Target announced a policy in 2016 allowing transgender customers to use the bathroom that matches their gender identity. This sparked massive public debate and boycotts led by conservative groups. While public opinion was divided on the issue, Target maintained their stance. Though Target and competitors experienced stock price declines in recent years, the impact of boycotts alone is unclear given other market factors. The controversy highlighted the challenges of aligning corporate social responsibility with brand identity during times of crisis.

1. Target’s Transgender Bathroom Policy
Missing the target or hitting the bullseye?

2. 2
Abstract
Over the past few years, lesbian, gay, bisexual, transgender, and queer (LGBTQ) rights have
been in the spotlight. Target, America’s second-largest discount retailer, tried to showcase their
inclusiveness by making a statement, which later became controversial, on their website—
transgender individuals are allowed to use whichever bathroom they prefer (Target Corporation,
2016). This statement sparked massive boycotts and debate. Target, amidst the controversy,
remained firm on their bathroom policy. This case study follows Target throughout their
transgender bathroom policy implementation and public and media responses.

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Table of Contents
Introduction…………………………………………………………………… 4
Target’s CEO ………………………………………………………………….5
Corporate Identity……………………………………………………………..6
Target’s Transgender Bathroom Policy……………………………………...8
Public Response………………………………………………………………..9
Media Response………………………………………………….……………12
Business Performance………………………………………………..……….13
Future of CSR and Brand Authenticity…………………………….………16
References…………………………………………………………………….19

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Introduction
From the Supreme Court’s same-sex marriage decision in 2015 to Caitlyn Jenner featured on the
cover of Vanity Fair, the LGBTQ movement has made many strides over the past few years. As
public acceptance has increased, so have many civil rights protections and media visibility of
LGBTQ individuals. Given this changing landscape, many companies are incorporating
LGBTQ-friendly policies to appeal to both their employees and customers (Human Rights
Campaign Foundation, 2017).
Over the past few years, several states have introduced “bathroom bills,” which is legislation that
requires individuals to use the bathroom which corresponds to the sex on an individual’s birth
certificate. Target is a company that prides itself on diversity and inclusiveness (Target
Corporation, 2015). In an effort to accommodate transgender individuals, and as a response to
the bathroom bills, Target stated that transgender customers and employees are free to use the
bathroom that best matches their gender identity. The statement, which was released in April
2016, has been the subject of public controversy and boycotts. Target, remaining true to their
mission statement, has stood firm on its bathroom policy through these tumultuous months.
This case study examines the public and media response to Target's transgender bathroom policy
as well as the business impact the transgender bathroom policy has on the company. The main
issue is that Target's controversial bathroom policy seems to divide the American public and has
caused public outcry and boycotts. Despite the negative feedback, Target’s new policy aligns
well with its corporate values of diversity and inclusion (Target Corporation, n.d.). Out of this
issues management case, questions are raised about the future of corporate social responsibility
(CSR) and how brands remain authentic during times crises.

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Target’s CEO
On July 21, 2014, Target Corporation announced that Brian Cornell would be the company’s
next chief executive officer, effective August 12, following the stepping down of former Chief
Executive Officer (CEO) Gregg Steinhafel. Prior to Target, Cornell served as CEO of PepsiCo
Americas Foods where he oversaw the company’s global food business. He was also CEO of
Sam’s Club, CEO at Michaels Stores, Inc., and prior to that, executive vice president and chief
marketing officer for Safeway (Target Corporation, 2014).
His focus for Target is to accelerate the company’s performance and advance Target’s
omnichannel evolution. Cornell is the first Target CEO to be recruited from outside the
company, and he has already instilled a fresh energy through his new style of approach, such as
visiting a Target store incognito (Wahba, 2015).
“I am honored and humbled to join Target as the first CEO hired from outside the company. I am
committed to empowering this talented team to realize its full potential, lead change and
strengthen the love guests have for this brand,” Cornell said. “As we create the Target of
tomorrow, I will focus on our current business performance in both the U.S. and Canada and on
how we accelerate our omnichannel transformation” (Wahba, 2015).
Under Cornell, diversity and inclusion remain important. In 2015 Brian Cornell shares this
message when talking about Laysha Ward, Target’s female chief CSR officer: “My hope for the
future: that our next generation of leaders won’t remember a time when it was unusual for
women to lead at all levels” (Target Corporation, 2016). Aldo under his leadership, Target has
removed the “boys” and “girls” labels from toy aisles because they feel “[G]ender stereotypes
and gendered marketing are passé” (Hains, 2015).
Figure 1: Target CEO Brian Cornell (Target Corporation)

