Values Driven:DICK’s Sporting Goods &

the Future of Corporate Social Advocacy

(Source: Koterba, J. Omaha World Herald. 2018.)

Abstract:

Political issues permeate our world from water cooler talk to the dinner table on Sunday night; there’s no escaping the conversation. With the average consumer expecting companies to take a stand, it’s become increasingly difficult to separate business, marketing, and politics. The societal impact of politics has invaded C-suites across the nation. How does the C-suite straddle the line between business and advocacy? This case examines DICK’s Sporting Goods’ policy change around assault-style rifle sales through the lens of corporate character and corporate social advocacy (CSA), illustrating the implications CSA has on brands regarding national attention, consumer feeling, and financial impact.

Table of Contents

Table of Contents:

Overview 4Company Overview 5DICK’s Sporting Goods Mission Statement 5DICK’s Sporting Goods and Sports Matter 6Corporate Social Responsibility & Corporate Social Advocacy 6Corporate Character 7Situation Analysis 8

Timeline 8Risky Business: Financial Success or Standing up for What’s Right 10Responses by Stakeholders 10Business Impact 12

The Intersection of CSR and CSA 13Building a Corporate Character 14A Look Ahead 15References 17

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Overview On February 14, 2018, Nikolas Cruz used an AR-15 to open fire at Marjory Stoneman Douglas (MSD) High School in Parkland, Florida killing 17 students and staff members while injuring 17 others, making it the deadliest high school shooting after Columbine. The students of MSD High School formed Never Again MSD, a movement created by survivors of the mass shooting calling on the federal government to take action against gun violence (Witt, 2018). Polarizing events like the Parkland shooting have had an effect on how businesses interact with society at large. In recent decades, businesses have taken on larger roles than economic development in society. Corporate social responsibility (CSR) has become an integral part of the business model with companies adopting new policies to deter race, gender and sexual orientation discrimination, along with effective policies benefiting environmental sustainability and basic employee satisfaction. In recent years, businesses, especially CEOs, have started extending CSR into the new realm of corporate social advocacy (CSA). More CEOs are taking a definitive stance in today’s turbulent political climate. An example of this happened in 2017 when many executives, like Mary T. Barra, CEO of General Motors and Doug McMillon, CEO of Walmart, voiced their disapproval of President Trump’s remarks about the Charlottesville riot (Gelles, 2017). Another example is Nike’s inclusion of Colin Kaepernick in its latest advertising campaign. This case study examines the decision of DICK’s Sporting Goods , the largest sports retailer in the U.S., to not just stop selling assault rifles in its stores, but to advocate for stricter gun laws (“Industry Overview,” n.d.). On February 28, 2018, two weeks after the Marjory Stoneman Douglas High School shooting, DICK’s Sporting Goods announced it would ban assault rifles, raise the minimum age for buying guns from 18 to 21, and ban high-capacity magazines, while urging lawmakers to enact “common sense” gun reform (Media Statements, 2018).

DICK’s announced the decision with a statement on its company website and further publicized the change in a Good Morning America interview saying, “thoughts and prayers are not enough” (Media Statements, 2018, para. 2). This decision was shocking to some, especially in the midst of such a heated, public debate around gun control. DICK’s took a risk by making this decision, potentially alienating part of its audience. According to CEO Edward Stack, DICK’s abides by every single law put forth by the federal government when it sells firearms, yet Cruz, the MSD shooter, was able to easily obtain a shotgun from one of DICK’s stores. While the shotgun Cruz purchased from DICK’s was not used in the MSD shooting, it pushed DICK’s to make its policy change and then turn into a policy advocate (Taylor, Feb. 2018).

