Why Wasn’t Corporate Social Responsibility Enough? The Target & Budweiser Debacles.
I vomit in my mouth every time I see Dylan Mulvaney – a transgender activist – plastered over my social media feed. To me, Mulvaney doesn’t exist, and I don’t care about whoever Dylan is now because Dylan will not affect my life in any way. Budweiser, however, saw fit to shoot its entire brand in the foot by running ad campaigns featuring Mulvaney and then defending it by saying that America’s frat boys need to grow up.
Likewise, Target saw fit to promote that it was stocking its shelves with attire that supports individuals’ gender confusion, and, to my understanding, it even stocked a kids’ line of swim-wear that had “tuck-friendly” features, allowing boys to wear them without having the outline of their genitals show. Target then doubled down on the issue in the face of backlash, and it has lost billions in stock value over the past week.
What Dylan Mulvaney does is Dylan’s business as long as it doesn’t involve me, and what Target sells candidly does not bother me. I am as straight and all man as men come. I prefer a good Sam Adams when I have to drink one with the boys, and, as much as I love skin-tight clothing, I still try to avoid swimwear than outlines my genitals. Thus, I have largely been oblivious to the outrage over both Target and Budweiser.
That said, I have seen enough that I have to ask: Why wasn’t corporate social responsibility enough?
Life had different plans for me than what I initially envisioned. My best laid plans were to use a law degree and a master’s in business administration (MBA)to get into some sort of private equity/hedge fund venture as a career. I completed all of the academic steps to do so. Over the past ten years, I’ve acquired a law degree and an MBA, and, as part of my academic indoctrination, I spent 7 years learning about how corporations need to be socially responsible.
The indoctrination even attached a fancy name to it: corporate social responsibility (CSR).
At its heart, CSR was always more than a theory with roots in John Stuart Mills’ articulation of utilitarianism. It was a business model that gained popularity primarily with Starbucks in the 1980s. Early CSR was ethics-driven, and the Starbucks model was emblematic of the movement.
The early CSR movement focused on conforming to well-established societal norms, and American corporations realized that they could impose these norms across the globe by using the power of their supply chains. For instance, Starbucks made ending child and slave labor a critical focus of its supply chain, attempting to source products only from reputable suppliers who could demonstrate that they used neither.
Other companies followed the Starbucks model with varying degrees of commitment and with various objectives. CSR, however, always clashed with the natural and constant race for businesses to compete on price, which required them to minimize costs of goods.
When I went through my indoctrination, CSR hadn’t changed much from its 1980s roots, and it had taken on broad popularity in corporate America because it actually boosted the bottom line through its positive impact on corporate brands. Companies established philanthropic foundations, and they donated to charities and others organizations that gave back to local communities in non-controversial fashion – i.e., funding cancer research or Make-A-Wish.
I look back now though at corporate America, and it appears that “diversity, equity, and inclusion” (DEI) has replaced CSR. DEI is not a business model that has any measurable connection to the bottom line. It is code for political advocacy.
Culture wars have existed since people developed a common conception of community and banded together for various political, social, and practical reasons. They have been, and always will be, rife with controversy and heated passions. CSR allowed corporations to navigate controversy without taking sides simply by showing that they were a responsible actor in the community. DEI, however, requires corporations to take sides and active roles in culture wars.
Taking sides in a culture war will always piss someone off. Taking sides in an American culture war is sure to piss off a lot of people. Because DEI maintains no connection to the bottom line though, DEI initiatives have no controls in place to navigate controversy gracefully.
The results have been devastating for Budweiser and Target. Instead of recognizing that they screwed up big time with their DEI stances in the ongoing culture war over gender identity, both Budweiser and Target doubled down in tone-deaf ways, and there were no controls to stop the bleeding. Both companies lost billions in stock value as pissed-off consumers boycotted their products. They likely will continue to face blowback in their bottom lines.
So why wasn’t corporate social responsibility enough? Why did Target and Budweiser feel the need to take sides in a culture war?
I don’t know if even they have answers, but I do know that any objective institution of higher learning should be preparing case studies on their disasters and cautioning would-be do-gooders that they can never lose sight of their connection to the bottom line.