When Business Bows To Activists

The culture wars have finally come to Corporate America. Just ask Microsoft Corp. (MSFT ), which initially supported a bill in Washington State that would ban employment discrimination based on sexual orientation. But after complaints early this year from a local minister crusading against gay rights, the company withdrew its support. Religious conservatives declared victory, and many angry employees wondered what happened to the open workplace that they thought was Microsoft.

This scenario is sure to be repeated in the wave of religious activism sweeping America. Already, Procter & Gamble (PG ), Safeway (SWY ), and GE (GE ) have been targets of letter-writing efforts or outright boycotts from religious groups unhappy with their support of gay causes or controversial research. Rather than risk bad publicity and lost business, many companies simply back down. That's unfortunate, because it ignores the valid reasons why most adopted these policies in the first place. Companies are pluralistic entities that need to serve all their constituencies: customers, shareholders, employees, and larger communities. Serving only one group, however vocal, to the detriment of all others is a recipe for disaster.

Despite its initial fumble, Microsoft ended up finding its compass. On May 6, CEO Steve Ballmer e-mailed employees that Microsoft was reviving support for the anti-discrimination law because it meshes with a business imperative: enhancing workplace diversity. Indeed, allowing discrimination of any form to flourish in the workplace is bad business in a nation that needs to marshal all its human capital to retain its economic leadership. To be sure, critical issues are being debated in the Culture Wars. But Corporate America acts most wisely when it makes decisions for business -- not emotional or religious -- reasons. Let's keep it that way.

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