(Source: Wasik, 2018)

(Source: Twitter, 2018)

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Company Overview Eighteen-year-old Dick Stack worked at an Army Surplus store where he was tasked by the manager to come up with a list of products for fishing, which Dick was more than able to do, seeing that he was an avid fisherman (DICK’s About Us, n.d.). When Dick’s manager laughed at his list, Dick quit and went off to start his own sporting goods store with the help of his grandmother’s $300 life savings. In 1948, Dick opened a bait-and-tackle shop in Binghamton, New York. By the 1970s, Dick had expanded his product line and opened another store in Upstate New York. In 1984, Dick Stack’s son, Edward Stack, took over the company as CEO. He moved the headquarters from Binghamton, NY to Pittsburgh, PA. In just a decade, Edward expanded DICK’s Sporting Goods to the national chain consumers know today. In 2002, DICK’s Sporting Goods shares opened for trading on the New York Stock Exchange, closing its first week of trading at $14.95 per share (“Dick’s Sporting Goods,” 2002). Through a hard work ethic and a clear vision, a humble bait-and-tackle shop worth $300 expanded into a national sporting goods chain that has captured 11% of the market for the U.S. sporting goods industry (“Industry Overview,” n.d.). Until the beginning of 2018, there has been little public information about Edward Stack, except for his prominent wealth, which Forbes has calculated at $1.2 billion as of March 20, 2017 (“Edward Stack,” 2017). Stack received a bachelor’s degree from St. John Fisher College (“Edward Stack,” 2017). He serves on multiple boards, including the board of directors for the National Retail Federation (“Edward W. Stack,” 2014). Before DICK’s policy changes in February 2018, Stack was hardly in the national news. Now, Stack speaks often at national conferences, conducts on-air interviews and authors op-eds in prominent news publications (“DealBook Conference 2018”, 2018; Dick’s Sporting Goods to no longer”, 2018; Stack, 2018).

DICK’s Sporting Goods Mission Statement Figure 1 displays DICK’s Sporting Goods’ mission statement found on the company’s investor relations webpage.

FIGURE 1(Source: “OUR VISION/MISSION”, n.d.)

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DICK’s Sporting Goods and Sports Matter DICK’s Sporting Goods established its official CSR initiative, the Sports Matter program, in 2014. DICK’s believes, “Sports build character, increase confidence, and motivate kids to stay in school and aim for higher education” (Learn More, n.d.). Through Sports Matter and the DICK’s Sporting Goods Foundation, the initiative has pledged over $50 million towards funding youth sports programs in the United States since its inception, according to the Sports Matter website (Learn More, n.d.). DICK’s believes that children who play sports evolve into high-functioning, successful adults. The Sports Matter page cites a study from Up2Us Sports, which states that “$3.5 billion was cut from school budgets from 2009 - 2011” (Learn More, n.d.). Through the DICK’s Sporting Goods Foundation and Sport Matter, DICK’s facilitates a crowdfunding initiative where individuals can donate to specific Sports Matter teams (Donate, n.d.). DICK’s Sporting Goods is an advocate for youth sports, as demonstrated by its Sport Matter program and its pledge “to match up to $1.5 million in donations to public and public charter school sports teams in communities across the country” (Donate, n.d.). While it surprised many when DICK’s made the decision to pull the assault-style rifles off of its shelves, from a CSR standpoint, it’s less surprising. DICK’s concern for youth access to sports articulates what the company values: allowing kids to be kids. In this sense, DICK’s acted congruently with its values by supporting the MSD students organizing to create a safer community.

Corporate Social Responsibility & Corporate Social Advocacy Although corporate social responsibility is not a new concept, its importance has grown to an extent where in 2017, 87% of consumers reported buying based on their values while 76% said they would boycott based on their values (2017 Cone Communications CSR Study, 2017). Many companies today are choosing to do societal good whether it prioritizes its shareholders or other stakeholders. The “positive relationship between CSR actions/policies and firm financial performance” shows that “doing good is good for business” (Ragas & Culp, 2014, p. 114). Despite the financial incentive of CSR, corporations that take a stakeholder approach consider company success by looking at the triple-bottom-line, where a business considers people, the planet, and profits when making decisions (Aragon-Correa, Marcus, Rivera, & Kenworthy, 2017). This commitment lends “that businesses have a range of responsibilities that extend beyond the shareholders in the firm, including obligations to consumers, employees, governments, the environment, and the public as a whole” (Carroll, 2016, p. 217). In contrast, when a company prioritizes its shareholders over all other stakeholders, CSR initiatives are only useful if they contribute to the singular goal to “maximize profits for the shareholders” (Mackey, 2005, para. 6). With an increasingly polarized political environment, and social media allowing for easier interaction between consumers and businesses, companies “are adapting to meet new social and political expectations in sometimes startling ways” (Gelles, 2017, para. 14). CEOs are tasked with voicing their opinion, as a 2018 “study by BrandFog found that more than six in ten consumers say it is “‘extremely important’ for CEOs to take positions on social issues, especially among the companies they buy from” (Bersin, 2018, para. 3). Additionally, the 2018 Edelman Trust Barometer

