20231024

Israel-Hamas War Puts Pressure on Companies to Speak Up

She echoed similar statements from chief executive officers at Goldman Sachs Group Inc., BlackRock Inc., United Airlines Holdings Inc. and other companies, who are facing increasing pressure to speak up on a conflict where the human cost is rising by the hour.

Crisis communications experts say their phones have been vibrating out of their pockets as CEOs seek help calibrating their messages both inside and outside their companies. With third-quarter earnings season ramping up, many companies won’t have a choice but to face investors, employees and other stakeholders who have come to expect their corporate leaders to weigh in on global events.

CEOs are “all asking the same question,” said Davia Temin, founder of New York crisis consultancy Temin and Company. “If you say something, it’s about what you say. But equally you are at risk if you say nothing, because silence is a statement, so silence is controversial, as well.”

Some employees said they were disappointed with the response, according to Slack messages in a group for Jewish employees seen by Bloomberg. One employee quoted the email the person had sent directly to Donahoe, writing the worker’s “heart is broken” that the CEO didn’t unequivocally condemn Hamas’ attack. Another called it a “good first step,” but questioned why a company-arranged fundraiser was designated solely for organizations in Gaza and not also in Israel.

In the days after the attack, the head of human resources at Instacart Inc. said she was “deeply saddened to see the extensive devastation and loss of life across the Middle East.” Workers at the grocery-delivery company, though, questioned why the senior leadership remained silent and more support from the diversity and equity team wasn’t forthcoming, according to internal Slack messages seen by Bloomberg News.

Instacart CEO Fidji Simo stepped into the fray three days later, mourning the “horrific terrorist attacks on Israel.” Hours later, she posted yet another message lamenting “the loss of all innocent lives” — “Israeli, Arab and Muslim alike.”

At German health-care giant Bayer AG, CEO Bill Anderson’s LinkedIn post condemning “acts of terror against civilians” was met with a barrage of comments taking umbrage against his statement of “solidarity with the people of Israel,” where Bayer has about 150 employees. Workers pushed back against a condemnation of violence that one sales specialist called “one-sided.”

The Israel-Hamas war comes amid debate over companies’ roles in social and diversity initiatives and the expectations of leaders at global companies managing large, diverse workforces.

“Once you get into this game, you cannot get out. That’s the expectation now, post-George Floyd,” said Paul Argenti, professor of corporate communications at the Tuck School of Business at Dartmouth.

While there was widespread condemnation over the death of George Floyd, companies have begun to scale back public statements on controversial topics to avoid alienating customers and investors. And for good reason — crisis consultants point to the swift outflow of donations in recent days at storied institutions such as Harvard University, highlighting the dangers of wading into geopolitical tensions.

After photos and videos surfaced on Instagram that showed franchised McDonald’s stores in Israel giving soldiers meals, calls to boycott the fast-food chain spread across social media. Operators in Saudi Arabia, Malaysia and Pakistan renounced the actions. In a statement posted to its Instagram account, the Israeli franchisee confirmed it donated 100,000 meals to soldiers, hospitals and nearby residents.

EK: I don’t see why corporations need to speak up on this war. It’s not about internal matters, not about internal stakeholders (given that the employees are not the “victims” in the war), and not even about external stakeholders unless the companies serve Palestinians or Israelis specifically. What’s the point of DEI initiatives for GEOPOLITICAL ISSUES that are historically and “politically” tainted? Obviously, Jew-dominated corporate America?

South Korea’s Naver Wins Saudi Deal to Build Digital Replicas of Mecca, Riyadh

South Korean internet leader Naver Corp. won a contract to build and operate a cloud platform for Saudi Arabia, securing its first major high-tech export to the Middle East.

Naver’s announcement came as South Korean President Yoon Suk Yeol and heads of major companies including Samsung Electronics Co. and Hyundai Motor Co. are visiting Saudi Arabia. They’re trying to win some of the kingdom’s industrial and mega projects, such as in Neom, a vast new city the Saudi government is building in the desert that is expected to cost over $500 billion.

The Korean company, which provides everything from a search engine to generative artificial intelligence, cloud and mapping services, beat a handful of global tech firms to secure the project. In March, Naver signed a non-binding agreement with Saudi Arabia to work together on digital transformation. Since then, Naver has hosted more than nine visits by senior Saudi officials at its second headquarters in Korea, a high-tech edifice where more than 100 robots roam around delivering coffee and meals.

EK: Life goes on while the war is on next door.

South Korea to Tap Africa as China Tightens Graphite Controls

South Korea is looking to African countries to secure graphite as China tightens its exports controls over the key material used in electric-vehicle batteries.

