Nike Memo Describes Diversity Failings

The head of HR at Nike wrote a memo describing how the company has not lived up to plans to promote women and people of color. Nike has been grappling with complaints about its "boys-club culture," and the memo may have worsened the situation.

When complaints surfaced, Chief Executive Mark Parker said, “When we discover issues, we take action. We are laser-focused on making Nike a more inclusive culture and accelerating diverse representation within our leadership teams."

Weeks later, HR Chief Monique Matheson wrote in the memo that the company wants to “to create a culture of true inclusion. As part of our plan, we need to improve representation of women and people of color.” She also wrote, “While we’ve spoken about this many times, and tried different ways to achieve change, we have failed to gain traction—and our hiring and promotion decisions are not changing senior-level representation as quickly as we have wanted."

Of Nike's 74,000 employees, only 29% of vice presidents are women and, in the U.S., only 16% are nonwhite. In the memo, Matheson also reported that men, women, and people of color earn about the same, although she acknowledged, "We’ve also heard from some of you that this result does not reflect your personal experience" and promised to do more research into pay equity.

Discussion:

• How does the memo reflect both positively and negatively on Nike?
• Should Matheson have avoided putting such information in a memo, knowing that it could be made public? Or, do you think she intended for it to go public?
• How do executives balance internal communication and the possibility of messages being leaked to the press?
• In what ways does this situation demonstrate vulnerability?

Major Retailers Respond to Data Breach

Retailers Saks Fifth Avenue and Lord & Taylor experienced a data breach affecting about 5 million customers. Hackers JokerStash Syndicate (also known as Fin 7) stole and resold credit and debit card information retrieved during the sales process.

Both companies are owned by Hudson's Bay Co., and we see that their customer messages have been coordinated. On both retailers' websites, text appears at the top of the page in a yellow box. When you click on the "Important Message" link, you see two statements dated one day apart and a list of FAQs.

The second message is below:

April 2, 2018 Statement

Updated Statement

We recently became aware of a data security issue involving customer payment card data at certain Saks Fifth Avenue, Saks OFF 5TH, and Lord & Taylor stores in North America. We identified the issue, took steps to contain it, and believe it no longer poses a risk to customers shopping at our stores. While the investigation is ongoing, there is no indication that this affects our e-commerce or other digital platforms, Hudson's Bay, Home Outfitters, or HBC Europe. We deeply regret any inconvenience or concern this may cause.

We wanted to reach out to our customers quickly to assure them that they will not be liable for fraudulent charges that may result from this matter. Once we have more clarity around the facts, we will notify our customers quickly and will offer those impacted free identity protection services, including credit and web monitoring. We encourage our customers to review their account statements and contact their card issuers immediately if they identify activity or transactions they do not recognize.

We are working rapidly with leading data security investigators to get our customers the information they need, and our investigation is ongoing. We also are coordinating with law enforcement authorities and the payment card companies. For further information, please visit https://www.saksfifthavenue.com/security-information/notice.html, https://www.saksoff5th.com/security-information/notice.html, or https://www.lordandtaylor.com/security-information/notice.html. To speak with a dedicated call center representative, beginning April 4, 2018, you can call 1-855-270-9187, Monday - Saturday, 8 am - 8 pm CT.

Discussion:

• Read the statements on the retailers' websites. Identify the primary and secondary audiences and communication objectives.
• How well do the statements achieve their objectives? What else, if anything, should the companies communicate at this point?
• To what extent are the retailers holding themselves accountable for the breach?

Howard University Responding to Embezzlement

Six student employees were terminated by Howard University for embezzling financial aid funds. The students made up fake scholarships and found other ways to steal what could be more than $1 million.

On Twitter, the student association unleashed its frustration with the university's response. In a statement, President Wayne Frederick expressed empathy for this frustration and for other reactions:

Hearing about the mishandling of funds at the University can be difficult to process. I can also understand how upsetting it is to feel that the University has not communicated with you regarding this incident. The goal established at the onset of this investigation was to conduct it in a confidential manner that ensured a thorough examination of the issues without jeopardizing the integrity of the findings. However, that does not mitigate the sense of mistrust that many students and members of our community feel right now. We understand that and we hear you.

