When Hollywood Gets Political: Partisan Profits

Entertainment celebrities and businesses alike risk losing customers and thus revenue by taking positions publicly on political issues. Fearing a surge from political parties on the far-right, some large businesses in the E.U. took the unusual step of coming out against those parties, labeling them as “extremist,” prior to the E.U. election in June, 2024. Typically, businesses there limit their political stances to particular issues that bear on core functions. This is a prudent policy, for human beings, being of bounded rationality, can easily translate ideological disagreement into switching brands. Even universities can get bruised by becoming embroiled in a domestic or international matter that is controversial. Hence after the contentious spring semester of pro-Palestine protests at Harvard (and other many other universities), the university’s administration enacted a policy not to take positions on issues in which the core functions of the university are only indirectly touched or are not affected at all. In creating a “marketplace” for academic freedom, universities themselves are best positioned by staying neutral. Although it is tempting for anyone (for oneself or one’s institution) who has access to media to sway public opinion on a political issue, I contend that the immediate self-gratification is usually outweighed by lost revenue and the reputation of being partisan. Applying strict scrutiny to one’s foray into controversial issues is harder to do if some vocal customers are demanding that a position be publicly taken. The silence of other customers, who would “vote with their purse or wallet” were an opposing position to be taken, should not be overlooked.  The singer Taylor Swift and the actor Robert De Niro provide us with two illustrations. Stepping out of their respective domains comes at a cost in those domains, and thus should, I submit, be done prudently and seldom.

As Israel was bombing Rafah in Gaza in 2024, contravening two rulings of the International Court of Justice (i.e., the UN’s court), a significant number of “Swifties,” that is, fans of the singer Taylor Swift, pleaded on social media for the international celebrity to take a position against Israel’s aggression. One fan wrote, “Taylor, please say something. Your silence is hurting us. We need you to stand with Palestine and condemn the Israeli occupation and aggression.”[1] I submit that the alleged hurt was exaggerated by the teenager. I sincerely doubt that Taylor’s silence kept many Swifties from buying Swift’s recently released album. Had the singer taken a stand, on the other hand, her fans on the other side might do more than block Swift on social media. That is to say, Swift’s financial bottom-line would be more impacted, and negatively so. It seems very improbably that increased purchases by Swifties in favor of Palestine would surpass the loss of revenue from Swifties on the other side of the issue “voting with their purses and wallets.” The lack of symmetry here is behind my advice to celebrities not to take a position on a controversial political issue, or to do so knowing that a financial cost will come with the exercise of political influence.

To be sure, exercising political influence on a societal and even world stage is tempting. As one Swiftie wrote on social media of Swift’s latent power, “if she can rally all of us to vote, she had the power to speak up about injustice.”[2] More bluntly stated, Taylor Swift had the power to significantly influence elections. The ideological benefit to her in doing so is not trivial; my point is that in accruing such a benefit, she should know that it comes with a financial cost in terms of her core function. By 2024, she had made so much money that not earning as much as she otherwise could by taking a position on Israel and Palestine could have made rational sense to her. Yet possible hits to her reputational capital could go beyond merely losing some customers of her music.

As Israel was bombing Gaza, former U.S. president Don Trump was on trial for criminal fraud in order to commit a political crime. Robert De Niro, a movie star, went to the courthouse and castigated Trump, calling him a monster.[3] As a result, the National Association of Broadcasters rescinded its Service to America Award, which the actor was to accept in just days. A spokesperson for the organization explained that it “is proudly bipartisan, uniting those from across the political spectrum to celebrate the impactful work of local broadcasters and our partners.”[4] De Niro would be a “distraction.”[5] Hence he was disinvited from even attending the event. De Niro took the high road and wished the organization well. For him, the loss of the award and even any loss at the box office if Trump supporters would then “vote with their purses and wallets” was worth it. Like Swift, De Niro had plenty of money, no doubt, and great star-power; he could take some of it out for a spin—like taking a new car out for a fast drive—without fear that he would end up in the poor house. Even so, the question of whether the hit to his personal “brand” was worth the financial and reputational cost is worth asking. Perhaps the answer is yes only if his public condemnation of Trump would end up making a difference in the election that was still half a year away. To De Niro, the answer could have been yes even if not because of the psychological reward that he felt from standing up for something important to him. Even so, rationally it would still be wise to keep an eye on the brand.

