Business school professors’ picks

Welcome to professors’ picks, offering a weekly curated selection of FT articles by and for business school faculty to connect classrooms to current events and to develop students’ critical thinking.

Read all submissions at www.ft.com/bschoolpicks. Save this link in myFT to receive emails alerting you to each new edition. Search the tags for relevant topics to illustrate teaching points. Encourage students to join the debate in the comments section beneath the article.

Comments or contributions? Get in touch at [email protected] 

Generative AI

New York Times agrees first AI deal with Amazon

Tags: Amazon, New York Times, Generative AI, IP protection

Summary: The New York Times has announced a licensing deal to allow its editorial content to be used to train Amazon’s AI products. This is a big shift in policy for the media group, which has an ongoing legal dispute with OpenAI and Microsoft, arguing that its content was used without permission for their large language model. The case opens up significant concerns about IP ownership.

We are seeing echoes of the battle between platforms and publishers when the internet was first created. Back in the late 1990s, with the threat of news appearing on Google and Facebook at zero cost, media companies fought back initially by offering their own content for free, and then by developing subscription-based business models to protect their content and maintain the quality of their journalism. It was a successful shift, a victory for high quality writing.

This time is slightly different because Generative AI appropriates quality writing in a less blatant way. Nevertheless, premium providers fear a race to the bottom, so the New York Times seems to have taken a proactive step to work with Amazon (currently a laggard to Microsoft and Google in the Gen AI stakes), in return for an undisclosed sum. It is an interesting test case, and will be watched closely by other publishers over the next couple of years.

Classroom application Instructors might want to remind their students of the battle between publishers and tech platforms during the 1990s and 2000s, and the important role of IP law and competition policy. Ultimately, big tech was the big winner, but the top providers such as the New York Times also did well. There is still a premium on quality. For more background reading, see Too Little, Too Late? How Policymakers and Regulators Respond to the Business Model Innovations of Digital Firms.

Questions:

• Is it possible to prove IP ownership in a world of generative AI? Gen AI creates new text output drawn from vast bodies of training data, making it almost impossible to attribute to any one source. This is very different to IP ownership questions in the pre-Gen AI world, when software products like Turnitin could reliably prove when content was being re-used

• What’s in it for the New York Times? Is this an act of desperation to try to salvage some value from its content or a clever way of opening up a new revenue stream from existing content? 

• Why would Amazon pay for content it can probably get for free? Does it think this will give it an edge over other large language model providers?

• How will Generative AI change the whole writing and publishing industry?   More and more of the content we read is written by Gen AI, and judging by what happened with the internet 20 years ago this ‘commoditisation’ of text puts a premium on high quality writing from places like the New York Times and indeed from best selling novelists.

Julian Birkinshaw, Dean, Ivey business school

Accounting, reputation

Article: PwC exits more than a dozen countries in push to avoid scandals

Tags: Market exit, divestment, corporate scandals, reputation management, corruption

Summary: PwC — one of the big four accounting firms — exited more than a dozen foreign host countries which became too risky to operate in, mainly in Africa. These decisions are part of a broader initiative to protect its reputation and build partnerships primarily with firms which are able to follow compliance standards in different host markets. Accusations of corruption in countries such as China and misuse of confidential government information have resulted in PwC exposing its global reputation to significant risks. In attempts to avoid risk, the company is revising its partner firms in different countries and, in some cases where the partnerships remain, local managers have been replaced with global directors to better control operations.   

Classroom application: This article provides a clear overview of the relationship between corporate scandals, organisational reputations and their effect on global divestment decisions. 

Questions for students/readers:  

• Do corporate scandals — accusations of corruption, misuse of confidential information etc — affect corporate reputations globally? When is it so and when not? 

• Is the decision to exit a strategic or financial decision for PwC? 

• Is it ethical for PwC to abandon its partners and clients in host markets? What might be the reputational effects of such decisions in the future? 

