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News Digests

Stay abreast of what’s happening internationally with developments in corporate public affairs. Here is news that you may find useful and interesting:

The 2017 Sustainability Leaders: A GlobeScan/SustainAbility SurveyND

GlobeScan and SustainAbility Survey, 28th June 2017.

The Sustainability Leaders survey has been running since 1997 with more than on thousand experts from 79 countries responding to the survey. Unilever has been ranked the global corporate leader in sustainability for the seventh year in a row, with the margin between it and the second and third placed companies growing ever wider. However, the private sector still preforms relatively poorly compared to NGOs (59 per cent of respondents rated the contribution to the sustainable development agenda as excellent), Social entrepreneurs (48 per cent of respondents rated them as excellent), while only 23 per cent of respondents rated the private sector ‘excellent’ in its contribution to the sustainable development agenda.

Most interestingly was the 3rd place company Interface which is the ‘worldwide leader in design, production and sale of environmentally-responsible modular carpet’, and is arguably not a household name. Its presence among companies like Unilever, and its higher ranking than Tesla, Nestle and GE arguably shows that it’s positioning as an environmentally responsible company has elevated its corporate positioning.

For more information see:

Delivering meaning in a turbulent workplace Disrupting the function of Internal Communication. A global perspective. ND

Marc Do Amaral, 2017.

The clear message throughout this chapter on how to approach uncertainty, and ‘turbulence’ is for communication professionals to embrace the chaos and accept it as a part of the function and to approach it through honest, tranquil and certain communication. Amaral argues creating a culture of authentic dialogue and feedback is key to create a communication strategy which will generate both trust, and support. Traditional top down corporate communication is becoming antiquated, at the same time the communication professionals role is moving away from imposing corporate truth and towards dialogue between stakeholders, this is partially the responsibility of the communications specialist to encourage, and also to assist.

For more information see:

How Should You Tweet?: The Effect of Crisis Response Voices, Strategy, and Prior Brand Attitude in Social Media Crisis Communication ND

Mi Rosie Jahng and Seoyeon Hong, Corporate Reputation Review, 4th June 2017

Jahng and Hong study the value of a human voice over a corporate voice in responding to crises and how this can be utilised to moderate the company’s presence on Twitter following a crises. The study found that a C-suite executives Twitter presence played very little roll on the overall success of the crisis communication, but prior brand attitudes played a large role in moderating public outrage. The study accepts that tweeting, and a good public face presented by C-suite before a crises will assist in its management.

For more information see: Corporate Reputation Review hosted on Springer.

Use of YouTube for Business Communication. Analysis of the Content Management and Level of Participation of Spanish Best Reputed Companies Youtube ChannelsND

Carmen Costa-Sanchez, Corporate Reputation Review, 31st May 2017.

Companies are increasingly integrating social media into their relationships with stakeholders. The article analysed the content of 454 videos from 20 YouTube channels. It found that YouTube is used as a promotional platform, rather than a way to inform stakeholders. The videos analysed had low levels of public interaction and a general lack of interest in the contents of the videos. The platform offers companies a way of publicising corporate social responsibility undertakings which received higher levels of interaction than standard promotional material.

For more information see: Corporate Reputation Review:

Uber has fired 20 employees after investigating hundreds of misconduct allegationsND

Oliver Stanley and Alison Griswold, Quartz, 7th June 2017

Uber is firing 20 employees after an internal investigation into the reportedly toxic culture. The #deleteUber movement and ‘exodus’ of top level executives has been furthered by an investigation conducted by the legal firm Perkins Coie which found its integrity hotline for employees receiving 215 claims of misconduct.

The firm has approached Francis Frei to work for the Uber as senior vice president for leadership and strategy, and ultimately bring the PR nightmare CEO Travis Kalanick into line. Ubers corporate testosterone-fuelled culture is apparently similar to the now infamous video of Kalanick berating an Uber driver who dared to complain to the CEO about wages, and then as anyone else would, leaked the video of the exchange.

While hiring Frei and funding a report to be made by former US attorney general Eric Holder on paper appears to be the appropriate move, the way the results are utilised and acted upon will be the key to Ubers future.

For more information see:

Funeral pricing comparison website targeted with legal threatsND

Elle Hunt, The Guardian, 30th May 2017.

