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R E V : A U G U S T 1 , XXXXXXXXXX
Professor Nien-hê Hsieh and Research Associate Victor Wu prepared this case. Many thanks to Shelley Alpern (Clean Yield Asset Management)
for her assistance. This case was developed primarily from published sources. Funding for the development of this case was provided by Harvard
Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as
endorsements, sources of primary data, or illustrations of effective or ineffective management. The authors acknowledge the assistance of Karl
Sandstrom (Perkins Coie LLP) in providing information contained in the section “Citizens United.”
Copyright © 2017, 2018 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call XXXXXXXXXX-
7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized,
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N I E N - H Ê H S I E H
V I C T O R W U
Making Target the Target: Boycotts and Corporate
Political Activity
On March 23, 2016, North Carolina Governor Pat McCrory signed into law the Public Facilities
Privacy & Security Act, commonly known as HB2. The bill invalidated lesbian, gay, bisexual, and
transgender (LGBT) non-discrimination ordinances at the municipal level and prohibited individuals
from using public restrooms and changing facilities that did not match their biological sex.1 Civil rights
activists and liberal political groups around the United States quickly denounced the law as patently
discriminatory against transgender individuals. Its proponents argued that it was a common-sense
measure to standardize discrimination statutes across the state in the interest of public safety.
On April 19, in response to HB2, Target published a statement on its website firmly reiterating its
commitment to LGBT rights and welcoming transgender customers and employees to use the
estrooms and changing rooms co
esponding to their gender identity (see Exhibit 1). The New York
Times described Target’s stance as “the most prominent position taken by a national retailer” at the
time on the issue. 2 The day after Target’s statement, the American Family Association (AFA), a
conservative advocacy group, launched an online petition to boycott the company’s stores, quickly
garnering over 1.4 million signatures. The petition castigated Target’s “dangerous new policy” for
“allowing men to frequent women’s facilities,” arguing that it enabled sexual predators.3
This was not the first boycott Target faced over LGBT issues. The last time, though, the company
had found itself at odds with the other side of the political aisle. In 2010, the company was widely
criticized by liberal organizations for its $150,000 donation to Minnesota Forward (MN Forward), a
political advocacy group that spent heavily in support of Tom Emmer, a Republican candidate for
governor of Minnesota who opposed same-sex ma
iage and LGBT parental rights. Then-CEO Gregg
Steinhafel had initially defended the donation, arguing that it was motivated exclusively by business
interests. However, under mounting public and shareholder pressure, he soon backtracked,
apologizing for the donation and pledging revisions to Target’s political contribution policy.
Target CEO Brian Cornell was relatively new, having been hired in 2014, when Steinhafel was
forced out after Target suffered a major customer data
each. Cornell knew he could not always
choose or predict what challenges he would face as CEO. Cornell had not caused the problem; although
the statement reflected company policy, it had been published without Cornell’s knowledge or
approval.4 But he had to decide how to solve it.
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ena, 2021.
This document is authorized for use only by Graciano Ca
ena in GWU GLOBAL MBA/PUBLIC POLICY taught by JEFFREY JOSEPH, George Mason University from Feb 2021 to May 2021.
XXXXXXXXXXMaking Target the Target: Boycotts and Corporate Political Activity
2
Company Background
Target began as a subsidiary of The Dayton Company. Founded in 1902 in Minneapolis, Minnesota,
y George Draper Dayton as a dry goods store, The Dayton Company developed into a successful
egional department store, steadily diversifying its merchandise offerings in the following decades. In
1960, the company drafted plans to enter the burgeoning mass retail market with a new store chain:
Target. The first Target store opened shortly thereafter in 1962 in Roseville, Minnesota. The Dayton
Company continued to expand its other operations, going public in 1967 and merging with the
department store J. L. Hudson Company in 1969 to form the Dayton-Hudson Corporation. Target,
however, quickly became the most important part of the business, establishing itself by the late 1970s
as the Dayton-Hudson Corporation’s most profitable division. As such, the company shifted primarily
into the retail business, expanding the Target chain across the United States. Accordingly, in 2000, the
Dayton-Hudson Corporation was officially renamed the Target Corporation.
