You may
know Nike as a liberal company in US politics – it is known for marketing
statements with a liberal bent, and it also has liberal corporate policies such
as transparency about manufacturing locations and labor practices. It is based
in Beaverton, Oregon, a state that generally sends Democrat representatives to the US Congress.
Dell is a conservative company, though it is more obviously conservative in its
political donations than in public statements. It is based in Round Rock,
Texas, a state that most often elects Republicans senators and representatives.
Are these facts connected?
A recent paper by Abhinav Gupta and Forrest Briscoe in Administrative Science Quarterly
looked at the connections between firms‘ politics and their locations, and it
found some relations that should be surprising. Let’s start with the more
obvious ones. First, firms differ in how conservative or liberal they are. This
can be measured by the political donations of their employees, and liberal
firms are more sensitive to their surroundings and likely to concede to social
movements’ demands. Second, the relation between employees’ political leanings
and firms’ behaviors is stronger when employees are closer to the headquarters.
The employees in Nike-owned stores far away from headquarters will not matter
as much for the headquarters’ thinking and decisions as the employees in the
headquarters.
Now for the
really new stuff. Both Nike and Dell have political leanings that match their
locations pretty well. That seems quite normal, and it matches some other firms
we know about such as Seattle-headquartered Starbucks. But there are also firms
that are more liberal or conservative than the average voter in their state,
such as the software company SAS, which is in Cary, North Carolina and much
more liberal than its state. If we compare equally liberal firms in a
conservative and a liberal state, which one will be more likely to concede to the
pressures of a social movement? You might think that it would be the liberal
firm in the liberal state because its management feels more secure taking such
actions. In fact, it is the opposite. The liberal firm in a conservative state
will take a stand, so it will be more liberal than a liberal firm in a liberal
state. Similarly, a conservative firm will take a more conservative stance if
it is in a liberal state.
So, location
and politics intermingle in organizations in ways that go beyond what you might
expect if you thought of organizations as sponges that absorb whatever is
around them. Employees can shape their organizations’ messages and actions in
the political sphere. They are clearly more influential than people who live or
work near the organization but who aren’t employees, because employees’ views
not only shift organizational politics but also prompt the organization to take
a stand against community members’ opposing views. People outside the
organization can try to influence its beliefs and actions, but whether they
succeed is largely a function of the views held by those on the inside.
Gupta, A., and F. Briscoe
2019. "Organizational Political Ideology and Corporate Openness to Social Activism." Administrative Science Quarterly, forthcoming.