In short, it is human, all too human, to want to have political influence on a societal or even a global scale, and to enjoy the psychological pleasure that goes with the expenditure even though it could mean fewer sales than would otherwise be the case and a hit to one’s reputational capital, or brand. Generally speaking, though, such immediate gratification may not usually be worth the long-term costs, both tangible and intangible. Balancing the immediate with the long-term is not something that we humans are particularly good at, and natural selection in the process of evolution is to blame. The time-value of money, an economic concept, stems from the human preference for instant gratification. It is for this reason that I contend that celebrities should as a rule stick to their core functions—stick to the knitting in the words of the business book, In Search of Excellence—and only branch out to “cash in” to influence a political matter only rarely if at all. Taylor’s silence wasn’t actually hurting anyone; she was being an astute businesswoman and thus acting in her best interest.

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1. David Mouriquand, “#SwiftiesForPalestine: Taylor Swift Urged to Speak Up on Gaza Conflict,” Euronews.com, May 29, 2024 (accessed June 3, 2024).
2. Ibid.
3. Dylan Donnelly, “Robert De Niro Has Award Withdrawn after Calling Donald Trump ‘Monster’ Outside Trial,” Sky News, June 2, 2024 (accessed June 3, 2024).
4. Ibid.
5. Ibid.

Time Magazine’s Person of the Year: Taylor Swift

Time magazine named the singer Taylor Swift as its person of the year for 2023. Such a force of nature were her stadium-filled concerts during that summer that they triggered economic booms in the respective host cities. In Pittsburgh, Pennsylvania, for example, hotel rooms went for as much as $2,500 downtown on the night of the concert. In terms of American culture, the analogy of gravity waves may fit. During an interview for television at her home (or one of her homes), Swift’s savvy business acumen was very evident; her marketing prowess was extraordinary. She even re-released her own songs, resulting in a huge financial windfall for what are really the same songs merely re-sung. It is not as if she had grown a new voice. Swift personifies American culture, whose “movers and shakers” seem “happy go lucky” on stage yet, behind the scenes, they tend to be lazar-focused on the business end. In short, considerable distance may exist between the societal image and the private business practitioner, and the ethical element can get lost in the shuffle and excitement.

To be sure, economics was evident in the “Swiftie” phenomenon during the summer of 2023. According to Time, Swift “achieved a kind of nuclear fusion: shooting art and commerce together to release an energy of historic force.”[1] Her Eras concert tour "brought in a whopping $1.04 billion with 4.35 million tickets sold across 60 tour dates."[2] Not just any singer can make such a haul and even trigger municipal economic booms and saturate the media’s attention worldwide simply by going on tour. Also, the magazine is clear that such a gargantuan amount of money brought in is not “something we often chalk up to the alignments of planets and fates,” for “giving too much credit to the stars ignores [Swift’s] skill and her power.”[3] In particular, her intense and sustained focus on every conceivable way, such as by re-recording existing songs and bundling them (admittedly with some songs from her vault) into albums in their own right, attending to merchandise and actively using the media for free publicity, to increase revenue leveraged, or made use of, her tremendous market power that was unrivaled; she dominated the airwaves during the summer of 2023. The “Taylor’s Version” albums provide us with an interesting case study wherein hype, money, and ethics are all in the mix.

According to Time, “Swift began releasing re-recordings of her back catalog in 2021 in an effort to reclaim her original music, after her initial label Big Machine Records sold her masters to Scooter Braun’s Ithaca Holdings in 2019. ‘Now Scooter has stripped me of my life’s work, that I wasn’t given an opportunity to buy,’ Swift wrote. . . . ‘Essentially, my musical legacy is about to lie in the hands of someone who tried to dismantle it.’”[4] I don’t doubt the authenticity of her emotive motivation here. In the vernacular, she was pissed.  Even so, if she had signed a contract with Big Machine Records giving it the unilateral right to sell the masters of her songs, and the purchaser has the legal right of use, then she had no legal or ethical claim to preempt the sale or be sold the masters outright. Of course, if labels write heavily unfair contracts essentially reflecting the commercial interests of the labels, taking advantage of the lack of bargaining power of new signers, ethical critique is fair game.