(Source: “Learn More”: n.d.)

(Source: 2017 Cone Communications CSR

study, 2017)

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revealed that, while public trust in government fell to 33 percent, public trust in CEOs rose to 44 percent with two-thirds of those surveyed believing businesses should lead policy change when the government does not (2018). In assuming this new political responsibility, more CEOs are enacting corporate social advocacy (CSA). According to Dodd and Supa (2014), “corporate social advocacy (CSA) refers to an organization making a public statement or taking a public stance on social-political issues” whether the statement is planned or not (p. 5). Although wealthy CEOs have been inadvertently supporting political candidates by making sizable campaign donations, Citizens United v. Federal Elections Commission “gave corporations much of the same right to political speech as individuals have” (Bai, 2012, para. 2). The Citizens United decision is often discussed in terms of increased campaign financing, but it also empowers businesses and CEOs to use their influence to affect politics. CSA asserts that businesses do so in order to advocate for the best interests of its stakeholders and society as a whole. Corporate Character Prior to February 2018, DICK’s Sporting Goods had not consistently asserted its views publicly on national issues. Mention a company like Starbucks, Patagonia, or Whole Foods, and one may think of the advocacy work they do; mention DICK’s, and one would likely think of just sporting goods. This makes good sense considering its mission, as articulated previously, revolves around being the #1 sporting retailer and helping athletes achieve their best (Vision | Mission, n.d.). After the Parkland shooting, DICK’s actions illustrate the company’s previously unarticulated opinion that guns are not being properly controlled. A traumatic experience like losing the lives of young people has led a variety of corporations to do something to protect citizens, especially children. Stack specifically articulates his belief that the “systems in place are not effective to protect our kids and our citizens” and that “it’s time to do something about it” (Media Statements, 2018, para.7-8). This statement articulates DICK’s’ value of allowing kids to be kids, a value that the company previously embodied with its Sports Matter program. Originally created with the goal of providing children the means to play sports, DICK’s redefined this value to incorporate the safety and security of children, including the desire not to add to the gun violence problem (Caplan, 2018). This display of values leads us into a discussion on DICK’s and corporate character. As we analyze DICK’s Sporting Goods’ decision, we will consider how it shaped the company’s corporate character. But first, what is corporate character? What it means to be a business has changed over time, therefore, the definition of corporate character has evolved as well. For the purposes of this case study, we will consider two definitions. The first, which is from The Arthur W. Page Society, concisely asserts that “corporate character refers to the enterprise’s unique identity, its differentiating purpose, mission and values” (Arthur W. Page Society, 2012, p. 5). A more extrapolated definition comes from Geoff Moore:

“Corporate character is the summary of characteristics that develop over time in response to a corporation’s challenges, opportunities and its own pursuit of virtue. A corporation can be characterized by the extent to which it possesses and exercises moral virtues (and lacks the associated vices) and by the extent to which it draws on the intellectual virtue of practical wisdom in its pursuit of a good purpose and to enable the correct ordering in its pursuit of both excellence and success” (Moore, 2005, p. S109).

(Source: Case Study Authors, 2019.)

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Using these definitions, we will examine DICK’s Sporting Goods actions following the MSD mass shooting through the following aspects of corporate character:• Corporate character is formed through responses over time• Corporate character is characterized by declaring and acting on values that create the company’s

unique identity• Corporate character entails considering societal virtues when deciding a company’s purpose and how a

company balances exercising its values and business success.

