The Purpose of the Corporation

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The Business Roundtable published a statement, The Purpose of the Corporation, signed by 181 of its 193 members. The Roundtable, a corporate lobbying group, includes CEOs of the largest U.S. companies.

In essence, the CEOs write that they have responsibilities beyond shareholders—to customers, employees, suppliers, and communities (including the environment). The statement is a step to improving the perception of businesses as solely driven by creating shareholder value through short-term profits.

Skeptics abound. A writer for the Washington Post called the statement a “truism”:

“What’s significant about the statement is what it does not say. The corporate signatories do not suggest in any way weakening the fiduciary duties of the boards and managers of ordinary for-profit shareholder corporations to manage such companies’ affairs for shareholders’ benefit.”

The CEO of Allstate and head of the U.S. Chamber of Commerce wrote an opinion piece in the New York Times encouraging businesses to pay people more if they’re serious about serving more stakeholders.

A writer for Forbes argued that these companies are multinationals and have global responsibilities as well. He also accused the executives of being self-serving, warding off criticism about executive compensation.

Others noted company CEOs who didn’t sign, for example, Alcoa, Blackstone, GE, NextEra, Parker Hannifin, and Wells Fargo (whose representative said the CEO is interim and wasn’t asked to sign). Some companies, for example, Kaiser and State Farm, say they didn’t sign because they don’t have shareholders.

Discussion:

  • What’s your view of the statement: significant, placating, diverting, or something else?

  • Assess the statement itself. Consider the audience, purpose, writing style, organization, and so on. What works well, and what could be improved? What’s extraneous and what’s missing?

Overstock CEO Resigns

Overstock CEO Patrick Byrne resigned after admitting to a relationship with Russian agent Maria Butina. Butina is serving prison time because of her attempts to gain political access during the 2016 U.S. presidential election.

Byrne announced his decision in a letter to shareholders. He begins with the news:

“In July I came forward to a small set of journalists regarding my involvement in certain government matters. Doing so was not my first choice, but I was reminded of the damage done to our nation for three years and felt my duty as a citizen precluded me from staying silent any longer. So, I came forward in as carefully and well-managed fashion as I could. The news that I shared is bubbling (however haphazardly) into the public. Though patriotic Americans are writing me in support, my presence may affect and complicate all manner of business relationships, from insurability to strategic discussions regarding our retail business. Thus, while I believe that I did what was necessary for the good of the country, for the good of the firm, I am in the sad position of having to sever ties with Overstock, both as CEO and board member, effective Thursday August 22.”

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Byrne’s letter then describes his thinking about Overstock, including blockchain technology, retail, and strategy.

This announcement came 10 days after Byrne wrote a news release titled, “Overstock.com CEO Comments on Deep State, Withholds Further Comment.” In that post, he refers to “Men in Black” and his “Omaha Rabbi,” reinforcing perceptions that Byrne is a controversial figure.

MarketWatch shows the stock performance during this period.

Byrne image source.

Discussion:

  • What’s your view of Byrne’s decision to resign? Consider his history with Overstock, company performance, and the company trajectory.

  • CNN referred to Byrne’s first news release as “strange.” Do you agree?

HP CEO Resigns

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HP CEO and President Dion Weisler will step down after about four years in the position. In a news release titled, “HP Announces CEO Successor, the company identified Enrique Lores as the next company executive.

The announcement has the typical quotes, from the incoming and outgoing executives and from the board chair. Weisler’s decision is positioned as “due to a family health matter” and notes that “he will be returning home to Australia.” Chip Bergh, the board chair, reinforces the message in his quote:

“On behalf of the board, we respect Dion’s decision to support the needs of his family. We thank him for leading HP post-separation, building a strong team and restoring the company to drive strong shareholder value creation over the last four years.”

In after-hours trading, HP shares dropped more than 6%, according to a Wall Street Journal article.

Weisler image source.

Discussion:

  • How does this company news release compare to others announcing CEO resignations, for example, Overstock?

  • What’s your view of mentioning Weisler’s personal situation in the announcement? Why would the company include this? From Weisler’s point of view, what are the reasons to include or exclude this information?

