Reciprocity in the News

Students of persuasion likely learned about reciprocity. In my class, we discuss reciprocity as a logical reasoning type and as one of Cialdini’s six principles of persuasion. We also talk about quid pro quo, meaning “this for that,” as a type of sexual harassment.

Steven Pinker, a cognitive scientist at Harvard, wrote an opinion piece in the New York Times titled, “A Linguist’s Guide to Quid Pro Quo,” referring to the discussions between President Trump and Ukrainian President Volodymyr Zelensky.

President Trump and his supporters have gone to the heart of the issue, denying any quid pro quo. Senator Lindsey Graham of South Carolina tweeted, “What a nothing (non-quid pro quo) burger.” Defenders also say that this type of reciprocity is common for political leaders.

Pinker believes that an explicit “if,” “then” construction isn’t necessary for a quid pro quo agreement:

It’s true that the transcript of the reconstructed conversation does not reveal a smoking sentence with an “if” and a “then.” But to most readers, Mr. Trump’s claim that he was merely musing about his druthers does not pass the giggle test. That is because people in a social relationship rarely hammer out a deal in so many words but veil their offers in politeness and innuendo, counting on their hearers to listen between the lines.

More typically, we see politeness in reciprocal transactions. During the call, President Trump said, “I would like you to do us a favor though.”

This article also raises issues about a “transcript,” which he describes as a reconstructed conversation. The summary isn’t verbatim, and it’s unclear whether a recording exist.

Discussion:

• Describe reciprocity as a method of influence. What is the value to business relationships, and what dangers should be avoided?

• Talk about a time when you practiced reciprocity, but it felt imbalanced—either for you or for the other person? How did it feel? How can avoid this in the future?

• In this case, do you think President Trump crossed a line, or do you believe his statement, “There was no quid pro quo”?

LeBron James Enters the Tweet Debate

As the NBA struggles to recover after Houston Rockets General Manager Daryl Morey tweeted in support of Hong Kong protesters, LeBron James questioned Morey’s choice:

“Yes, we all do have freedom of speech. But, at times, there are ramifications for the negative that can happen when you’re not thinking about others, when you’re only thinking about yourself. . . . I believe he wasn’t educated on the situation at hand, and he spoke. And so many people could have been harmed, not only financially, but physically, emotionally, spiritually. So just be careful. . . .”

The Wall Street Journal reports that people were “stunned” by his comment because James is typically careful about his public comments.

Discussion:

• What’s your view of James’ commenting on the situation? Should he have avoided commenting? Why or why not?

• What’s your view of his comments? How well did he handle the situation?

• What leadership character dimensions are illustrated by James’ comments?

NBA Tweetstorm

The NBA is thrust into a political quagmire after Houston Rockets general manager Daryl Morey tweeted in support of the Hong Kong protesters: '“Fight for Freedom. Stand with Hong Kong.” The tweet has since been deleted.

NBA Commissioner Adam Silver is dancing a line between protecting Morey’s free speech and staving off China’s backlash. Critics say the league is driven by profit instead of principle. He has tried to clarify his position:

“It is inevitable that people around the world — including from America and China — will have different viewpoints over different issues. It is not the role of the NBA to adjudicate those differences. However, the NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues. We simply could not operate that way.”

At this point, The Wall Street Journal reports better news:

“The situation appears to have de-escalated. After a week of blistering anti-NBA rhetoric in Chinese media, the government is signaling that it’s time to cool it, a message that includes the vitriol directed at the Rockets, according to one person familiar with the situation.”

But the Journal also acknowledges: “China’s love affair with the Rockets might not be the same again.”

Discussion:

• Should Morey have avoided sending the tweet? Why or why not?

• How do you assess the league’s response to the situation?

• Analyze Silver’s news conference. What did he do well, and what could he have done differently?

Layoffs Planned at WeWork

After a failed IPO and questions about its leadership and financials, WeWork is planning to downsize. New co-CEOs Artie Minson and Sebastian Gunningham warned employees to expect layoffs but said they will be handled “humanely.”