The statement also describes plans for investigating the charges and ends on a positive note.

Discussion:

• The above paragraph from the president's statement raises an interesting conundrum: how do leaders ensure both privacy and transparency? The same issue is relevant to investigating sexual harassment claims. What are your thoughts? How, if at all, is it possible to achieve both?
• Assess the president's statement. Who is the audience, and what are the communication objectives? How is the statement organized? How would you describe the writing style, tone, and so forth?
• How well does the president's statement demonstrate accountability? 

Profile of a Wells Fargo Whistleblower

Duke Tran was a Khmer Rouge slave in Cambodia when he was 17 years old, but he made his way to the United States and eventually landed a job at Wells Faro. At some point, Tran received phone calls from customers about large payments due on loans ($90,000 and $165,000). In both cases, the customers said they didn't have a loan with the bank, and Tran couldn't find any documentation. When Tran asked his supervisor what to do, he was told, "It’s no problem. If the customer calls back, you tell them it’s a balloon [due all at once]." Tran refused to lie to the customers and got fired: “I told him this is a fraud. I cannot be a part of that. He got upset."

This is one of many stories of retaliation against whistleblowers at the company, but Tran persisted. Rather than fight for his job back, Tran wanted the bank to admit wrongdoing. A New York Times article describes what Tran went through:

To further his lawsuit, he opened his life to intense scrutiny, used vacation time at his new job to attend meetings and court dates, and told and retold the story of his experiences at the bank, which maintained that Mr. Tran had been fired for poor performance and that there had been no cover-up of missing documents. He would not go away. . .

He couldn’t sleep. He couldn’t bring himself to tell his wife, Ann, and their sons, Justin and Jimmy, that he had been fired. When they asked why he wasn’t going to work in the mornings, Mr. Tran said he was on vacation. When that excuse no longer seemed plausible, he invented another.

“I thought, my God, I’ve lost my American dream,” he said.

His wife worked in a dental equipment factory. She earned $17 per hour, and it was suddenly the family’s only income.

Although he didn't want to, Tran eventually settled for what is estimated to be "seven figures."

Cover image source. Page image source.

Discussion:

• Which character dimensions does Tran most demonstrate?
• When have you been in a situation where you had to decide whether to speak out against a company practice? What was your decision process? How did it turn out?
• HR told Tran he was fired for not responding to a customer whose call he had taken. How is this problematic?

FB Admits Mistakes and Makes Promises

After five days of silence, Facebook CEO Mark Zuckerberg is addressing new criticism about privacy issues. Recent reports describe how Cambridge Analytica used data from about 50 million FB users without their permission, possibly to influence voters during the 2016 presidential campaign. Although some users gave permission for their information to be shared, their "friends" didn't, and this gave developers enormous amount of data about people's preferences. In addition, Cambridge claimed it had deleted data in 2014, but new reports indicate it did not.

Now Zuckerberg is visible in the media and has issued a statement that included the company's responsibility and failings: 

We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you. I’ve been working to understand exactly what happened and how to make sure this doesn’t happen again. The good news is that the most important actions to prevent this from happening again today we have already taken years ago. But we also made mistakes, there’s more to do, and we need to step up and do it.

He also told CNN, "I'm really sorry that this happened." He promised to limit developers' access to data in the future.

Facebook also published a full-page newspaper ad in the New York Times on March 25.

Discussion:

• How does this situation represent issues of integrity and trust?
• Read Zuckerberg's full statement. Which parts do you find most and least convincing?
• How is the statement organized? Is this the best approach, or could other organizational strategies have worked better? 
• Assess Zuckerberg's writing style. Which principles of business writing are followed, and which are not?

Facebook Under Scrutiny

Questions about Facebook's role in user privacy are getting increasingly serious, and shareholders are getting worried. Company shares fell 7% after the news that third-parties used FB users' personal information without permission.

Analysts say we know that Facebook monetizes users' data, but the number of people affected (50 million) and the extent of the violation is dramatic. One concern is how much additional regulation the company will face in the future. Already, the Federal Trade Commission (FTC) is investigating whether Facebook violated a 2011 settlement in which the company promised to get users' consent before changing certain privacy settings.

