Strategy Forum / Panelist

Olav Sorenson

Anderson Graduate School of Management

University of California, Los Angeles

United States

Olav Sorenson is the Joseph Jacobs Chair in Entrepreneurial Studies, professor of strategy, and faculty director of the Price Center for Entrepreneurship & Innovation at the Anderson Graduate School of Management at UCLA. Professor Sorenson’s research on economic geography focuses on how entrepreneurship influences the growth and competitiveness of regions within countries and on why some regions appear more supportive to entrepreneurs than others.

Voting History

Statement Response
Online education and specialized degrees will supplant the traditional two-year full-time MBA.  Strongly disagree “Both online education and specialized degrees will probably reduce the demand for the traditional MBA, but I do not expect them to supplant it. Online education seems more a threat to part-time programs than to the traditional MBA. In its current form, online programs simply do not offer effective substitutes for either the certification or community roles of in-person programs. Specialized degrees are interesting for some, but they do not train general managers. They also potentially face problems in terms of being able to operate at a minimum efficient scale. Most of these niche programs do not attract enough students to support a rich body of complementary electives. But larger business schools might find ways to do more customization.”
Starbucks’s plans to increase wages for nonunionized workers is a shortsighted strategy. Neither agree nor disagree “Strategy for what? Higher wages and better benefits will almost certainly help Starbucks to attract employees to deal with labor shortages.

It’s less clear whether doing so will discourage unionization. Presumably, a union could negotiate for similar terms. Plus, employees might want to bargain on dimensions other than pay, such as having more stable and predictable work schedules.”
Sanctions against Russia will cause multinational companies to consider human rights protections in supply chains more broadly. Disagree “"Outside of extraordinary events, not that many stakeholders pay attention to what happens in companies’ supply chains. Those who care most sort themselves into working for, buying from, and investing in the companies that already manage their supply chains more ethically. So most companies do not face much pressure to consider human rights in their operations. But there’s also an information gap. Customers, investors, and all but the most senior employees usually have little insight into firms’ supply chains to inform their choices and when they might lobby managers. Progress on human rights and other ESG issues in the supply chain will probably depend on improvements in the availability of information about these activities."”
Blockchain is more likely to be a sustaining innovation than a disruptive innovation in the financial sector. Agree “Banks and other financial institutions have enormous pools of capital, social capital, and complementary resources. They also have the systems necessary to operate within a highly regulated sector. Blockchain should allow them to become more efficient at a variety of types of transactions, but I do not see it as eliminating the value of their complementary assets.”
The field of strategic management has overlooked the role of corporate purpose in driving business performance. Disagree “I believe that purpose does (or can) have a role in business performance. However, I do not believe that it has been overlooked. A number of people have studied the relationship between organizational culture and performance, and I would see purpose as one aspect of culture. Strong organizational cultures have often been seen as a source of competitive advantage, through either better coordination among employees or through exerting more effort. Some of the recent studies in corporate social responsibility similarly suggest that companies might benefit from having a social mission both by attracting better employees and by getting them to work harder.”
Socially responsible mutual funds are more of a marketing tool than a solution to environmental and social problems. Agree “Socially responsible VC or PE funds could certainly help to solve these problems. But mutual funds buy and sell existing shares. They do not provide additional capital to firms. Most mutual funds also do not get involved in active management, such as putting someone on the board. So, they do not directly influence the behavior of the companies in which they invest. These mutual funds can help investors to express and signal their preferences, which might influence executives to place greater weight on the environmental and social consequences of their company’s actions. Any effect though would be indirect and therefore probably weak.”
When hackers take data hostage, companies should pay the ransom. Disagree “If hackers get paid ransoms, it would seem to encourage them to invest even more effort in building tools and developing strategies to blackmail companies. Even though it's still a disruption, ideally companies would have strong enough backup procedures that they could recover with minimal losses from these attacks.”
Relaxing the rules around physical presence in the office will improve employee productivity and firm performance. Disagree “For many types of independent jobs, being able to spend time outside the office might benefit employee productivity. But it depends a lot on the type of job and on the space available outside the office. Work-from-anywhere is not a panacea. People employed in jobs that require creativity or intensive coordination still benefit from the unplanned and frequent interactions of being at work in person. Although people in those jobs might benefit from a mix of in-person (interactive) and remote (isolated) time, trying to implement that mix could prove costly and difficult. Many people also do not have good workspaces outside the office where they can concentrate on work without distractions. Productivity and firm performance could easily go down. ”
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Agree “In many ways, business will eventually return to normal. But the disruptions caused by the pandemic should highlight for firms the costs of inflexibility. Companies will probably move toward creating more redundancy in their supply chains. They may also generally adopt strategies that shift the balance of their costs away from fixed costs toward variable costs.”
The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Agree “I would expect companies to create more redundancy across locations in their operations. But global cities remain attractive in terms of the amenities that they offer and may become relatively more attractive in terms of transportation centrality. So, companies will probably continue to keep many employees in those places.”
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. Strongly disagree “Many consumers will not bother to take advantage of these rights. Even for those who do, companies can still target their advertising based on non-identifying information, just not to the degree that they have been able to do.”
Antitrust policy should intervene more decisively to limit the scope of large technology platforms. Agree “Platforms are clearly able to leverage their power across services — an antitrust issue. But I am not sure that we have a good handle on the extent to which their ability to do so hurts consumers. But it probably reduces the variety of services available and may slow innovation.”
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.
Disagree
“According to the statement, these leaders believe that they already focus on more than just shareholder value. It's not clear that they consider this a change in practice. It will take more than just a statement of values to make a difference for workers — CEO incentives, corporate governance, and/or regulation will need to change as well.”
In the next decade, we will see the first sustainably profitable private commercial activities in space. Agree “Early activities will probably center around satellite delivery (and possibly repair).”
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage. Disagree “If China actually beats other countries by three-plus years, it probably would give Chinese firms an advantage. But it’s unclear that they will. 5G has already begun being deployed in Korea and the U.S. It’s also not clear whether the version that China adopts will become the standard. If it does not, early deployment might even become a disadvantage.”
A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Disagree “The tough part of this question is the final clause. I have little doubt that Brexit will be bad for U.K. businesses and possibly for EU businesses as well. But for firms without much of a presence in this market, a hard Brexit might end up being a positive if it reduces the competitiveness of EU and U.K. rivals.”
China is no longer the most attractive growth opportunity for Western multinationals. Disagree
In the next five years, the blockchain will have a transformative effect on finance in emerging markets. Disagree “Blockchain may reduce transaction costs and the extent of corruption, but many types of contracts will still depend on local institutions for enforcement.”
In the absence of a carbon tax, industry self-regulation can help mitigate the worst fallout from climate change. Strongly disagree
Amazon’s new $15 per hour minimum wage will force other companies to follow suit. Agree “I do not think that these spillovers would come from direct competition in the labor market but rather from political pressure. If a firm that has been pushing prices for consumers down can still pay a reasonable wage, what excuse do others have for not doing so?”