• ‘Market exit’ helps firms reorchestrate resources and manage risk, as more and more seek to prioritise how they invest their resources and managerial attention. Discuss

• Could PwC re-enter these markets in the future? What might be the incentives and/or impediments? 

Irina Surdu-Nardella, Professor, Warwick Business School 

Global Business

US vows to use ‘every tool’ in crackdown on international students: Trump administration moves to slow applications amid deepening stand-off with universities

Tags: Multinational management, Administrative trade policy, Student visas

Summary: The Trump administration seeking to limit applications from foreigners wanting to study in the US by altering the current vetting process. By tightened screening of the social media activities of applicants, the government seeks to ensure that students who are in the US understand the law and do not have criminal intent.

Classroom application: Imagine you are the CEO of a $2.6bn multinational enterprise with 17 business units, with international buyers representing more than 22 per cent of its customers and 30 per cent of its revenue. This allows us to explore the implications of such an administrative trade policy on a company’s strategic and organisational approach to internationalisation.

Questions:

• How would you react to government limits on your ability to sell to the foreign market?

• What organisational issues and opportunities does such a situation present?

• What strategies might you employ to adapt to this change?

• How might this situation increase pressures for efficiency vs market responsiveness in your industry?

• How could you adapt your internationalisation strategies as a result?

Joseph LiPuma, Clinical Associate Professor, Questrom School of Business

Investment

Investors shift away from US bond market on fears over Donald Trump’s policies

Disciplines: Finance, International Entrepreneurship, International Strategy, Bonds

Tags: International Finance, Treasuries, Diversification, US debt

Summary: Investors are beginning to diversify their fixed income portfolios towards non-US investments. US fixed income markets have been poorly performing recently because of President Trump’s US tax bill, which has passed the house and is now in the Senate. Finance leaders stress the dollar will remain the world’s reserve currency, and treasuries will continue as a central core of bond portfolios. However, many countries’ debt markets are now providing decent returns such as Japan and Australia. The 30-year yield climbed above 5 per cent, its highest level since 2023, and capping a multi-day decline. The dollar has dropped 8 per cent this year against six other international peers. One chief investment officer estimates the US budget deficit to be 6-7 per cent of GDP and buyers will require higher yields to compensate for the risk.

Classroom application: This article provides a good catalyst to continue the debate inside business school classrooms about how domestic policies (eg, US tariffs) are affecting not only consumer spending, but also fiscal and monetary policy. Treasury bonds are protected by the full faith and credit of the US government, and generally are considered to be stable, non-controversial and low yield investments. This is in sharp contrast to the traditional higher yield from corporate or junk bonds. However, treasuries are not immune to the risk and return trade-off, apropos to their climb to over 5 per cent. This also is on the heels of the US’ sovereign credit rating being downgraded by Moody’s on May 19. This article only provides a few examples, but there are many other investment firms pursuing a similar tack.

Questions:

• Do you believe that treasury yields will eventually begin coming down?

• Financial markets often trade on trends, real, erroneously perceived or not. Do you believe the increase in treasury yields is a bona fide trend or is it just a temporary blip?

• There has been much debate over the past couple of years on the positives and negatives of a strong US dollar. What are your thoughts?

• Do you agree with Moody’s downgrade for the US sovereign credit rating?

• Would you plan to diversify your own investments right now or are you still going to primarily keep your existing portfolio intact?

• Do you believe the US fiscal and monetary policies are in the long-term best interest of the country and for world trade?

Case Discussion Positioning: Here are other associated articles. The Moody’s downgrade, why credit ratings sort of matter, and commentary on President Trump’s tax bill being big but not beautiful. There is coverage on why the EU needs to become its own asset haven, non-US perspectives and concerns about why increasing US debt is becoming problematic. Last but not certainly not least, what might be happening with the Japanese bond market?

Gregory Stoller, Master Lecturer, Boston University Questrom School of Business

Got feedback on professors’ picks or willing to contribute? Get in touch at [email protected] or add your selected articles and questions in the comments below.