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Corporate Identity
According to the Arthur W. Page Society, “corporate character” is “the definition and alignment
of mission, purpose, values, culture, business model, strategy, operations and brand to create the
unique, differentiating identity of the enterprise.” The corporation, according to the society,
must authentically embody that character in every interaction in order to be deserving of trust
(Arthur W. Page Society, “Building Belief”). Target embodies their corporate character through
their commitment to corporate social responsibility, diversity, and inclusion have created a
unique crisis situation. Below are the company’s mission statement, values, and CSR statement.
Mission Statement
“To make Target your preferred shopping destination in all channels by delivering outstanding
value, continuous innovation and exceptional guest experiences by consistently fulfilling our
Expect More. Pay Less. brand promise” (Jurevicius, 2013).
Values
Target is well-known for their community outreach. Since 1946, the company has been donating
5 percent of its profits to charity. Target also champions diversity and inclusion. According to
the company’s website, it partners with certified minority- and women-owned suppliers and has
inclusive health plans to accommodate employees with disabilities and parents (Target
Corporation, n.d.). As the company states, “Target remains committed to its legacy of
responsible corporate citizenship, ethical business practices, environmental stewardship and
generous community support” (Jurevicius, 2013).
Corporate Social Responsibility Statement
“At Target, purpose has always been our compass and guide. We see corporate social
responsibility (CSR) as an enterprise-wide commitment focused on business, social and
environmental impact to protect and enhance our reputation. We believe we can fuel Target’s
growth, improve people’s lives and make a sustainable difference in the world. That aspiration is
fully integrated with the company’s overall purpose and strategy” (Target Corporation, 2015).

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LGBTQ Equality
Since 2010, Target company has received perfect scores from the Human Rights Campaign
annual Corporate Equality Index, which is the largest study of LGBTQ workplace equality in the
country. According to the Index, Target accommodates LGBTQ employees by offering
coprehensive health coverage, same-sex spousal/domestic partner benefits, and ongoing LGBTQ
community support (Human Rights Campaign Foundation, 2017). A full list of the Index’s
criteria to obtain a perfect score is listed below:
Figure 2: HRC’s Corporate Equality Index Rating Criteria (Human Rights Campaign
Foundation, 2017)
When it comes to LGBTQ equality, Target would be considered “progressive.” Being considered
progressive is important because, the strongest opinions—good or bad—about an enterprise are
shaped by the words and deeds of an increasingly diverse workforce. Because of this, all
employees are involved with public relations. A commitment to diversity and inclusion,
therefore, would encourage “each employee’s capability to be an honest brand ambassador” to

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their personal social circles (Arthur W. Page Society, “Page Principles”). Through its inclusion
and diversity efforts, Target ensures positive brand image through authenticity.
Target’s Transgender Bathroom Policy
On April 19, 2016, Target announced that transgender customers would be welcome to use the
bathroom that matches their gender identity via their corporate website. “We welcome
transgender team members and guests to use the restroom or fitting room facility that
corresponds with their gender identity,” the retailer said, “Everyone deserves to feel like they
belong” (Target Corporation, 2016).
This policy was implemented in response to several “bathroom bills.” In Minnesota, where
Target is headquartered, such a bill was proposed by a Republican state senator that would
restrict access to restrooms, locker rooms and dressing rooms based on an individual’s biological
sex. Similar “bathroom bills” were also passed in North Carolina and Mississippi (Mclean,
2016). In-line with the Page Principles, Target proved their LGBTQ inclusiveness by publicly
stating their transgender bathroom policy. Target told the public, honestly, about their policy,
which aligns with their corporate character and values.
Timeline
● 2010: Target receives 100 on HRC’s CEI
● April 19, 2016: Target issues transgender bathroom policy
● May 16, 2017: #FlushTarget campaign begins
● April 29, 2016: Boycott Target petition reaches 1,000,000 pledges
● October 3, 2016: 51% of Americans say transgender people should use public bathrooms
that align with their gender identity
● August 17, 2017: Target announces that it will add single-user restrooms to all of its U.S.
locations, totaling $20 million
● March 1, 2017: Boycott Target petition reaches 1,500,000 pledges
● April 6, 2017: Target stock drops 6% in the three quarters since the transgender
bathroom policy announcement

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Public Response
During Target’s transgender bathroom policy implementation, the American public was divided
over the issue. Slightly over half (51%) of US adults say transgender people should use the
bathroom that corresponds to their gender identity whereas 46% disagree (Lipka, 2016).
Figure 3: American Public Opinion of Transgender Bathroom Usage (Lipka, 2016)
The American Family Association (AFA) is an organization that promotes Christian values and
has been referred to as an “anti-LGBT extremist group” by the Southern Poverty Law Center.
The AFA was responsible for the petition to boycott Target because of its transgender bathroom
policy. The AFA took to social media to promote the campaign #FlushTarget, which received 1
million pledges to boycott Target within the first month of the policy’s existence. According to
the AFA, they are against Target because its transgender bathroom policy puts women and
children at risk for sexual assault (American Family Association, 2017).

