Strategy Forum / Panelist

Anita McGahan

Rotman School of Management

University of Toronto

Canada

Professor McGahan is cross appointed to the Munk School of Global Affairs at the Physiology Department of the Medical School and is a senior associate at the Institute for Strategy and Competitiveness at Harvard University. McGahan’s current research emphasizes entrepreneurship in the public interest and innovative collaboration between public and private organizations.

Voting History

Statement Response
Online education and specialized degrees will supplant the traditional two-year full-time MBA.  Agree “According to Google, supplant means “1. to take the place or substitute for: replace; 2. to usurp or take the place of, especially through intrigue or underhanded tactics; 3. to trip up.” Online education and specialized degrees are most certainly substituting some demand for the full-time MBA, occasionally through intriguing tactics, such as ambiguous claims about placement and long-term value. Even so, the vast majority of online and specialized offerings are legitimate substitutes that offer some of the main benefits of the MBA, often for lower tuitions and fees. There is no question that online education and specialized degrees are tripping up many MBA programs. While the MBA is not going away anytime soon, its relevance is challenged by these alternatives.”
Starbucks’s plans to increase wages for nonunionized workers is a shortsighted strategy. Agree “Starbucks is a differentiator with a long history of offering its workers important growth opportunities through critical experiences of personal development. The firm’s future depends on regaining the trust of workers by paying fairly and equitably, and then investing to create new opportunities for worker development and career progress.”
Sanctions against Russia will cause multinational companies to consider human rights protections in supply chains more broadly. Disagree “The history of consideration of human rights protections suggests that change emerges most potently from pressures exerted by employees and customers. I am hopeful that the war in Europe will amplify human rights protections in supply chains, but I think that the most powerful source of change will be public pressure on companies rather than the sanctions per se. One reason for that is the complicated impact of the sanctions on human rights across Eastern Europe and around the world. In the end, the sanctions will be important and pressure on companies to act responsibly through supply chain relationships will intensify. But the causal link between sanctions and human rights considerations may not be as strong as we want.”
Blockchain is more likely to be a sustaining innovation than a disruptive innovation in the financial sector. Neither agree nor disagree “Blockchain is disruptive in some financial industries, including, for example, project financing and real estate. It’s sustaining in some other financial industries, such as credit card payments and commercial lending. In yet others, it has the potential to be both disruptive and sustaining. Foreign-exchange trading comes to mind as an area where different firms pursuing varying blockchain implementation strategies may be either sustaining or disruptive. ”
The field of strategic management has overlooked the role of corporate purpose in driving business performance. Agree “For decades, scholars in the field of strategic management considered the purpose of the corporation as maximization of profitability primarily in the interests of shareholders. This reductionist view gutted understanding of the opportunities faced by firms to create prosperity and, ultimately, to generate value for a wide range of stakeholders. It also distracted attention away from the ways that firms could work with stakeholders to accomplish value creation. Even though the field didn’t overlook purpose entirely, by framing purpose so narrowly, the field did not do justice to the nuanced ways in which corporations contribute to society. I think that qualifies as “overlooking,” yes.”
Socially responsible mutual funds are more of a marketing tool than a solution to environmental and social problems. Strongly disagree “Historically, these funds have been oversubscribed relative to investment opportunities. Now, the availability of capital is encouraging social entrepreneurs to establish new enterprises dedicated to environmental and social problems.”
When hackers take data hostage, companies should pay the ransom. Neither agree nor disagree “The circumstances are critical in discerning the best approach, which depends on the nature of the data, the nature of the breach, the risks of disclosure, the level of redundancy, and a zillion other factors. The critical issue here is that regulatory, legal, and governance frameworks are decades behind on data stewardship, cybersecurity, privacy, data accountability, and enforcement tools. In the face of escalating criminality, we can no longer rely on the poor grammar of scammers as our first line of defense in safeguarding precious data assets. ”
Relaxing the rules around physical presence in the office will improve employee productivity and firm performance. Strongly agree “In many organizations, the rules on physical presence reflect heritage concerns from the pre-digital era. Their relaxation will enable optimization, given new ways of working enabled by technology. In general, the relaxation of old rules on job requirements will enable organizations to attract diversifying talent, retain valuable personnel, and redesign jobs to reflect idiosyncratic needs of both employers and employees. The traditional 9-to-5, onsite job is no longer a blueprint for how talented people can contribute in organizations.”
