Is Corporate Responsibility Good For Business?

A management expert says society always has expectations of business, but what people want, and what they’ll support with their dollars are often different.

By Michael MarksMarch 6, 2018 7:38 am

After 17 people died in a school shooting in Florida on Valentine’s Day, Dick’s Sporting Goods announced that it would no longer sell AR-15-style rifles like the one used in the shooting, or high-capacity magazines. The chain also said it would no longer sell firearms to anyone under 21 years old. A few days later, the company’s chairman and CEO, Edward Stack, explained the decision on CNN.

“The hunt business is an important part of our business, and we know there’s going to be some backlash,” he said. “But as we sat and talked about it with our management team, it was to a person that this is what we needed to do, we need to take a stand on this.”

But how clear is such a decision – to insert your company’s brand into the middle of a debate as politically-loaded as gun regulation?  

David Chandler, an assistant professor of management at the University of Colorado-Denver and an expert in corporate social responsibility, says society has always had expectations about companies’ behavior and responsibility. But what’s happening in the culture at a particular moment shapes those expectations.

“Expectations need to be rewarded by those stakeholders,” Chandler says. “The nature of the demands changes, but the fact that society always makes those demands has always been there.”

Chandler says it isn’t essential that a company take positions that everyone agrees with, because not everyone is a likely customer. Further, what customers and other stakeholders say they want, and what they will vote for with their dollars, can be different things.

“Firms have to navigate this treacherous area where stakeholders are likely to say one thing, but do something else in practice,” Chandler says.

Written by Shelly Brisbin.