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Figure 4: AFA Truck Poster (Bourne, 2017)
AFA President Tim Wildmon stated:
[W]e do not feel that the transgender community poses a threat to other shoppers,
our major concern was that Target’s policy would grant voyeurs and sexual
predators easier access to their victims by allowing men in women’s restrooms and
changing areas (Starnes, 2016).
This statement implies that the AFA’s main concern is the safety of women and children
rather than attacking the transgender community. Against this backdrop, Wildmon has
also stated, “[T]hen, there's Target’s all-out love affair with the LGBTQ. For the past two
years, Target stores have entire sections dedicated to products normalizing
homosexuality” (Wildmon, 2017).
Public opinion can be found on Twitter using #FlushTarget to track the conversation.
While analyzing the tweets there are mixed reactions regarding the policy itself, the

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safety of women, and LGBTQ rights.
Figure 5: (TRU AMERICAN PATRIOT, 2017, @HEART4AMERICA, Tweet)
Figure 6: (Shane, 2017, @jaredshane_, Twitter)

12. 12
Amidst the Twitter discourse, the Human Rights Campaign featured an anecdote of a transgender
individual who is directly affected by “bathroom bills,” possibly to persuade those who oppose
Target’s transgender bathroom policy to rethink their position:
For decades I walked the earth as a visibly gender non-conforming person, and the
question of which restroom or fitting room or locker room to use was a constant
source of anxiety and pressure and not without good cause: I faced discrimination
and verbal and physical abuse more than once while using sex-segregated facilities.
An act as simple as using the restroom or trying on a new pair of jeans was often
demoralizing at best, and dangerous at worst (Bailey, 2016).
Media Response
Like the public’s response to Target’s policy, the media had mixed responses. Most of the
responses can be broken down into media outlets who are historically supportive or against
LGBTQ rights. Both types of outlets give similar facts but frame them differently.
OutSmart Magazine and Pink News are two pro-LGBTQ news outlets and support Target’s
transgender bathroom policy. They both discuss how there is no evidence the boycott has had
any significant effect on sales (Isadore, 2016). They state that Target’s decreasing profit is a
combination of factors and is largely related to competition from other retailers and online
shopping giants like Amazon (Duffy, 2017). Additionally, both articles discussed the AFA’s
actions against Target. Both reporters explain that a video of a little girl being assaulted in a
bathroom was staged by Target’s opposition. Both outlets ended their articles discussing how the
opposing opinion is false and reinforces false notions of the transgender community.
Life Site News holds historically more traditional views and opposes Target’s transgender
bathroom policy. They begin by discussing their #FlushTarget campaign, which was covered by
the Wall Street Journal for the campaign’s effectiveness. They mention the video released saying
“the campaign included a video depicting the dangers of mixed-bathroom access that received
more than a million views on social media” (Bourne, 2017). Life Site News concludes by
discussing their opinion that “sexual crimes are often crimes of opportunity, allowing grown men
in the girls’ bathroom increases opportunity for sexual crimes” (Bourne, 2017).

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Both pro- and anti-LGBTQ news outlets concede that Target faces many issues that contribute to
their drop in profit including competition from other retailers and online shopping. However,
both agree that the boycott was the main factor in Target’s poor business performance. When
considering the two opposite opinions, in addition to the boycott, Target faces other market
struggles.
Business Performance
Some media outlets and the community that opposes Target suggest that their boycott has played
a role in the downward slope of Target’s stock, while Target supporters say it is an occurring
trend for all similar store chains. When looking at Target’s stock since its transgender bathroom
policy announcement, there is a clear decline in stock prices. On April 1, 2016, Target’s stock sat
at $82.76, the highest it had ever been. Target issued its transgender bathroom policy on April
19, 2016. In June of 2016, the stock dropped to $67.50. By March of 2017, the stock had gone
through many peaks and troughs and sat at $54.29. It continued dropping to $50.76 in June
before beginning a rise for the rest of the year. As of December 26, 2017, Target’s stock price sat
at $66.29 (Google Finances, 2017).
Figure 7: Stock price of Target Corporation, 2012-2017 (Google Finance, 2017)