Situation AnalysisTimeline:

(Source: Case Study Authors, 2019.)

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2012-2013:December 14, 2012: Shooting at Sandy Hook Elementary School, in Newtown Connecticut. Adam Lazna, 20, shot his mother, and then fatally shot 20 children between six and seven, and six adult staff members.

December 18, 2012: DICK’s announces it will suspend the sales of some semi-automatic rifles in its stores (Candiotti, 2012).

November 2, 2013: NBC News reports DICK’s new line of stores, Field & Stream, sells Bushmaster AR-15 assault rifles (Rappleye & Winter, 2013). 2018:February 14: Shooting at Marjory Stoneman Douglas High School in Parkland, Florida. Nikolas Cruz, 19, kills 17 high school students and faculty with an AR-15 assault rifle.

February 28: DICK’s announces it will no longer sell any assault-type rifles in its stores and raises its selling age of guns to 21 (DICK’s, 2018). Walmart also announces it will raise the selling age of guns and ammunition to 21, as well as remove all toys and airsoft rifles that resemble assault-style weapons (Haag, 2018).

March 5: Tyler Watson sues DICK’s and Walmart for age discrimination, where Oregon law allows residents to buy shotguns or rifles starting at age 18 (Flaccus, 2018).

March 6: Tristin Fulton sues DICK’s, claiming that the policy violates Michigan law, which allows anyone 18 years of age or older to buy a firearm unless otherwise legally incapacitated (Mamula, 2018).

March 21: DICK’s CEO, Ed Stack, publishes an op-ed in The Washington Post urging Congress to create stricter gun laws, saying, “But this was about our values and standing up for what we think is right” (Stack, 2018).

April 9: DICK’s announces it will destroy unsold assault rifles instead of returning them to the manufacturer (Ritenbaugh, 2018).

May 3: DICK’s hires Glover Park Group to lobby Congress for stricter gun laws (Polly, Mosendz & Townsend, 2018).

May 3: Following DICK’s announcement of its decision to hire lobbyists, Springfield Armory, a major manufacturer of handguns and rifles, decided to cut ties all ties with DICK’s (Davis, 2018).

May 4: The National Shooting Sports Foundation, (NSSF) the trade association for the firearms, ammunition, hunting and shooting sports industries, expels DICK’s from membership in response to hiring lobbyists related to gun control (National Shooting Sports Foundation, 2018).

May 9: American firearms manufacturer O.F. Mossberg & Sons, Inc. announces it would no longer sell products to DICK’s stores in response to DICK’s hiring lobbyists (O.F. Mossberg & Sons, Inc., 2018).

August 29: DICK’s releases second quarter earnings, stating that sales have decreased, however, Stack states, “In addition, we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution” (DICK’s Sporting Goods, 2018, p. 1).

October 1: The Watson lawsuit moves to trial, which is scheduled for November 14, 2018 (Furuichi, 2018).