We have no comment yet from Mark Zuckerberg or Sheryl Sanberg, and critics say they need to be out in front of this.

Image source.

Discussion:

• A Bloomberg reporter called the company "tone deaf," but others say it's an impossible situation to fully address at this point. What's your view?
• What, if anything, should company leaders say? What could explain their silence?
• In what ways is this situation an issue of integrity for the company?

Stanford Event Criticized as "Too White and Too Male"

The organizer of a history conference at Stanford admitted to having trouble identifying a more diverse panel of speakers. All 30 are white men.

Priya Satia, history professor at Stanford said, “Given how prevalent women are in the history department, you’d have to try really hard to come up with a roster of speakers that looks like that." Satia also leads the history department's diversity committee.

Referred to as a "conservative British historian" by the New York Times, Niall Ferguson says he invited women, but only one could attend. Ferguson also said, "We all agreed that we must redouble our efforts to represent diverse viewpoints in future conferences." 

Discussion:

• What are some possible reasons for the lack of diversity?
• Should Ferguson have done more to recruit women and people of color? How could he approach the conference planning differently?
• What is Stanford's responsibility? I don't see a statement from the university.
• In what ways does Ferguson demonstrate vulnerability, and in what ways does he fall short?

Turnaround for Martin Shkreli

We see a different Martin Shkreli from the one criticized for smirking during a congressional hearing on Capitol Hill in 2016. Shkreli ran Turing Pharmaceuticals when the company was accused of raising drug prices 5,000% in 2015. At the time, he was only 28 years old and was called "the most hated man in America."

Last week, Shkreli was sentenced to seven years in prison for fraud committed while he was a hedge fund manager and while running another drug company, Retrophin.

Shkreli pleaded for leniency. According to a CNBC report, he "broke down in tears." Another  article summarizes his statements in court:  

"The one person to blame for me being here today is me," a choked-up Shkreli told a judge before she imposed the prison term in Brooklyn, New York, federal court.

"Not the government. There is no conspiracy to take down Martin Shkreli."

"I took down Martin Shkreli with my disgraceful and shameful actions."

"This is my fault. I am no victim here," Shkreli said, before breaking down into tears as he promised not to let his lawyer Benjamin Brafman down in his efforts to contribute to society.

"Do not feel bad for me," Shkreli told a packed courtroom that included supporters and family members, many of whom had written letters asking Judge Kiyo Matsumoto to spare him from a harsh sentence.

And he had a message for the investors he duped: "I am terribly sorry I lost your trust. ... You deserve far better."

"I was never motivated by money," Shkreli said. "I wanted to grow my stature and my reputation."

"I am here because of my gross, stupid and negligent mistakes I made."

Image source.

Discussion:

• Let's assume Shkreli's statements are sincere. How could you explain Shkreli's smirking in 2015 at such as serious hearing and his behavior more recently?
• Do you believe Shkreli's statements are sincere? Why or why not?

A Dog Dies on a United Flight

United Airlines, again, has apologized for a problem on a flight. A flight attendant told a family to place their dog, in a carrying case, in the overhead compartment. The dog didn't survive the trip.

The flight attendant's instruction is curious because the airline's policy states that pets are to be stored under a seat:

"A pet traveling in cabin must be carried in an approved hard-sided or soft-sided kennel. The kennel must fit completely under the seat in front of the customer and remain there at all times."

In a statement, a United spokesperson apologized:

“This was a tragic accident that should never have occurred, as pets should never be placed in the overhead bin. We assume full responsibility for this tragedy and express our deepest condolences to the family and are committed to supporting them.”

Image source.

Discussion:

• United's statement doesn't mention the flight attendant's role. Why do you think this isn't included? Should the statement be revised?
• What action, if any, should United take against the flight attendant if she did, as passengers report, instruct the family to put the dog in the overhead compartment?