Research About Befriending Your Boss

A Wall Street Journal article describes the positive and negative effects of being friends with your boss. Research shows that managers do give preferential treatment to employees they consider friends.

However, a study published in the Journal of Experimental Social Psychology demonstrates that managers may favor others when decisions are public. To avoid perceptions of bias, Alex Shaw, an assistant professor of psychology at the University of Chicago, offers three solutions for managers:

  • Recuse yourself. I’m skeptical about this because a manager’s job is to make such decisions, but I see the point: if you can get out of being the final decision maker, that might be best in some situations.

  • Make the criteria public. This is a good practice, anyway, to ensure transparency in decisions, particularly those that are sensitive and affect people personally.

  • Ask for opinions. This could work, for example, when peer feedback may be as relevant—or more relevant—than the manager’s point of view.

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Discussion:

  • Have you considered a boss a friend? How might the relationship have affected decisions?

  • What’s your view of the strategies suggested here? In what types of situations could each work or backfire?

Graphical Resumes

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Are employers becoming more open to graphical resumes? The boring, standard resume format hasn’t changed much despite some attempts at infographics and video.

A Wall Street Journal article indicates that acceptance may be increasing for resumes that look more like a social profile:

The stodgiest of business documents is in the midst of its most extreme makeover yet—whether employers want it or not. Gone are the utilitarian, black-and-white documents covered in bullet points. As Gen Z enters the workforce, companies are seeing digital CVs filled with artistic flourishes, including illustrations of college mascots, logos of past employers and icons to denote hobbies such as home renovation and watching movies.

Particularly for jobs in fields like marketing, graphical resumes are more common. Candidates might include an avatar or a section called “By the numbers.”

For more traditional fields, it’s a bigger risk: a visual resume might get you noticed but not for the right reasons. For any jobs, bitmojis and other images that seem childish don’t represent candidates in the best light.

Resume image source.

Discussion:

  • How traditional is your resume? Would you consider adding graphics? Why or why not?

  • In addition to marketing, which fields might be more open to a graphical resume?

  • What’s your view of the resume shown above? What about this Microsoft template resume?

Shirtless Video Calls

Child interruptions, toilets flushing, clinking ice—I’ve seen and heard it all on video and audio calls. The Wall Street Journal reports that more remote workers have brought more mishaps, like a coworker appearing shirtless, forgetting to turn off his camera. And who can forget the adorable kids who walked in on a BBC interview.

The article suggests signs outside a home office door to indicate when calls are in progress—”On Air” or “Do Not Disturb.” Double-checking your mute button is a good idea too.

I would also suggest being clear about whether a call will be video or audio. A job candidate was surprised to know that her interview was via video. The employer insisted that she turn on her video, and she wasn’t dressed for it.

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Discussion:

  • What mishaps have you experienced on audio or video calls?

  • What other ideas do you have to prevent embarrassing situations?

  • How does this story relate to the concept of authenticity?



Backlash After President Trump Fundraiser

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Equinox and SoulCycle customers are not happy about a fundraiser for President Trump sponsored by the companies’ owner, the chairman of a real estate firm. Threats of boycotts and cancelled memberships provoked quick responses from both companies.

SoulCycle CEO Melanie Whelan also said, “SoulCycle has nothing to do with the event and does not support it. … We know who we are and we know what we believe in, and nothing will ever change that.”

Capitalizing on the brands’ distress, other fitness companies are offering discounts and free trials to try to win business.

Soul Cycle image source.

Discussion:

  • More company executives feel inspired towards political activism. What are the advantages and risks?

  • Did the real estate company owner, Stephen Ross, act inappropriately by hosting a fundraiser? Why or why not?

  • Analyze the companies’ statements. What persuasion strategies do they use to rebuild each brand?

  • Compare the statements. Does one work better than the other? What criteria do you use to compare them?

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Another Blackface Disaster

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Belgium’s Africa museum hosted an event for which people arrived in pith helmets, blackface, and other offensive and stereotypical clothing. Understandably, the Congolese community is upset. As one representative said, "Ethnic, exotic or African is not a costume that you can put on and take off.” You can read about Belgium’s occupation of the Congo to understand the history.