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Risky Business: Financial Success or Standing Up for What’s Right DICK’s made the decision to change its policies ostensibly understanding the potential impact it could have on its business for two of its primary stakeholders, customers and employees. For example, according to an article in the Journal of Public Interest Communications, DICK’s president acknowledged that the company expected a wide range of responses from individuals within these groups, stating, “‘We weren’t expecting it to be a well-received decision by many of our customers,’” (Gaither, Austin, Collins, 2018, pg. 185). In August 2017, DICK’s stock plunged 23% in just one day and “the company cited its struggling hunting business and lower gun sales as reasons for the drop” (Cam, 2018, para. 8). This points to gun sales falling, but still having a significant impact on the health of DICK’s overall business. In addition, DICK’s sold assault-style weapons only out of its 35 Field & Stream stores, and not in its 715 DICK’s Sporting Goods Stores (Wahba, 2018). According to an article in Fortune, “[DICK’s] overall hunting business, which encompasses firearms, has been declining with sales down by a double-digit percentage for a few quarters now.” Further, estimates from Wall Street analysts at Wedbush Securities are “that the whole hunting segment, not just firearms, makeup only 10% of company sales” (Wahba, 2018, para. 7-8). While firearms were not a large part of DICK’s sales, such sales still impacted the business and DICK’s took a risk when it came to impacting consumer perception of the company’s core customer. Looking at a report of those who have shopped at DICK’s over a three-month period, DICK’s model customer is between the ages of 35 and 54, has at least a bachelor’s degree, makes over $150,000 a year, and is white (GfK Mediamark Research & Intelligence, 2016). The report does not note political affiliation, but considering it describes an upper-class, educated white person, it further articulates the risk DICK’s took in adopting what turned out to be a largely partisan policy on assault style rifle sales. Gun control debates often spark extreme fervor amongst the public. Therefore, DICK’s took a risk to its brand perception and retail traffic in making this decision, as DICK’s could not know if its core customer would continue to shop at its stores or if the general public would overall view the announcement favorably or not. DICK’s ultimately decided that, while it was a risk to its business, there was a moral obligation. CEO Ed Stack said on Good Morning America that “we felt we needed to do something” and that the decision came after witnessing the Parkland students’ rallying call for a change in gun laws (Stack, Feb. 2018). According to an article in the New England Cable News, “Leadership experts say the change in policy [...] shows a growing sense of change and social responsibility in the way executive leaders handle serious issues” (Best, 2018, para. 2). This decision came about because DICK’s felt the need to take a stance, even with the possible risk to its immediate sales, for the morals of DICK’s leadership, and the longevity of the business, as more of the general public has been clamoring for businesses to take socio-political stances in recent years. Responses by Stakeholders DICK’s decision was generally met with praise by a majority of the public. In a heavily political world, some consumers appreciated DICK’s taking a stance. Immediately after the announcement, there was a public

(Source: Dick’s Sporting Goods Inc., Chairman and CEO Edward Stack speaks out on “Good Morning America,”

Feb. 28, 2018.)

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reaction on Twitter. According to The New York Times, “by midday, the number of Twitter messages containing DICK’s name had jumped 12,000 percent from the average over the previous 10 days, according to Sprout Social, a social media management, advocacy and analytics software platform” (Creswell, 2018, para. 15). There was a large buzz around the internet about the decision, and most of the public response was positive. In fact, “about 79 percent of the tweets had a positive sentiment, Sprout Social said, including supportive messages from Hollywood actors and actresses” (Creswell, Feb. 2018, para. 16). In other circles, however, the response was negative. Many gun owners and the National Rifle Association (NRA) decided to boycott DICK’s after the announcement.

When it came to stakeholder response, the sentiment was mixed. Two DICK’s employees quit over the change, with one saying he could not “be the face of these new gun policies in affect [sic]” and that he “find[s] them morally and constitutionally wrong. I refuse to be a part of a corporation with these liberal policies” (Taylor, March 2018, para. 4). The other employee said that he would “not take part in the systematic discrimination Dick’s Sporting Goods CEO Edward Stack has arbitrarily decided to implement” (Taylor, March 2018, para. 9). Further, the National Shooting Sports Foundation (NSSF) and two gun manufacturers decided to cut ties with DICK’s over its decision. The NSSF expelled DICK’s from its

membership. More specifically, firearm manufacturers Mossberg & Sons Inc. and Springfield Armory Inc. are no longer selling its products to DICK’s. These decisions were largely fueled by, and came after, DICK’s hired gun control lobbyists in April 2018. All of these organizations directly cite the hiring of a lobbyist in their decisions to cut ties with DICK’s Sporting Goods. At DICK’s annual shareholder meeting in Pittsburgh in June 2018, one investor confronted Stack about the decision. He accused Stack of “violating fiduciary duties by knowingly and purposely giving up money” and went on to say that DICK’s had “damaged its reputation by lending its voice and its resources to those who want to abolish the Second Amendment” (Prince, 2018, para. 2-3). The news media’s response to DICK’s decision was mostly positive. There were some who claimed DICK’s shouldn’t be inserting themselves into politics and others who lambasted the decision. One such example is a Pittsburgh Post-Gazette op-ed which was titled, “Dick’s Sporting Goods’ Cowardly Decision on Guns.” Regardless, most of the news coverage remarked on the shocking stance DICK’s took and praised DICK’s for sticking to its values and morals. DICK’s responded to the mostly positive public and media response by tweeting its thanks for the support after its announcement.

