Carlos Ghosn Responds to Charges

The former CEO of Nissan, Carlos Ghosn, who has been arrested four times on charges related to financial misconduct, responded in a video message. The key point: “I’m innocent of all the charges.” Ghosn also claims that accusations are “all biased, taken out of context, twisted.”

Ghosn was a celebrated business executive in Japan. His success in growing Nissan is “incontrovertible,” according to a New York Times podcast. He gained a reputation as a serious cost-cutter ("Le Cost Killer"), a strategy that was questioned at the time but brought about great profits for the company, placing it second in the list of Japanese automakers behind Toyota and ahead of Honda. Ghosn was CEO from 2001 - 2017, when he became chairman. He was then removed from the board in 2018, after his first arrest.

Charges against Ghosn include using company funds for multiple personal residences, hiding about half of his compensation, shifting $16.6 million in person losses to the company, and other accounting issues.

Nissan management responded to Ghosn’s video message:

“The sole cause of this chain of events is the misconduct led by Ghosn and Kelly. Aside from any criminal matters, Nissan's internal investigation has uncovered substantial evidence of blatantly unethical conduct. This resulted in a unanimous board vote to discharge Ghosn and Kelly as chairman and representative director, followed by a shareholder vote to discharge them from the board. Further discoveries related to Ghosn’s misconduct continue to emerge. The company's focus remains on addressing weaknesses in governance that failed to prevent this misconduct.”

Ghosn image source.

Discussion:

  • What persuasive communication strategies does Ghosn demonstrate in his video message?

  • What are the most and least convincing statements?

  • Assess his Ghosn’s delivery skills.

  • Which leadership character dimensions are illustrated by this situation?

Boeing's Apology Dilemma

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A Yahoo Finance article describes Boeing CEO Dennis Muilenburg’s decision to apologize for the 737 MAX tragedies and speculates that he may open the company up to lawsuits. However, for crisis communication, his apology is the right decision.

After a report found the planes to blame, Muilenburg admitted, “but with the release of the preliminary report of the Ethiopian Flight 302 accident investigation, it is apparent that in both flights, the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information." He’s not telling us anything we don’t already know, and Boeing will likely get sued anyway.

He also apologized: “We at Boeing are sorry for the lives lost in the recent 737 accidents and are relentlessly focused on safety to ensure tragedies like this never happen again.” The apology is critical—and too late in my opinion. Research on apologies indicate that they often reduce lawsuits, time to agree on settlements, and settlement pay.

Discussion:

  • Do you agree with the assessment that the CEO did the right thing by apologizing?

  • How does this situation illustrate vulnerability as a positive leadership character dimension?

  • What other character dimensions are illustrated by this situation?

Boeing System at Fault

According to investigators, the flight-control system caused trouble before the Boeing 737 MAX crash in Ethiopia. The report also concluded that pilots followed procedures and did nothing wrong.

On its website, Boeing posted a video and statement of CEO Dennis Muilenburg’s apology.

April, 4, 2019

We at Boeing are sorry for the lives lost in the recent 737 MAX accidents. These tragedies continue to weigh heavily on our hearts and minds, and we extend our sympathies to the loved ones of the passengers and crew on board Lion Air Flight 610 and Ethiopian Airlines Flight 302. All of us feel the immense gravity of these events across our company and recognize the devastation of the families and friends of the loved ones who perished.

The full details of what happened in the two accidents will be issued by the government authorities in the final reports, but, with the release of the preliminary report of the Ethiopian Airlines Flight 302 accident investigation, it’s apparent that in both flights the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information.

The history of our industry shows most accidents are caused by a chain of events. This again is the case here, and we know we can break one of those chain links in these two accidents. As pilots have told us, erroneous activation of the MCAS function can add to what is already a high workload environment. It’s our responsibility to eliminate this risk. We own it and we know how to do it.