Bias in Online Courses

A Stanford University study found biases in how instructors interact with students in online courses. In a review of 124 Massive Open Online Courses (MOOCs) in a variety of subjects, researchers found that responses to comments vary by students' race and gender: 

Each comment was randomly assigned a student name connoting a specific race and gender. We find that instructors are 94% more likely to respond to forum posts by White male students. In contrast, we do not find general evidence of biases in student responses. However, we do find that comments placed by White females are more likely to receive a response from White female peers. 

The study is significant because it identifies teachers' potential responsibility for different student learning outcomes. In other words, it's difficult to isolate why teachers respond differently to students because the students may, for example, be less prepared or have less ability. But in this study, the issue is clearly isolated: teachers tend to favor students based on race and gender, which were randomly assigned by way of fictitious names.

Discussion: 

• How well do these results match your own experience as a student?
• What are the implications of this study for instructors?
• What potential flaws or issues do you identify with this study? 

Is Blankfein Leaving Goldman?

It's big news on Wall Street: the 12-year CEO of Goldman Sachs is leaving the company. But Lloyd Blankfein and other Goldman executives say they were surprised to read the Wall  Street Journal report. 

CNBC's Jim  Cramer said the news made sense because Goldman has two co-presidents who are vying for the position: "Blankfein is deeply committed to letting a newer generation" lead.

Blankfein tackled some tough times at the investment bank. The firm managed well through the Great Recession despite criticism for misleading customers, for which Goldman paid $550 million to the SEC as a settlement. In 2009, Blankfein faced criticism when he, perhaps jokingly, told a reporter Goldman was "just doing God's work." He was positioning the firm as having a "social purpose." Finally, in 2012, a Goldman executive wrote a scathing report about the company in a New York Times opinion piece, "Why I Am Leaving Goldman Sachs."

For now, we don't know how true the WSJ report is. 

Discussion: 

• The Wall Street Journal report is very clear, although it doesn't identify sources, but that is typical. How do news reports like this happen? Who is responsible if it is a mistake? 
• How well did Blankfein handle the situation? What, if anything, should Goldman communicate as a company at this point?

KFC Shuts Stores and Blames DHL

About 900 KFC UK restaurants closed because they didn't have chicken. A problem with DHL as their new transportation partner caused the problem, which upset customers so much they called the local police and Parliament.

The company has been sending steady messages and is trying to find humor in the situation. A spokesperson said, "We know that this might have inconvenienced some of you over the last few days, and disappointed you when you wanted your fried chicken fix — we're really sorry about that. Shout out to our restaurant teams who are working flat out to get us back up and running again.” A notice on the company website reads, "Thanks for bearing with us," and lists other locations nearby.

In addition, KFC posted a message on Twitter:

Another post read, "KFC runs out of chicken. You couldn't make it up, but we'll make it up to you. Join the Colonel's Club and get a finger lickin' reward when your restaurant opens." 

Discussion:

• How well do you think KFC is communicating about the situation?
• DHL made a big announcement in October of 2017: "KFC revolutionizes foodservice supply chain with DHL." But a press release about the current situation is nowhere to be found. Should the company be more vocal? 
• Is it appropriate for KFC to blame DHL? In what ways does this both demonstrate and lack accountability?

More Companies Take Action to Curb Gun Sales

Dick's Sporting Goods has taken a strong stance on gun control. In a statement, the company announced it will no longer sell assault-style rifles and will no longer sell firearms to people under 21 years of age. The statement dances the fine line between both sides of the gun control debate:

We support and respect the Second Amendment, and we recognize and appreciate that the vast majority of gun owners in this country are responsible, law-abiding citizens. But we have to help solve the problem that’s in front of us. Gun violence is an epidemic that’s taking the lives of too many people, including the brightest hope for the future of America – our kids.

Walmart also announced it will no longer sell to people under 21 years of age. The company ended some firearm sales in 2015, so this policy further restricts what people can purchase when.

Companies are in a tough spot. Dicks, Walmart, Delta, and other companies have suffered backlash for their decisions, including people promising to boycott.

Discussion:

• Compare Dick's and Walmart's statements. How do they differ? Which is more effective and why?
• Describe Dick's choices. What are the risks and rewards of the announcement?
• Should other CEOs jump into the controversy? How might the decision depend on industry, customer base, or the leader him- or herself?