The new leadership had already prepared employees: "While we anticipate difficult decisions ahead, each decision will be made with rigorous analysis, always bearing in mind the company's long-term interest and health." The new information gives employees a better sense of what will come.

But news stories aren’t consistent. Fortune reports 2,000 layoffs or about 16% of WeWork employees affected, while Dice reports 5,000. Dice acknowledges differences in reporting.

Affected employees could be in business segments that will be spun off, so they may still have a job. WeWork may try to sell Meetup, Managed by Q, and Conductor brands.

Discussion:

• Assess WeWork’s communications to employees so far. Even if the percentage were clear, the number of layoffs may change. Are the new leaders doing the right thing in giving an estimate now?

• Employees know layoffs are coming “soon.” Should they have more specific dates? Consider whether this is a good idea.

https://fortune.com/2019/09/25/wework-new-ceos-memo-employees/

WeWork: "Humbler"

Several articles in the past few weeks have scolded WeWork CEO Adam Neumann and the investors who followed his story.

The Wall Street Journal was the first to describe Neumann’s odd behavior and published another article, “WeWork Investors Turned Off by ‘Sloppy’ IPO Filings.” The recent article explains one problem in the filings (shown below):

“A section headed ‘illustrative annual economics’ that assumed 100% workstation utilization vanished, for example, as did two graphs portraying a typical location going from ‘-$’ to ‘+$,’ with no y-axis showing the actual dollar amounts being depicted.”

A New York Times article, “Was WeWork Ever Going to Work?” criticizes investors for missing obvious problems with the company’s initial business plan, such as the reliance on start-up revenue when most entrepreneurial ventures fail. According to this report, it took people finally looking at the data to realize how much We is losing and how hard it will be for the company to succeed.

The article includes other examples of investors’ blind exuberance:

“It is not merely money that separates the ruling class from the rest of the country. Often it seems as if it is the gaping difference in the application of common sense. Ultimately, it was the bankers, technocrats, statesmen and acolytes of the data-junkie class who were willing to believe that Elizabeth Holmes, a 19-year-old college dropout who thought a black turtleneck would make her Steve Jobs, was going to revolutionize blood-testing. It didn’t seem to matter that she could not deliver any real evidence to prove it.”

An Inc. article, “The Future of WeWork: Leaner, Humbler, and Duller,” suggests a new path for We. The author suggests less hype, fewer employees, and more discipline for the company to survive.

WeWork image source.

Discussion:

• Who do you blame for WeWork’s failed IPO?

• If you believe the New York Times article, investors are gullible. Do you agree with this assessment? If so, why might this be the case?

• Read the “Note”—the fine print—under the table, shown above. How do you interpret this information?

• What should We do now to build credibility and save the business?

East Carolina University Leader Placed on Leave

East Carolina University’s interim chancellor is being investigated for inappropriate behavior with students. One video shows Dan Gerlach chugging beer and dancing with students, and photos show him with his arm around a student at a local hangout in Greenville, NC.

Gerlach wrote a statement in his defense:

When I first started here, and even before, one constant concern that I heard was that our students needed a leader of the university to be present and approachable, someone who can speak to them in their language. That’s what I’ve set out to do at ECU. I regret that these photos are being perceived as anything more than what they are.

A member of the board of trustees said, “This is very concerning without question.” However, the bar owner defended the chancellor in a tweet:

I wasn’t there, but two of the staff told me that several people were kind of excited to see the chancellor out and in the bar…It really is a damn shame. The guy came in with some off duty cops to have some beer. Just wrong place, wrong time.

Discussion:

• How do you assess Gerlach’s response? Explain his perspective of the situation.

• Analyze the bar owner’s tweet. How much credibility does he have in this situation?

• What do you think of university administrators socializing with students in this way? Do you have a different perspective of faculty? Why or why not?
  
  

WeWork Co-Founder and CEO Steps Down

WeWork announced that Adam Neumann will leave his position after controversy about the company’s financial situation and the co-founder and CEO’s behavior. Within a week, the company went from preparing for an IPO to facing criticism that led to this ouster and a delayed public offering.

