Strategy Forum / Panelist

Nicolai J. Foss

Copenhagen Business School


Nicolai J. Foss is a professor of strategy at the Department of Strategy and Innovation at Copenhagen Business School. He is also an honorary adjunct professor of marketing and management at Southern Denmark University and serves as external chair for the Danish Institute for Advanced Studies. Professor Foss is a member of Academia Europaea.

Voting History

Statement Response
BP’s decision to dial back plans for cutting oil and gas production shows that short-term financial performance pressure will make it difficult for many firms to transition their strategies toward more sustainable business models. Agree “It is indeed likely that there will be continued‚ “short-term” (as well as long-term) pressure on companies such as BP to not only maintain their oil and gas production but perhaps even to increase it. The reason is that the cost of decarbonization (or net zero) is massive. It is well known that a number of countries pay lip service to decarbonization but continue expanding carbon-based energy sources, as these are relatively inexpensive and stable. This is likely to continue as so-called less-developed countries try to catch up with Western levels of income.”
Digital platform companies like Uber and Netflix have lost their first-mover advantage. Neither agree nor disagree “It seems likely that some platform companies are losing their competitive advantage, like the ones mentioned in the statement. However, platform companies are emerging in many industries, and they are competing in new ways based on new resources that confer new sources of competitive advantage. Thus, advances in AI are likely to spawn new platforms. Also, while technological disruption and multi-homing will indeed continue to challenge existing platforms, network externalities remain a powerful source of advantage.”
The use of generative AI will restore competition in search. Strongly agree “ChatGPT’s integration with Microsoft’s Bing is a major game changer. In particular, search inputs can be much less precise and much more mundane and still yield valuable outputs. However, search inputs can also be much more ambitious (“What should I do to become a management guru?” or “How do I best spend a week in Copenhagen?” for instance). Of course, Google has announced its own ChatGPT competitor, as has Baidu. Consumers will benefit, even if Google ultimately prevails, but there are challenges to the new technology, such as the role of advertising and how to make AI-produced search outputs sufficiently reliable.”
Artificial intelligence is reducing wasteful holiday giving (i.e., deadweight loss) by helping online retailers to better match people to presents. Agree “AI-powered customer analytics is reshaping retail markets. Improvements in matching may be expected to reduce waste by improving the matching of people and presents. However, a key issue is what kind of person-specific data the AI has access to. Matching requires accuracy here. Additionally, some gift givers may like to give surprising gifts, gifts out of the ordinary, gifts designed to change the views of the recipient, etc., and for such gift giving, AI may be less suitable.”
Charging for user verification will lead to increased user engagement and trust on Twitter. Disagree “While user verification could lead to more trust as fake accounts and trolls are more clearly identifiable, it is questionable whether it will lead to more engagement: One of the attractions of Twitter is that a critique can be launched anonymously (e.g., against government oppression). In other words, anonymity is not just a bad feature of Twitter. Also, while Musk criticizes the current “lords & peasants system,” it seems that a substantial number of already verified high-profile users are unhappy with the “democratization” of verification, and this may lead to their exit from the platform.”
The era of dominance for Tesla in the EV market is coming to an end. Strongly agree “The era of dominance for Tesla in the EV market is coming to an end for a number of reasons. First, many automobile producers have pledged to go all-electric within the foreseeable future. Second, many producers who are now offering EVs benefit from stronger complementary assets, such as reputation and distribution, than those controlled by Tesla — even if they don’t have an Elon Musk in company leadership — and may already be offering EVs of higher quality than the S model (e.g., the Mercedes EQS). Third, Tesla has disappointed in a number of ways recently: The 2022 Tesla Model S Plaid hasn’t lived up to promises, the US$25,000 Tesla seems to have been shelved, and it is unclear what is happening to the Roadster.”
Sanctions against Russia will cause multinational companies to consider human rights protections in supply chains more broadly. Agree “The Russian aggression against Ukraine and the war crimes that have accompanied this aggression (rather than the sanctions per se) have emphasized the need for multinational companies to conduct intensified human rights due diligence. Human rights issues in supply chains have long been seen as a key CSR challenge, and normally, multinational companies can spend considerable time performing such due diligence. However, the recent pandemic and the current war in Ukraine has underscored the need for often very swift due diligence.”
The field of strategic management has overlooked the role of corporate purpose in driving business performance. Disagree “It wouldn’t be entirely accurate to say that the field of strategic management has overlooked the role of corporate purpose (corporate goals that go beyond profits) in driving performance. For example, the role of a sustainability orientation has been investigated for quite some time. However, the relations between different goals in terms of whether they are substitutes or complements with respect to firm value is less well understood. To the extent that corporate purpose increases profitability, the mechanisms behind such an effect are ill understood. Does having pro-social corporate goals send a signal to employees that makes them engage more in helping behaviors in the workplace? Do they experience higher job satisfaction which may benefit productivity and reduce turnover?”
When hackers take data hostage, companies should pay the ransom. Neither agree nor disagree “Paying ransom is usually not illegal, but paying hackers imposes external costs on the business community (and the rest of society). Most companies are not likely to consider these costs and hence end up paying hackers. From an ethics perspective, they should not pay; however, not paying may threaten the survival of the business. Banning the practice of paying will simply be too destructive of existing business and risk criminalizing otherwise law-abiding companies. The alternative of banning the practice and setting up victim-support mechanisms introduces moral hazard (as companies may not be sufficiently incentivized to invest in avoiding hacking). The long-run solution is to impose greater costs on the perpetrators, not the victims—harsher punishment, more deterrence and prevention.”
Relaxing the rules around physical presence in the office will improve employee productivity and firm performance. Neither agree nor disagree “In work settings with low task interdependence and individual work efforts that are easy to measure, relaxing such rules will likely improve employee productivity and firm performance mainly because more flexibility is likely to improve work motivation. The situation is more ambiguous for work settings where teamwork is very important, work standards are unclear, and productivities are hard to measure. The effect of greater flexibility on work motivation may not compensate for losses caused by difficulties of measurement, etc.”
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Agree “The COVID-19 pandemic may permanently change the relative importance of nonmarket and market strategies. Politicians have at their disposal instruments such as lockdowns and may have become more risk-averse. Companies need to develop capabilities that allow them to anticipate political responses to future disasters and influence these responses such that they become more fine-grained and less harmful to business.”