For decades, corporate boardrooms worked under the Chicago School of Economics mantra that an organization’s sole mission was to maximize shareholders’ profits. But last August, 181 CEOs from some of the most powerful companies in America decided that Milton Friedman’s guiding principle was no longer acceptable.
At a thinktank called the Business Roundtable, these executives issued a Statement on the Purpose of a Corporation, which tossed out the philosophy of profit above all and called for a change of priority in American businesses. In 300 words, the statement rejects profit as the primary goal of an organization and instead embraces a broader purpose—one that creates value for customers, invests in employees, protects the environment, and fosters diversity and inclusion.
This shift away from shareholders as the only (or most important) stakeholder marks a major move toward accepting social responsibility as a core principle guiding business practices. The statement was signed by a cornucopia of America’s most influential executives including Amazon’s Jeff Bezos, Coca-Cola Company’s James Quincey, and Fox Corporation’s Lachlan Murdoch, to name a few. Only seven members of the Roundtable did not sign the statement due concerns over its potential impact.
But the statement has critics, too. They denounce the notion that companies have an obligation beyond making profits for shareholders and say changes should come from investors, not CEOs.
The statement is not a doctrine; businesses are not being forced to adopt its tenets. But should they?
- Should the people who invest in a company (stockholders) be the primary focus of a business?
- Why do you think the business leaders who signed the statement added a commitment to “all our shareholders,” including suppliers and communities, as well as shareholders?
- Do you think all businesses should be accountable to society at large?
Testimonials—written recommendations about a product by a user or celebrity—are among the most effective marketing tools. But a recent scandal has put the practice in the headlines, shedding light on some unethical behavior.
Many testimonials include a photograph of a happy customer who has purchased the product and wants to share his or her positive user experience. Advertisers claim that testimonials without photographs don’t offer the same level of persuasion as ones with photographs, so these images play a large part in the efficacy of the advertisement.
Such was the case for a product sold by uBiome, a lab-testing company. On the company website, a picture of a young, handsome, smiling man was accompanied by his purported testimonial that said uBiome’s product helped him learn that “a lot of my immunity issues stemmed from the lack of bacteria in my microbiome.”
The problem was that the same man’s face can be found on multiple websites with different names and marketing a variety of products and services. An investigation revealed that the uBiome photograph was actually a stock image taken from Shutterstock.com, although the testimonial itself came from a customer account page or a survey. Government rules require that endorsements feature actual customers unless the advertising company reveals where the substitute image was obtained. That was not, however, what uBiome did. Subsequently, the company’s co-founders and co-chief executives were placed on administrative leave.
Using a stock photo the way uBiome did is quicker and easier than tracking down customers and obtaining permission to use their photos. But just because it’s easier doesn’t mean it’s legal.
- Why is it unethical to use a fake photo in a testimonial?
- Who should be held responsible for such lapses—the marketing manager, advertising director, CEO or all?
- Would you be more likely to use a product after reading a testimonial with a photo or without a photo?
Should the college experience focus solely on academic subjects, teaching students about theories and perspectives, developing literacy and critical thinking? Or would today’s college students be better off honing career-specific skills to groom them for the workplace?
Why not both?
This is the conclusion reached during a roundtable discussion between a panel of experts and sponsored by The Chronicle of Higher Education. The subsequent report, Preparing Students for 21st Century Careers,* gave advice on how collaboration between academic institutions, employers, and civic organizations would best prepare new workers in the coming decades.
The report details the disconnect between skills students think they need to be employable and skills employers demand of new employees. Students want a major that will land them a job upon graduation—employers need workers who are “versatile and resilient” and who will be able to change careers many times over their work lives. However, the problem is that majoring in a career-specific discipline does not adequately prepare students for the demands of the future workplace.
The panel of experts believes colleges can help close this gap by integrating the educational experience with career development by doing the following:
- Investing in stronger career counseling programs
- Making career development mandatory
- Building career skills into coursework
- Providing faculty development to help instructors update their pedagogy
- Incorporating problem solving and group projects into course work in conjunction with local organizations or nonprofits.
However, the panel also emphasized the importance of faculty continuing to teach in their disciplines, but in ways that teach students howto learn. In the future, the panel noted, today’s students will likely have several careers, and unless they learn how to learn, they will be at a disadvantage. The panel also emphasized that all graduates, despite their major, need certain skills—project management, information literacy, and computational understanding. These skills should be developed not outsideof the college experience but as part ofit.
- Have you taken advantage of career counseling resources on your campus?
- Why do you think many employers want new hires who know how to learn rather than graduate with specific knowledge?
- Why do you think employers consistently rank communication skills at the top of their “wants” for new hires?
*Download the report using this link.