The company valuation has been reduced from about $47 to $15 billion based on governance issues and what the Wall Street Journal calls “ballooning losses.” The Journal also reported on Neumann’s “eccentric behavior,” including a heavy-party lifestyle that recently involved bring marijuana on a plane to Israel and saying that he might like to be the prime minister.

In its news release, WeWork provided scant information and a few quotations, including this from Neumann:

“As co-founder of WeWork, I am so proud of this team and the incredible company that we have built over the last decade. Our global platform now spans 111 cities in 29 countries, serving more than 527,000 members each day. While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive. Thank you to my colleagues, our members, our landlord partners, and our investors for continuing to believe in this great business.”

Neumann image source.

WeWork office image source.

Discussion:

• Compare the company’s news release to others announcing CEO departures. How does this one differ, and why would the company take this approach?

• What are the communication objectives of Neumann’s statement? How well does his quote meet those objectives? What else, if anything, should Neumann say or do?

Amazon Response to Employee Walkout

Like many around the world during the Global Climate Strike, hundreds of Amazon employees walked out of their offices yesterday. Employees have been urging Amazon leaders to take more steps to reduce fossil fuel dependency and wrote an open letter back in April. The pressure seems to be working.

On Thursday, CEO Jeff Bezos announced The Climate Pledge, with the following commitments:

• Commits to net zero carbon by 2040 and 100% renewable energy by 2030

• Orders 100,000 fully electric delivery vehicles, the largest order ever for electric delivery vehicles

• Invests $100 million in reforestation projects around the world to begin removing carbon from the atmosphere now

• Launches new sustainability website to report progress on commitments

The Pledge encourages other businesses to sign on, with Amazon leading the way. Bezos said, “We’re done being in the middle of the herd on this issue — we’ve decided to use our size and scale to make a difference.” Amazon employees reacted positively.

Discussion:

• Analyze the employees’ open letter. What persuasive strategies do they use? Look for examples of logical argument, emotional appeal, and credibility. What organizational strategies do the writers use?

• The Amazon announcement doesn’t mention employees’ influence in the decision, although news articles and employees make the connection. Should Bezos include this recognition? Why or why not?

• Describe a CEO’s dilemma in situations like these. When is it appropriate for leaders to meet their employees’ demands, and when should they resist? Did Bezos take the best course of action?

Online Reviews Written by Attractive People Carry More Weight

A study published in Consumer Marketing found that reviews written by more attractive rather than less attractive reviewers lead to “enhanced brand evaluation.” The Cornell and Penn State researchers swapped out photos of reviewers to test the impact of bias.

Marie Ozanne, assistant professor of food and beverage management in the School of Hotel Administration, explains the result:

“More often than we think, we are replicating our offline behavior online, and we don’t know the impact of all our general offline thinking on our online thinking. Hopefully, understanding it can help us be more conscious about it and find ways to focus more on the information that matters.”

Negative reviews didn’t see the same effect, which Ozanne believes illustrates how people think about products or services. When reading negative reviews, people may think more deeply about the product or service, and then the reviewer’s image becomes less important.

Image source. (Confession: I added a period after the first sentence.)

Discussion:

• To what extent do you rely on online reviews?

• How do you think appearance might influence your judgment—of online reviews or in other situations?

• How can you ward against the effect of appearance bias?

Google Reassures Employees They Can Speak Out

The National Labor Relations Board has ordered Google to allow dissent among its workforce. Although you might think of Google as a place of open ideas, some employees feel stifled.

The first public incident was the infamous “Google Memo,” which argued conservative ideas about women. The employee was terminated—a decision some thought essential for the company, and others thought unfair.

More recently, employees have complained that management puts restrictions on what they can say, including how they express attitudes about the company on social media. But employees in the U.S. are allowed to engage in potential union organizing activity, which includes discussing pay and issues with management.

