Miami Beach, Florida Hand made sign advocating boycott of BP due to the Gulf oil spill. (Photo... [+]
Over the past several weeks, a growing international boycott of Stolichnaya vodka has prompted much discussion of the purpose—and efficacy—of social actions against corporations. A study released recently by Georgetown University finds that boycotts do, in fact, take a toll—though not in the way many might expect.
Prof. Mary-Hunter McDonnell looked at 221 boycotts organized against public companies between 1990 and 2005, as reported by the six largest U.S. papers. McDonnell said her research was prompted by simultaneous “puzzling” trends she noted during the great recession: an increase in corporate charitable activity (odd, since such activity tends to be linked to an organization’s cash reserves) and an increase in attacks from social groups, NGOs, and in some cases even shareholders.
She found that companies measurably increase their “prosocial claims”—their public statements that they were doing good works--after becoming the target of boycotts or protests. On average, each media mention of an action against a company increased that company’s prosocial claims by 12%.
Additionally, companies already making prosocial claims reemphasize them when facing a crisis, hoping their goodwill will serve as a “buffer.”
“Companies that are engaging in these kinds of claims before a boycott occurs are more likely to do it to a larger extent after the threat,” said Mcdonnell. “Companies that have held themselves out as being particularly socially responsible are going to be extra threatened by boycotts.”
But McDonnell made another important discovery, too: Boycotts, typically, don’t have a major effect on a company’s sales. In fact in many cases, actions against a particular company or product created no sales-related change at all.
For instance, the Earth Island Institute organized a three-year boycott of Star-Kist tuna organized in the early 1980s, claiming that the company’s fishing equipment was slaughtering dolphins. Rather than looking to drain company resources, the stated reason for the boycott was to create a negative perception of Star-Kist’s family-oriented parent company, Heinz.
“It’s really hard to get consumers to change their behavior,” said McDonnell. “More than an assault on company sales, these boycotts are a war-game between activists and companies that take place in the media. It’s more about threatening a company’s image than the bottom line.”
The most significant takeaway for companies with a public image to uphold? The time to start positioning yourself as a socially conscious organization is now—not after you become the target of a boycott or protest. Since boycotts are aimed at company esteem, rather than sales, building a strong reputation for philanthropic activity can ultimately provide insulation from future attacks.
“I think definitely the study underlines the importance of prosocial claims as a social strategy,” said McDonnell. “Charitable activity can act as a kind of insurance from an image crisis.”
Follow me on Twitter @KathrynDill.
