BGA | BUSINESS IMPACT
Yet, layering ESG modules onto business- as-usual curricula, as many Schools do, is an insufficient response. ESG is but a part of the political aspects of business, aspects that go much deeper to reach the very way we conceptualise what business is all about. If students go away believing that it's ok to keep thinking how we’ve always thought, keep doing what we’ve always done, and that today's context asks only that businesses are a little bit nicer about it and tick all the boxes around ESG, then these modules could end up doing more harm than good. This new era requires businesses to accept that they are part of our panoply of political institutions and to become increasingly reflexive about their political roles. This requires a deep understanding of the political way of thinking and its incorporation into all aspects of business purpose, strategy and operations. Business School students need to be prepared for this new reality.
own employees, interviewed this week in the Financial Times , said they supported Mr Trump’s policies.’ Why? Getting back to our previous quote, from the University of Edinburgh’s Christina Boswell, politics is about, ‘tapping deep-rooted values and beliefs, rather than invoking objective self-interest’. Trump tapped those values whereas management might have imagined that the workforce would blame the President for a bad decision while considering their own decisions perfectly 'rational'. A perfect example of the difference between thinking in narrow financial terms and thinking politically. What seems right from one perspective seems utterly mistaken from another. In the Harley case, so-called ‘business- focused decisions’ went against the value system of its employees. In other cases, employees’ political views end up driving business decisions. In 2018, Google took itself out of the Maven contract with the US Department of Defense after a staff outcry against the company agreeing to let its AI technology be used for military purposes. Yet more politics. Dropping out of the contract put paid to potential future work that could have earned Google some $10 billion USD over a decade. Earlier that year, employees at both Microsoft and Salesforce had protested against their companies' work for US Immigration and Customs Enforcement (ICE) in opposition to President Trump's policies that separated children from their parents. Microsoft CEO, Satya Nadella (an MBA alumnus of the University of Chicago Booth School of Business) issued a memo to employees with an explicitly political title: ‘My views on US immigration policy.’ In it,
Politics drives performance Let us look at some examples of
how political thinking is driving business performance. When former US President, Donald Trump, slapped tariffs on imported steel, Harley-Davidson (Harley), an icon of US manufacturing, decided to shift some of its production out of the US – a business decision. US workers were going to lose their jobs. One worker, interviewed by the media during this process, understood that he might lose his job and was asked whether he thought Trump had made the wrong decision in imposing tariffs (the business view). His response surprised the TV interviewer. ‘Yes, I know I might lose my job. But it was still the right decision. We must stop others exploiting America through unfair competition.’ His ire, in as much as there was any, was reserved for management rather than Trump. At the time, the Financial Times also interviewed a number of Harley employees and, in June 2018, reported: ‘Many of Harley’s
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he denies that Microsoft was working on anything that related to the child separation policy.
The memo opens with politics: ‘Like many of you, I am appalled at the abhorrent policy of separating immigrant children from their families at the southern border of the US.’ He
‘This new era requires businesses to accept that they are part of our panoply of political institutions’
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