Whether you like it or not, the recent Queensland Local Government Elections, paired with the US National Government Elections, squarely placed politics back in the spotlight and back into everybody’s conversations at the office.
An October 2024 article in Economist.com digs a bit deeper into managing politics in the workplace. However you try to keep politics out of business, it has other plans for you. Events have a habit of sucking organisations into controversy. Some examples include Google firing some employees earlier this year who had taken part in a protest against their cloud-computing contract with Israel.
A software company, 37signals, is explicit that it “does not weigh in on politics publicly, outside of topics directly related to our business”. Google’s boss, Sundar Pichai, told employees after the protest that “This is a business, and not a place to…attempt to use the company as a personal platform, or to fight over disruptive issues or debate politics.”
Avoiding political and social controversy is very difficult, as explained by Karthik Ramanna, Oxford University professor, in his new book “The Age of Outrage”. Polarisation is increasing in many countries, with grievances quickly amplified (and sometimes very much exaggerated) by social media.
Moreover, politics can infect organisations, their leaders included, in deeply insidious ways. In the US, now just weeks after another divisive presidential election, partisanship is becoming a feature of the boardroom. A study by Vyacheslav Fos of Boston College and his co-authors found that between 2008 and 2020 the executive teams at S&P 1500 firms grew more likely to be dominated by people affiliated to a single party. This echo-chamber effect is caused primarily by a tendency for bosses to team up with people who share their political views.
Another study, by Ran Duchin of Boston College and his co-authors, finds that “politically divergent firms in America, as measured by the affiliations of employees who are registered party supporters, have become less likely to merge over time. Between 1980 and 2010, mergers between extremely divergent firms—those in the top deciles for leaning Republican and Democrat—made up 11% of all deals; by 2019 that figure had fallen to 3%. When firms with different political leanings do merge, there is likely to be higher subsequent turnover among employees.”
Furthermore, studies have found that company owners are substantially more likely to employ workers who belong to the same party.
In short
This summary highlights three important takeaways: political polarisation cannot easily be suppressed; it might erupt a storm or brew more subtly. The second is that the benefits of diversity can extend to political views: partisanship can limit your market, narrow your employee base and hurt your business.
The argument of Mr Ramanna’s book is the third takeaway: bosses who want to act in a non-partisan way need to develop a process for dealing with polarisation rather than responding on an ad hoc basis.
The article concludes with some recommendations made in the book, where it is suggested that organisations should appoint a group of people to debate and adjudicate on controversial issues as they emerge. “Politicians have parliaments. Firms may need an equivalent.”
Also read Good Boss, Bad Boss | Executive PA Media