Mozambique and Tanzania are among countries that South Korea plans to tap into to address potential shortfalls, the trade ministry said Monday in a statement. Last week China strengthened export controls on some categories of graphite in a move it said will “safeguard national security and interests.”

China is the world’s largest producer of graphite and its announcement has raised alarm among major South Korean battery makers. Beijing said it will place graphite deemed highly sensitive under “dual-use item” export controls from Dec. 1.

Graphite is essential for producing EV battery anodes, a terminal inside a rechargeable cell. China’s announcement came days after the US bolstered efforts to keep advanced chip technology out of China. Beijing said its measures don’t target any specific country.

EK: Making new friends seems like a reasonable option, despite some shortfalls. EMs are a blue ocean to explore.

Gen Z Could Pay a Steep Price for Buy Now, Pay Later

As Gen Z aged into adulthood, studies emerged claiming they were the generation with the lowest levels of credit card debt. Well, of course they were: They couldn’t easily access credit cards.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 made it significantly harder for college-aged consumers to get a credit card. Gone were the days of banks hanging out on college campuses offering to sign up 18-year-old students in exchange for a cooler, frisbee or backpack. Today, you need to be at least 21 or demonstrate that you have independent income or have a co-signer.

The new rules did help keep young adults out of consumer debt, at least for a few years. It is only recently that Gen Z’s use of credit cards is beginning to catch up to other generations. But even before credit card usage increased, a new contender arrived. Buy now, pay later services such as Klarna and Affirm Holdings Inc. have lured Gen Z into consumer debt in the same way credit cards did with millennials and Gen Xers. Unfortunately, for now no laws protect young buy now, pay later users from getting in over their head financially. And buy now, pay later options don’t come with the perk of helping young adults build a credit history when they use the cards responsibly.

While buy now, pay later plans typically don’t charge interest, there can be fees for missed or late payments. Shoppers could also end up overdrafting their checking accounts if they set up automated payments and the funds aren’t there. Plus, damage can be done to your credit history if payments are significantly late or the loan goes into default and is turned over to a collection agency.

An additional concern is that a disproportionate number of buy now, pay later users are considered “financially fragile,” according to recent research from the Federal Reserve Bank of New York, meaning they would have difficulty coming up with $2,000 in the next month for an emergency. Nearly one-third of buy now, pay later users either have poor credit scores, have been delinquent on a loan payment within the last 12 months or have been rejected for a credit card.

EK: Regular concerns over credit card uses. Hopefully, they will learn to manage finances eventually, with or without paying for the expensive lessons.

Business Schools Grapple With How To Teach Artificial Intelligence

Business schools increasingly are adding AI components to their curricula to educate students about the technology and its application in business. The Kellogg School of Management at Northwestern University offers what it calls the MBAi, an artificial intelligence-focused joint program with the university’s McCormick School of Engineering. The master of quantitative management degree at Duke’s Fuqua School of Business includes new coursework on how the AI models work. And a new course at the University of Pennsylvania’s Wharton School, AI in Our Lives: The Behavioral Science of Autonomous Technology, addresses ways of improving managerial decision-making with data and algorithms. Meanwhile, New York University’s Stern School of Business has launched a program called GenerativeAI@Stern to train students, faculty and administration on best practices.

Dan Wang, a professor at Columbia Business School, says today’s AI courses must address the technology’s limits and opportunities. “The goal actually is not to advocate for or promote the use of AI tools, but rather for students to see, experience and understand the benefits, but importantly [also] the constraints,” Wang says.

“Right now there are a lot of older CEOs who think this is new, it’s scary,” says Emily DeJeu, a professor at Carnegie Mellon University’s Tepper School of Business. “They’re not even that sure how to use it. Expectations are sort of muddy at best down the chain. Leaders who communicate expectations and goals around AI just like they would communicate expectations and goals around anything else — that’s going to set leaders apart.”

AI also will factor into how businesses are structured and how they operate. Organizationally, it will grow to become a part of everyday communication, from email, memos, reports and marketing copy to product development through design, software engineering and other processes. Understanding this, too, will be as essential for future executives as mastering public speaking and learning how to lead a team.

For future leaders, the stakes are high: White-collar workers are facing the threat of automation for the first time, and government regulators around the world are struggling to keep up. Close to three-quarters of Fortune 500 chief human resources officers foresee AI replacing jobs in their companies over the next three years, according to a recent survey by polling firm Gallup. In May, International Business Machines Corp. Chief Executive Officer Arvind Krishna said the company expects to pause hiring for nearly 8,000 roles it thinks could be replaced with AI in the coming years. Whether other executives opt to downsize or retrain employees for new roles is a question that will have far-reaching consequences.

EK: Generative AI is kinda scary, I agree.