Colin Wong created a website to compare the prices from more than 600 funeral homes and get user ratings to try and limit the benefits that the funeral industry gain from the lack of transparency. Wong spurned by a terrible experience set up the website to protect customers from purchasing coffins which are already marked up by 400% which could be inflated to 1,000% if the client is perceived to be willing. The website is hoping to break the ‘opportunistic pricing’ utilised by funeral agencies which is poised to become a growing industry with the price of a basic funeral increasing approximately 21 per cent between 2009 and 2016 while Australia’s ageing population creates more demand for the services. Wong aims to create transparency in the industry, while also having plans to charge companies $29 per month to get preferential treatment on the site to create revenue.

For more information see:

Why Harvard Business School is under fireND

The Economist explains, 18th of May 2017

Duff McDonalds recent book ‘The Golden Passport’ argues that Harvard Business School has lost its place as the premier business school in America, and simultaneously become a toxic environment filled with conflicts of interest. While the influence of the school is undeniable with its MBA graduates filling Wall Street and having a founding place in 10 per cent of all Silicon Valley unicorns (private start-ups worth over $1bn). However, the prices of the MBA course has consistently grown (by around 30 per cent in five years) while companies have been given the ability to promote positive case studies in the MBA course, and veto negative ones.

Harvard Business School has two options, firstly focus upon its position as an academic institution or treat itself as a business and pursue its own self-interest.

For more information see:

Qantas boss Alan Joyce to press charges against pie-thrower opposed to same-sex marriageND

ABC News, 11th March 2017

A former farmer assaulted Qantas chief Alan Joyce who has been vocal about his support for various social issues, most recently the gay marriage debate. Proving the effectiveness and ability for corporate leaders to influence the political debate with the sixty-seven-year-old motivated by homophobia and irritation of executives ability to ‘bulldoze’ the opinions of middle Australia. Joyce was one of twenty CEO’s including Telstra, CBA, ANZ, Holden, AGL, KPMG, PWC, Lendlease, Wesfarmers and others, who signed a letter urging Turnbull to take legislative action on same-sex marriage.

Alan Joyce’s lemon meringue pie to the face and the sacrifice of a nice suit has given the bold CEO a legitimate platform to address social issues in Australia. His position and statements after the incident suggest that he will push assault charges and will not be willing to sit back and focus on ‘knitting’.

For more information see:

The Business Case for PurposeND

EY, Harvard Business School, 2015

The EY Beacon Institute funded a global survey of 474 executives to determine company’s willingness to embed ‘sense of purpose’ in the way they make decisions or determine motivations. The survey defined organisational purpose as “an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society”. Eighty nine per cent of executives surveyed said a strong sense of collective purpose drives employee satisfaction, eighty four per cent said it can affect an organisations ability to transform, and eighty per cent said it can help increase customer loyalty.

The report determined that the companies surveyed fell into three categories prioritisers, companies that already have a clearly articulated and understood purpose (39 per cent); developers, companies that do not yet have a clearly articulated purpose but are working to develop one (48 per cent); and laggards, companies that have not yet begun to develop or even think about purpose (13 per cent).

For more information see:$FILE/ey-the-business-case-for-purpose.pdf

MPs slam ‘freeriding’ gig economy companiesND

Josephine Cumbo, Financial Times, 1st of May 2017

The Commons work and pensions committee in the UK have described companies who operate in the gig economy as “free riders’ on the welfare state. The committee singled out Uber and Deliveroo as drivers of the gig economy, which is seen as driving the growth of self-employment in the UK to 5 million (or 15 per cent of all British workers). This rise in self-employment has been combined with an overall reduction in the availability of benefits and tax credit income while companies operating in the gig economy contribute far less to the welfare state through national insurance contributions.

The decisions of the committee will have nock-on-affects to the continuing pressure for gig economy companies to recognise staff as employees or workers in Australia and elsewhere.

For more information see:

A lack of competition explains the flaws in American aviationND

The Economist Print Edition, 22nd of April 2017

Comparing US air carriers to European air carriers is clear cut with European operators gaining on average $7.84 profit per seat compared to $22.40 in the US, quality suffers as a result. Only one operator based in the USA can be found in the world’s 30 best carriers, compared to 9 European based carriers.

