Blurring the Lines Between Business and Government: Salesforce and CEO Activism

by: Andrew Hoffman

Publication Date: April 10, 2019
Length: 20 pages
Product ID#: 2-027-758

Core Disciplines: Leadership/Organizational Behavior, Social Impact, Strategy & Management, Sustainability

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Teaching Note

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Description

This case features CRM technology firm Salesforce, and its CEO, Marc Benioff. In 2015, the state of Indiana’s new Religious Freedom Restoration Act (RFRA) was signed into law by then governor Mike Pence. The RFRA was criticized as legalizing blatant discrimination of the of the lesbian, gay, bisexual, transgender or questioning (LGBTQ) community. Because Salesforce had recently expanded to Indianapolis and anticipated future growth there, Benioff decided to ban company travel to the state and threatened to reduce the company’s presence in Indiana if RFRA was not repealed. Salesforce was joined by many other large corporations in vocalizing disagreement with RFRA and threatening to reduce or eliminate investment in Indiana.

The case explores Benioff’s decision to take a public and aggressive stand against the new Indiana law. Some disagreed with Benioff’s extreme action that put the company at risk. Others applauded him for taking a stand.

 

Teaching Objectives

After reading and discussing the material, students should:

  • Describe the phenomenon of the activist CEO, the changing role of the CEO in the United States, and shifting expectations from the public.
  • Discuss the complexity and pressures of civic leadership for a corporate executive and formulate an opinion on the choices they may make if faced with a similar scenario.
  • Analyze the business implications of an activist CEO's actions and how they relate to the short- and long-term health of the business.