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Agree “The pandemic has exposed all our vulnerabilities and intensified the imperative for us to discontinue old industrial-era practices and ideas that are at the root of climate change, vaccine resistance, and biological instrumentalism. At the same time, it has revealed the power of remote work, online connection, and collaborative innovation. Companies that are ready to step up and deal with these vivid truths can create enormous value for society and, as a consequence, for their customers, employees, investors, and communities. Those that don’t will lose their relevance, growth, profitability, and prospects.”
The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Disagree “COVID-19 will eventually be everywhere. One shift will be toward replacement of jobs with AI, analytics, and new processes — regardless of location. Another will be continuing work-from-home both in urban and nonurban areas.”
The California Consumer Privacy Act will undermine the targeted advertising market by giving consumers the right to opt out of allowing companies to sell personal data to third parties. Agree “Much depends on detection and enforcement. If the State of California does not dedicate expertise and talent to the prosecution of violations of the CCPA, then its impact could be deferred until the courts resolve private action. However, if resources are committed to enforcement, then the CCPA’s impact could be quite significant.”
In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Disagree “Many companies are buying insurance and developing contingency plans, such as building partnerships for supporting the transfer of operations under emergency conditions. Yet the risks and liabilities associated with climate change are too great for almost any company to address fully through these techniques. Innovation for prevention and risk mitigation at scale is required.”
Antitrust policy should intervene more decisively to limit the scope of large technology platforms. Agree “Antitrust policy is insufficiently developed to deal with the interrelationships between skill and market power in the achievement of monopolies on tech platforms. A new conceptual framework for antitrust is needed.”
U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Neither agree nor disagree “Some firms will voluntarily adhere to rules that reflect the old standards; others will not. Those that will not will gain advantages in some areas but also risk losing customers, employees, and other stakeholders in the process.”
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation.
This shift will have material impact on the well-being of U.S. workers.
Strongly agree
“The focus on stakeholders is a focus on value creation. Managing for shareholder supremacy amounted to running businesses for their residual claimants rather than for sustained superior performance. The Business Roundtable, led by Jamie Dimon, has put forth the same principles that have guided JPMC (and, before that, BankOne) under Dimon’s leadership. The results speak for themselves.”
In the next decade, we will see the first sustainably profitable private commercial activities in space. Disagree “There are already profitable ventures in space (primarily as services to researchers). So I have to disagree with the word ‘first’ in this statement! Scaled ventures in space that are private and commercially accessible to the public are likely not to be profitable for the next 10 years.”
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage. Agree “Faster internet connectivity gives firms an edge in market analysis of all types, including financial. It gives firms an edge in responding to opportunities. The question here is whether access to 5G networks in China will be restricted to Chinese firms. If so, and if Chinese companies are not restricted internationally from access to data, then 5G will confer an advantage on them.”
The increase in stock market volatility that began in 2018 will last for another three to five years. Agree “Structural changes in value have not been built into many valuation models, which makes them less reliable. These structural changes will not slow over the next five years. The only question is whether approaches to valuation will catch up.”
A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Agree “The direct effects of a hard Brexit will be greatest in the U.K. and Europe, but because of the significance of the U.K. as the world's fifth largest economy, the impact will be significant everywhere in the world. The most significant consequences will be in financial services, IT, oil and gas, and other industries in which U.K. firms have significant positions on a global scale.”
China is no longer the most attractive growth opportunity for Western multinationals. Neither agree nor disagree “Whether China is the right growth opportunity for an MNC depends on the strategy of the MNC, the industry structure, the cost of investment, the prospective returns on that investment, and the purpose, character, and context for the growth goal in the first place. China is massively important. Whether a specific firm should seek growth in China depends on whether and how the firm engages.”