This is argued to be down to competition. The biggest four carriers in America control 80 per cent of the market, compared with just 48 per cent a decade ago. The top four carriers in Europe have around 45 per cent of the market. This is due to European regulators preserving competition between carriers for example blocking mergers between Ryanair and Aer Lingus and preventing single airlines from dominating airports.

Combined with the preservation of competition between EU-based carriers, the EU allows airlines with a non-EU owner that has a stake of up to 49 per cent to fly anywhere within the bloc, compared to America which caps foreign ownership at 25 per cent. The EU also encourages competitions between different airports and their operators, seen through London’s three separately owned airports.

For more information see:

Macron and Le Pen advance to the second round of the French electionND

The Economist, 23rd of April 2017

The French first round vote resulted in Emmanuel Macron (pro-EU centrist) and Marine Le Pen (far right member (or not) of the National Front) continuing to the final round of the French election. Macron is seen as pro-establishment serving the economy minister under Francois Hollande, but running as an independent, gaining 23.7 per cent of the vote while Marine Le Pen, the daughter of Jean-Marie Le Pen who previously made it to the final vote against Jacques Chirac and anti-immigration proponent gained 21.9 per cent of the ballot.

Macron goes into the second vote as a ‘firm favourite’ with polls predicting he will beat Le Pen by 20 points in a head-to-head contest. Although recent results (Brexit, Trump) show polls should not be trusted as an absolute.

For more information see:

Amazon breaks silence on Australian retail plansND

Sue Mitchell, Australian Financial Review, 20th of April 2017

Amazon will launch invitations for local retailers to join its global marketplace on Thursday, confirming the company’s goal to roll out a full retail offering in Australia over the next few years. The company is currently looking for a large distribution and fulfilment centre in Australia with the company already having close to 1000 staff within the country.

Amazon is predicted to gain a 44 per cent market share of electronics sold in Australia, 19 per cent of physical and electronic media, 11 per cent of sports and outdoors supplies, 10 per cent of clothing and apparel, 5 per cent of tools and garden supplies and 2 per cent of pharmaceutical products. The introduction of the service will disrupt prominent bricks and mortar retailers like JB Hi-Fi, Harvey Norman, Myer, Dymocks, Super Retail, Big W, Kmart and Target and online retailers who haven’t experienced as much competition like eBay, Booktopia and The Catch Group. Citigroup’s head of research Craig Woolford estimates that Amazon’s Australian sales could reach $4 billion within five years representing about 14 per cent of all online sales and 1.1 per cent of total retail sales.

For more information see:

India’s ID system is reshaping ties between state and citizensND

The Economist, 12th of April 2017

The Aadhaar identification system utilised in India is becoming a crucial part of everyday life for billions of people. The scheme has amassed the fingerprint and iris scans of 1.1 billion people since 2010 representing 99% of the adult population. Visibility to the government is assumed in developed nations with personal details taken for tax or other reasons being very hard to avoid for the average citizen. The fingerprints and iris scans are taken and matched to a unique 12-digit identifying number which is a massive step forward when you accept that India registers less than half of all births. India is already benefitting from its system, with ‘leakage’ in subsidy payments resulting in only 27% of the money ending up in the right hands, discovering that the electoral role in Punjab had 800,000 fictitious voters and that up to 30% of driving licences are fake (many of them duplicates to avoid driving bans). The Aadhaar system has obvious downsides, including the author’s description of a potential Orwellian panopticon and the issue of labourers chafed fingers preventing proper fingerprinting. For more information see:

How Amazon works - and why Aussie retailers are at risk of getting crushedND

John McDulin, Australian Financial Review, 12th of April 2017

After years of speculation it appears, again, that Amazon will make it to Australia. Watching Amazon’s rapid ascent to dominance in the UK first hand suggests that without innovation Australian retailers will struggle. The company has recently taken out 250 trademarks covering 30 classes of goods in Australia which has not gone unnoticed with Harvey Norman boss Gerry Harvey describing the US based company as ‘parasites’. Amazons success comes from its business model which prioritises low prices, loyalty and playing the long game. The CEO Jeff Bezos explicitly does not prioritise profit or profit margins instead championing an ‘intergenerational approach’, prioritising free cash flow over traditional net income. Bezos takes the cash created through Amazons retail operations and reinvests it back into Amazon's infrastructure and logistics to ensure a positive customer experience. Australia’s population has a high level of disposable income and companies which have very healthy margins that Amazon plans to undercut. For more information see:

The rise and fall of American leadership ND

Martin Wolf, Australian Financial Review, 31st May 2017.

