The Power of Walmart
Arkansas’ governor is scrambling to get some edits to the “religious freedom” law that landed on his desk last week. While the backlash against a similar law in Indiana has been fierce and widespread, the firestorm in Arkansas also may hurt that states’ economy. In this instance, the one holding the match is Walmart.
The massive worldwide big box retailer has its headquarters in Arkansas, and Walmart CEO Doug McMillon has issued a dire warning to Arkansas Governor Asa Hutchinson, according to CNN. “Veto the bill.” In a media statement, McMillon pulled no punches, “Today’s passage of HB1228 threatens to undermine the spirit of inclusion present throughout the state of Arkansas and does not reflect the values we proudly uphold.”
While 14 other states are considering similar legislation this year, few face the massive consequences Arkansas would face should Walmart prove less than amenable to its pending legislation. But they are not the only company speaking out. Already several major brands have stepped up to say “no” to what they perceive as discrimination. These businesses include Starbucks, Apple, Angie’s List, the NCAA, the NBA and NASCAR.
The very public mixing of business and politics may be nothing new, but it signals a sea change in the way corporations impact social policy. In the past, companies might work behind the scenes, creating focus groups, think tanks or funding lobbies. Now they are mobilizing their armies of customers on social media, motivating them to vote with their wallets while also threatening to pull revenue from states that infringe on the company’s expressed social views.
It’s an interesting exercise in applied public relations. On one hand, this sort of overt activism can be a two-edged sword. The same decision that some celebrate, others will decry. Think about Chick-Fil-A’s windfall after its CEO was publicly criticized for anti-gay remarks. Then Hobby Lobby saw an avalanche of support for its stand against certain provisions in the Affordable Care Act. These cases may have emboldened businesses on these issues, but recent developments have proved one thing—the winds can shift very quickly.
Navigating these societal shifts can lead to sailing dangerous waters and taking a stand always has a cost. It’s wise to consider that cost before raising sail.
Jonah Engler is finance expert and a former stock broker from NYC.