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The Unequal Effects of Partisanship on Brands


As an increasing number of executives use their company soapboxes to espouse values unrelated to the businesses they run, they must think carefully about how their actions align with the attitudes of their customers. Companies that engage in corporate activism risk taking stances that reflect the values of their management but alienate key segments of a politically divided customer base. Our data suggests that company executives should think carefully about customers’ political affiliations and likelihood to engage in positive and negative word-of-mouth. Actions that push brands into vulnerable or dissonant territory are likely to hurt revenue and growth. Staying out of the political fray allows companies to avoid the risk of alienating customers, but may result in only modest financial performance. It takes a long time for companies to build successful brands, and mega brands have both Republican and Democrat customers. Failure to understand how corporate activism may affect their attitudes is a mistake.

In Harvard Business Review (Online).