By its very nature, a contract is a coming together of (at least) two interests, with consideration (money) given by one party to the other. A residential lease, for instance, should reflect both interests. It should not restrict use of premises to be narrowed down to reflect only how the property owner would use the space or would like the space to be used. A property owner might prefer a “no guest” policy, but such as “policy”—the very word being presumptuous—violates reasonable use of premises. Furthermore, the property owner’s personal religious or moral lifestyle, for instance, should not bind the counterparty as long as the property itself is not damaged. “I don’t believe in eating meat, so you are not allowed to use the kitchen of your apartment to cook meat,” for instance, is presumptuous and dogmatic. More to the point, such a clause would violate or nullify the fact that in receiving rent, the property owner is selling the use of the space (as long as the property is not damaged). The mantra, “It’s my house,” taken as an absolute, is circumscribed when use is being sold for consideration (i.e., rent). Having it both ways is selfish and childish.

Whether or not Taylor Swift originally signed a one-sided contract is beyond my ability to investigate, given the information that I have. Her fans did not know either, and so, because of her emotional claim and her “star power,” her ethical cause resonated. Even so, it can be asked whether it is ethical to have hyped “Taylor’s Version” albums to the extent that buyers were willing to pay the full price of an album even if they had most of the songs already. To be sure, the “Taylor’s Versions” included “vault tracks”—songs not on the original albums. She also updated some lyrics. Even so, it can be asked whether the additional work justifies a full price of a new album. It can also be asked whether customers having receipts for the original albums, such as Fearless, should have been able to buy Taylor’s version at a discount. I submit that such a discount would be reasonable, given both the amount of additional work on Taylor’s part and the substance of the product (i.e., the extent to which it differs from the originals). A few songs from the vault and some new lyrics do not render the albums commensurate with albums filled with previously unreleased songs.

If Swift’s motivation was indeed to gain control of her songs, she should have agreed to a discount. Fearless (Taylor’s Version) had the biggest debut for any album in 2021, with 722.7 million on-demand streams in the U.S. that year.[5] Surely at least some of those customers already possessed the original album. Of course, the irrational exuberance that would cause such a customer to buy the same songs again can also be criticized, but many of her customers were teenagers and thus easily taken in even by orchestrated hype of good feeling seemingly aloft from the earthly taint of business strategizing. My point is that it is no accident that Taylor Swift made a lot of money essentially recycling songs ready for re-singing. She was not merely trying to regain control over her work. I submit that she was acting as a business woman, and a darn good one at that.  Her true identity—her driving financial ambition—was practically hidden under the blinding glitter of the “nuclear fusion” that Time magazine describes. My point is that the resulting sonic boom was orchestrated to coordinate and max out both the hype and the revenue. Behind the moral cause, behind the curtains, Swift’s financial acumen could be said to be a subterranean force of nature.

Such a force tends to be obscured, obfuscated, or, more often, intentionally hidden in the American entertainment industry. Similarly, elected representatives in Congress or the White House keep both their fowl tongues and their raw desire for power far away from the reach of microphones and cameras. In short, the sheer difference between private personas, including agendas, motivations, and even personalities, and the public images on the societal stage is astounding. Especially in politics in a representative democracy, this differential is a real problem that goes beyond the financial harm to young “Swifties” who have been subtly manipulated into buying (mostly recycled) songs at full price.

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1. Jordan Valinsky, “Taylor Swift Named Time’s ‘Person of the Year,” CNN.com, December 6, 2023.
2. Maria Sherman, "Taylor Swift's Eras Tour Is the First Tour to Gross Over $1 Billion, Pollster Says," APNews.com, December 8, 2023.

3. Valinsky, “Taylor Swift Named Time’s ‘Person of the Year.”
4. Mariah Espada, “Taylor Swift Is Halfway Through Her Rerecording Project. It’s Paid Off Big Time,” Time, July 6, 2023.
5. Ibid.

Corporate Social Responsibility or Increased Market-Share: The Case of Juul Labs on Youth Vaping

If the beneficial consequences for a society or the world are what externally validate corporations being socially responsible, does it really matter whether or not such benefits serve as the validators within the corporations? In other words, how much does the motive matter if stuff is getting done such that society is benefitting? To be sure, the motive can influence how much is getting done and for how long, but if the societal results are the same, would the nature of the motive really matter? I lay to the side the perfectly valid point that providing goods and services of value to customers benefits a society because consumers are, after all, a part of society. The interesting cases tend to be those in which profits can be expected to be negatively impacted from a socially responsible policy or program. Of course, a corporate management may announce the expectation of reduced revenue even as the management has carefully calculated how acting responsibly will be likely to be a profit-oriented strategy in the long term (including the related enhancement of reputational capital from appearing to have been self-sacrificial. The case of Juul Labs, Inc., the vaping industry leader in 2019 with a market share of 64 percent, shows just how difficult it is to get to corporate motives, even though the beneficial consequences to a society are arguably more important.

