JR Test Site News for 01-17-2018

Branson’s call: A new role for capitalism

Sir Richard Branson, founder of Virgin Group PLC, hopes it might some day become just as popular. For the British billionaire, it’s an ethos he hopes will spawn a movement to change the face of capitalism and improve the world. Attaching that number to our economic system is meant to emphasize that every business person has the responsibility for taking care of the people and planet that make up our global village. “It means reinventing how we live in the world to create a far more balanced, healthy, and peaceful place,” Sir Richard writes in Screw Business as Usual. He wants business people to break from the mindset and practices of the past – abandoning business as usual, and taking some unusual paths that can improve the world while still being consistent with their entrepreneurial, money-making instincts. His approach is not simply about not polluting – as many business people are trying to do – but of going further and undoing the pollution of the past couple of centuries, restoring harmony with nature. Now 61, Sir Richard oversees an empire of more than 200 companies, most built from instinct rather than bureaucratic calculation: He often responds to a tantalizing idea with his pet phrase, “Screw it, let’s just do it.” “I run Virgin Unite just as I would any other business, making sure that our investments have the best possible social and environmental return. I also feel strongly that it’s not just about the money – in fact, often money is the least important bit. It’s about people using their skills and figuring out ways to use the assets of their business to drive not only profits but a better world,” he says. Of course, foundations run by successful capitalists are not new, even if today’s wealthy believe they are taking a more businesslike approach. Sir Richard makes note of some other companies getting into the social-justice fray, such as the Paul Newman food line, which began under the motto of “Shameless exploitation for the common good” and has grown to more than 100 products with all the profits going to charity; and Montreal native Jeffrey Skoll’s Participant Media, whose movies such as An Inconvenient Truth, Fast Food Nation, and Darfur Now tackle important issues for a wide audience. The book is like an extended, sometimes dizzying, monologue by Sir Richard, with lots of wonderful examples of social energy that he lovingly shares with readers. Sometimes it’s hard to tell whether the ventures are philanthropic, non-profit, social enterprise or good-spirited capitalism, but maybe that’s beside the point. For Sir Richard, what matters is stimulating change – bringing people and ideas together, with business people worrying less about profit and more about redressing social and environmental ills. He quotes Ben Cohen, co-founder of the iconic ice cream company Ben & Jerry’s, at a leadership gathering hosted by Virgin Unite: “When business starts using its voice for the benefit of the country as a whole, not just its narrow self-interest, it can really be the force that can make the changes that need to be made.” Illinois-based consultant Matt Anderson has built his business through referrals; he shares his advice in Fearless Referrals.

Keywords: [“business”,”people”,”Sir”]
Source: https://www.theglobeandmail.com/report-on-business/careers/management/bransons-call-a-new-role-for-capitalism/article547837/

MOD Pizza’s Scott Svenson: People First

The serial entrepreneur’s latest venture, MOD Pizza, embraces what he calls “Enlightened capitalism.” Yes, the company aims for profitability, but not at the expense of its greatest asset – its employees. Many MOD Squaders find the fresh start that they need at the company, earning a level of trust that in turn creates a great customer experience. Spencer Rascoff: For today’s podcast, I stayed local in Seattle to connect with Scott Svenson, serial entrepreneur, pioneer of the fast casual pizza concept, co-founder and CEO of MOD Pizza, which is, incidentally, one of my kids’ favorite restaurants. Scott’s had a sequence of deliciously successful ventures, including Seattle Coffee Company in London, which was purchased by Starbucks as their entry point into Europe; followed by the Italian-style deli, Carluccio’s, also in London; and now in Seattle with MOD Pizza, which has grown 220 percent to over 125 stores today, with new ones opening almost every week. Talk to me about Seattle Coffee Company, this is a company that you started. So we complained about it for years, until some good friends of ours said, “You should either stop complaining about it or do something about it.” And so we decided, with encouragement, to start this company, Seattle Coffee Company, which was an attempt to bring both the Starbucks-style coffee experience, as well as a little bit of the Seattle culture and ethos to London. Being inside of a big company, where there was an – Howard Schultz took my wife and I out to dinner right after the deal was done, and the first thing he said to us was, “We love what you’re doing here in London. The way you’re approaching it, the culture, don’t change.” And then he said, “I want you to build a wall in the middle of the Atlantic Ocean,” and specifically he said, “Don’t let the bastards in.” And what he meant was -. So you sold Seattle Coffee Company to Starbucks, ran Starbucks Europe for a while, sampled retirement, dabbled in some other industries, and then you got bitten by the entrepreneurial bug again and started MOD Pizza. We started another company in the UK after Seattle Coffee Company called Carluccio’s, which was a very successful Italian deli-cafe concept. In 2007, we started the company, opened our first store in downtown Seattle in 2008, spent about a year trialing and realized we had something. In the first two chapters, both Seattle Coffee Company and Carluccio’s, they were very culture-driven companies. We evolved with MOD to add another dimension, which is to really put a significant and meaningful purpose behind the company. We bring new general managers -general managers are the people that run our stores, the most important people in our companies. We – my wife said this very, very early on when we were starting Seattle Coffee Company, which is you spend more time with the people you work with, generally, than you do with your spouse, and wouldn’t it be fantastic if we could find a way to combine those two. Rascoff: In speaking with Scott, I learned that leading a tech company and a pizza company really aren’t all that different.

