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Business and Society

There is substantial talk now about the concept of Greenwashing where environmentally conscious efforts are destabilizing for-profit businesses. There is the fear of overdoing it. Yet that may not be true as several formerly ruthless businesses have now buckled down and looking to fruitfully engage with the community on social and environmental causes. The list includes the likes of BlackRock, Shell and Vanguard. In order to strike the right balance, and ensure maximum rewards for different stakeholders, companies need to properly define and map social responsibility. Proper reporting tools need to be used so that tangible evidence can be provided. The social responsibility must emanate from the very top, but not as an isolated case. It must be included in the corporate strategy itself so that it finds alignment with the business goals. The social responsibility goals must then be clearly communicated to the staff. A phased divestment helps. Follow up must be done by the company board.

Source:https://knowledge.insead.edu/blog/insead-blog/big-investors-call-for-company-attention-to-social-purpose-what-next-8451

Uploaded Date:16 March 2018

Every few generations major changes take place which shake the very foundation of the existing societies. We are going through one such period, though not it is even more strongly pronounced, thus called mega-change. Newer business models are manifesting themselves regularly while incumbents in different industries are losing ground. There are likewise societal changes accompanying the work pattern evolutions. There is growing anxiety in the developed markets regarding potential job losses due to automation. There have also been geo-political changes and related ramification across the globe from Russia to Venezuela and from Syria to France. A lot of countries have been slow to react to these changes and related business innovations. There is a dire need to bring the world together as happened in 1945, but it needs factors which will be very different from the Marshall Plan which was then implemented to rebuild post-war Europe.

Source:http://knowledge.wharton.upenn.edu/article/161018b-kwr-westbook/

Uploaded Date:03 March 2018

The Big Four of Silicon Valley’s tech industry- Apple, Amazon, Facebook and Google- are responsible for some of the breakthrough innovations over the last decade, and at present are financially rich beyond the norms at any other era. Their investments have helped other companies come out of the recession, have helped spawn new online or mobile based businesses, helped propel the field of digital marketing, and are now major recruiters from college campuses. Yet, the time has come to break them up, as they have now become too big, so detrimental to the overall economy. Their net worth is now well over the combined levels of legacy companies in several other major industries. Yet, they are not paying the kind of taxes, or generating employment that they are easily capable of. Quite to the contrary, these companies’ huge data warehousing machineries enable that they now know all dark secrets for a huge proportion of the population. They have also caused massive inequality and are now striving hard to develop automations, that will render a large proportion of people unemployed and skills irrelevant. Their deep involvement in government projects gives them further access to sensitive public data. While Google or its renamed avatar Alphabet is a mind-altering platform, Facebook targets the heart. In spite of the great progress the American middle-class made between 1941 and 2011, now the real wages for all classes in the US is declining. Markets too are failing, while monopolies are emerging in every known sphere.

Source:http://www.esquire.com/news-politics/a15895746/bust-big-tech-silicon-valley/

Uploaded Date:01 March 2018

The old adage “the trend is your friend” holds true today, more than ever before. This is due to shifting growth, rise in social tensions and accelerated disruption. Companies that are leveraging these tailwinds of change, are the ones most likely to progress at far faster rates than those on the more normal of curves. More people are physically healthy, literate and entering the middle class, but the post-Cold War global order has been disturbed. There now exist some major global forces and their subsequent interactions. Spaces where concentrated forces run through may be termed as the crucibles. One is the shift in global growth to markets such as the BRIC countries- Brazil, Russia, India and China- or those of Southeast Asia and Africa. Accelerating industry disruption has led to Alibaba founder Jack Ma renaming the B2C segment as C2B. This implies that businesses these days take decisions based on customer insights gleaned from the huge deposits of data warehousing done by organizations. There is also a new societal deal where cybercrimes are increasing so collaborations between businesses and governments need to be smoother. Globalization seems to have taken a hit with the Brexit decision and the US exit from the TPP. Cross-border data flows though are on the rise. Economic power has further alleviated China’s political power with the establishment of the OBOR initiative. The advances in business analytics, Internet of Things and automation have halted the obsession with greater material cravings. Resource production and its utilization is now being diversified and driven by these new technologies.