The Wall Street Journal explains the agreement between NLRB and Google, which does not include a statement of responsibility:

“The settlement orders Google to inform current employees that they are free to speak to the media—without having to ask Google higher-ups for permission—on topics such as workplace diversity and compensation, regardless of whether Google views such topics as inappropriate for the workplace.”

Image source.

Discussion:

• What is the value of allowing debate in the workplace? What are the drawbacks?

• How can managers draw the line between employees’ right to dissent and what’s right for the company?

• Have you expressed political opinions at work? When and how were they received? Have you ever felt uncomfortable during others’ discussions? What did you do?

The Purpose of the Corporation

The Business Roundtable published a statement, The Purpose of the Corporation, signed by 181 of its 193 members. The Roundtable, a corporate lobbying group, includes CEOs of the largest U.S. companies.

In essence, the CEOs write that they have responsibilities beyond shareholders—to customers, employees, suppliers, and communities (including the environment). The statement is a step to improving the perception of businesses as solely driven by creating shareholder value through short-term profits.

Skeptics abound. A writer for the Washington Post called the statement a “truism”:

“What’s significant about the statement is what it does not say. The corporate signatories do not suggest in any way weakening the fiduciary duties of the boards and managers of ordinary for-profit shareholder corporations to manage such companies’ affairs for shareholders’ benefit.”

The CEO of Allstate and head of the U.S. Chamber of Commerce wrote an opinion piece in the New York Times encouraging businesses to pay people more if they’re serious about serving more stakeholders.

A writer for Forbes argued that these companies are multinationals and have global responsibilities as well. He also accused the executives of being self-serving, warding off criticism about executive compensation.

Others noted company CEOs who didn’t sign, for example, Alcoa, Blackstone, GE, NextEra, Parker Hannifin, and Wells Fargo (whose representative said the CEO is interim and wasn’t asked to sign). Some companies, for example, Kaiser and State Farm, say they didn’t sign because they don’t have shareholders.

Discussion:

• What’s your view of the statement: significant, placating, diverting, or something else?

• Assess the statement itself. Consider the audience, purpose, writing style, organization, and so on. What works well, and what could be improved? What’s extraneous and what’s missing?

Overstock CEO Resigns

Overstock CEO Patrick Byrne resigned after admitting to a relationship with Russian agent Maria Butina. Butina is serving prison time because of her attempts to gain political access during the 2016 U.S. presidential election.

Byrne announced his decision in a letter to shareholders. He begins with the news:

“In July I came forward to a small set of journalists regarding my involvement in certain government matters. Doing so was not my first choice, but I was reminded of the damage done to our nation for three years and felt my duty as a citizen precluded me from staying silent any longer. So, I came forward in as carefully and well-managed fashion as I could. The news that I shared is bubbling (however haphazardly) into the public. Though patriotic Americans are writing me in support, my presence may affect and complicate all manner of business relationships, from insurability to strategic discussions regarding our retail business. Thus, while I believe that I did what was necessary for the good of the country, for the good of the firm, I am in the sad position of having to sever ties with Overstock, both as CEO and board member, effective Thursday August 22.”

Byrne’s letter then describes his thinking about Overstock, including blockchain technology, retail, and strategy.

This announcement came 10 days after Byrne wrote a news release titled, “Overstock.com CEO Comments on Deep State, Withholds Further Comment.” In that post, he refers to “Men in Black” and his “Omaha Rabbi,” reinforcing perceptions that Byrne is a controversial figure.

MarketWatch shows the stock performance during this period.

Byrne image source.

Discussion:

• What’s your view of Byrne’s decision to resign? Consider his history with Overstock, company performance, and the company trajectory.

• CNN referred to Byrne’s first news release as “strange.” Do you agree?

Backlash After President Trump Fundraiser

Equinox and SoulCycle customers are not happy about a fundraiser for President Trump sponsored by the companies’ owner, the chairman of a real estate firm. Threats of boycotts and cancelled memberships provoked quick responses from both companies.