From the days immediately following the Lion Air accident, we’ve had teams of our top engineers and technical experts working tirelessly in collaboration with the Federal Aviation Administration and our customers to finalize and implement a software update that will ensure accidents like that of Lion Air Flight 610 and Ethiopian Airlines Flight 302 never happen again.

We’re taking a comprehensive, disciplined approach, and taking the time, to get the software update right. We’re nearing completion and anticipate its certification and implementation on the 737 MAX fleet worldwide in the weeks ahead. We regret the impact the grounding has had on our airline customers and their passengers.

This update, along with the associated training and additional educational materials that pilots want in the wake of these accidents, will eliminate the possibility of unintended MCAS activation and prevent an MCAS-related accident from ever happening again.

We at Boeing take the responsibility to build and deliver airplanes to our airline customers and to the flying public that are safe to fly, and can be safely flown by every single one of the professional and dedicated pilots all around the world. This is what we do at Boeing.

We remain confident in the fundamental safety of the 737 MAX. All who fly on it—the passengers, flight attendants and pilots, including our own families and friends—deserve our best. When the MAX returns to the skies with the software changes to the MCAS function, it will be among the safest airplanes ever to fly.

We’ve always been relentlessly focused on safety and always will be. It’s at the very core of who we are at Boeing. And we know we can always be better. Our team is determined to keep improving on safety in partnership with the global aerospace industry and broader community. It’s this shared sense of responsibility for the safety of flight that spans and binds us all together.

I cannot remember a more heart-wrenching time in my career with this great company.  When I started at Boeing more than three decades ago, our amazing people inspired me. I see how they dedicate their lives and extraordinary talents to connect, protect, explore and inspire the world — safely. And that purpose and mission has only grown stronger over the years.

We know lives depend on the work we do and that demands the utmost integrity and excellence in how we do it. With a deep sense of duty, we embrace the responsibility of designing, building and supporting the safest airplanes in the skies. We know every person who steps aboard one of our airplanes places their trust in us. 

Together, we’ll do everything possible to earn and re-earn that trust and confidence from our customers and the flying public in the weeks and months ahead.

Again, we’re deeply saddened by and are sorry for the pain these accidents have caused worldwide. Everyone affected has our deepest sympathies.

Dennis Muilenburg
Chairman, President & CEO
The Boeing Company


Discussion:

  • Analyze Boeing’s communications so far. After the report was published, who were the primary and secondary audiences for these messages? What are the company’s communication objectives, and to what extent were they achieved?

  • What’s your view of the timing? Should the CEO have communicated via video and statement earlier or wait, as he did, for the investigation report results to be published?

  • What leadership character dimensions are demonstrated by this situation?

Updates on the Virginia Govenor

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Whether Virginia Governor Ralph Northam resigns just got more complicated. If Northam steps down because of racist photos in his yearbook, the lieutenant governor would replace him. But Justin Fairfax faces his own challenges: a woman accused him of sexual assault.

Fairfax denies the claims and refers to the incident at the 2004 Democratic National Convention in Boston as consensual sex. To complicate matters further, Fairfax has accused Northam’s supporters of a “smear” campaign:

“Does anybody think it’s any coincidence that on the eve of potentially my being elevated that that’s when this uncorroborated smear comes out?”

Fairfax also questioned whether Mayor Levar Stoney of Richmond may have been involved in the accusation to which Stoney responded, “The insinuation is 100 percent not true, and frankly it’s offensive.”

For its part, Eastern Virginia Medical School is investigating how the racist photos got into the 1984 yearbook.

Justin Fairfax image source.

Election night image source.

Discussion:

  • What’s your view of Fairfax’s response?

  • Should a 2004 sexual assault charge prevent Fairfax from replacing Northam?

  • Should the replacement issue drive whether Northam resigns?

  • What is the medical school’s responsibility in this situation?

Governor's Racist Yearbook Images

Virginia State Governor Ralph Northam is facing calls for his resignation when images from his 1984 medical school yearbook surfaced. After Northam was in the news this week for supporting women’s rights to an abortion, a conservative group posted the images on the website Big League Politics.