Keywords: [“company”,”Rascoff”,”people”]
Source: https://www.zillow.com/office-hours/scott-svenson/

JR Test Site News for 01-17-2018

The Neuroscience Of Enlightenment

The Corporate Governance Green Paper: enlightened capitalism tempered by prudent reality

The Green Paper looks at the 2013 reforms to quoted company pay. Strengthen the UK Corporate Governance Code to provide greater specificity on how companies should engage with shareholders on pay, including where there is significant opposition to a remuneration report. In addition to suggesting means to strengthen shareholder powers on pay, the government also wants to look at ways of encouraging shareholders to make full use of their existing and any new powers on pay, and engage in active stewardship of the companies they own. The government recognises the “Challenging” role of remuneration committees in balancing a range of competing interests and considerations in setting executive pay, but believes that some committees are not “Sufficiently or visibly pro-active in consulting formally with shareholders and with the company’s workforce. There are concerns too, that some lack the authority or inclination to take positions that may not align with the CEO or wider executive team’s expectations.” Reducing the ability of companies to rely on “Commercial sensitivity” exemptions to the existing requirement to disclose bonus targets, either by increasing non-legislative pressure on future reporting through relevant governance bodies such as the FRC, or by requiring retrospective disclosure of previous targets within a specified date range. The government notes investor criticism of some aspects of current long term incentives plans, which are “The model of choice for almost all quoted companies. They aim to align directors’ incentives with the long-term interests of the company, on the basis of share awards which must be held for a set number of years, usually at least three years.” These criticisms include the relative crudeness of success measures such as earning per share or total shareholder return, and the encouragement of short-termism through short holding periods. The Green Paper argues that a consideration of wider stakeholder interests benefits both companies and society as whole. Section 172 Companies Act 2006: Duty to promote the success of the company. A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to -. The Green Paper discusses the current obligation on all companies to prepare a strategic report to provide shareholders with information that will enable them to assess how the directors have performed their duties under section 172 of the Companies Act 2006. It notes that the “UK’s strongest corporate governance and reporting standards are focused on public companies where the owners or shareholders are distant from the executives running the company. These standards provide independent shareholders with reassurance that the company is being run in their interests and that they have the information needed to hold the executive to account”, and that to date the differing ownership structure of private companies has meant that the governance standards expected of listed companies has not been extended to these businesses. The renewed focus on stakeholder interests and the Government’s view that “Society has a legitimate expectation that companies will be run responsibly in return for the privilege of limited liability” has led the Government to revisit where the corporate governance demarcation line is drawn. Applying enhanced governance standards through a new voluntary code for private companies – essentially a modified version of the UK Corporate Governance Code reflecting the different circumstances of private companies; and. Whilst the Government is inviting input on what threshold should apply to any future governance requirements for private businesses, the Green Paper does highlight the number of private companies and LLPs with over 1,000 employees, which perhaps provides some indication of the size of business the Government has in mind. The thoughtful alternatives put forward provide a constructive framework to advance discussion of the proper role that the consideration of stakeholder interests should play in the prudent management of companies.

Keywords: [“company”,”pay”,”government”]
Source: http://www.osborneclarke.com/insights/the-corporate-governance-green-paper-enlightened-capitalism-tempered-by-prudent-reality/

