Patriotism as an Instrument in Corporate Communication

Patriotism and patriotic communication are particularly popular in the USA, but national populist tendencies do not stop at European countries either.

Patriotism and patriotic communication are particularly popular in the USA, but national populist tendencies do not stop at European countries either. It is also striking that companies increasingly emphasize their origins in their external communication. Is that expedient?

Alexander Mohr, professor at the University of Vienna, and his team investigated whether companies could take advantage of national populist moods in their country of origin by correspondingly patriotic communication with stakeholders and customers. The results make it clear that nationally active companies can actually increase their success by emphasizing their home country. International companies should avoid patriotism in corporate communication.

Patriotism is playing an increasingly important role in companies

National populist moods shape the political picture not only in the USA, but also in European countries. The British magazine The Economist also attests to companies an increasing tendency to underline their national origin in communication - both with stakeholders such as investors and analysts, as well as with customers. But how does such corporate flag waving affect corporate success?

WU scientists Alexander Mohr and Christian Schumacher addressed this question. They examined whether companies can take advantage of national populist sentiments in their home countries through patriotic statements, such as the obligation to create jobs in their home country, and thus boost corporate success.

When interest groups reward and punish

For their study, the authors analyzed corporate communication based on the statements of the CEOs of US companies in 20,458 teleconferences with investors and analysts as well as 12,260 press releases from these companies from 2002 to 2015.

The study, published in Strategy Science, shows that under certain conditions, companies that emphasize how they serve the national interests of their home country are more successful.

Study author Alexander Mohr, professor at the Institute for Export Management at the Vienna University of Economics and Business, explains: We assume that strong populist moods in the home country will result in both the government, customers and employees expecting a stronger commitment from the company to support national interests, If companies comply with this obligation - if only apparently - these groups reward this. Non-patriotic behavior is punished. For example, on the part of politicians by cutting tax breaks, on the part of employees by dismissals or on the customer side by buying boycotts.

International companies should better avoid patriotism

The results also make it clear that patriotic statements by companies that are heavily dependent on foreign markets have a negative impact on their success. Because these companies are rewarded in their home country, they are punished by foreign governments, customers and employees. While pegging to national populist ideas can be beneficial for those companies that are mainly active in their home country, this harms companies that do a significant proportion of their business abroad, for example through exports or international branches.