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Two people appear in one image: one in blackface and the other wearing a KKK outfit. Northam responded to the controversy with this statement:

“I am deeply sorry for the decision I made to appear as I did in this photo and for the hurt that decision caused then and now. This behavior is not in keeping with who I am today and the values I have fought for throughout my career in the military, in medicine, and in public service. But I want to be clear, I understand how this decision shakes Virginians’ faith in that commitment.”

For some, the apology isn’t enough. Several democrats who recently entered the 2020 presidential race have weighed in: Sen. Elizabeth Warren (Mass.), Sen. Kamala D. Harris (Calif.), Sen. Kirsten Gillibrand (N.Y.), Sen. Cory Booker (N.J.), and Julián Castro (former mayor of San Antonio) all called for Northam’s resignation. He has been in office about 13 months.

UPDATE: Governor Northam now says he did not appear in the photo, and he refuses to resign:

Discussion:

  • What do you think Northam thought when he ran for office? Did he not remember the photo, or did he not think it was a big deal, or was he hoping that people wouldn’t find out? You have to wonder.

  • Should Northam have done or said anything in addition to the apology to garner more support? Would it have made a difference in the public response?

  • How do you interpret Northam changing position?

  • Should Northam resign? Why or why not?

Emails to International Duke Students Sparks Controversy

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Faculty at Duke University Medical Center have been criticized for asking international students to speak only English. The controversy started when an administrator of the biostatistics program sent an email after hearing complaints from faculty members that Chinese students were speaking “VERY LOUDLY” in their native language in “student lounge/study areas.” The faculty expressed concern that students “were not taking the opportunity to improve their English and were being so impolite.”

Also in the email, the administrator said that faculty asked for students’ names so that they might deny them job and project opportunities.

Students took offense and started a petition. In response, the administrator of the program stepped down from her position, and the university posted a letter to students in the program.

Discussion:

  • What’s your view of international students speaking in their native language at an American University?

  • Was the administrator out of line? Why or why not?

  • How do you assess the university’s response to the controversy?

  • What leadership character dimensions are at play?

Law Firm Faces Backlash About Diversity

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When a law firm announced its 2019 partners, they didn’t expect such a strong reaction. A photo shows the 12 members of the new group—all white and only one woman. Paul Weiss is an elite firm in midtown Manhattan and claims that this year is unusual.

The firm has since removed the photo from LinkedIn, where it drew attention. About 170 lawyers across the country wrote an open letter to express their wishes for a more diverse legal community.

Paul Weiss leaders took quick action to address the controversy and held a town hall meeting for employees. Firm leaders also say this group is unusually not diverse. In fact, the firm was recognized by a Microsoft initiative that offers bonuses to diverse law firms. In addition, 23% of the firm’s partners are women compared to about 18% of other law firms’ top leaders. The firm’s website boasts additional awards for diversity, including being ranked #16 in The American Lawyer’s 2018 Diversity Scorecard.

An email to Paul Weiss employees shows the words “diversity” and “associate professional satisfaction” in quotes, and a writer for the website Above the Law warns,

“…maybe there’s still some work to be done in mastering how to talk about these subjects. In general, don’t put anything in quotation marks that you wouldn’t be willing to sarcastically put air quotes around in conversation. That’s my advice.”

Discussion:

  • What’s your view of the photo and the reaction: should the firm have avoided the composite, did people overreact, or something else?

  • How do you assess the firm’s response? What else, if anything, should the firm leaders do to improve its image?

  • What persuasive strategies do the attorneys use in their open letter? Which are most and least effective for the situation?

Lawsuit Charges Purdue Pharma Family with Instigating Opioid Crisis

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In a 312-page complaint, Massachusetts lawyers detail how members of the Purdue Pharma family contributed to the opioid epidemic. The complaint shows the company’s aggressive marketing strategy, including how it convinced doctors to over-prescribe drugs.