In the first part of the paper, a taxonomy is presented that describes the different types of economists interested in this subject-market economists, regulatory economists, and enlightened economists-and illustrates the extent to which each tribe has been captured by the concept of self-interest. A recent analysis of mentions of the term “Economist” in The New York Times shows that one in every hundred articles on all topics refers to the views of an economist, dwarfing the influence of other academic disciplines. Winston Churchill recognized this inequality of outcomes when, during a speech in the British House of Commons, he compared the merits of capitalism and socialism: “The inherent vice of capitalism is the unequal sharing of blessings,” he stated, “And the inherent virtue of socialism is the equal sharing of miseries.”3 1.2 Economists as Tribes The capitalist model presented above has captured the interest of a variety of economists and moral philosophers. Using this schematic model as a guide, we can subdivide economists into four tribes: market economists, regulatory economists, macro economists, and enlightened economists. 10/14/2015 7 Regulatory Economists: ‘Constrain Freedom’ While market economists have focused on how to improve the efficiency of organizations by leveraging self-interest, a second group of economists-regulatory economists-are interested in the second term of the capitalist model: freedom. Macro Economists: ‘Predict and Stimulate Aggregate Demand’ For the sake of completeness, I include a third tribe-macro economists. Because of the potentially injurious outcomes of the policies promoted by market economists and the drag of the policies of regulatory economists, a third group of economists is emerging-enlightened economists. “22 In response to these sentiments, enlightened economists are seeking radically new solutions to the seemingly intractable problems of our time. They attempt to think outside the box of existing paradigms. But there are limits as to how far outside the box any serious economist can venture. Unlike moral philosophers, no economist who wants to be taken seriously by professional peers can abandon self-interest as a first-principle organizing concept: Miller, for example, claims that self-interest is the”cardinal human motive” in the 21 In response to a question on the Phil Donahue Show in 1980. 23 Because self-interest is so deeply ingrained in the DNA of economists, enlightened economists have been forced to redefine the concept of self-interest to make it fit with their theories and normative prescriptions. At the heart of their argument, enlightened economists insist that business executives must subjugate their self-interest and freedom to benefit the common good. Not surprisingly, the theories of economics purportedly offer solutions-whether developed by market economists, regulatory economists, or enlightened economists. Market economists are animated by opportunism and modelling the principal-agent roles of stockholders and CEOs; regulatory and enlightened economists focus on the interests of a broad range of stakeholders that might be harmed by errant corporate behavior. In practice, such intrinsic drivers are rarely consequential in the models of organization developed by economists. 2.3 Implications for Business Schools The economic theories used to describe business practices-whether promulgated by market economists, regulatory economists, or enlightened economists-have had, and will continue to have, enormous impact. Rather than the plethora of rules and regulations advocated by regulatory economists or the highly-leveraged CEO rewards favored by market economists, economists might become interested in understanding the nature of the boundary systems that managers use to declare certain behaviors and initiatives off-limits, thereby staking out the domain for creative innovation and risk-taking and, at the same time, inoculating the business from wrongdoing.

Keywords: [“Economist”,”self-interest”,”business”]
Source: http://www.hbs.edu/faculty/Publication%20Files/16-045_2276e3cd-ab73-4ee8-b494-59488e6e1f0b.pdf

JR Test Site News for 01-17-2018

Enlightenment and Its Critics by Nadia Bou Ali

The West Point of Capitalism

Writing to H. G. Wells in 1906, William James lamented “The moral flabbiness born of the exclusive worship of the bitch-goddess SUCCESS.” Alarmed by the devotion this deity elicited from his avid Harvard undergraduates, James diagnosed as “Our national disease” the “Squalid cash interpretation put on the word success.” Two years later, Harvard Business School opened its doors to its inaugural class of the divinity’s curates. Duff McDonald is savvier than James about the ways and ruses of the gilded goddess, but he leavens his remarkable history of Harvard Business School with a kindred outrage. A contributing editor at the New York Observer and a writer for Fortune, Vanity Fair, the New Yorker, and other periodicals, McDonald is one of the nation’s finest business journalists. In his sprawling and capacious new book he chronicles the nation’s most prestigious business school-sometimes referred to as “The West Point of capitalism”-with an engagingly ambivalent blend of admiration, effrontery, and cynicism. Tracing HBS from its exalted inception to its unabashedly mercenary present, McDonald provides a gargantuan case study in hubris and self-delusion. Like other business schools that were established at the time-Wharton at Penn, Tuck at Dartmouth, Sloan at MIT-HBS emerged from the crucible of the corporate reconstruction of American capitalism. As small proprietors were increasingly engulfed or eclipsed by corporations in the decades after the Civil War, economists and capitalists forged a new conception of business activity and education. In this view, HBS and other business schools taught the sophisticated, even recondite skills required for success in the brave new corporate world. While being transfigured into a “Profession,” business also morphed from the “Trucking and bartering” described by Adam Smith into a “Science” comparable to other bodies of knowledge with disciplinary protocols. At the same time, business leadership assumed a more mandarin, platonic countenance; more than a cadre defined by organizational prowess, it was seen to comprise the philosopher-managers of a prosperous corporate republic. As the school’s first dean, Edwin Gay, explained to trustees in 1909, “We believe there is science in business,” and HBS graduates would be men with “Breadth of view and an inclination for learning.” Harvard’s humanist ancien rĂ©gime recoiled; business students, they feared, would pollute the groves of academe with their swinish avarice and careerism. As the literary critic John Jay Chapman scolded an HBS audience in 1924, it was “Vanity and ignorance” to think that a business school is anything more than “a school where you learn to make money.” But the sanctimonious fantasy of corporate management as the enlightened elite of capitalism persisted. Seeking to drape business in the raiment of professionalism, HBS employed the renowned “Case study” method-a compendium, as McDonald characterizes them, of “Sanitized versions of corporate heroism” that, in his view, impairs the ability of graduates to adapt quickly and deftly to changes in markets and technologies. In his seven-year stint at the helm of the war machine, McNamara supervised a carnage that claimed the lives of nearly sixty thousand Americans and millions of Vietnamese, a mass production of death and dispossession facilitated by the methods he learned at HBS. So was there really such a great metamorphosis? In his penetrating chapter on McNamara, McDonald attributes the war’s ferocious futility to the data-driven nescience of “Slide-rule commandos.” Oblivious to the elusive or unmeasureable-commitment, tenacity, or intrepidness, especially on the part of the Vietnamese-McNamara and his fellow technocrats of slaughter thought of war as a venture in statistical analysis, not unlike marketing at Ford.

