BCG Henderson Institute

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Almost everything about business today is political, in the sense that it requires consideration of a wide range of often controversial ethical, social, and ecological issues. Choices that may have been clear-cut in purely economic terms—such as what business to be in, where to do business, whom to do business with, and even how to price goods or hire and promote employees—can now easily become complicated by politics.

The stakes for skillfully managing this situation are higher than ever. When Delta stopped offering discounts to NRA members following a 2018 school shooting in Florida, it was threatened with the withdrawal of fuel subsidies in Georgia. When Disney spoke up on LGBTQ+ rights in Florida, it lost its special governance status and rights in the state. When H&M voiced concerns about cotton sourcing and human rights in China, its revenues in that country plummeted. When the Ukraine crisis broke, McDonald’s was forced to exit the business it had painstakingly built in Russia over a 30-year period.

The assumption that business and politics can and even should be separate is no longer realistic—especially where values, identity, and security are concerned. And these days it’s not enough to attempt to defuse political issues when they arise by relying on messaging from the corporate affairs department.

What has changed?

Sources & Notes