CHALLENGES and EVOLUTION of CORPORATE LEADERSHIP in the 2020s

 

CHALLENGES and EVOLUTION of CORPORATE LEADERSHIP in the 2020s

I. Lead-in. Discuss the questions with other students.

A.   Can you name some well-known CEOs or business leaders and share what you admire about their achievements?

B.   In your opinion, how has the role of a CEO evolved in recent years, and what new challenges do they face today?

C.   What qualities do you think are essential for someone to become a successful CEO?

 

II. Match the words to their definitions. Use four words in your sentences.

1.	to pocket	A.	the price at which something can be sold
2.	flux	B.	a  resource that has no physical form
3.	to wield	C.	to turn negative
4.	allocation	D.	to hold and use
5.	ruthlessly	E.	to take something for yourself
6.	intangible asset	F.	unclear and difficult to understand
7.	market value	G.	continuous change
8.	opaque	H.	to bring something  back to their home country
9.	to sour	I.	to struggle with a problem
10.	to repatriate	J.	without pity for others
11.	to grapple with	K.	the process of sharing out something

III. Look through the text. Five sentence fragments have been removed. Read the text and choose from the sentence fragments (A-H) the one which fits each gap (1-5). There are  sentence fragments that you do not need to use.

 

A.  Uber’s 4m drivers are not employees

B.   golden age for bosses

C.   recovered to pre-pandemic levels last year, reaching $1.6 trillion

D. approval to close a facility

E.  shutting plants

F.   so that returns on capital are only 7 %

G. face big changes

H. no matter how good a CEO someone is

 

On paper this is a 1)_______. Chief executives have vast power. The 500 people who run America’s largest listed firms hold power over 26m staff. Profits are high and the economy is performing well. The pay is fantastic: the average of those CEOs pockets $13m a year.

Today the nature of the job is being disrupted. In particular, CEOs’ mechanism for exercising control over their vast enterprises is failing, and where and why firms operate is in flux. CEOs 2) _______, starting with how they control their firms. Ever since Alfred Sloan shook up General Motors in the 1920s, the main tool that CEOs have wielded is the control of physical investment, a process known as capital allocation. The firm and the CEO have had clear jurisdiction over a defined set of assets, staff, products and proprietary information. Think of “Neutron” Jack Welch, who ran General Electric between 1981 and 2001, opening and 3) _______, buying and selling divisions, and ruthlessly controlling the flow of capital.

In 2020, however, 32% of big American firms invested more in intangible assets than physical ones, and 61% of the market value sat in intangibles such as research and development (R&D), customers linked by network effects, brands and data. The link between the CEO authorising investment and getting results is unpredictable and opaque. Meanwhile the boundaries of the firm, and the CEO’s authority, are blurring. 4) _______ and neither are the millions of workers in Apple’s supply chain, but they are mission-critical. As CEOs’ authority is being redefined, a shift is under way in where firms operate. Generations of bosses have obeyed the call to “go global”. But in the past decade the profitability of multinational investment abroad has soured, 5) _______. Trade tensions mean that CEOs face the prospect of repatriating activity or  redesigning supply chains. Most have only just begun to grapple with this.

 

IV. Match the words to their definitions. Use four words in your sentences.

1.	take a stand on	A.	to make a formal promise to do something
2.	engaged	B.	to get rid of something
3.	to weigh in	C.	actively involved
4.	hypocrisy	D.	difficult or complicated
5.	to pledge	E.	having a strong desire to achieve something
6.	to shrink	F.	to  express a clear opinion about an issue
7.	to shed	G.	accepting something bad to gain something good
8.	trade-off	H.	having a narrow or limited perspective
9.	aspiring	I.	to offer opinion on a matter
10.	to prize	J.	not moving or progressing
11.	tricky	K.	gradual change and expansion in goals beyond original purpose
12.	to marshal	L.	to deal with a difficult situation directly
13.	stuck	M.	to become smaller
14.	myopic	N.	to gather or organize  for a specific purpose
15.	to face up to	O.	when what a person says is not what they do
16.	mission creep	P.	to highly value something

 