With around 1,800 stores and $73.79 billion in revenue for FY2016, Target was the second-largest
discount chain in the United States in 2016, behind its chief rival Wal-Mart ($482.13 billion in revenue
for FY2016). As a large retail chain, it sold a wide variety of consumer products, divided among five
major categories: household essentials (26% of sales), food and pet supplies (21%), apparel and
accessories (19%), hardlines (17%), and home furnishings and décor (17%). a With the rise of the
Internet, e-commerce became an increasingly important part of Target’s business, putting it in
competition with online giant Amazon ($107.01 billion in revenue for FY2016). While Wal-Mart and
Amazon were both multinational corporations, though, Target operated exclusively in the United
States. In 2011, Target had expanded into Canada by purchasing store locations from defunct retailer
Zellers. However, the stores struggled financially. In 2015, Cornell decided to close down the Canadian
operation entirely to concentrate on the domestic market. (See Exhibit 2 for key financials.)
Within the crowded space of retail, Target sought to differentiate itself from its competitors by
honing a business model often described as “cheap but chic.” In contrast to Wal-Mart’s focus on
“everyday low prices,” Target cultivated an upscale discount image, offering trendy and fashionable
merchandise in attractively designed stores. It catered especially to “younger, image-conscious
shoppers” in u
an areas.5
Target also sought to establish a reputation in its public activities and messaging as a socially
progressive company. Before the MN Forward controversy, Target had been praised as a notably
LGBT-friendly company, earning a perfect score of 100 on the Corporate Equality Index, a measure of
workplace policies and environments for LGBT employees published by LGBT advocacy group the
Human Rights Campaign (HRC), in 2009 and 2010.b,6 It was also active in the Minneapolis community,
sponsoring events such as the annual Twin Cities Pride Parade. In 2009, Lavender, a Minneapolis-based
a Household essentials included pharmacy, beauty, personal care, baby care, cleaning, and paper products. Food and pet
supplies included dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and pet supplies.
Apparel and accessories included apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as intimate
apparel, jewelry, accessories, and shoes. Hardlines included electronics (including video game hardware and software), music,
movies, books, computer software, sporting goods, and toys. Home furnishings and décor included furniture, lighting,
kitchenware, small appliances, home décor, bed and bath, home improvement, automotive, and seasonal merchandise such as
patio furniture and holiday décor. See Stuart Hampton, “Target Corporation,” Hoover’s, http:
subscriber.hoovers.com,
accessed December 2016.
In 2009, Target was one of 260 companies that received a 100% from the HRC, out of a total of 584 evaluated companies. In
2010, Target was one of 305 companies out of a total of 590. See endnote 6.
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ena, 2021.
This document is authorized for use only by Graciano Ca
ena in GWU GLOBAL MBA/PUBLIC POLICY taught by JEFFREY JOSEPH, George Mason University from Feb 2021 to May 2021.
Making Target the Target: Boycotts and Corporate Political Activity XXXXXXXXXX
3
LGBT magazine, awarded Target one of its PRIDE Awards for its record of support on local LGBT
issues.7
MN Forward and the Evolution of U.S. Campaign Finance
MN Forward was founded in 2010 as a vehicle for corporate political involvement in Minnesota. Its
stated mission was “to ensure that private-sector job creation and economic growth are at the top of
the agenda during the 2010 campaign.”c Associated with the Minnesota Business Partnership and the
Minnesota Chamber of Commerce and headed by prominent state Republican political operatives, it
solicited donations from major businesses in the state such as Target.
In early July 2010, Target donated $150,000 to MN Forward, the company’s largest single political
expenditure of that year and MN Forward’s largest single donation. MN Forward also received
significant donations from 12 other prominent Minnesota-based companies, accepting, for instance,
$125,000 from Pentair and $100,000 from Best Buy.8 Raising about $1.9 million in total, the organization
spent money on behalf of candidates, both Democrats and Republicans, who supported business-
friendly policies. However, the most prominent of the candidates—and the beneficiary of $1.3 million,
the vast majority of MN Forward’s spending—was Republican candidate for governor Tom Emmer.9
In mid-July, MN Forward began running television ads in support of Emmer.d On the other side,
the left-leaning Alliance for a Better Minnesota, funded in large part by state-level unions, began
unning ads against him, spending $4.4 million in total. MN Forward touted Emmer’s support for pro-
usiness policies. However, attention soon turned to the candidate’s social conservativism. Emmer was
criticized for