In 2019, Juul “voluntarily pulled its sweet, fruity and mint-flavored refill pods from the U.S. market.”[1] The company’s CEO pointed out in a meeting at the White House that flavors can help adult cigarette smokers switch to a less harmful alternative, so the company “would defer to the science-based approach of the Food and Drug Administration.”[2] President Trump had announced his intention to ban all flavors except that of tobacco. In refusing to follow Juul’s lead, NJOY and Reynolds American, Inc., makers of the second and third most popular vapers, kept selling all of their respective flavors, including those especially popular with teenagers.

Joseph Fragnito, a manager at Reynolds, said at the meeting, “We believe we can market flavors responsibly.”[3] At that meeting, President Trump, fearful of banned flavors being sold on the street and thus unsafe, was coming to the same stance. So had Juul gone too far in having taking kid flavors off the shelves if even those flavors could be marketed responsibly? In other words, had Juul lost revenue when the company could have changed how it marketed the inflammatory flavors? On the other hand, can flavors so attractive to teenagers be marketed in such a way that teenagers do not vape? In such a case, responsibly market may be an oxymoron, especially given that NJOY and Reynolds supported raising the minimum vaping age to 21. U.S. Sen. Mitt Romney, also at the White House meeting, supported Juul’s ban on certain flavors. “Putting out cotton-candy flavor and what is it, unicorn poop flavor?,” he said in reference to Juul’s competitors. “Look, this is kid product,” he added. “We have to put the kids first.”[4] Therefore, I submit that Juul applied responsibility better in banning such “kid product” than NJOY and Reynolds did in applying the concept to marketing the kid flavors.

This does not, however, absolve Juul with respect to its motive. At the White House meeting, the company’s rivals claimed that Juul’s management had voluntarily pulled its flavored products because it could sit out and wait for authorization from the Federal Drug Administration (FDA) as smaller companies went out of business. Then Juul would be able to come back with even more market share. Juul’s CEO countered that the company had banned its flavored products to address the problem of youth use. Whether or not the company’s socially responsible action was ultimately designed to increase market share or reduce the youth use of vaping—that is, to increase profits in the long-term or reduce teen vapers—the question is: Does this make any difference if the benefit to society in terms of less youth vaping is the same? I contend that the difference is ethical in nature, except from a consequentialist standpoint. In other words, an ethical basis exists—that of consequentialism—that essentially treats the question of motive as a non-issue.

Of course, if the societal benefits differ according to motive, the motive would matter even from a consequentialist ethical basis. If the motive of Juul’s management was to increase market share rather than see fewer kids vaping, then should the market-share strategy become compromised or fail, the societal benefits could be expected to be less than had the company’s management been intending to reduce youth vaping, which in turn could be expected to result in less government intrusion and greater reputational capital.  

Regarding the market-share strategy, could not young Juul customers simply start buying the sweet flavors from the other companies? Although they would have to justify their flavors to the FDA, the president was inclined to allow the flavors to be sold because otherwise kids might get them on the street. Would not Juul eventually go back to competing in those flavors? The other companies would not have gone out of business because the FDA would have approved the flavors. Juul’s management had pulled its flavors when President Trump was inclined to ban them industrywide. The changed politics, likely influenced by industry pressure (and perhaps campaign contributions), may have taken the wind out of the market-share motive, in which case the societal benefit would be less than had the motive been that of reducing youth vaping.

