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 |
|---|---|
| The U.S. Federal Trade Commission’s proposed ban on noncompete agreements will impact innovation and entrepreneurship outside of existing technology hubs. Strongly agree | “The geography of innovation and entrepreneurship has changed, particularly after the pandemic. While tech hubs are clearly important, they are not as important as they once were as centers of innovation. The talents of insightful scientists and inventors are increasingly being tapped by entrepreneurs who may be located far away from them. Banning noncompetes will encourage this trend by empowering scientists and inventors who want to work with funders, investors, and supporters who truly get how much value can be created from their work, no matter where they are located.” |
| The diametric experiences of Disney and UEFA illustrate that firms should refrain from making political statements in support of particular stakeholders. Strongly disagree | “The problem with not making a statement is that saying nothing may be tantamount to assenting to something that runs contrary to the position that is implicit in a firm’s purpose. For example, if part of Disney’s identity is that it supports LGBTQ+ employees, customers, and community members, then it must enact that, in part, by taking a stand when necessary. Otherwise, the claims of support — and the identity and purpose they define — are empty.” |
| 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. Neither agree nor disagree | “It will be difficult for companies to transition, mainly because identifying a sustainable business model requires hitting three grand-slam home runs. The first is on conceptualizing value for the long run in the industry as a whole, which requires geopolitical, technical, regulatory, and competitive insight. The second is figuring out how the company can port its capabilities to the new model. The third is actually doing it. Without a full-scale commitment to all three of these achievements, a firm can easily get pulled back into seeking success on the old business model. In this case, however, I don’t think it’s the short-term financial pressure that's driving BP’s announcement. Rather, I think it’s pressure for short-term energy security, which is central to value creation.” |
| Digital platform companies like Uber and Netflix have lost their first-mover advantage. Strongly disagree | “Uber and Netflix still are the first movers in their industries and retain the advantages associated with having moved first in them. The problems they face, which are considerable, are threats to the industry structures in which they operate. Uber’s industry structure is changing with shifts in buyer behavior that originated in the pandemic, as well as with changes in the legitimacy of the employment model. Netflix is facing a full-on disruptive threat to its subscription model emanating from conventional cable companies and major tech companies seeking to collaborate with content creators. The return on assets of the two companies makes me worry much more about whether Uber can weather the storm.” |
| The use of generative AI will restore competition in search. Strongly agree | “Generative AI is still developing. It can be creepy, wrong, frustrating, and clunky. Yet clearly ChatGPT and other generative AI tools are changing the game in search. At the heart of the disruption will be a transformation of the ways that products are advertised and promoted. Instead of the old, TV-derived, banner-ad-oriented approaches that rest on old ways of thinking about consumer behavior, the new generative AI technologies open up opportunities for a reconceptualization of what it means to meet consumer needs through analytics. That’s going to change the game in search. Whether it will restore competition will depend on how aspiring leaders in this field differentiate.” |
| New salary transparency laws will cause companies to increase bonus pay and other nonreportable perks as a share of total compensation. Agree | “For those with high salaries and high levels of managerial discretion, some of these laws may create an incentive to divert pay to nonreported categories. But for the majority of employees, they are likely to have the intended effect of exposing irregularities, which in turn creates pressures for companies to remedy them. We will have to keep a close eye on both the intended and unintended consequences of these laws, both of which are likely to be significant.” |
| Artificial intelligence is reducing wasteful holiday giving (i.e., deadweight loss) by helping online retailers to better match people to presents. Neither agree nor disagree | “It is a shame that so much of holiday giving is wasteful. Because choices about giving occur at the point of purchase by the giver rather than by the recipient, the matching that occurs through AI in online retailing isn't so much oriented toward reducing waste as toward inducing purchase. At the same time, AI in retailing encourages competitive pricing and may facilitate returns. It also can reduce delivery costs and smooth supply chains. All in all, there are pros and cons, with the real opportunity in AI-facilitated cultural change to reduce unnecessary consumption altogether.” |
| Charging for user verification will lead to increased user engagement and trust on Twitter. Disagree | “The trust problem on Twitter can no longer be solved with only user verification, as the issues have now escalated beyond only the detection of imposters, bots, and fake accounts. User verification will help to address the problem, but the fundamental loss of trust has to be addressed in a deeper way.” |
| Corporate investments in diversity, equity, and inclusion should be expected to generate a monetary return on investment. Strongly disagree | “Discrimination is not acceptable. ROI criteria that require that disenfranchised persons perform better than long-privileged persons are not fair. Equity and inclusion are compulsory as matters of fairness. Some diversity initiatives can be assessed on ROI criteria if the alternatives are constituted in ways that are fair. On the whole, however, DEI initiatives are best assessed on criteria that reflect whether a corporation is operating in ways that will assure its continuing license to operate.” |
| The era of dominance for Tesla in the EV market is coming to an end. Agree | “Tesla will continue to be an important competitor in the EV market, but other firms now will gain considerable share, especially given the California decision.” |
| 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.” |