(Source: Twitter, 2018.)

(Source: Twitter, 2018.)

(Source: Twitter, 2018.)

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Business Impact

Immediately after the announcement, there was no big change in DICK’s stock price. According to The New York Times, right after the announcement, “investors did not appear to worry about a backlash, as Dick’s stock spent much of Wednesday trading about 1.8 percent higher before finishing up 0.69 percent” (Creswell, 2018, para. 18). There was still room for concern, however, as in March 2018, Stack noted that “the new gun restrictions had hurt traffic and sales, as customers unhappy with the moves said they would shop elsewhere” and sales “declined 2.5% from a year earlier; analysts polled by Consensus Metrix were expecting a 1.4% decline” (Germano, 2018, para. 4). This decline was attributed to Under Armor’s distribution strategy changes (George-Parkin, 2018).

Lee Belitsky, DICK’s finance chief, said in reference to hunting sales that the chain’s gun policy prompted, “an accelerated decline in an already challenged category” (Germano, 2018, para. 5). DICK’s had “higher quarterly profits and sales” in May 2018, which did a lot to ease investors’ concerns about the policy change (Germano, 2018). While DICK’s hunting business definitely suffered during its fiscal first quarter, DICK’s also “reported better demand for other items, which helped profit margins” (Germano, 2018, para. 2). Looking specifically at DICK’s stock price from February 12 to March 12, 2018, pictured above, and comparing DICK’s stock to its competitors and the S&P 500, we can see that there was not a large change in DICK’s stock after its announcement. As before, DICK’s remains above Walmart and below Big Five Sporting Goods in stock performance. Overall, looking at the month following its announcement, we see that DICK’s stock price was generally flat. When comparing DICK’s stock change after its announcement to the similar announcement by CVS in 2014 to stop selling cigarettes, we see differences. Both of these decisions were surrounded by cutting out a portion of its sales for moral reasons; however, in 2014, CVS did take a financial hit. CVS blamed its eight percent merchandise sales slump on the tobacco ban, and even said in its initial statement that they expected to take a “$2 billion hit

to sales” (Egan, 2018, para. 6). Looking beyond DICK’s stock price, there has been an increase in DICK’s brand perception since the announcement. When comparing DICK’s Sporting Goods to Walmart, YouGov found that DICK’s had a sharp increase in positive perception. According to YouGov, “the perception

(Source: Yahoo Finance, 2018.)

(Source: YouGov, 2018.)

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jump was especially acute for Dick’s, which was the first retailer to make an announcement of this type” (YouGov, 2018, para. 2). Similarly, looking at Word of Mouth, as seen in the figure below, we see a sharp rise in Word of Mouth for DICK’s, whereas Word of Mouth remained steady for Walmart. When looking further into brand perception according to political orientation, YouGov found that the increase in DICK’s perception was driven by Democrats, whereas support from both Republicans and Independents remained steady (2018). The study continued on to say that “the unchanged response from the other two groups [Republicans and Independents] possibly indicates conflict within their own ranks. Support for stricter gun control has risen since the shooting in Parkland, Florida, according to a recent Economist/YouGov poll” (YouGov, 2018, para. 3). This increase is compared with Walmart, where Republican perception of Walmart dropped after Walmart’s similar announcement.

