As companies face pressure to engage with social issues beyond their immediate business interests, communicators must anticipate how every word an organization says and every topic it raises will be received by different stakeholders, a new study finds.
For the annual Global Communication Report, researchers at the USC Center for Public Relations surveyed PR professionals, investors, large company employees and consumers to study stakeholder expectations in a polarized political climate.
“The Balancing Act,” produced in conjunction with several organizations, including PRSA, finds that as corporate purpose collides with political polarization, communicators can help guide companies.
“In this unprecedented year, purpose and polarization are colliding head on, posing a challenge for CEOs. They’re walking a tightrope in a hurricane. Balancing the weight of competing demands from their stakeholders, while withstanding turbulence from a category-five political storm,” said Fred Cook, director of the USC Center for Public Relations, when introducing the report. “It’s tempting to hunker down until it blows over, but silence isn’t a sanctuary for companies with strong values and close relationships with their employees and customers.”
Since 2000, several factors have driven a dramatic increase in corporate activism. People believe the government has not fulfilled its role in society. Many also believe that corporations have the resources and expertise to solve major problems, the research finds.
Over the last decade, the term for social engagement that falls outside normal business activity has changed from “philanthropy” to “purpose.” By embedding a deeper mission into their business that reflects the values of their stakeholders, the thinking went, companies earn brand loyalty, public recognition and higher valuations. Public relations professionals became the primary advocates for this narrative.
Now companies might be shifting away from purpose, the report says. A year ago, the 2023 report found that 69% of consumers, 71% of employees and 89% of investors believed companies had a responsibility to help solve some of society’s problems. In this year’s report, those numbers dropped significantly, falling 8% among consumers and 7% among employees, but increasing by 7% among investors.
Among PR practitioners, the belief that companies have a responsibility to help solve some of society’s problems fell by 4%.
Demographics of polarization
The U.S. population has been polarized for years, but the issues that divide the American people have changed. While the abortion debate has intensified, discussions on climate change have grown quieter. Disagreements over the wars in Ukraine and Gaza have come to the forefront.
Differences in opinion have escalated into a culture war, the USC report says. Politicians and the media draw the battle lines — to increase ratings, raise money and get votes. With no room for nuanced messages, taking extreme positions has become an effective strategy for many brands, the report finds.
People with higher incomes are more likely to expect companies to take stances on controversial social issues, a class divide that illustrates the demographics of polarization. Wielding social media as their weapon, stakeholders have the power to protect or damage a brand.
Before taking sides on a political issue, introducing a divisive new policy or launching a controversial product, companies should find out whether their employees and customers agree on the issue. According to the report, senior executives freely admit that many issues consumers care about are less important to the executives themselves.
The report also reflects on the potential impact of the 2024 presidential election on corporate communication and stakeholder relations. Download a copy of the report here.
The USC Center for Public Relations is located within the Annenberg School for Communication and Journalism.