SoulCycle CEO Melanie Whelan also said, “SoulCycle has nothing to do with the event and does not support it. … We know who we are and we know what we believe in, and nothing will ever change that.”

Capitalizing on the brands’ distress, other fitness companies are offering discounts and free trials to try to win business.

Soul Cycle image source.

Discussion:

• More company executives feel inspired towards political activism. What are the advantages and risks?

• Did the real estate company owner, Stephen Ross, act inappropriately by hosting a fundraiser? Why or why not?

• Analyze the companies’ statements. What persuasion strategies do they use to rebuild each brand?

• Compare the statements. Does one work better than the other? What criteria do you use to compare them?

Another Blackface Disaster

Belgium’s Africa museum hosted an event for which people arrived in pith helmets, blackface, and other offensive and stereotypical clothing. Understandably, the Congolese community is upset. As one representative said, "Ethnic, exotic or African is not a costume that you can put on and take off.” You can read about Belgium’s occupation of the Congo to understand the history.

The party was organized by a separate company, Thé Dansant, and one organizer defended the party: “Even if one person painted his face black, it was not meant to be offensive. Many people of African origin were enthusiastic about the concept and were present.”

So far, the Royal Museum of Africa is trying to distance itself from the event and hasn’t issued a statement or apology.

Museum image source.
Party image source.

Discussion:

• What’s your view of Thé Dansant’s response?

• What is the museum’s accountability? What should the leaders do or say?

Employees Pressure Walmart to Consider Role in Gun Violence

Walmart is in a tough spot after recent shootings. Some employees are pressing the company to do more to fight gun violence, but no policy changes are planned. After previous attacks, Walmart stopped selling assault-style weapons and raised the minimum age to purchase guns and ammunition, but it’s unclear whether the leaders will do more. Employees are asking Walmart to stop selling firearms and to disallow customers from carrying guns into the stores.

The company seems divided about employees’ activism. Chief Executive Doug McMillon wrote, ”We are proud to be woven into the American fabric as a place for all people. We are more resolved than ever to foster an inclusive environment where all people are valued and welcomed.” At the same time, the company blocked two employees’ access to Slack, encouraging employees to use “more constructive ways for associates to offer feedback such as emails or conversations with leaders.”

A study recently published in the International Journal of Business Communication found that employees are more likely to “express dissent to managers and coworkers” when they are more socialized in the company and when they believe their company is “more ethical and reputable.”

A Wall Street Journal article explains the risk for Walmart to take more action against gun sales:

“[A]ny change to its gun policies risks alienating Walmart’s core customers, who often live in more conservative-leaning rural and suburban communities. The company faced some consumer backlash after raising the minimum age to purchase guns to 21.”

Image source.

Discussion:

• How can the company balance employees’ and customers’ perspectives? What else, if anything, should company leaders say and do?

• Did the company do the right thing by blocking Slack access? In what ways are email and conversations more or less “constructive”?

• What leadership character dimensions are illustrated by this situation?

Capital One's Response to the Breach

A hacker got access to 140,000 Capital One customers’ credit information and social security information, and about 106 million people were affected by other leaked information. Officials arrested Paige A. Thompson, who goes by “erratic” and was a former Seattle technology company software engineer.

In a bar chart, a BBC article puts this breach in context of others. Capital One’s press release describes the company’s quick response:

“Capital One immediately fixed the configuration vulnerability that this individual exploited and promptly began working with federal law enforcement.”

The release also includes a statement from Chairman and CEO Richard Fairbank:

"While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened. I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right."

In addition, as expected, the release includes information for customers, offers free credit monitoring, and provides an FAQ.

Image source.

Discussion:

• Analyze the press release. Consider the audiences, objectives, organization, tone, and so on.

• How well does Fairbanks demonstrate humility in the press release? What other leadership character dimensions are illustrated? How well does he inspire confidence in Capital One?

• Analyze the BBC chart shown here. What works well about the chart, and what else would be helpful to understand these breaches in context?