In conclusion, motive can matter even from a consequentialist standpoint because the amount of benefit to society can differ. In cases in which such benefits are the same even if the motive is one thing or another, the motive does not matter from a consequentalist standpoint. Even so, we want to think it does, ethically speaking. We want to assume that a management acting in a socially responsible way values doing so, rather than merely using social responsibility to earn more profit even in the long term. The field of business and society looks at the degree of fit between societal and company values, norms, or policies (as the corporate values may not matter), whereas business ethics delves into the ethical basis of a management’s motive. For example, is it enough that society benefits? Shouldn’t a company’s management want that consequence even if it comes with some financial loss (or opportunity cost)? These two fields are typically conflated at this point of contact. To say that Juul’s motive was in line with societal values is not to say what the motive should be. More than description is needed to get to normativity: the matter of should. We want to believe that Juul’s motive was the right one, but this is an ethical point that may not be relevant from a consequentialist standpoint. In terms of the degree of fit between corporate policies and societal values, the extent to which a society benefits is the litmus test.

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1. Jennifer Maloney and Alex Leary, “Trump Warns of Dangers in Banning Vape Flavors,” The Wall Street Journal, November 22, 2019.

2. Ibid.

3. Ibid.

4. Ibid.

McDonald’s Over-Reach: Blending a Restaurant and a Coffee Shop

In spite of essentially flat sales in the U.S. in February 2013 from the same month in 2012, McDonald’s CEO, Don Thompson, said he was confident that the people at the company had sufficient experience to “grow the business for the long term.” Even assuming that a business can be grown as if it were a geranium plant, the claim can be critiqued both in regard to the underlying assumption regarding “growth” and that of long-term viability. Fusing a restaurant with a coffee shop can be said to be an over-reach that had blended the company too much, at least at the store level.
In regard to the company’s long-term viability, changes in the business environment were important. The fast-food industry had obviously changed from 1970 to 2010, as did American society. As restaurant chains like McDonald's gained substantial economies of scale with the proliferation of restaurants, the increasing popularity of healthy meals gradually undercut the prospects for continued growth.

From "Americana" to "Enjoy Getting Fat": A change in the business environment in the last quarter of the twentieth century in the U.S. that impacted McDonalds at its core.    source: McDonalds.com

The management at McDonald's did relatively well in introducing healthy alternatives to its menu by 2010. The strategy also included blending the restaurant with a coffee shop experience, the enjoyment of which had also expanded due to Starbucks. To cut into that market, McDonald's introduced new drinks, such as smoothies, mochas and lattes, and added wireless internet service. As a result of having adjusted to the health-conscious and coffee shop mini-cultures in the business environment, McDonald’s U.S. sales rose 11.1% in February 2012 from the year before.[1] By 2013, Burger King was renovating its restaurants and adding "coffee shop" drinks too. Even so, the flat McDonald's sales figure in February 2013 was a bit of a surprise. Although the problem could have been the newly introduced fish product, I suspect that the market may have been questioning McDonald’s expansion into the coffee shop business as being an over-reach even it did enjoy certain synergies.
McDonald's was admittedly poised to give Starbucks a "run for its money" concerning that the giant coffeeshop chain had gotten away with mass-producing drinks to sell as premium prices. That coffee chain was essentially charging a premium price for non-premium products, given the manner of production. Even though McDonald's could undercut Starbucks on price and thus potentially gain market share, a McDonald's facility looked and functioned more like a restaurant than a coffeeshop where people would feel comfortable hanging out and getting work done or socializing. 
Adding to the discordance was the decision of McDonald's management to continue to stress the “dollar menu” for the “budget conscious” customer. Put somewhat delicately, the business strategy assumed that two very different market segments would co-exist in the same room. Starbucks had the same problem because of its "third place" policy, wherein people could hang out without purchasing anything. I know of at least one Starbucks' store in which the number of homeless "customers" has driven out otherwise paying customers. McDonald's management, through at least the 2010's, was essentially blurring the company's identity by seeking continued sales growth by trying to combine a restaurant with a coffee shop.
In general terms, a company’s senior management (or board of directors) should not get so caught up with important changes in the business environment that the resulting strategic change involves trying to remake the company into something the company is not. A fast-food restaurant is not a coffee shop. Although some people in the fast-food crowd would relish mocha, blending the social distance between the two cultures could result in a bitter drink that satisfies nobody. Had McDonald's management concentrated simply on adding new healthy fast-food (i.e., restaurant) products, sales would probably have improved without risking an identity crisis at the restaurant level. Alternatively, McDonald's could have built real coffee shops, with suitable furniture and decor, and synergies could still have existed. Perhaps fusing different lines of business, in cases in which each has a distinct culture and customer base, is not wise. To keep up with societal shifts and profit from them while not blurring the business’s identity is the sort of balance that a corporate management should attempt to reach and sustain in formulating strategy over the long-term.