One argument in the documentation shows how representatives were trained to encourage doctors to prescribe medication to what the company called “opioid-naive” patients:

Purdue also promoted its drugs for opioid-naive patients using the receptive term “first line opioid.” “First line” is a medical term for the preferred first step in treating a patient. Opioids are not an appropriate first line therapy. Nevertheless, Purdue’s internal documents and testimony from sales reps shows that Purdue repeatedly promoted OxyContin as “first line” — “the first thing they would take to treat pain.” (Sic: “first-time opioid” should include a hyphen.)

A 2001 email written by Richard Sackler, whose family owns OxyContin, blames victims:

“We have to hammer on abusers in every way possible. They are the culprits and the problem. They are reckless criminals.”

The lawsuit also charges the family with claiming that opioids are addictive to only one percent of the population, although they had no evidence for that claim.

This lawsuit follows others in Washington, Ohio, and Alabama. Last year, the company did stop promoting opioids.

Purdue image source.

Discussion:

  • Read more in the legal complaint. According to the documentation, how did the company wrongfully use persuasive communication?

  • In some of the documentation, we see ads and tactics that any company might use. Which do you find to be typical examples, and which cross an ethical line?

MSU Gets Another New Interim President

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Michigan State University hired a second interim president. First, President Lou Anna Simon resigned after 13 years following criticism that she didn’t do enough to stop Dr. Larry Nassar from abusing girls. John Engler replaced her as interim president in 2018, but he, too, faced criticism for insensitivity to Nassar’s victims.

Most recently, Engler commented after a $425 million fund was approved for 332 current claimants and another $75 million was approved for additional victims. Engler said, “The people who got the $425 million are probably OK." Engler said he was thinking more about the potential additional victims who haven’t been part of the process yet. He made things worse when he said more:

"You’ve got people, they are hanging on and this has been … there are a lot of people who are touched by this, survivors who haven’t been in the spotlight. In some ways they have been able to deal with this better than the ones who’ve been in the spotlight who are still enjoying that moment at times, you know, the awards and recognition. And it’s ending. It’s almost done.”

People took great offense to his implication that the earlier claimants have “enjoyed the spotlight.” So now, MSU has a new interim president, Satish Udpa.

MSU image source.

Udpa image source.

Discussion:

  • Try to see Engler’s point of view. What was he trying to convey with his comments?

  • We might say that Engler’s comments lacked compassion. What else is problematic about his comments?

  • What’s your view? Was forcing Engler’s resignation the right thing to do? Why or why not?

McKinsey PPT Slide Causes Problems

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Back in 2006, Boeing hired management consultancy McKinsey to help the company launch its 787 Dreamliner despite rising titanium prices. According to a New York Times article, McKinsey evaluated a proposal for Boeing “to mine titanium in India through a foreign partnership financed by an influential Ukrainian oligarch.”

On a PowerPoint slide, the consultancy suggested that Boeing “respect traditional bureaucratic process including use of bribes.” Included on the slide were names of eight “key Indian officials.” As the article notes, “Nowhere in the slide did McKinsey advise that such a scheme would be illegal or unwise.”

McKinsey admitted authoring the report only after learning that the Times had a copy. Details are fuzzy, and McKinsey isn’t offering more explanation.

Discussion:

  • What’s your view of McKinsey’s responsibility in this situation? Do you believe they encouraged illegal activity, were just doing the job of management consultant firm and considering cultural realities, or something else?

  • The PPT slide seems to have implicated McKinsey. Should the consultants have been more careful about what was documented? Why or why not?

  • What character issues may be at play in this situation?

  • The NYT author wrote, “Nowhere in the slide…” I would say, “Nowhere on the slide…” Which is correct—or are both acceptable?

Facebook's Rules for Managing Political Speech

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A New York Times article describes a complex rulebook to help employees decide whether to address political speech on the site. The decision process is daunting, and guidelines include extensive examples of content—text and visuals—that may indicate hate or inspire violence.