Rossello's Resignation

After initial resistance, the governor of Puerto Rico announced his resignation. More than a week of protests about inappropriate chats and financial mismanagement forced Ricardo Rosselló to step down, effective August 2.

Rossello’s video was posted on Facebook. In his statement, Rossello first described successes of his administration, for example, “We raised the salary of teachers in the middle of a bankruptcy.” Then he said, “I was willing to face any challenge, fully understanding that I would prevail against any accusation or process.”

But Rossello admitted he could not continue, having “heard the demand of the people,” and recognizing that his failure to resign “would endanger the successes we have achieved.” He also tried to quell protests: “I hope this decision serves as a call to citizen reconciliation.”

Rossello image source.

Protests image source.

Discussion:

• Did Governor Rossello make the right decision by resigning? Why or why not?

• Analyze his speech (if you understand Spanish or find a translation). Consider his audience, communication objectives, word tone, organization, and tone.

• What similar business situations come to mind? Think about a CEO who was under pressure to resign and what happened. What conclusions can you draw between the business and political situations?
  
  

Government Scandal in Puerto Rico

Gov. Ricardo A. Rosselló says he will not resign despite protests about private messages that included personal attacks and crude language. With 11 of his top aides, Rosselló participated in chats via the messaging app Telegram. Almost 900 pages of text are now public, and we see insults about other officials with references to people’s sexual orientation, gender, and weight.

The news comes after government corruption chargers earlier this week. The governor admitted, “I committed inappropriate acts,” but also said, “I have not committed illegal acts.”

In a news conference, Rosselló used the words “improper” and “shameful,” but didn’t agree with the reporter that the chats were unethical.

Discussion:

• Should the governor resign? Why or why not?

• What’s your view of the private chats? Should government officials be able to message each other freely? Why or why not?

• How well did the governor respond to the reporter’s questions? Did he convince you?

Nike Flag Shoe Controversy

Nike pulled shoes with flag decorations and is taking some heat for the decision. The shoes featured 13 white stars, reflecting an early version of the American flag created by Betsy Ross in 1776. But, according to a Bloomberg article, “The design recently has taken another meaning for some Americans as far-right groups have claimed it as a symbol of their cause. It has also been criticized as evocative of an era when slavery was still predominant in the U.S.“

Former NFL quarterback Colin Kaepernick, who endorses Nike products, and others asked the company to remove the shoes because they are considered offensive. The company complied but is facing backlash from some groups, and the Air Max 1 USA sneakers are selling for up to $2,500 a pair. The company also issued a statement:

“We regularly make business decisions to withdraw initiatives, products and services. Nike made the decision to halt distribution of the Air Max 1 Quick Strike Fourth of July based on concerns that it could unintentionally offend and detract from the nation’s patriotic holiday.”

Sneaker image.
Colin Kaepernick and sneakers image.

Discussion:

• What’s your view of the sneaker image: offensive, patriotic, or something else?

• How do you assess Colin Kaepernick’s role in the controversy?

• Did Nike do the right thing in pulling the sneakers? Why or why not?

• Assess Nike’s statement in response to the controversy. What else, if anything, should company leaders have said?

Noncompete Agreements for Interns

A Wall Street Journal article reports that college interns are increasingly asked to sign agreements that restrict their job choices in the future. “Noncompete, nondisclosure and forced arbitration agreements,” which have been common for senior-level employees, have made their way down the ranks.

Now, interns are asked to sign agreements on their first day with a company, and they don’t always understand what they’re signing. An agreement can prevent a new grad from, for example, accepting an offer with a competitor within a geographic region.

Some agreements are important for companies to protect their intellectual property and preserve confidentiality, but critics say they go overboard. Also, such agreements may not hold up in court, particularly when they affect low-skilled workers.

Bottom line: interns should be careful about what they sign. An agreement may be more of a deterrent and might not inspire legal action, but students shouldn’t have to feel as though their choices are limited right after graduation.

Signing image source.
Noncompete image source.

Discussion:

• What’s your experience with these employment agreements?

• What would you do if asked to sign one?

• What should companies do differently to protect themselves?