Trump has undeniably changed the way we see the USA. Four months has transformed the nation builder into a relationship destabiliser. It has taken four months for Trump to damage the diplomatic position of the USA with his proposed 29 per cent cut ($12bn) to the budget of the state department and the international development agency. The prioritisation of hard power while lowering taxes are traditionally Republican, but the predominately white working class voters who placed Trump in power have little to gain from it. In fact, they have nothing to gain as they face the loss of health care coverage.

Angela Merkel’s statement that the USA can’t be depended upon is true, with growing polarisation of the American voter occurring while the media face of the country pushes a NATO prime minister out the way. The first four months of the presidency have undeniably not been positive; the refusal to accept the danger of climate change at the G7 meeting suggests the impact of the Trump presidency may not be temporary.

For more information see:

Video of United Airlines passenger creates furore in China, too ND

Javier C. Hernandez and Cao Li, The New York Times, 11th of April 2017

The now infamous incident of Dr David Dao being forcefully removed from a United Airlines flight has taken another, worse, turn. The hashtag ‘United forcibly removes passenger from plane’ received more than 550 million views and more than 240,000 comments on the Chinese social media platform Weibo. Chinese state broadcaster CCTV showed photographs of the passengers face with the title ‘savage’ above while People’s Daily (the ruling Communist Party’s leading newspaper) also scolded United for failing to condemn the man's treatment instantly. The event is likely to affect United’s growing business in China with 96 weekly departures from mainland China and Hong Kong. The New York Times notes that Chinese news media frequently highlights episode of violence and racism in the United States as evidence of what it perceives to be a hypocritical double standard surrounding human rights. For more information see:

Loss of coral reefs caused by rising sea temperatures could cost $1tn globally ND

Ben Doherty and Christopher Knaus, the Guardian, 12th of April 2017

The loss of coral reefs caused by rising sea temperatures could cost $1 trillion globally according to a report from Australia’s Climate Council. Queensland’s Great Barrier Reef alone could lose 1 million visitors a year, placing 10,000 jobs into question and draining $1 billion from the economy. The only way to protect the Great Barrier Reef the report argues is to reduce greenhouse emissions, which the U.S.A are currently achieving, Chinas emissions are flat-lining, while Australia has increased its emissions by 0.8% in 2016. The federal and state government planned to spend $200 million annually to protect the reef; this is however juxtaposed by their support of the Carmichael coal mine in Galilee Basin in Queensland. For more information see:

Apple faces serious penalties after anti-competitive 'error 53' repairs ND

Yolanda Redrup, Australian Financial Review, 6th of April 2017

The Australian Competition and Consumer Commission is launching a Federal Court case against Apple due to the ‘Error 53’ messages. Error 53 messages occur after a device has been serviced by a third party, which is ‘unauthorised’ by Apple. Apples closed business model prevents anyone but Apple from doing repairs to the handsets, the handsets can also essentially be ‘bricked’ if the phone is fixed by a third party while the warranty is simultaneously voided. The watchdog is seeking penalties, injunctions, declarations, compliance program orders, corrective notices and costs. This case comes at a bad time for Apple with rising competition from Android manufacturers. For more information:

An Australia that can say no to ChinaND

The Economist, 6th of April 2017

Australia has escaped recession for 25 years thanks partially to Chinese demand for coal from Queensland and iron ore from Western Australia. China currently is raising its stake in the Australian economy with 160,000 Chinese students studying in Australia, annual beef exports about to exceed $1bn and Australian wine exports were near $500m in 2016, and growing steadily at a rate of around 50% each year. The issue arises with Australia’s relationship with ‘the indispensable strategic power in the region’, the U.S.A. The difficult situation Australia finds itself in has been routinely seen, most recently through the detention of Feng Chongyi, the Australian based academic, receiving no statement from Malcolm Turnbull. Further to this the clear, and public rejection, of the Australian-Chinese extradition treaty by the Australian parliament shows a separation between the working parts of the Australian government and its public face. For more information see:

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