The author questions whether Facebook employees are making rational, consistent decisions:

The guidelines for identifying hate speech, a problem that has bedeviled Facebook, run to 200 jargon-filled, head-spinning pages. Moderators must sort a post into one of three “tiers” of severity. They must bear in mind lists like the six “designated dehumanizing comparisons,” among them comparing Jews to rats.

Others say Facebook has too much power because the company controls speech in international political situations. For example, before an election in Pakistan, during a 24-hour media blackout, Facebook may have been the go-to source. Before this time, Facebook distributed 40 pages of “political parties, expected trends, and guidelines” to its employees. But guidelines sometimes contradict each other, and Facebook relies of Google Translate, which may not be accurate or precise enough.

Cover image source.

Discussion:

  • When Facebook faced criticism about sharing information with technology partners, company leaders responded in a blog post. If they were to do something similar in this case, what should they say to rebuild confidence in the site?

  • Although the rules can be a “bit baffling,” as the author says, Facebook is trying to address other criticism about its response to hate and violence on the site. What, if anything, can the company do differently to accept accountability?

Juul Employees Can't Juul at Work

The e-cigarette company has decided to follow the law and prohibit its employees from Juuling at work. The law isn’t new: The California law against vaping in the workplace has been on the books since 2016.

A Wall Street Journal article describes vaping etiquette from the American Vaping Association:

There is etiquette for in-office vaping, says Gregory Conley, president of the American Vaping Association. Foremost: Don’t blow clouds. Take a puff and hold your breath for three to five seconds, and the vapor evaporates in your mouth. “If it’s 10 degrees outside and I want a single puff, I just take a puff and hold my breath” when indoors, he says. “Ninety-nine percent of people don’t care so long as they don’t see anything.”

Meanwhile, the U.S. Surgeon General just released a warning against vaping. Experts say e-cigarettes have toxic chemicals, and users are at higher risk for a heart attack. Studies indicate that teens who vape are more likely to smoke cigarettes later on.

Discussion:

  • The situation is a confusing issue of integrity. Some might question why employees were allowed to Juul, against the 2016 law. What’s your view of their decision?

  • Juul is popular among young people even though the product is intended for people 21-and-over. To what extent is that the company’s responsibility?

Facebook Defends Sharing Information with Partners

Facebook is responding to new criticism about how it shares users’ information. A New York Times report identified a few examples of how Facebook allowed other technology companies to access private information:

Facebook allowed Microsoft’s Bing search engine to see the names of virtually all Facebook users’ friends without consent, the records show, and gave Netflix and Spotify the ability to read Facebook users’ private messages.

The social network permitted Amazon to obtain users’ names and contact information through their friends, and it let Yahoo view streams of friends’ posts as recently as this summer, despite public statements that it had stopped that type of sharing years earlier.

In a blog post, Facebook’s Director of Developer Platforms and Programs, Konstantinos Papamiltiadis, explained the reason for about 150 companies to have such access:

Today, we’re facing questions about whether Facebook gave large tech companies access to people’s information and, if so, why we did this.

To put it simply, this work was about helping people do two things. First, people could access their Facebook accounts or specific Facebook features on devices and platforms built by other companies like Apple, Amazon, Blackberry and Yahoo. These are known as integration partners. Second, people could have more social experiences—like seeing recommendations from their Facebook friends—on other popular apps and websites, like Netflix, The New York Times, Pandora and Spotify.

To be clear: none of these partnerships or features gave companies access to information without people’s permission, nor did they violate our 2012 settlement with the FTC.

The post goes on to explain the value to Facebook users of having their information shared.

Discussion:

  • Read the full blog post. How well does the company defend its practices? Analyze the audience, communication objectives, writing style, and so on.

  • How well does the company accept responsibility for sharing information?

  • What else, if anything, should Facebook do to rebuild its image? The company has faced increased criticism and regulatory interest in the past few months.