The Intersection of CSR and CSA

DICK’s actions are a particularly unique case because it blends concepts of corporate social responsibility and corporate social advocacy. CSR asserts “that businesses have a range of responsibilities that extend beyond the shareholders in the firm, including obligations to consumers, employees, governments, the environment, and the public as a whole” (Carroll, 2016, p. 217). In the context of DICK’s Sporting Goods, Stack’s statement identifies the company’s most important public that it felt responsibility towards: “the brightest hope for the future of America – our kids” (Stack, 2017, para. 5). As previously analyzed, DICK’s past CSR initiatives focused on allowing children to be children through access to sports. After finding out the Parkland shooter had purchased a gun from DICK’s Sporting Goods, the company felt like it had to do something to relieve this issue of mass shootings disrupting the lives of schoolchildren. In altering its business model to have more restrictive rules on gun sales, DICK’s is upholding its obligation to keep this key public safe because the company believes the current federal gun laws fail to do this (Media Statement, 2018).

However, DICK’s’ act of corporate social responsibility falls into the realm of corporate social advocacy. Again, Dodd and Supa articulate that, “corporate social advocacy (CSA) refers to an organization making a public statement or taking a public stance on social-political issues” (2014, p. 5). DICK’s’ statement is a good example of CSA as it aligned the company with one stance of the socio-political issue of gun regulation. We will analyze DICK’s’ CSA through Dodd and Supa’s three facets of CSA:

“(a) the social-political issues addressed by organizations are divorced from issues of particular relevance to the organization; (b) engagement in the social-political issues is controversial and serves to potentially isolate organizational stakeholders while simultaneously attracting activist groups; and, (c) as a result, there is a particularly necessary emphasis on financial outcomes for the organization” (2015, p. 289).

(Source: YouGov, 2018.)

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The first facet of socio-political detachment is not consistent with DICK’s’ corporate social advocacy. In the DICK’s media statement, the company articulates that it believes “gun violence is an epidemic,” and that despite its policies, DICK’s sold a gun to a person that went onto commit a mass shooting, therefore, DICK’s decided to remove itself from the assault rifle business (Media Statements, 2018, para. 5). This facet of CSA is overshadowed by DICK’s intention to act responsibly as a corporation. Although the issue was relevant to the company, its advocacy was not bolstering business; the measures it took of self-restricting gun sales limited that aspect of its business.

Next, DICK’s engagement in the issue of gun regulation sparked controversy and garnered pro-regulation support and anti-regulation scrutiny. As outlined in the stakeholder response, DICK’s was praised as well as sued.

Lastly, after the company’s actions, much attention was paid to its financial performance. According to the company’s annual report, DICK’s took into consideration the financial loss it would take in gun sales in its 2018 fiscal outlook (Marketline, 2018). However, the company also predicted its stance would “also attract more people to its stores” (Sharma, 2018, para. 4).

From this analysis, we can see that DICK’s statement and business model change does not neatly fit into the traditional notion of CSA nor are the company’s efforts simply a part of a CSR campaign or initiative. Instead, DICK’s Sporting Goods made advocacy part of its business model by assuming responsibility for the negative impacts its business had on its key publics. Building a Corporate Character

These CSR and CSA efforts served to help DICK’s Sporting Goods form and strengthen its corporate character. To articulate again, “corporate character refers to the enterprise’s unique identity, its differentiating purpose, mission and values” (Arthur W. Page Society, 2012), and the following aspects of corporate character can be analyzed:• Corporate character is formed through responses over time.• Corporate character is characterized by declaring the value, and acting on the value.• Corporate character entails considering societal virtues when deciding a company’s purpose and how a

company balances exercising its values and business success. Responses Over TimeAs our timeline articulates, DICK’s decision was responsive over time. DICK’s first acted towards regulating gun sales in 2012, shortly after the Newtown shooting. The company waited five years to take further measures, and these new self-regulatory measures came as a response to the Parkland, Florida shooting. Throughout 2018, DICK’s continued to support gun regulation through Stack’s op-ed (Stack, 2018), hiring a lobbying group (Polly, Mosendz & Townsend, 2018), and fighting lawsuits that challenge its new policies (Furuichi, 2018). This progression strengthened DICK’s corporate character by articulating to the public that this is an issue that the company has had long standing concern for, and, is part of the company’s identity and values.

(Source: Case Study Authors, 2019.)

