Why do organizations take political stances? A review of reasons and risks

Abstract

Organizations and their leaders have begun publicly signaling political values in candidate endorsements, statements, and advertisements, yet political action often has negative organizational consequences, including lower public support, financial costs, and reduced trust. We review the costs of organizational politicization, moderators of those costs (such as ideological alignment and size of the organization), and potential reasons why leaders take political action. Scholars often attribute political action to public pressure to “take a stand”, but this public pressure may be misunderstood. Members of the public who want organizations to take political stances desire particular stances to be made in particular ways, tend to believe in the superiority of their own values, and are relatively likely to boycott businesses for political reasons. Catering to these individuals could lead to the accumulation of supporters who are especially politically zealous and likely to punish perceived political missteps. Demands to “take a stand” might seem like one unified call to action, but they may instead be a large set of directly conflicting demands. We make recommendations for future research to better understand leaders' reasons for political action and when, if ever, such actions support the interests of organizations and broader society.