V. Read the text and choose the correct option to complete the sentences

     The last changing/change/changed is over the purpose of the firm. The generally acceptance/except/accepted approach has been that they operate in the interests of their owners. But pressurize/pressure/stressed is coming from above, as politicians such as Bernie Sanders and Elizabeth Warren call on CEOs to favour staff, suppliers and clients more; and from below, as both customers and young workers demand that firms take a stand on  societies/population/social issues. Keen to show they are engaged, bosses are publicly weighing in on issues like abortion and gun control. The danger is hypocrisy. Goldman Sachs’s boss wants to “accelerate economic progress for all”, but it faces a huge fine for its role in the 1Malaysia Development Berhad corruption/corrupt/corrupted scandal in Malaysia. In August 2020 181 American CEOs pledged to serve staff, suppliers, communities and customers as well as shareholders. This is a promise, made during a long economic expansion, that they will not be able kept/keep/to keep. In a dynamic economy some firms have to shrink and shed workers. It is silly to pretend there are no trade-offs. Higher wages and more cash for suppliers mean lower profits or higher prized/prices/priced for consumers.

          What, then, does it take be/to be/is a corporate leader in the 2020s? Every firm is different, but those hiring/hire/hired a CEO, or aspiring to be one, should prize a few qualities. Mastering the tricky, creative and more collaborative game of allocating intangible capital is essential. A CEO must be able to marshal the data flowing between companies and their counterparties, redistributing who earns prophets/profits/profitable and bears risk. Some firms are ahead – Amazon monitors 500 measurable goals – but most CEOs are still stuck clearing their email inboxes at midnight. Last, bosses need to be clear that a firm should be run in the long-term interest of its owners. That does not mean being myopic. Any sensible/sensational/sensed business should face up to the risks from climate change, for example. It does mean avoiding mission creep. CEOs in the 2020s will have/has/to have their hands full with their own company, so forget trying to run the world too. 

 

 

VI. Read all the text fragments again. Are the sentences true (T) or false (F)? Correct the false statements.

 1.    In theory, this is a challenging period for bosses as chief executives possess limited authority.   

2.    Profits are high, the economy is excelling, and CEO remuneration is astronomical.  

3.    Currently  CEO’s power is mainly based on the control over capital allocation especially physical investment.    

4.    Now more and more companies invest in intangible assets.  

5.    Research and development (R&D), customers, inventory, machinery, and data are the examples of intangible assets.  

6. What makes a company becomes less clear-cut, for example modern businesses are relying on various types of workers, not just traditional employees, to achieve their goals.  

7. CEOs are exploring opportunities for expanding abroad while the profitability of international investment is improving. 

8. Companies choose not to go beyond their core business activities and avoid addressing and promoting their viewpoints on important social matters. 

9. The pressure to shift focus from the company owners’ interests to staff, suppliers, and clients come from the new CEOs.  

10.  Goldman Sachs’s plan to “accelerate economic progress for all” became an example of responsible leadership successfully addressing social issues.  

11. In dynamic economy it is not possible to keep CEOs’ ambitious promises to always take care of employees’ interests.  

12. Those hiring a CEO, or aspiring to be one, should prize the ability to manage tangible resources.

13. A CEO should have the capability to oversee the exchange of information between firms and their partners, reassigning the distribution of profits and risk responsibilities.

14. Bosses need to be clear that a firm should be run in the long-term interest of its employees.

15. Businesses should not concern themselves with social issues.

16. CEOs should go beyond their core responsibilities within their own companies and try to expand their influence or involvement into other often unrelated areas.  

 

VII. OVER TO YOU. Think of the role of CEOs in modern companies. Use the questions below to organize your ideas. Discuss these questions with other students:

A.   How has the nature of the CEO's role and their authority been changing in recent years?

B.   What are some of the challenges CEOs face in terms of controlling their companies and making decisions about investments?

C.   What does blurring boundaries of the firm (for example, when Uber's workforce is not technically classified as employees, but rather as independent contractors) mean for the nature of the CEO's authority?

D.   How is the purpose of a firm evolving, and what are the pressures on CEOs to consider factors beyond shareholder interests?

What qualities and skills are becoming increasingly important for corporate leaders in the 2020s, according to the article?