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Declaring + ActingDICK’s declared its values through the initial media statement (2018) and Stack’s appearance on Good Morning America, and then continuously acted on it by implementing and upholding the new policies and advocating for others to support gun regulation as well. The company’s formal declaration and subsequent actions also strengthened its corporate character through solidifying its mission and values. Company Purpose vs. SuccessBecause of its value of keeping children safe, DICK’s decided it would no longer continue to make profits by selling assault-style rifles or through sellings guns in general to those under 21. The company put its values over its short-term financial performance, because as outlined in our risk section, the company did not know the level of backlash it would receive. By balancing its greater purpose over financial success, DICK’s articulated its commitment to this cause to the public, further contributing to its corporate character. Overall, the melding of CSA and CSR guided DICK’s to act responsibility towards a cause it cared about, therefore, articulating the company’s deeper purpose while advocating for others to uphold similar values.

A Look Ahead DICK’s FutureThere are two potential concerns for DICK’s future: its financial performance and potential legal ramifications over its change in gun sale policy. Over the last year, DICK’s has reported a decline in sales, although DICK’s believes it is due to a changing retail economy, rather than its decision on gun sales. In its second quarter 2018 financial earnings report, Stack stated, “we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution,” (DICK’s Sporting Goods, 2018, p. 1). However, the earnings report went on to state that DICK’s is confident that the sales trajectory will improve over the next year.

While taking a stance on the issue of firearm sales, DICK’s may face potential backlash from the legal system. With lawsuits filed in both Oregon and Michigan for age discrimination, DICK’s may have to consider the legal ramifications of its stance. (Mamula, 2018). The lawsuit in Oregon was scheduled to begin trial November 14, 2018 and the outcome of that trial may determine what actions DICK’s will have to take moving forward regarding its firearms policy.

The Future of the CCO and the C-SuiteAs we have looked at CSR, CSA and corporate character, it is becoming more and more important for the Chief Communications Officer (CCO) to play an integral role in the decisions companies make on social and political issues. Before making the controversial decision, “Mr. Stack consulted with his upper management and board” (Germano, 2018, para 17). DICK’s utilized the C-suite and executive board to make decisions regarding its advocacy. According to the Page Society, “All C-Suite members must collaborate on both activating corporate character and engaging stakeholders around it” (2016, p. 6). In actuality, “emerging research suggests that not taking a stance on controversial political issues can have potentially negative consequences for some companies” (Gaither, B. M., Austin, L., & Collins, 2018, p 177). Looking at case studies such as DICK’s, one can see the important role a CCO can take by advising the C-suite and executive leadership on taking a stand on a socio-political issue that align with the company’s values.

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The Future of Corporations and CSAAs the socio-political climate of the United States continues to rapidly change, our case study explored how one company decided to assert its values into this volatile public sphere. DICK’s acted as a catalyst by taking a stance on the issue of gun regulation. After DICK’s’ decision, other corporations and industries followed with similar measures. While DICK’s announcement came early in the day on February 28, 2018, Walmart announced it would also change its minimum selling age for firearms to 21 and remove any items resembling assault-style rifles (Creswell & Corkery 2018). On March 1, The Kroger Company announced it would increase the selling age for firearms to 21 and remove assault-style weapons from its Alaska stores (Bromwich, 2018). Citigroup announced it would set restrictions for firearms sales by its business customers on March 22, “making it the first Wall Street bank to take a stance in the divisive nationwide gun control debate,” (Hsu, 2018, para 1). Following Citigroup’s announcement, Bank of America announced it would stop lending money to gun manufacturers that make military-style firearms for civilian use. (Hsu, 2018). While several companies, such as Delta Air Lines, United Airlines and car-rental firm Enterprise quickly ended ties with the NRA after the Parkland shooting, FedEx only recently announced it would end its agreement with the NRA to offer discounts to its members.

All of these examples show that more companies are taking a stand on social issues and influencing change within society. Not only are companies showing that they are willing to take a business risk to take a stand on social issues, they are proving that they don’t necessarily need to sacrifice profits to stand up and be values driven.

(Source: Case Study Authors, 2019.)

(Source: DICK’s Sporting Goods, n.d.)

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