How since in the awakening in American companies?
In 1925, President Calvin Coolidge made the oft-quoted statement: “… the main business of the American people is business.” “
For most of the history of the modern economy, the primary goal of businesses was to make a profit for their owners.
This has changed over the past 10 years. Businesses today practice a type of capitalism that doesn’t just care about the owners of the business but all stakeholders in the business. Stakeholders include anyone with an interest or concern in business. This can include customers, employees, suppliers, government officials, and members of the general public.
Vivek Ramaswany, originally from Ohio, in new book “Woke, Inc.” argues that many of the companies that claim these socially responsible platitudes are in fact doing so not to help the causes they claim to help, but to improve their own bottom line. He calls this awakened capitalism without sincerity.
Businesses claim to care about something other than profit and power, but really try to gain more from everyone. They are distracting from some of the negative consequences of their operations for the good they say they do for society.
Coca-Cola is an example of awakened capitalism in bad faith. Ramaswany suggests that the soft drink company’s support for moving the Major League All-Star Game from Atlanta to Denver last summer to protest the state of Georgia’s passage of a law on the voter identification was just a distraction.
The law has been criticized as a change that makes it more difficult for black voters to vote. President Joe Biden called the law “Jim Crow in the 21st Century”.
Ramaswany said this really prevents people from paying attention to “the epidemic of diabetes and obesity among black Americans through the products he sells.”
This movement towards awakened capitalism began during the 2008 recession. Companies were looking for ways to win back customers while improving their profits. These corporate social ethics proclamations do the trick.
One of the most confusing aspects of what these companies do is that it seems that these awakened activities are viewed negatively by members of these companies’ target customers. Airlines like Delta derive their biggest profit margins from business travelers. It’s probably safe to assume that many of these business travelers are conservative and disagree with decisions Delta made, such as moving this summer’s All-Star Game to Denver.
Coca-Cola is one of the most iconic brands in the world. It’s right up there with mom and apple pie in the eyes of many Americans. So why would Coke want to take a political stance that could irritate many of its customers?
For a company like Nike, on the other hand, this kind of social conscience tends to match its brand. Since its beginnings in the 1970s, the sportswear company has projected a progressive image that has perhaps been best exemplified in its use of Colin Kaepernick in its 2019 TV commercials.
Kaepernick is the former NFL player who was the first to kneel down during the pre-game national anthem. At the same time that Kaepernick was featured in those ads, Nike was employing low-wage workers in factories in Southeast Asia and selling shoes for $ 200 to inner city kids who couldn’t afford them.
Most of the examples of enlightened capitalism cited by Ramaswany dealt with liberal causes, but there are conservative examples. MyPillow Guy Mike Lindell leveraged his support for the unproven theory of voter fraud in the 2016 presidential election to sell more pillows.
It will be interesting to see the long term results for those companies that have decided to “wake up”.
Perry Haan is from Watertown. He is Professor of Marketing and Entrepreneurship at Tiffin Unveristy in Tiffin, Ohio. He can be contacted at haanpc @ ti