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6 - Do Companies Try to Avoid Public Backlash?

Published online by Cambridge University Press:  21 April 2022

Jane L. Sumner
Affiliation:
University of Minnesota
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Summary

In this chapter, I test whether concerns about public backlash actually translate into changes in corporate political behavior. The theory suggests that companies that are worried their political advocacy might get them into hot water with the public and thereby imperil their reputation and brand ought to take one of two broad strategies: either hide their political behavior or take steps to make the activity more palatable to the public. I test this using federal campaign contributions and lobbying data. The evidence suggests that both campaign contributions through PACs that share the company’s name and direct lobbying at the federal level are relatively rare and that companies that cite concerns about social media and reputation damage in their 10-Ks are less likely to engage. Having demonstrated that these companies are less likely to do these things raises the question of what, if anything, they are doing instead, which I address using interviews. I find strong evidence that companies take concerted steps to both hide their political advocacy and somewhat weaker evidence that they try to make it more palatable.

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Chapter
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The Cost of Doing Politics
How Partisanship and Public Opinion Shape Corporate Influence
, pp. 162 - 191
Publisher: Cambridge University Press
Print publication year: 2022

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