered those facts this spring to the detriment of their sales and stock prices. Bud Light hired a widely-recognized transgender as a spokesperson in some of its advertising. When it was heavily criticized on social media and sales plummeted 30%, it backtracked, placing two marketers on leave and saying it never “intended to be part of a discussion that divides people.”

Target prominently displayed LGBTQ signage and apparel in its stores and advertising, celebrating June’s pride month. It lost $15 billion in stock market value.

Undoubtedly a significant number of both companies’ employees are uncomfortable with their companies’ advocacy, not wanting to be associated with those viewpoints. Customer boycotts of both companies’ products have been effective in reducing sales.

Progressives have been given lots of support for their LGBTQ social issues by the liberal media, arguing that discrimination against the 7% or so of LGBTQ Americans (mostly bisexual) violates their civil rights and is contrary to American standards of equal opportunity and fair play.

As part of their larger campaign, this relatively small interest group – 6% of the public identify as progressive – has pressured businesses to embrace and promote their controversial social positions. More recently, relatively small “anti-woke” groups are trying to prevent the progressive LGBTQ worldview from being forced on the public.

Putting shoes on the opposite feet, I suspect that progressive groups would have major heartburn if large, nationwide businesses were to endorse social causes at odds with those supported by progressives, issues that actually have widespread popular support. While I believe such business endorsements would be a mistake, consider a few possibilities:

Over 40% of Americans are prolife and antiabortion. A vast majority of Americans oppose “gender-affirming care” for teenagers. A large majority believes our borders should be secured and existing immigration laws enforced. A large majority believes police funding should be increased and measures like “stop and frisk” should be implemented or expanded. Most Americans support standardized testing in school. A majority of Americans believe in judicial independence from Congress and state legislatures.

I could add more, but suffice it to say that progressives would be apoplectic if major companies were to promote these and other causes which they call reactionary and “far right wing,” contrary to public opinion.

Becoming an advocate for social or political issues is a bad idea for business, period. CEO Tim Knavish of PPG Industries states, “We run a business. We don’t run a political organization. We don’t run a religious organization, and we don’t run a social organization.”

Most of us, including me, are quite willing to live and let live, to “don’t ask, don’t tell.” Beer companies can make and sell beer whether or not I think drinking beer is a good idea. Target can sell all types of apparel for which it can attract adequate numbers of customers, including rainbow T-shirts. Both companies will do nicely without advocating controversial social issues.

My advice to business: stick to your knitting, don’t be what Budweiser now calls “part of a discussion that divides people.”

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