The party was organized by a separate company, Thé Dansant, and one organizer defended the party: “Even if one person painted his face black, it was not meant to be offensive. Many people of African origin were enthusiastic about the concept and were present.”

So far, the Royal Museum of Africa is trying to distance itself from the event and hasn’t issued a statement or apology.

Museum image source.
Party image source.

Discussion:

  • What’s your view of Thé Dansant’s response?

  • What is the museum’s accountability? What should the leaders do or say?

Employees Pressure Walmart to Consider Role in Gun Violence

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Walmart is in a tough spot after recent shootings. Some employees are pressing the company to do more to fight gun violence, but no policy changes are planned. After previous attacks, Walmart stopped selling assault-style weapons and raised the minimum age to purchase guns and ammunition, but it’s unclear whether the leaders will do more. Employees are asking Walmart to stop selling firearms and to disallow customers from carrying guns into the stores.

The company seems divided about employees’ activism. Chief Executive Doug McMillon wrote, ”We are proud to be woven into the American fabric as a place for all people. We are more resolved than ever to foster an inclusive environment where all people are valued and welcomed.” At the same time, the company blocked two employees’ access to Slack, encouraging employees to use “more constructive ways for associates to offer feedback such as emails or conversations with leaders.”

A study recently published in the International Journal of Business Communication found that employees are more likely to “express dissent to managers and coworkers” when they are more socialized in the company and when they believe their company is “more ethical and reputable.”

A Wall Street Journal article explains the risk for Walmart to take more action against gun sales:

“[A]ny change to its gun policies risks alienating Walmart’s core customers, who often live in more conservative-leaning rural and suburban communities. The company faced some consumer backlash after raising the minimum age to purchase guns to 21.”

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Discussion:

  • How can the company balance employees’ and customers’ perspectives? What else, if anything, should company leaders say and do?

  • Did the company do the right thing by blocking Slack access? In what ways are email and conversations more or less “constructive”?

  • What leadership character dimensions are illustrated by this situation?

College Applications Controversy

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A Wall Street Journal article reports that colleges are making few changes to how they review applications despite the recent admissions scandal. University officials say they are overburdened by reading applications, which have increased dramatically in the past few years, shown here.

University leadership also argue that they should not distrust all applicants because of the few who misrepresent themselves. Other than school transcripts and test scores, as a spokesperson at Dartmouth said, “The rest of a student’s file is reviewed on an honor-code assumption that a student’s work is a student’s work. It is not our policy to suspect every student of falsifying records.”

On the other hand, some universities have implemented additional checks, for example, of athletes. Some hire outside firms to verify information, and admissions staff do check for inconsistencies, but the article concludes that “almost none have a formal audit process in which they select a random sample of applications to independently verify.”

Admissions image source.

Line chart source.

Discussion:

  • Should universities do more to verify the accuracy of students’ applications? Why or why not?

  • Analyze the line chart at right. How does the chart skew the data? How could this affect the arguments presented in the WSJ article? What recommendations would you make to the designer?

Republican Google Employee Claims Bullying

Google engineer Kevin Cernekee was fired because, as the company claims, he downloaded information and used software inappropriately, violating company policies. But Cernekee says he was fired because of his political views, particularly because he was outspoken and conservative.

Cernekee is an “outlier,” according to a Wall Street Journal article that describes how rare his beliefs are at Google:

“Some 95% of Google employee donations to candidates in the 2018 midterm elections went to Democrats, according to the Center for Responsive Politics, citing public disclosures.”

Google contends that open dialogue is encouraged and valued, but some of Cernekee’s internal posts were deemed offensive. In one, Cernekee wrote that “many Googlers strongly disagree with Social Justice theory and even more Googlers are concerned about the ‘internet mob’ shaming and intimidation tactics employed in support of this agenda.”

This situation echos the 2017 case when another Google employee was terminated after his memo criticizing diversity and inclusion initiatives at the firm was made public.

Discussion:

  • What’s your view of these situations at Google? After researching these two cases further, do you tend to side with the terminated employees or with Google management?

  • How do you think your own political views might influence your feelings about these situations?

Capital One's Response to the Breach

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A hacker got access to 140,000 Capital One customers’ credit information and social security information, and about 106 million people were affected by other leaked information. Officials arrested Paige A. Thompson, who goes by “erratic” and was a former Seattle technology company software engineer.

