Jeremy Hobson: Tea Party favorite Ted Cruz has defeated lieutenant governor David Dewhurst in a heated Republican primary to run for U.S. Senate in Texas. And at the victory party for Cruz, Chick-Fil-A was served. If you haven’t heard, Chick-Fil-A is at the center of a political fight, after its president came out against same-sex marriage. That prompted a boycott of the chain by gay marriage supporters. So what are the business implications when executives take controversial stances like this?
Here’s Marketplace’s Mark Garrison.
Mark Garrison: One reason Chick-fil-A’s president speaks out against gay marriage is because he can. The company is privately held by the Cathy family. There are no shareholders to answer to.
Eric Dezenhall is a PR crisis consultant.
Eric Dezenhall: When you’re head of a public company, you’re pretty much like a mayor. You have to go to a town meeting and listen to everybody. But if you’re privately held you can do what you want.
Also, private companies don’t face shareholder pressure for constant growth. More than half of Chick-fil-A restaurants are in just five southern states. But the owners don’t have to grow beyond socially conservative areas if they don’t want to. Still, every political position will alienate some customers.
Dartmouth business school professor Paul Argenti says the Coors family business expanded after members learned to separate their conservative views from their beer.
Paul Argenti: They were able to keep their politics to themselves and allow the business to grow the way it should, which is what every smart businessperson should do.
As Chick-fil-A’s president fights gay marriage, Amazon’s CEO has made a large donation supporting it. Argenti has strong words about business leaders taking public positions on any side of a divisive issue.
Argenti: It’s just dumb, absolutely dumb.
I’m Mark Garrison for Marketplace.
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