After reading another post about Nike and their sustainability practices, there seemed to be a consensus that Nike was simply incorporating these practices because their consumers wanted to align with a brand known to be green. In this respect I definitely agree with HBSTOM17 in that companies like Exxon are far away from consumers so they likely won’t feel any direct pressure from their downstream counterparts to change. My initial thought is that change will need to come from the regulatory side because there’s no way a company like Exxon would take sustainability initiatives such as carbon reduction when it would directly impede on their core business. However, after reading Danny’s post, capitalism may prove to be a valuable ally for the environment after all because renewable technologies that don’t rely on fossil fuels will eventually begin to compete economically. When Exxon’s shareholders vote to reduce global warming I can’t help but think it’s only because they believe incorporating sustainability into Exxon’s business is to their economic advantage.
Reading through the comments, it seems like, surprise, we are all skeptical about Nike’s authenticity in regards to sustainability. I admit I am as well. There’s an article on the HBS website, linked below, about a case study called “Governance and Sustainability at Nike.” It gives a glimpse of Nike’s strategy and reason for pushing sustainable practices. Nike has been around for a long time and they’ve learned from their past, for example when labor practices in overseas factories came to the public light, that short-term planning can lead to large consequences in their bottom line. Because Nike is so established and therefore long-term planning is crucial for their continuous survival, I do believe they are truly trying to incorporate sustainable practices into their business as opposed to simply doing it for optics. By putting in the investments now, they’re setting themselves up for a future where consumers will care more and more about the brands they wear and government agencies may start regulating their industry.
I used to believe corporations could never lead the way in things like sustainability that typically conflict with their bottom lines and that it was instead the government’s role to force them to. I now realize it’s the consumers themselves who will be the key driver because through democracy they will force the government to act and at the same time, through sales, force corporations to do the same.
Thanks for you post DC. It made me curious about Chinese steel manufacturing. With so much news about dumping of steel and it’s affect on global steel prices I wanted to understand their strategy. Reading a couple articles about this led me to the following conclusions.
In the Forbes article May 31, 2017, there are reports of a huge oversupply of Chinese steel . Foreign countries in Europe and the United States have protected themselves with anti-dumping duties, forcing the Chinese government to create stimulus packages with domestic infrastructure projects to create demand. Unfortunately, the expected steel demand from these projects aren’t as high as expected leading to an oversupply and fears of falling steel prices in China.
Fast forward a couple months to August 10, 2017 with this CNBC article covering how prices in China are somehow rising . It turns out that due to fears of steel oversupply along with pollution issues, the Chinese government drastically cut back on steel production causing steel prices to spike in fear of a shortage.
After reading these articles it seems to me that, because the Chinese government has so much control over steel production, they are losing the market forces that cause independent businesses to match supply and demand. They artificially inflate steel production by subsidizing the true costs then overreact causing swings in prices and this leads to consequences around the world.
 Forbes, “Chinese Steel Production Continues To Rise Amid Faltering Demand Conditions”, published May 31, 2017,
https://www.forbes.com/sites/greatspeculations/2017/05/31/chinese-steel-production-continues-to-rise-amid-faltering-demand-conditions/#3c0049e41201, accessed November 2017.
 Sophia Yan, “China’s steel prices are rising and that’s worrying Beijing”, published August 10, 2017,
https://www.cnbc.com/2017/08/10/chinas-steel-prices-are-rising-and-thats-worrying-beijing.html, accessed November 2017.
Great post Eleonora! It made me want to read more about the pros and cons of manufacturing in China vs USA. I found a great article, linked below, that covers a textile manufacturer who is actually moving his plant to the United States to actually save on costs! He mentions cheaper electricity, land (located in North Carolina), and cotton and, even though labor is roughly twice as expensive compared to China, it leads to a 25% savings per ton of textile. Other advantages he cites are that the US government is much better at leaving businesses alone compared to the Chinese government and that if Trump’s corporate tax cuts are successful the advantages will be even more pronounced.
The rising popularity of Chinese companies moving to America still only includes capital-intensive businesses as opposed to labor-intensive. For example Fuyao Glass and their Ohio plant are mentioned from our TOM case. I’m curious to see if made in China will soon be a thing of the past as domestic manufacturering makes a resurgence.
Awesome post! Having worked in the construction industry before, it’s great to see technology being harnessed to finally increase efficiencies. From my experience, I believe the most drastic improvements can be found during the design phase of a new project. What I mean is for a typical project, say the construction of a new commercial building, the project goes sequentially through three distinct phases:
(1) The architect designs the building concept/aesthetic.
(2) The engineers design the structure of the building and things like HVAC.
(3) Finally, the contractor comes in and builds it.
Problems arise becomes each of the three parties (architect, engineer, and contractor) are different entities with subtlety different incentives. Examples of typical problems may include: the architect’s beautiful rendering didn’t take into account the weight of the facade and the engineer needs to request additional columns as support; the engineer specifies welding of every single joint because it’s easy to implement in a construction drawing and the contractor realizes it’ll take a ridiculous amount of labor to do; or the engineer specifies a beam in a certain location that directly impedes the path of the air condition ducting, causing a massive rework.
Things like BIM help solve these problems because all these details can be seen in a 3D model by all three parties, allowing them to work together. However, the contracts need to be changed in order for each group to be incentived enough to actually incorporate these improvements rather than continuing the traditional path of separating responsibility, that has been followed forever in construction.
Great post Kate I found this super interesting. I never realized consulting firms are so forward-thinking in their preparation for the future of their industry. I definitely believe IDEO should incorporate their short and long-term investments in order to stay relevant with technology. From my understanding of the consulting industry, I have a hard time imagining them being in any real danger in the near future, when the singularity occurs is a different story. Management consulting firms like McKinsey and design consulting firms like IDEO, bring different values to their clients so I thought I’d break them up below.
Design consulting (IDEO): They really pride themselves, and have achieved some incredibly creative concepts/solutions to problems through a combination of their finely-tuned design thinking methodology and their insanely competitive hiring process that typically requires experts in a chosen field. The point is their process and sheer talent level shouldn’t be taken lightly. I have a difficult time believing the crowd will replace this machine anytime soon.
Management consulting (McKinsey): The same things can be said here in regards to premium talent and proven processes. I also agree with Dennis on his point 2; according to “The Firm: The Story of McKinsey and Its Secret Influence on American Business” by Duff McDonald, there are many things management consulting firms bring to the table besides idealized consulting value. For instance, hiring a management consultant gives a legal avenue for finding out corporate rival’s secrets and for the CEO to have someone else to blame for mass layoffs. So in this regard, even if consulting know-how of McKinsey somehow gets replaced by the crowd, they still have a place in the corporate world.