Source:https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-global-forces-inspiring-a-new-narrative-of-progress?cid=other-eml-ttn-mkq-mck-oth-1712

Uploaded Date:01 March 2018

The pro-Brexit vote and the results in the US elections of 2016 signalled a dark time in the history of human collaboration and globalization. This follows less than a decade after the financial crisis that emerged in the US followed by a massive debt and banking crisis in Europe. In the US and UK, society itself seemed split in 2016 during these two landmark votes. Five major shifts have been observed about the world now. One is a rise in income inequality. To put things into context, as per business intelligence provided by an Oxfam report, just eight people now own as much wealth as more than three-and-a-half billion other people do. The second major shift has been technology causing change in the nature and availability of jobs. A third is rising protectionism in business all over the world, especially among the traditional economic giants in the west. Recent election results in France, the Netherlands and significantly in Germany show that in spite of efforts by right-wing parties, majority of the people voted in favour of globalization and liberal principles. There is also the growing concern of immigration especially of refugees from war-torn countries such as Syria, Afghanistan and Iraq. Their integration into mainstream societies in their new homes will be a major challenge. A final concern is the growing role of digital marketing through social media outlets in influencing people’s thoughts.

Source:http://knowledge.wharton.upenn.edu/article/what-are-the-top-five-challenges-for-international-organizations/

Uploaded Date:19 January 2018

Microsoft founder Bill Gates proposed a radical idea by claiming that governments should impose a “robot tax” in order to save human employment and to make up for the tax losses accrued due to automation. While this was generally met with derision, a team of researchers led by a finance professor from Kellogg decided to go behind the scenes and test this scenario. During this business research, they found out, much to their surprise that the income gap will actually increase as a result of increasing automation. Routine workers will suffer most as their jobs are easily replaceable by machines, so they will need to work at constantly reducing real wages. Non-routine workers such as scientists and doctors though will prosper as their expenses will go down and robots are able to perform routine tasks at a far quicker pace. To put things into perspective, the US economy already is suffering as a result of inequality with real wages having increased only for college graduates since 1979, but depressed for every other educational group. In the long run, the income of non-routine workers will also go down as they will have fewer people to lend their services to as a result of generally lowered wages. Real production will not rise then. South Korea so far is the only country to have introduced such a robot tax.

Source:https://insight.kellogg.northwestern.edu/article/how-a-robot-tax-could-reduce-income-inequality/amp?__twitter_impression=true

Uploaded Date:19 January 2018

 

In the 1930, a mathematician Nikolai Kondratieff was tasked by the Soviet Union to prove that capitalism was bound to fail. His research instead found that while capitalism tended to reinvent itself after every crisis, technology explained the rise and fall of human societies. His theory dubbed as the K-waves proves that after every five to six decades, technological disruptions lead to business innovations. Spectral analysis has proven his theory starting from the 1770s. The last fifteen odd years in each cycle tends to bring about a crisis with the present ongoing from 2015 till 2030. The last crisis sub-phase was between 1965 and 1980. A look at Irish airliner Ryanair gives us a peek on how business models will evolve. For each choice that Ryanair takes, an equal consequence too takes place. Its choice of secondary airports leads to low airport fees, standardised fleets of 737s gives way to a bargaining power with suppliers, single class means economies of scale and so on. The next cycle of capitalism will begin from 2030 involving Artificial Intelligence (AI), Human Enhancement Technology (HET), geographical dispersion, extreme mobility, new raw materials coming from space and finally solar, wind and biomass forming a new energy matrix.

Source:https://knowledge.insead.edu/strategy/the-next-cycle-of-capitalism-5226

Uploaded Date:21 October 2017

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