Rethinking Political Activity at Target
(8 pages of text)
The focus of the case is on understanding firms’ campaign contributions and lobbying strategies — and their limits. The case centers on controversy facing Target Corporation in 2010. In the wake of the Citizens United decision, Target was one of the first companies to take advantage of their newly acquired freedom to use corporate treasury money (rather than money in a corporate-linked PAC) to make a contribution to an independent expenditure committee (aka “Super PAC”).
The company decided to make a donation to Minnesota Forward, a political action committee that had the primary goal of supporting job creation within the state. Pro-gay rights activists discovered that Minnesota Forward primarily backed Republican gubernatorial candidate Tom Emmer, who had previously supported traditional marriage. After this, Target, despite its liberal and socially responsible positioning, was subject to harsh criticism and activist protests as its donation was viewed as a contradiction to its social policies.
The events put CEO Gregg Steinhafel in a position to revisit the company’s policies towards political activities. Should there be constraints on what the firm would do on the political front? If so, what should those be?
The goal in teaching this case is to bring out the tensions inherent in any firms’ corporate political activity — particularly with respect to the use of corporate-linked monies in political campaigns. Target’s donation to the Minnesota Forward independent expenditure committee and the ensuing activist response gave the firm an impetus to reflect on its own involvement in political campaigns and its political activity policies. Hence, the case provides a good opportunity to discuss issues related to tensions in corporate-linked political activity more broadly.
It is often assumed that making use of corporate-linked monies in campaigns is an easy choice, such that firms can simply write cheques, effectively buying candidates, and in return receiving the policies they want. This case illustrates how the reality is more complex, particularly in a world where political campaign contributions are scrutinized by the public and where political campaign contributions might be seen as being inconsistent with other corporate policies.
United States, Large, 2010
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