Welcome to Professor Pick. Business school teachers will provide weekly curated FT article selections to connect classrooms to current events and develop critical thinking for students.
Read all submissions at www.ft.com/bschoolpicks. Save this link in Maft and receive an email alerting you with each new edition. Search for tags for related topics to describe educational points. Encourage students to participate in the discussion in the comments section below the article.
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Sustainability
ESG is beyond red: May it tear
Sustainability is real, and smart investors know it
Tags: Sustainability Return on Investment, ESG Investment, Sustainable Finance, Corporate Sustainability
Summary: Two professors at NYU Stern have opposing positions on ESG and sustainability, and have written an OP-ED to explain perspectives. We want students to review two works on weaknesses and strengths, and create their own resolve on topics based on analysis and class discussion.
Classroom Application: Sustainability for competitive advantage for undergraduate and MBA students can examine a variety of perspectives on corporate sustainability and return on investment for sustainable investment.
question:
Read both op-eds and summarize the key points
Which argument do you disagree with, and why?
Which do you agree with and why?
Are there any facts and numbers that support the author’s argument? If not, will it weaken the author’s position?
After reading both perspectives, where do you come up with the topics of corporate sustainability and ESG investment?
Tensie Whelan, Professor at the NYU Stern School of Business
Innovation, Marketing
The challenging economic situation is a good time for IKEA’: Swedish giants clean up town
Tags: Retail, Marketing, Sustainability, Innovation
Summary: IKEA has moved from traditional suburban megastolls to small urban format shops, adapting to changing consumer habits, including increasing online shopping and reducing car ownership. Despite the wider retail struggles and closures, IKEA is investing in premium locations and digital integration, betting that physical presence will boost online sales. Faced with environmental and ethical challenges, the company’s paradox — balancing mass appeal and sustainability — raises deeper questions about modern consumer culture.
Classroom Application: This article provides a platform for faculty and students to explore how one retailer is innovating to adapt to changes in consumer preferences, shopping preferences and sensibilities.
question:
Which of the changes in consumer preferences highlighted in the article will have a wide-ranging impact on IKEA and uniqueness?
What evidence is provided for this claim and do you agree with it? “Over the past decade, shopping behaviors and our lifestyles have changed dramatically. It has been accelerated by the pandemic.”
How have other retailers adapted (or enhanced) to the distorted approach to online and in-store purchases?
Which other retailers suffer from a similar paradox to IKEA?
How does IKEA’s legacy model represent a disruptive innovation, and to what extent does IKEA’s current pivot extend to its legacy?
Tom Davis, Clinical Assistant Professor, Joseph M. Katz Graduate School of Business, University of Pittsburgh
leadership
CEO’s silence
Tags: CEO Leadership, Ethics, Strategy, Interests/Shareholder Value
Summary: It is surprising that CEOs of major US companies remained significantly silent in the face of Donald Trump’s chaotic tariff policies and declined to express their dissent despite substantial evidence and expert warnings that such tariffs could lead to rising prices and lower unemployment.
While CEOs have significant financial and human resources responsibility, and their shareholders have already lost trillions, the majority seem to be extremely reluctant to stand up and openly challenge themselves, either personally or collectively, for fear of retaliation. This is one of the biggest failures of executive leadership in corporate history, characterized by a lack of courage and vision to protect the interests of its stakeholders. Most CEOs have extensive leadership training, MBA programs and coaching. So, important questions arise. Why don’t they apply leadership knowledge to actions, “Fighting for the right thing – for all of us, shareholders and frankly.”
Classroom Application: This article provides an excellent opportunity for executives/MBAs and graduate students to engage in discussions that stimulate thinking about CEO power, responsibility and moral duties in an age of significant disruptive change brought about by government actions and policy decisions.
question:
Is the CEO a moral obligation to publicly oppose government actions that could have a negative impact on key stakeholders, especially shareholders?
“There is only one social responsibility for business, and consider Milton Friedman’s mission in your reflection on activities designed to increase profits as long as they stay within the rules of the game.”
Is the US CEO actually doing Friedman’s mission?
What are the current “rules of the game”?
Does Friedman justify silence?
