Introduction
Once a company gains a consumer, the goal is to retain that consumer and maximize the company’s revenue. Thus, it becomes important for the company to build a good consumer-company identification (CCI) (deep relations between the company and the consumer). The question remains, should a company participate in Corporate Social Advocacy (CSA), where companies voice their opinions on different controversial issues like Starbucks’ making a public statement in support of same-sex marriage, and Hobby Lobby’s policies over employee reproductive rights? The referenced article attempts to solve this problem and explain why consumers attitude towards companies depends on the issues they support through the balance theory concept in network science and why companies’ involvement in these issues positively effects CCI. Specifically, when the public’s views are same as the company’s stance on controversial issues, their identity overlaps and strong connections are formed. However, opposite stances can have negative influences on the public’s identification with the company.
Analysis
A report by Edelman reveals that over 60% of consumers are “belief-driven buyers”, who “choose, switch, avoid or boycott a brand” based on the stances the brand takes in social- political issues (Edelman, 2018). This result can directly be shown through balance theory using triadic P-X-O model, where P, X, and O are three entities consumer/public, company, and social issue respectively and relations between P, X, and O can be positive (liking) or negative (disliking).
To have a balance state, the consumer’s stance and company stance on an issue must be the same and the company and consumer must have a pre-existing liking relationship. A balance state also occurs when company and consumer stance on issues are opposite, but they have a pre-existing dislike between them.
To have an imbalance state, the consumer’s and company’s stance must be opposite and they should have a pre-existing liking relationship. An imbalance state also occurs when company and consumer have same stance and pre-existing dislike between them.
The above makes sense since if let’s say consumer Tom and company Starbucks have good relation and Tom supports a controversial issue, then Tom would expect Starbucks to support the same issue. If Starbucks does, then there is a balance state, but if not, then an imbalance state. Similarly, if Tom doesn’t support the issue, then he expects Starbucks to not as well. Moreover, if Tom and Starbucks don’t have a good relation and Tom supports an issue, Tom expects Starbucks to have an opposite opinion on the issue because of their dislike so hoping not to be on the same side and hence if Starbucks doesn’t support the same issue, then we have a balance state, otherwise imbalance.
Furthermore, under the imbalanced state, to eliminate cognitive discomfort, a person would need to change their relationship with the company or change their stance on an issue to make their personal values align with the company’s. For example, if a company and consumer have a liking relationship, but different stances, then the company and consumer are more likely to have a negative attitude change and start disliking each other because of differing opinions. However, if a company and consumer have a disliking relationship, but the same stance on an issue, then they are more likely to have a positive attitude change and start liking each other. A study conducted shows exactly this, where a liked company in imbalance state has a negative attitude change towards the company (-1.20), whereas a disliked company in imbalance state has a positive attitude change towards the company (1.31). Ultimately, the changes between the relation between the company and consumer in imbalanced state leads to a balance state. The triadic model shows how depending on the company’s stances on issues and whether it aligns with the consumers, their attitude towards the company changes.
Conclusion
Thus, raising a voice for the right issue is very important for the future of the company. Certain stances can greatly impact the company’s credibility and persuade consumers to want to identify with the company, ultimately increasing company growth.
References
Triadic public-company-issue relationships and publics’ reactions to corporate social advocacy (CSA): An application of balance theory. Taylor & Francis. (n.d.). Retrieved October 16, 2022, from https://www.tandfonline.com/doi/full/10.1080/1062726X.2022.2071273?scroll=top&needAccess=true
Brands take a stand – edelman. (n.d.). Retrieved October 17, 2022, from https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Earned_Brand_Global_Report.pdf