For a critique of Starbucks, see Bucking Starbucks' Star, available at Amazon. 

1. Candice Choi, “McDonald’s Sales Drop Despite New Fish McBites,” The Huffington Post, March 8, 2013.

“No Loans” on Gun Sales: G.E. as Socially Responsible or Financially Savvy?

In the wake of the Sandy Hook school shooting in Newton, Connecticut in late 2012, General Electric announced that the company would no longer finance consumers’ gun purchases. Russell Wilkerson, a G.E. spokesman, wrote in an email that the new policy was being adopted “in light of industry changes, new legislation and tragic events that have caused widespread re-examination of policies on fire-arms.” In other words, the policy shift was not simply a reaction to Sandy Hook. Rather, the company’s executives were adapting to changes in the organization’s environment, including the industry itself. This opens up the question of whether the new policy can be classified under the rubric of corporate social responsibility (CSR). Perhaps the adaptation was simply good business, with the appearance of “CSR” adding some reputational capital through a good public-relations campaign.

Do business principles mandate treating this product like any other?  Source: NBC News

Well-meaning moralists in particular may have a tendency to project their own strident sense of obligation onto other people, and even organizations as if they too could be moral agents. Yet an organization, like a biological organism, must adapt to its changing environment, or risk being replaced by a competitor that has achieved a better fit to the new environment. Does such adaptation, which renders a company more fit by means of a sort of competitive natural-selection process, involve obligation manifested as responsibility to that environment, or is the adapting simply a matter of survival and even accruing surplus? To do one’s duty is not typically said of what a person wants to do anyway in line with self-interest. A person would quickly see through my claim that it is my duty to eat the remaining chocolate sundae so not to waste food. People do not typically fall over themselves to do something out of a feeling of duty or felt responsibility. For the sense of obligation or responsibility to be the primary motivator, the person (or persons, in the case of a company) must not otherwise be inclined, as from the anticipation of a benefit, to act. When stimulated, self-interest tends to eclipse the feeling of duty of responsibility. This thesis can be applied to GE’s policy on financing firearm purchases. 
First, though, can the policy be said to fall under the rubric of corporate social responsibility? What if marketing the policy was simply good business? The societal benefit in making it more difficult for people to buy guns may simply have been intended as a byproduct. Surely the societal good of a byproduct has worth even without having been motivated when the policy was chosen. Even so, the primacy of self-interest--the profit motive--irrationally taints the resulting societal good. Such a company's societal reputation would be enhanced by the good of the byproduct and decreased by the primary motivation of self-interest.  
How salient was the profit-motive in GE's decision to stop lending on gun sales, and how great was the impact in terms of the benefit to society, beyond the company? GE Capital Finance had already stopped providing consumer financing for new gun-shop customers in 2008. The policy change in 2013 merely extended the ban to existing customers. So it is not as though potentially new customers would be discouraged from buying a gun on impulse for nefarious purposes. The impact on the bottom line from lost sales could not have been assumed to be great; even if new and existing gun customers had been eligible for financing before the policy change in 2013, we would still be talking about a small fraction of GE’s revenue. Additionally, according to USA Today in 2013, GE’s “decision affects fewer than 75 retailers, which GE says is about 0.001% of all gun retailers.” This is because the policy “affects only retailers that sell firearms exclusively.” General merchandise stores, such as Walmart, were excluded from the company’s lending ban. 
However, Wells Fargo had stopped financing gun purchases in 2004 “for business reasons,” according to company spokeswoman Lisa Westermann. Perhaps it was good business at GE too, but not directly. 
Indeed, the "corporate social responsibility" policy as promotion could have been expected to boost sales companywide without much cost in foregone gun sales on credit to new customers in gun stores only. In fact, the policy as promoted could even be misleading, as in the article's title in USA Today, “GE Won’t Make Loans to Buy Guns” even though GE would still be financing guns—just not through stores that sell only guns. The gap itself between the publicized and actual policy could mean that the managers' intent had been to use “marketed CSR” to boost the company's reputational capital with as little cost as possible. In other words, the profit-motive was likely the motive. If most of GE’s lending on gun purchases was through multi-merchandise retail stores, GE could capitalize financially on sympathy from the school shooting without having to give up much financially. Interestingly, the shooter’s father, Peter Lanza, was a GE executive at the time—the company being based in Fairfield, Connecticut. Had other GE executives felt obligated, also being at such close range to the tragedy, to protect the kids, we would not have seen the sort of motivation that led to the exceptions and allowing the misleading storyline to go uncorrected. Were the primary intent that of protecting kids at schools from getting shot, the loopholes would not have been allowed to exist even if GE had to wait for contract renewals with general-purpose retailers such as Walmart.  
Often corporate social responsibility and business ethics are conflated. The distinction in this case is clear. The fitness of a policy to societal norms is a descriptive matter of whether organizational values are in sync with societal ones, whereas the misleading claim to have have ended loans on gun sales is a normative matter. Whether the norm in GE is consistent with the societal norm on the role of guns in the tragedies does not require justification by ethical reasoning and principles or theories. In contrast, whether a company should be misleading or even fail to stop it in the press necessarily includes resort to ethical principles, for only they can justify the claim that the motive or consequence is unethical. 
Still another lesson to take from this case involves the choice to wade into a controversial societal issue. As in the case of gun control, which is really about access to guns, entering a controversial debate puts a company at risk for being negatively viewed by the “other side.” This could significantly reduce the good  to the company obtained from the use of corporate social responsibility. 
A USA Today poll taken at the time of the policy change in 2013 found public support for new gun-control legislation “slipping below” 50 percent. GE risked many people agreeing with John Meek, the owner of a gun store in Illinois, who called GE’s policy “an injustice” because the instrument rather than the user is being blamed. Howard Schultz of Starbucks, in contrast, correctly judged the changing American attitude toward gay marriage in using the company to promote the cause, even if a CEO using a company for a personal political agenda is unethical. A dramatically changing shift in societal mores, norms, or attitudes is like a wave that managers strategizing corporate social responsibility programs and policies can ride, whether the motive is financial gain only or includes improving the social good. What might seem like an easy way to enhance a company's societal reputation can easily backfire if not done with attention to a changing business environment. 