In a bar chart, a BBC article puts this breach in context of others. Capital One’s press release describes the company’s quick response:

“Capital One immediately fixed the configuration vulnerability that this individual exploited and promptly began working with federal law enforcement.”

The release also includes a statement from Chairman and CEO Richard Fairbank:

"While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened. I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right."

In addition, as expected, the release includes information for customers, offers free credit monitoring, and provides an FAQ.

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Discussion:

  • Analyze the press release. Consider the audiences, objectives, organization, tone, and so on.

  • How well does Fairbanks demonstrate humility in the press release? What other leadership character dimensions are illustrated? How well does he inspire confidence in Capital One?

  • Analyze the BBC chart shown here. What works well about the chart, and what else would be helpful to understand these breaches in context?

Rossello's Resignation

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After initial resistance, the governor of Puerto Rico announced his resignation. More than a week of protests about inappropriate chats and financial mismanagement forced Ricardo Rosselló to step down, effective August 2.

Rossello’s video was posted on Facebook. In his statement, Rossello first described successes of his administration, for example, “We raised the salary of teachers in the middle of a bankruptcy.” Then he said, “I was willing to face any challenge, fully understanding that I would prevail against any accusation or process.”

But Rossello admitted he could not continue, having “heard the demand of the people,” and recognizing that his failure to resign “would endanger the successes we have achieved.” He also tried to quell protests: “I hope this decision serves as a call to citizen reconciliation.”

Rossello image source.

Protests image source.

Discussion:

  • Did Governor Rossello make the right decision by resigning? Why or why not?

  • Analyze his speech (if you understand Spanish or find a translation). Consider his audience, communication objectives, word tone, organization, and tone.

  • What similar business situations come to mind? Think about a CEO who was under pressure to resign and what happened. What conclusions can you draw between the business and political situations?





How to Deal with Being "Ghosted"

Too often, employers stop responding to candidates. Even after an in-person interview, candidates never hear back. The CEO of a job search platform advises people to follow up in a few ways:

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  • Send one email a week. Be thoughtful about your messages to express interest; maybe share new research about the company .

  • Try different channels. For example, send a LinkedIn message instead of email, but only once.

  • Reach out to others. Contact another recruiter or the hiring manager directly.

All of these actions come with risk, but the writer argues, and I agree, that the risk is worth it. None of these follow-ups are too annoying, and you may turn the tide in your favor.

Ghost cartoon image source.

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Discussion:

  • Why do you think employers ghost applicants? Consider what incentive they have to follow up.

  • What’s your view of these follow-up approaches? Which are you more or less comfortable doing?

Email Niceties

We write certain phrases in emails by convention, but perhaps “I hope you’re well” is overdone.

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A New York Times opinion writer pokes fun at the overuse of the phrase by showing a few examples. The emails are short and include ridiculous requests, for example, about a missing attachment or whether someone has rubber bands. Still, the writers apparently can’t resist asking about the receiver’s health.

In their responses, recipients answer the question, which of course, is not really expected. It’s like saying “How are you?” when passing someone in a hallway.

Image source.

Discussion:

  • What’s the value of this phrase and others in email and in person? How do you feel writing emails without something like it?

  • What’s your view of the phrase: expected, overused, or something else?

  • What other phrases in emails do you think might be overused?

Government Scandal in Puerto Rico

Gov. Ricardo A. Rosselló says he will not resign despite protests about private messages that included personal attacks and crude language. With 11 of his top aides, Rosselló participated in chats via the messaging app Telegram. Almost 900 pages of text are now public, and we see insults about other officials with references to people’s sexual orientation, gender, and weight.

The news comes after government corruption chargers earlier this week. The governor admitted, “I committed inappropriate acts,” but also said, “I have not committed illegal acts.”

In a news conference, Rosselló used the words “improper” and “shameful,” but didn’t agree with the reporter that the chats were unethical.

Discussion:

  • Should the governor resign? Why or why not?

  • What’s your view of the private chats? Should government officials be able to message each other freely? Why or why not?

  • How well did the governor respond to the reporter’s questions? Did he convince you?