Keywords: [“Business”,”HBS”,”War”]
Source: https://www.commonwealmagazine.org/west-point-capitalism

The Frankfurt School

Working at the Institut fur Sozialforschung in Frankfurt, Germany in the late 1920s and early 1930s, theorists such as Max Horkheimer, T.W. Adorno, Herbert Marcuse, Leo Lowenthal, and Erich Fromm produced some of the first accounts within critical social theory of the importance of mass culture and communication in social reproduction and domination. Moving from Nazi Germany to the United States, the Frankfurt School experienced at first hand the rise of a media culture involving film, popular music, radio, television, and other forms of mass culture. Adorno’s analyses of popular music, television, and other phenomena ranging from astrology columns to fascist speeches, Lowenthal’s studies of popular literature and magazines, Herzog’s studies of radio soap operas, and the perspectives and critiques of mass culture developed in Horkheimer and Adorno’s famous study of the culture industries provide many examples of the Frankfurt school approach. In their theories of the culture industries and critiques of mass culture, they were among the first social theorists its importance in the reproduction of contemporary societies. The Frankfurt school theorists were among the first neo-Marxian groups to examine the effects of mass culture and the rise of the consumer society on the working classes which were to be the instrument of revolution in the classical Marxian scenario. The Frankfurt school focused intently on technology and culture, indicating how technology was becoming both a major force of production and formative mode of social organization and control. In the realm of culture, technology produced mass culture that habituated individuals to conform to the dominant patterns of thought and behavior, and thus provided powerful instruments of social control and domination. Victims of European fascism, the Frankfurt school experienced first hand the ways that the Nazis used the instruments of mass culture to produce submission to fascist culture and society. While in exile in the United States, the members of the Frankfurt school came to believe that American “Popular culture” was also highly ideological and worked to promote the interests of American capitalism. Freed from the mystification of high culture, Benjamin believed that media culture could cultivate more critical individuals able to judge and analyze their culture, just as sports fans could dissect and evaluate athletic activities. The Frankfurt School also provide useful historical perspectives on the transition from traditional culture and modernism in the arts to a mass-produced media and consumer society. Mass culture for the Frankfurt School produced desires, dreams, hopes, fears, and longings, as well as unending desire for consumer products. Thus, the Frankfurt school theory of the culture industry articulates a major historical shift to an era in which mass consumption and culture was indispensable to producing a consumer society based on homogeneous needs and desires for mass-produced products and a mass society based on social organization and homogeneity. Of course, media culture was never as massified and homogeneous as in the Frankfurt school model and one could argue that the model was flawed even during its time of origin and influence and that other models were preferable, such as those of Walter Benjamin, Siegfried Kracauer, Ernst Bloch, and others of the Weimar generation and, later, British cultural studies. The original Frankfurt school model of the culture industry did articulate the important social roles of media culture during a specific regime of capital and provided a model, still of use, of a highly commercial and technologically advanced culture that serves the needs of dominant corporate interests, plays a major role in ideological reproduction, and in enculturating individuals into the dominant system of needs, thought, and behavior.

Keywords: [“culture”,”mass”,”cultural”]
Source: https://pages.gseis.ucla.edu/faculty/kellner/papers/fs.htm