NIH Changes Funding Practices

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Following criticism in May, the National Institutes of Health (NIH) ended a study aiming to understand whether drinking alcohol every day could have health benefits. The study received $67 million in funding from six alcohol companies.

Now, the NIH is sharpening its guidelines for how employees of its eight institutes seek donations. The NIH director said, “We have to do everything we can to ensure the integrity of the NIH grants process and the quality of our research is above reproach, which means worrying about conflicts.” In addition, the NIH is planning for consistency across its institutes.

Some wonder why the NIH wasn’t already practicing due diligence and preventing conflicts of interest. Critics say the NIH isn’t doing enough and should accept private funding only for general use—not for specific research.

Discussion:

  • What’s your view of the NIH’s practices? How is this situation an issue of integrity for the organization?

  • The NIH’s credibility has taken a hit. What can the leaders do to recover the organization’s image?

Report on Larry Nassar

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A new report on the former Olympics coach and doctor, Larry Nassar, blames officials at Michigan State University, the U.S. Olympics Committee (USOC), and USA Gymnastics for allowing his abuse of hundreds of girls over decades. The investigators concluded, “Numerous institutions and individuals enabled his abuse and failed to stop him.”

In some cases when officials learned of an abuse allegation against Nassar, they waited weeks or months to report to; in other cases, officials reported claims but didn’t do enough to follow up. In still other cases, officials did nothing at all.

Nassar was finally convicted and sentenced to what will be life in prison. With the report results, some hope the USOC will now be investigated.

The report aligns with an NPR podcast, Believed, tracing claims against Nassar and his medical defense, which was accepted by too many for too long.

Image source.

Discussion:

  • How do you think the abuse continued for so long? If you listen to the podcast Believed, you’ll hear Nassar’s defense during police interviews.

  • Analyze the report. What business communication principles are followed, and in what ways could the report be improved?

Trump Undocumented Workers Speak Out

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Employees of Trump National Golf Club in Bedminster, NJ, say they are undocumented in the U.S. and express disappointment at the president’s comments about immigrants. For five years, Victorina Morales has worked at the property, and her responsibilities sometimes include providing housekeeping services for the president’s private quarters.

Although the president may not have known about their status, Morales and a former employee say several within the housekeeping, maintenance, and landscaping crews don’t have papers to work legally in the U.S.

Morales said her status is known at the club, and she was hurt when she heard the president comparing recent immigrants to criminals:

“We are tired of the abuse, the insults, the way he talks about us when he knows that we are here helping him make money. We sweat it out to attend to his every need and have to put up with his humiliation.”

During the presidential campaign, President Trump said of his businesses, “We didn’t have one illegal immigrant on the job.”

Image source.

Discussion:

  • What risks does Morales take by speaking out? Why might she forge ahead and not be deterred by those risks?

  • How is this a potential issue of integrity for President Trump?

  • Should President Trump be held accountable for undocumented workers on his properties? Why or why not?

Prep School Criticized for Abuse and False Apps

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College prep school T.M. Landry has garnered national attention for helping Black students get into college, but all has not been well at the school. Students are speaking out about emotional and physical abuse as well as falsified college applications.

According to a New York Times report, examples of physical abuse include “forced to kneel on rice, rocks, or hot concrete for hours” and being “choked, yelled at, and berated.” Students report being told to lie on college applications about classes they took and the conditions under which they grew up, for example, exaggerating their poverty.

The Landrys, a married couple who run the school, defended their actions, saying they push kids to their limits. Mr Landry admits to physical contact, and he said, “Oh, I yell a lot.” Since a 2013 case against him that included probation, Landry says he no longer practices physical punishment. He also denied falsifying students’ applications.

College results have not been great. Students who spent more time at the prep school are more likely to withdraw or transfer to less demanding programs. The New York Times article describes an unaccredited school with little traditional programming, so students may not be academically prepared for the schools that admit them.

Image source.