Relaxing Dress Codes

Just as schools are relaxing their dress codes, so are companies, including some financial firms. For schools, motivation comes from reducing body shaming and recognizing that gender isn’t binary.

At investment firm KKR, executives sent a memo to announce a new dress code. The rationale is stated, “Given the changing nature of workplace towards less formality…we believe this is the right change for our employees.” A Wall Street Journal article explains that KKR follows Goldman and JPMorgan in easing requirements in order to compete with technology firms for talent.

In the memo, KKR doesn’t give examples of acceptable and unacceptable attire, leaving the decision to employee discretion: “We trust you all to strike the right balance and exercise good judgment.” But executives did include this caveat: “At the same time, we recognize that many of our clients and other external relationships have a more formal expectation of professionalism. So please always have business attire available.”

Image source.

Discussion:

  • How important is a company’s dress code to your job search? Could a more relaxed dress code make a difference in accepting an job?

  • Should KKR be more specific, as companies such as Starbucks are, in what is acceptable attire?


Report on Minimum Wage

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The Congressional Budget Office has determined that raising the U.S. federal minimum wage to $15 per hour will improve pay for 17 million workers but leave about 1.3 million without jobs. A report explains the impact:

“[I]n an average week in 2025, the $15 option would increase the wages of 17 million workers whose wages would otherwise be below $15 per hour, CBO estimates. The wages of many of the 10 million workers whose wages would be slightly above the new federal minimum would also increase.”

Although it’s higher in some cities and states, the federal minimum wage has been $7.25 since 2009. The report explores changes related to increases to $15, $12, and $10 but concludes: “The options’ effects on employment and family income are uncertain.”

The report comes before a vote to pass the “Raise the Wage Act,” which is proposed by House Democrats to increase wages gradually to $15 until 2024.

Discussion:

  • Assess the graphic, at right, which is on the report cover. What does it mean, and how could it be improved? What’s your view of using the graphic on the report cover?

  • Assess the report. Which business communication principles are followed, and what could be improved? Consider organization, writing style, document design, and so on.

  • Finally, assess the report conclusions. What other data would be useful to know?

Suicide Among France Télécom Employees

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Management couldn’t fire employees at France Télécom, so, according to critics, they harassed them hoping they would quit. But at least 35 committed suicide under the pressure, and some reports claim the number is closer to 60.

France Télécom was privatized and rebranded as Orange in July 2013. The company wasn’t keeping up with technological changes and, according to executives, were saddled with state employees, who are protected from termination. In 2007, Didier Lombard, the former chief executive of France Télécom, said they would get to their ideal number of layoffs “one way or another, by the window or by the door.”

A New York Times article describes the environment: “A grim universe of underemployment, marginalization, miscasting and systematic harassment was established at the huge company, according to testimony at the trial.” Managers tried changing job responsibilities for some workers, but employees were left without tasks or with tasks they couldn’t do.

With France’s high unemployment rate, employees felt they had few options. Union members, shown here, express their support during the trial in Paris. We’ll see whether the judges find company executives guilty.

Discussion:

  • How did management justify its practices? On the other hand, how could they have acted differently?

  • What experience do you have with international labor laws? Describe differences and how they might affect business decisions.

  • Should France reconsider its lifetime employment protections?

  • What leadership character dimensions are illustrated by this situation?

Why Political Campaign Emails Are Successful

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With more than 20 democrats still in the 2020 presidential race, campaign emails are sounding more “desperate,” according to a Wall Street Journal article. The emails may be annoying, but they reap high rewards.

The number of candidate emails reached a high of 130 last weekend and are likely to continue. The article explains, “There is no such thing as too much. And the more cringeworthy the content, the more likely you are to click and give money.” Expect long subject lines, time-sensitive pleas, all-caps, contests, attempts at humor, and invitations to dinners and chats with candidates.

Candidates are trying to make themselves likeable and are practicing authenticity. Whether we know them any better from these emails is questionable, but the fundraising results are clear.

President Trump email source.

Discussion:

  • Have you received emails from candidates? What has been your reaction? Have you been inspired to donate to a campaign?

  • Assess President Trump’s email shown here. What principles of persuasion does his campaign use, and how effective do you find the message for fundraising?