Los Angeles EMBA
Arvind Bhambri
Theme 6
2014
Friday, August 29, 2014
Values and Global Strategy (1)
Apple came under heavy criticism when harsh labor practices at Foxconn, a major Apple
supplier, became headline news. This experience is not unique to Apple; instead, any global
company that operates in multiple countries through subsidiaries or partners faces similar
scrutiny. To understand the challenges of operating in multiple countries with different
legal and societal standards, we will start with a case on Nike. Like many other companies,
Nike expanded its international sourcing by working with independent contractors to
access low cost labor in its overseas plants. What started as a “simple” and fairly common
corporate practice suddenly escalated into emotional high profile media criticism about
human rights and globalization. We will use the Nike case and some recent Economist
articles on Foxconn and other companies to discuss the values and ethical dimensions of
global strategies.
Discussion Questions
1.
Does Jeff Ballinger have a convincing argument about Nike? Does Nike have a
convincing response?
2.
How well has Nike handled the publicity surrounding its labor practices? Could or
should the company have done anything differently?
3.
What is a “fair” wage in Vietnam? In Indonesia? How should Nike think about it?
Should Nike pay a competitive local wage or does it have an obligation to pay more? Why?
4.
What should Apple’s approach be in addressing labor issues with Foxconn?
Readings:
Hitting the Wall: Nike and International Labor Practices
HBSP 9-700-047
Hitting the Wall: Nike and International Labor Practices Spreadsheet Supplement
HBSP XLS304
Values in Tension: Ethics Away from Home by Thomas Donaldson, HBR 96502
Foxconn: When workers dream of a life beyond the factory gates. Economist, December
12, 2012.
Home or abroad? Herd instinct. Economist, January 19, 2013.
Saturday, August 30, 2014
Values and Global Strategy (2)
Yesterday, we discussed how MNCs should address pressures that, if handled improperly,
can hurt a company’s brand and reputation. Today, we will take a different, more proactive
view. Do MNCs, in view of their vast reach and deep resources have a responsibility to
make a substantive positive impact on society? If so, how should companies balance
corporate profitability with corporate social responsibility? And how should this balance
alter their approach to global strategy?
Discussion Questions
1.
Can major food and beverage companies such as PepsiCo play a constructive role in
addressing social and ecological costs associated with the industry (e.g., obesity and
environmental degradation)? Why or why not?
2.
Do large global corporations have a special responsibility in this area?
3.
How has the food and beverage industry responded to criticisms?
4.
What is your assessment of PepsiCo’s initiatives? To what extent should
sustainability and corporate social responsibility be more or less central to PepsiCo’s global
strategy?
5.
What recommendations would you make to Nooyi and to PepsiCo?
Readings:
PepsiCo, Profits, and Food: The Belt Tightens
9-314-055
Bhambri Materials:
1.
2.
3.
4.
5.
Hitting the Wall: Nike and International Labor Practices
HBSP 9-700-047
Hitting the Wall: Nike and International Labor Practices Spreadsheet Supplement
HBSP XLS304
Values in Tension: Ethics Away from Home by Thomas Donaldson, HBR 96502
Foxconn: When workers dream of a life beyond the factory gates. Economist,
December 12, 2012.
6. Home or abroad? Herd instinct. Economist, January 19, 2013.
7. PepsiCo, Profits, and Food: The Belt Tightens
9-314-055