Discussion:

  • Assess the school website. The opening video features Mr. Landry, and the rest of the site boasts college acceptances. How convincing might families find the way the school is promoted? Other than admitting abuse, should the site say more to give parents and prospective students a more accurate picture of the school philosophy and practice?

  • How is this situation an example of failing integrity? Also consider intent versus impact. What could the founders' intent, and how is that different from the impact? 

Dolce and Gabanna Cancels Show and Apologizes

Italian fashion designer Dolce and Gabanna cancelled a major show scheduled in Shanghai and apologized to the Chinese people for an offensive ad and comments on social media. The ad showed Chinese-French model Estelle Chen, in separate videos, eating pizza and pasta with chopsticks. With stereotypical music in the background, the ads seem to mock the woman and a Chinese pronunciation of the company’s name.

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After criticism on Weibo, the company made the situation far worse. Co-founder Stefano Gabbana posted negative comments, at right, about China and its people on Instagram, and then denied the comments, claiming his account had been hacked.

Later, Dolce and Gabbana leaders tried to recover by posting a statement on the company’s Instagram account: "We are very sorry for any distress caused by these unauthorized posts. We have nothing but respect for China and the people of China." Another post read, "Our dream was to bring to Shanghai a tribute event dedicated to China which tells our history and vision. It was not simply a fashion show, but something that we created especially with love and passion for China and all the people around the world who loves Dolce & Gabbana.”

They also posted an apology video.

Discussion:

  • What’s your view of the ad series? Can you see how people would think they are offensive? Why or why not?

  • How well did Dolce and Gabanna eventually recover from the incident? Analyze the apology video.

  • Which leadership character dimensions are illustrated by this situation?

Hotel Cleaning Caught on Video

Housekeepers in 14 hotels in China were caught on video using a towel or sponge to clean multiple surfaces, including toilets, showers, and glassware. Hotels included W Hotel Beijing, Bulgari Hotel in Shanghai, InterContinental Beijing Sanlitun, Hilton Beijing, Beijing JW Marriott Hotel, Peninsula Beijing, and Shangri-La Hotel Beijing.

So far, five of the hotels have issued statements. The Peninsula wrote, “The hotel will still take measures to strengthen the implementation of the standard procedures for room service staff to ensure all aspects meet the established standards of the Peninsula.” Park Hyatt in Beijing referred to the situation as an isolated occurrence.

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China's Ministry of Culture and Tourism ordered hotels to review their practices and called for an investigation.

Discussion:

  • What oversight should hotels have for room cleaning?

  • Analyze Park Hyatt's message: audience, communication objectives, writing style, and so on. How well does the company address the situation?

  • This isn’t the first time such as report has become public about luxury hotels. Do you think these cases are isolated, as the Park Hyatt claims, or systemic?

Nissan Chairman Is Arrested

Nissan’s chairman was arrested for financial misconduct, including under-reporting his income in securities fillings. Carlos Ghosn may have been engaging in improprieties for years.

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The news came as a surprise to many. Ghosn is a popular business figure, credited with turning around Nissan, Renault, and Mitsubishi by forming an alliance and directing cost-cutting and layoffs. According to a Wall Street Journal article, the shock is felt particularly at Renault; a union leader described the reaction as “a feeling of stupefaction and a lot of anger.”

The French government has a 15% state in Renault, so President Emmanuel Macron also weighed in: “As a shareholder, the French state will remain extremely vigilant regarding the stability of the alliance.” At this point, officials are still trying to sort out the news and determine leadership going forward.

Nissan CEO Hiroto Saikawa delivered a news statement, translated in English on Bloomberg. The company also issued this matter-of-fact statement.

Nissan image source. Ghosn image source.

Discussion:

  • Why would a successful business executive engage in financial misconduct? What leadership character dimensions are lacking?

  • How does financial impropriety go on for years in a situation like this? Who should be accountable for the misconduct?

  • Assess Saikawa’s news statement. What works well to improve brand image, and what could be improved?