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Trends & outlooks: corporate responsibility in times of crisis

By Eileen Jacob

When it comes to a corporation’s success, revenue is not the only consideration. A recent study by Cone Communications found that Americans want more transparency from the businesses they work with. Consumers want to know not only what a company stands for, but also what they stand up for.

Specifically, the study found that:

  • 60% of Americans hope businesses will drive social and environmental change in the absence of government regulation
  • 78% of Americans want companies to address important social justice issues
  • 76% of Americans will refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs

What happens when an event occurs that damages public opinion of a corporation?

When a business finds itself magnified in the public eye, they must respond carefully and quickly. For any aspiring entrepreneur, intrapreneur, or C-suite executive, it’s critical to learn what it takes to respond responsibly in times of crisis with grace and tact.

This article delves into strategies for corporate responsibility in times of crisis, and how a top MBA program can help fine-tune your abilities to handle the crisis as it strikes.

The complexity of handling a corporate crisis

Mass shootings—and the call for increased gun control—is a hot button topic in today’s social politics. The issue also provides a prime example of Americans looking for corporations to make social changes without government regulations.

In the wake of recent mass shootings in El Paso, Texas, which happened in a Walmart, members of the public are increasingly calling upon the megastore to stop selling firearms.

According to CNN, Walmart is one of the largest sellers of guns and ammunition in the United States. In response to public demands, the company—which has added restrictions to gun sales in the past—initially announced it had no plan to change the current company policy regarding selling weapons at their stores. Instead, the retailer ordered employees to remove video game signs that depicted violence, as well as displays for movies and hunting videos that reference gun violence. This move did not sit well with the public, and shoppers and the American Federation of Teachers threatened to stop shopping at Wal-Mart in response. In the days following the announcement, #BoycottWalmart began trending on Twitter. Within days, the company announced it would stop selling ammunition that can be used in assault rifles, would discourage shoppers from openly carrying guns in its stores, and would support Congressional action on gun control.

Dick's Sporting Goods found itself in a similar situation last year following the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida. Upon the incident, which killed 17 people, customers called for a ban on guns. As a result, Dick’s ended the sales of semi-automatic, assault-style rifles, and high-capacity magazines in their stores. The sporting goods store also raised the age for purchasing weapons from 18 to 21.

Even though the retailer took a hit to their revenue by removing the items from their inventory list, their public perception improved. This move, in the long-term, could result in a wider pool of foot soldiers for the company: loyal customers and brand ambassadors spreading positive word-of-mouth about the retailer.

These cases show the complexity of corporate responsibility in times of crisis. The success of a company encompasses how they respond to a social issue, how the public perceives the response, how quickly action happens, and a blend of short- and long-term goals.

Learning the skills you need for handling crisis

Responses to a corporate crisis must account for many layers of the business. How will your response impact your reputation? How will the response affect your bottom line (immediately and in the long term). What social or environmental cause will your response promote?

It’s not an easy scenario, especially in a divided nation. However, many of the skills you can obtain through an MBA program at UC Berkeley can help you navigate the muddy waters of crisis.

Leadership for cohesiveness

Perhaps the most important component of crisis response is a unified front. Everyone on your team must band together to stand behind whatever decision you make. Cracks in the team can show weakness and disorganization and can make the crisis worse.

An MBA program is a great place to hone soft skills like communication, teamwork, and empowerment. These skills are all necessary to rally the troops in times of business crisis. By advancing your understanding of effective communication, and learning new ways to encourage and inspire your team, you can have a stronger line of defense as you tackle the issue at hand.

Design thinking for innovation

Responding to a crisis is a game of chess, not checkers. There is a grey area when it comes to responding to public pressure appropriately, without being too reactive. It’s also critical to avoid short-sightedness during a response.

For these reasons, learning new approaches to solving complex problems is critical before you are faced with a crisis. While getting your MBA at UC Berkeley, you can unlock new ways of tackling a problem through design thinking education. The concept of design thinking is rooted in the principle that humans should come before business for better fiscal results, which aligns well with a long-term crisis strategy.

Emphasize corporate responsibility

Top business schools offer specialized training in corporate responsibility, which covers curriculum like:

  • Managing Human Rights in Business
  • Business Models and Strategies for a Better World
  • Creating Shared Value
  • Designing Financial Models that Work
  • Negotiations and Conflict Resolution

In conjunction with relevant curriculum, during your studies at UC Berkeley, you can also take advantage of independent studies, consulting projects, and events that focus on corporate responsibility and sustainability to deepen your understanding of the tactics even further.

Learn from the best

Of course, nothing beats experience. During an MBA program at UC Berkeley, students have the opportunity to work with professors who have been battle-tested in corporate responsibility techniques.

  • Robert Strand is the executive director of the Center for Responsible Business and lecturer at the Berkeley Haas School of Business, who specializes in contrasting varieties of capitalism in the U.S. and Nordic contexts.
  • Sara L. Beckman, an Earl F. Cheit Faculty Fellow, is also an expert in integrating design, critical and systems thinking skills for framing and solving problems in multi-disciplinary teams.
  • Faris Natour specializes in human rights and business. Before teaching at UC Berkeley, Natour led the human rights practice at Business for Social Responsibility (BSR) and human rights research and advocacy at Calvert Investments.

Are you ready to start working on the skills you’ll need to advance into entrepreneurship, intrapreneurship, or a C-suite position? Learn to become a business executive who can handle it all from the top professors in the country. Apply Now.

Learn about the Berkeley MBA for Executives program

Posted on September 9, 2019
Themes: Entrepreneurship  |  Marketing
Eileen Jacob
Eileen was Senior Assistant Director of Admissions for the Berkeley MBA Programs for Working Professionals from 2017-2019. She enjoyed meeting prospective students and helping them explore the benefits of an MBA, and hopes these blog posts provide valuable insight into the Berkeley MBA experience.