Source:

Paul Davidson, “GE Won’t Make Loans to Buy Guns,” USA Today, April 25, 2013.

The Founder of Theranos: A Flawed Charismatic Vision and Leader

“Theranos rose quickly from being a college dropout’s idea to revolutionize the blood analysis industry to a hot tech bet that accrued $700 million in funding and many famous names for its board.”[1] Elizabeth Holmes, the company’s founder, was stripped of her position at the company in 2018 after the SEC discovered her deep involvement with the fraud at the company. Her “smarts, fierce determination and Steve Jobs-inspired look . . . were critical” to her being able to perpetuate the lie that the company had a device that could do blood tests with just a scant amount of blood, obviating the unpleasant experience of having blood drawn by needle.[2] Although Jack Welsh, Bill Gates, and Steve Jobs accomplished enough to warrant their fame, I submit that companies are too prone to create “champions”—even strangely calling them “rock stars.” In other words, even though charismatic vision is of value to a business, neither such a leader nor his or her vision itself should be overplayed. Business, I submit, has a marked tendency to do just that, and often with impunity.

The full essay is at "Fraudulent Charismatic Vision at Theranos."

On leadership vision, see Skip Worden, The Essence of Leadership: A Cross-Cultural Foundation

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[1] Marco della Cava, “Behind the Scenes of Theranos’ Dramatic Rise, Fall,” USA Today, March 16, 2018.

[2] Ibid.

Plato’s Justice: On the Conflict of Interest in Google’s Search Engine

“Google’s popularity was built on its ability to help people find just the right Web pages. Then came the social Web, led by Facebook.”[1] Then came the “fledgling Google Plus social network,” the content of which Google then included among other search results at its search engine. The idea, ostensibly, is to “personalize” internet searches.[2] In addition to expertise on a given topic, relevant comments and even pictures posted at Google’s social network may be listed, especially if from a friend. The added utility is debatable, however, particularly as content from other social media sites such as Facebook and Twitter is more in demand, according to Danny Sullivan of Search Engine Land. I question the relevance of even that content to a search on Google, given my searches up to now, though of course it is possible that someone’s post on X could be helpful if information on X is otherwise hard to come by. At the very least, Google ought to make it very easy for users to turn off the feature while at the search site.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

1. Claire C. Miller, “Google Adds Social Network to Search Results,” The New York Times, January 11, 2012.

2. Ibid.