NYU Criticized for Racially Insensitive Menu Items

One of the NYU dining halls created new menu items to observe Black History Month. Unfortunately, the items reinforced racial stereotypes and weren't well received, according to a New York Times report:

"Barbecue ribs, corn bread, collard greens, and two beverages with racist connotations: Kool-Aid and watermelon-flavored water."

After a sophomore, Nia Harris, complained about the menu and didn't get a satisfying response, she wrote an email calling the decision "racially insensitive" and "just ignorant." She described her perspective and experience in a Facebook post:

Harris seems more concerned about the failed response than the initial decision to create the menu. Clearly, staff members could have handled this situation differently.

Later, the university did respond, including statements from Aramark to which dining at NYU is outsourced.

Discussion:

• Describe Harris's point of view. What were the university's missteps in this situation? Why do you think Harris didn't get a better response?
• Assess the university's response. They blame Aramark. Is that appropriate in this case? Why or why not?
• Now assess Aramark's two statements. How well does the company address the criticism?

Facebook Under Fire for Russian Interference

Facebook is facing more criticism following detailed reports of how the Russian government infiltrated U.S. social media platforms during the 2016 election. The report cites Facebook as the target for Russian bots far more than any other social media site.

Since the Florida school shooting last week, we see evidence of Russian bots weighing in on gun control. Experts say these efforts are to divide the American people on political issues and are "casting public doubt on institutions such as the police or the media."

Facebook is taking action, but it's been slow, and experts wonder how much the company can do at this point. A Wired article details Facebook's journey to accountability, with much time spent in denial. Now, Facebook promises to verify accounts for election ads, but critics say it won't be enough.

In a report, Facebookers point to inherent problems with the platform:

“The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform,” they write. “The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising.

“There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.”

Discussion:

• What's your view of the situation and Facebook's responsibility. Is the company doing enough?
• How could Facebook re-envision its platform to avoid the problem of infiltrators on the site?
• Read the report, Digital Deceit. What business communication principles are followed, and how could the report be improved?

Shark Tank Example: Learning from Failure

On a recent Shark Tank, two entrepreneurs sought investment in their dog water company—flavored water for your favorite pet to drink. The sharks weren't excited, and Robert Herjavec summed up the sentiment: "My challenge is with you." He then listed the reasons the founder gave for not being farther along with the business, and they were all outside her control. At one point, the founder blames the economy and the company's inability to get a business loan.

The founder doesn't quite understand—or doesn't acknowledge the criticism. She responds with, "But I'm still here!" and seems to miss the point entirely.

The end is also awkward. It takes a while for her to leave because she's still selling even after all sharks are "out."

Discussion:

• How could the entrepreneurs demonstrate humility and their ability to learn from failure? In other words, how can they describe their setbacks in a way that doesn't turn off investors?
• How do you view the founder's last couple of minutes with the sharks? I admire persistence, but is it too much? If so, why?

Delta Representative Confronts Customer—on Video

When a Delta flight from Honolulu to Portland, OR, was delayed twice, a customer was re-booked on a Hawaiian Airlines flight, but his luggage didn't make it.

We don't see the context, but the passenger filmed (NSFW) an interaction with Delta staff, and the scene doesn't reflect well on the company. In the video, one of the agents says, "You can take my f-- picture if you want to, a--hole." He then suggests they call the police because "This guy's out of control."

Delta replied to the incident with a statement:

"The actions displayed by this employee do not in any way reflect the standard of customer service and professionalism we expect from our employees. This conduct is unacceptable, and we have reached out directly to the customer and apologized."

The employee was suspended.

Discussion:

• The employee has little excuse for his behavior, but could some context at least explain the agent's reaction? For example, why would he say, "This guy's out of control?"
• Did the passenger act appropriately? What is his responsibility for the interaction?
• Should the airline reinstate or fire the agent?

Newspaper Apologizes for Cartoon

The Albuquerque Journal in New Mexico issued an apology for a cartoon some call racist. Critics say the image advances "the most false and negative stereotype of DREAMers." Of the states, the Hispanic population is highest in New Mexico—48.5%.