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The stock prices of Target’s competitors (Kohl’s, Walmart, and Macy’s) were also examined. All
three corporations have experienced a decreasing stock price since the beginning of 2016.
Kohl’s, Walmart, and Target have almost identical stock price trends from 2016 to present.
Kohl’s and Walmart share the same low dip in 2016. Macy’s, however, experienced the same
downward trend in 2016 but has failed to recover.
Target stores are following a trend of many competitors and it cannot be claimed that the
boycotts are the sole reason for its decreasing stock price. It cannot, however, be said that the
boycotts have had no effect in recent profits. The cause of Target’s decreasing stock price still
remains unclear.
Figure 8: Stock price of Kohl’s Corporation, 2012-2017 (Google Finances, 2017)

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Figure 9: Stock price of Wal-Mart stores Inc., 2012-2017 (Google Finances, 2017)
Figure 10: Stock price of Macy’s Inc., 2012-2017 (Google Finances, 2017)

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The Future of CSR and Brand Authenticity
Many companies struggle to figure out how CSR aligns with their brand. Current scholarship
suggests that a corporation’s CSR efforts can have a positive financial impact upon their business
(Melé, 2008). Target understands the importance of CSR and have ample CSR reports and
resources on their website.
Perhaps Targets biggest and strongest initiative is its diversity and inclusion values, as stated on
their website:
We believe diversity and inclusivity make teams and Target better. And we’ll live
that belief as champions of a more inclusive society by creating a diverse and
inclusive work environment, cultivating an inclusive guest experience, and
fostering equality in society (Target Corporation, 2016).
Target’s blatant mission statement, corporate values, and CSR reports make it an example of the
“authentic enterprise model.” The authentic enterprise model was developed by researchers from
the Arthur W. Page Society, whose work has been published by the Institute of Public Relations.
The authentic enterprise model describes an enterprise that is grounded “in a sure sense of what
defines it—why it exists, what it stands for and what differentiates it in a marketplace of
customers, investors and workers” (Arthur W. Page Society, 2007). This enterprise then acts and
communicates its values and business practices in an authentic manner. How enterprises build
authenticity is shown in the figure below, and Target’s transgender bathroom policy can be used
as an example:
Figure 12: The Authentic Enterprise Model (Arthur W. Page Society, “Building Belief”)

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Starting at the center of the figure, Target has built its corporate character by taking a strong
stance for inclusivity. They have perfect scores from the Human Rights Campaign, donate a
portion of their profits to charity, and actively hire diverse team members. They aligned their
pro-LGBTQ policies with the current political climate and stated the transgender customers and
employees are free to use their preferred bathroom.
Moving to “belief,” Target engaged the “decision-makers” which are its stakeholders, by
allowing them to use whichever bathroom they prefer. Target believed that their stakeholders
shared the same pro-LGBTQ beleiefs as they do.
Moving to “action,” Target’s policy, which was not intended to be controversial, endured public
scrutiny. While pro-LGBTQ organizations and media sites supported Target, those opposed to
the policy took to social media and the internet to cast their opinions. This led the AFA to create
the #FlushTarget campaign and boycott. Target, unintentionally, spurred two distinct stakeholder
groups to act on their beliefs.
This plethora of responses led Target to restore its brand confidence. Target made sure that both
main stakeholder groups—those supportive and opposed to the transgender bathroom policy—
would feel validated, and that their actions mattered. This is when Target invested $20 million
and installed single-user bathrooms to ensure privacy, safety, and validation of both groups of
stakeholders (Isidore, 2016). Target’s actions lead to “advocacy at scale” portion of the model.
This is where the audience of the stakeholders learn about Target’s authenticity indirectly.
The researchers mention that the advancements in digital technology, a global economy, and the
empowerment of new stakeholders make authenticity the “the coin of the realm for successful
corporations” in the future. They also note that “what used to be controlled within a company’s
walls” is now spread across multiple channels across the world (Arthur W. Page Society, 2007).
Stakeholders with large audiences of their own act immediately with the power of social media,
as seen with Target.

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As social and political issues continue to dominate popular discourse, it will be interesting to see
how brands adapt. Based on a brand’s objectives and strategies, Target provides an example of
how a brand remains authentic while trying to appease its diverse stakeholder groups.

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