How can CEOs effectively oppose high-ranking officials?
This article advocates replacing CEO technocrats with “the true leader of vision and steel.” What is your perspective and what should “redefined” leadership look like?
What policies and incentives do CEOs need to ensure that their stakeholder interests are always prioritized during uncertain times?
What do you write about the legacy of current generation CEOs in “Leadership History Books”?
Professor at Queen Mary University of London, Stephen Krum Maker
economy
McDonald’s US sales have almost declined since the height of the pandemic
Tags: Brands, Business Cycles, Fast Food, Geopolitics, Nationalism
Summary: McDonald’s reported a 3.6% decline in U.S. roomy room sales (the biggest drop since 2020) due to economic uncertainty and reduced customer traffic amid the Trump-era tariffs. Visits to the low- and middle-income consumer fast food industry in the US fell by nearly 10%. Global sales also fell by 1% as emotions against America grew up overseas. Promotions like the $5 meal deal aim to revive demand. Revenue and net profit missed forecasts.
Classroom Application: This article provides an opportunity for faculty and students to analyse which businesses are the environment and companies are influenced by brand nationalism.
question:
Compare McDonald’s performance with competitors like Taco Bell and Chipotle. What role does consumer sentiment play in predicting performance in the fast food industry?
Why is it generally more sensitive to the business cycle?
We evaluate McDonald’s pricing and promotional strategies to assess as customer visits decline. Are they enough? Assessing the risk and rewards of limited time offers and promotion tying, like McDonald’s Minecraft Collaboration
Why do companies “tap” on country’s brand images? Find examples of companies with strong national identities and discuss how this backfires in an age of geopolitical conflict and brand nationalism.
How should MacDonald’s strategic plan be tailored to address the rise in anti-American sentiment in the international market?
Stefan Legge, Lecturer at St Gallen University
Finance, strategy
ai ‘application’ startups become big companies with new high-tech races
Tags: Funding, Large Language Models (LLMS), AI, Revenue Generation, Technology, Entrepreneurship
Summary: AI application startups like Cursor, Prperxity, Synthesia and 11 LeenLab are raising large amounts of funding and rapidly increasing revenue by creating tools useful for large-scale language models (LLMS) developed by Openai, Google and other companies. Within a few years, these companies have generated revenues of up to $200 million a year. This is driving the funding boom, where investment in AI apps doubles by 2024. However, customer loyalty, revenue sustainability, and the possibility that popular apps can be easily mimicked by popular software companies are still a concern. There is still a lot of ambiguity regarding the long-term market structure, but many experts see the surge in AI applications as a significant technological revolution on par with the development of the Internet and cloud computing.
Classroom Applications: Through a real-time case study on how AI application startups use large-scale language models (LLMs) created by industry leaders such as Openai and Google to increase revenue and capture critical investments, this article highlights the intersection of entrepreneurship, venture capital, technological innovation and business strategy. Just as some companies generate hundreds of millions of dollars in revenue in a few years, they provide information on the characteristics of startup growth much faster than the early tech generation. In addition to examining risk variables such as customer retention, product sustainability, and copying competition by large organizations, students can investigate discussions about investment decisions, particularly funding for “application layer” breakthroughs for “basic model” builders.
question:
Why do AI application startups outperform the early technology launch waves for revenue growth? What causes this acceleration?
What strategic differences are there between creating basic AI models for Google and Openai and creating AI applications? What are the advantages and disadvantages of investors?
What are the main risks of AI application startups, especially those associated with large tech companies, sustainability, and competition from customer retention?
How can AI app startups establish sustainable competitive advantages to prevent simple replication by larger players?
How can the simplicity of switching AI models help or hinder startups like Sierra? What does this adaptability teach other industries?
Will some venture capitalists hesitate to fund AI app startups, even if sales numbers look promising?
Case Discussion Positioning: AI applications are revolutionizing many industries by increasing productivity and creating new paths for creativity. Alibaba founder Jack Ma, who returned from exile, sat in the front row along with other executives during a meeting with Chinese President Xi Jinping last month. This was a very iconic gesture.
Gregory Stoller, Master Lecturer, Boston University Questrom Business School
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