In a statement, editor Karen Moses explained the paper's view:

Political cartoons are often satire and poke at more than one point of view. I do not presume to know what cartoonist Sean Delonas was trying to convey in his cartoon that was published in Wednesday’s Albuquerque Journal. But on one level it appeared to us to be poking at President Trump’s rhetoric by portraying a quaking Republican couple who were painting Dreamers with a broad, totally false, brush.

Obviously, that was not the message received by many readers. Instead, many saw an extremely objectionable cartoon and thought that was the position of the Journal. It is not.

In hindsight, instead of generating debate, this cartoon only inflamed emotions. This was not the intent, and for that, the Journal apologizes.

I repeat that the Albuquerque Journal does not condone racism or bigotry in any form.

I also want to reiterate that we do not agree with many of the opinions expressed on the editorial pages, which are intended to encourage debate. Also, the editorial board decides what to publish on these pages, and that is separate from the newsroom and its reporters.

News agencies report conflicting data about crimes rates among immigrants. Compare data presented by The New York Times and Breitbart.

Discussion:

• What's your view of the cartoon: funny, offensive, or something else?
• How well did the newspaper editor handle the response?
• Compare data from these two articles about immigrants: The New York Times and Breitbart. What do they each analyze, and how do they present the data? How do you explain the differences?

Questions of Transparency

The long-awaited memo written by Republican staff members about potential impropriety from the Justice Department and F.B.I in the Russia investigation has been revealed. Now, The New York Times editorial board is calling, once again, for President Trump to reveal his tax returns:

Since the Republicans are now on board with greater transparency, they will no doubt push President Trump to release his tax returns, as every other major-party presidential nominee has done for the past four decades, won’t they?

How about the White House visitor logs, which the Trump administration started hiding from the public last year? Or, say, the names of all foreign governments and officials who have stayed — at their own or at American taxpayers’ expense — at Mr. Trump’s Washington hotel, at his Mar-a-Lago resort in Florida or at his golf courses and his other businesses since he became president? Or the names of every foreign business with which the Trump Organization has a financial relationship, especially in countries where America has sensitive foreign policy interests, like China, India, Russia, Turkey or Saudi Arabia?

The reasoning sounds like reciprocity, but the argument may not get no more traction now than it did during the presidential campaign. A Pew research study in January 2017 showed that 60% of those surveyed believed Trump "has responsibility" to release his returns. Although some were adamant about the release at the time, the Wall Street Journal, for example, reported that the returns wouldn't tell us much anyway.

Discussion:

• What are the advantages and downsides of President Trump revealing his tax returns?
• Read the entire opinion piece. What other arguments do the authors make?
• Do you agree with their reasoning? Why or why not?
• How would you describe the tone? Does the approach help or hurt the argument?

MSU President's Resignation Letter

After calls for her resignation, Lou Anna Simon, the 13-year Michigan State University president submitted her letter. She could not escape criticism that she knew of Dr. Larry Nassar's sexual abuse of students and didn't do enough. Simons admitted encouraging an investigation and not receiving the final report. Reports also say that at least 14 university staff members received complaints about Nassar over two years.

Although most of the board initially supported her, students and others did not, and in the end, the board chair wrote, "We agree with Dr. Simon that it is now time for change."

Simon's letter is a mix of sympathy for the victims, love for the college, and defeat. In this paragraph, she focuses on blame:

As tragedies are politicized, blame is inevitable.  As president, it is only natural that I am the focus of this anger.  I understand, and that is why I have limited my personal statements.   Throughout my career, I have worked very hard to put Team MSU first.  Throughout my career, I have consistently and persistently spoken and worked on behalf of Team MSU.  I have tried to make it not about me.  I urge those who have supported my work to understand that I cannot make it about me now.  Therefore, I am tendering my resignation as president according to the terms of my employment agreement.

Discussion:

• Critics say Simon shifts accountability in her letter, particularly the paragraph above. What's your view?
• Did Simon make the right decision? Why or why not? 
• What should the university do to help the campus recover from this situation? How can they rebuild trust and make MSU feel like a safe place?