BA 385 Final Case Study: Target’s 2025 DEI Retrenchment and the Stakeholder Fallout
Background
In early 2025, Target Corporation made the controversial decision to scale back its long-standing Diversity, Equity, and Inclusion (DEI) initiatives. This included discontinuing the Racial Equity Action and Change (REACH) program and restructuring its Supplier Diversity program. These changes were driven by a combination of political, legal, and financial pressures (ThemLinks to an external site., The Washington PostLinks to an external site.).
- Political and Legal Pressures: The Trump administration’s early 2025 actions dismantled various DEI-related public policies and executive orders. This created a hostile environment for corporate DEI programs and increased legal uncertainty. (ReutersLinks to an external site.)
- Financial Pressures: Target faced significant financial strain, with share prices down more than 40% year-over-year and over 50% from their 2021 peak. Tariff instability and reduced consumer spending further hurt the company’s outlook.(Business InsiderLinks to an external site.)
- Conservative Backlash: Influential conservative figures and networks actively opposed corporate DEI efforts, creating reputational risk and political pressure for companies like Target.(ThemLinks to an external site.)
Consequences
- Consumer and Advocacy Group Boycotts:
- Partnership Losses:
- Financial Impact:
- Legal Challenges:
- Reputational Harm:
Some Questions Raised by This Case
- Equity and Inclusion: Did Target’s rollback of DEI programs violate its responsibility to marginalized communities? Is it right to remove DEI initiatives? Alternatively, is it right to focus on DEI initiatives? How do some employees or other SHs likely feel about this shift? Less included? More included? Might the DEI initiatives have alienated some SHs? Might the sudden removal of these DEI initiatives alienate some SHs?
- Transparency: Were stakeholders adequately informed about the risks of this strategic pivot? Was the process used to decide this fair and correct (procedural justice)?
- Corporate Values vs. Political Pressure: Should a corporation compromise its stated values due to shifting political or economic climates? Should corporations take any political stands?
- Fiduciary Duty: How should leadership balance social commitments with shareholder value and compliance with political directions? Since the boycotts have had a material effect, should Target prioritize financial returns over political compliance?
You are the CEO of Target. The company is under intense scrutiny and facing serious backlash from multiple stakeholders.
Case Question: What recommendations do you make to repair the damage to multiple categories of stakeholder groups (e.g., employees, consumers, shareholders, advocacy organizations, and community partners)?
Be prepared to consider:
- Whether to reinstate some or all DEI initiatives
- How to re-engage disillusioned partners and communities
- The financial and legal implications of your actions
- Target’s long-term ethical commitments and brand identity
Note on Political Perspective and Academic Freedom in This Assignment
In this assignment, your primary objective is to demonstrate moral and managerial competence in the role of Target’s CEO. There is no single “correct” political stance. Whether your personal perspective leans more conservative or more liberal, you are welcome to bring that lens into your analysis—provided your arguments are well-reasoned, clearly written, and grounded in course concepts and ethical frameworks.
You may choose to support or oppose Target’s recent decisions regarding DEI initiatives, as long as your position is supported by a thoughtful business and moral case. We encourage authenticity in your reasoning and critical thinking, and we recognize that sound arguments can emerge from a variety of viewpoints.
Please be assured that your work will not be evaluated based on its political orientation. We will assess your paper on the strength of your recommendations, their feasibility, the value to cost analysis, the integration of course theories and ethical reasoning, and your overall clarity and quality of expression.
This classroom is a space where diverse perspectives are respected, and it is our goal to create a psychologically safe environment for all students.
Note on Sources and Credit to Help With Writing This Case:
I discussed this case at length with a student from our class who helped me develop the ideas of the case. She chose to remain anonymous. I also used ChatGPT to aid in the writing of some of this case. The sources cited are therefore not in MLA or APA format as I ask of you in your papers. They are also not necessarily the most trusted sources but I have verified the facts via more traditional sources that are behind a paywall.
Additional Sources to Help With Your Analysis:
The following sources are contradictory and I offer them to help support you in your analysis. You do not have to cite them but if you do use either or both of them in your paper, please cite them and they do count as one of your research articles.
Advantages of Diversity in Organizations
- Diversity Wins: How Inclusion Matters. McKinsey (2020)Links to an external site.
- Does Diversity Pay?: Race, Gender, and the Business Case for Diversity (Herring, 2009)Download Does Diversity Pay?: Race, Gender, and the Business Case for Diversity (Herring, 2009)
Possible Disadvantages of DEI Programs
- The Business Case for Diversity Backfires: Detrimental Effects of Organizations’ Instrumental Diversity Rhetoric for Underrepresented Group Members’ Sense of Belonging (Georgeac & Rattan, 2022)Download The Business Case for Diversity Backfires: Detrimental Effects of Organizations’ Instrumental Diversity Rhetoric for Underrepresented Group Members’ Sense of Belonging (Georgeac & Rattan, 2022)
- Diversity Was Supposed to Make Us Rich. Not So Much. WSJ (2024)Download Diversity Was Supposed to Make Us Rich. Not So Much. WSJ (2024)
Please refer to all instructions from the practice case for this final case paper. And remember, you need to submit the SH table (practiced in part one of the practice case) with this final case paper as well.
Post any questions in the course questions area and feel free to bring thoughts or questions to our class meetings.
Please use the guidance from the practice case (both sections) provided in your grading feedback, the rubrics shared in that assignment, and the discussions we’ve had as you worked on your practice case. Some additional guidance is offered in the rubric for this assignment and below.
We suggest that your paper be as long as 13 double-spaced pages or as short as 9. It just depends on whether or not you’ve completed all requirements well. If it extends beyond 13 pages, consider using an appendix for any tables for figures and consider editing for relevance and conciseness. Consider the assignment – with your SH table – to require something between 2500 and 3250 words.
Start early, review the feedback on your practice case, break the job into smaller parts, and ask any questions you might have in class or the discussion area.
