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.

Comments or contributions? Get in touch at profpicks@ft.com

Economics

Target warns Donald Trump’s tariffs could cut into profits

Tags: Imports, pricing, retailer, sourcing, tariffs, trade, US

Summary: The US retail chain Target warned that additional US tariffs on imported goods could reduce its profits. Three quarters of its sales come from general merchandise such as electronics, textiles, or home decor — goods that are often imported to the US. Tariffs would raise the cost of imports and reduce consumer confidence. Target’s shares fell almost five per cent on Tuesday.

Classroom application: This article provides an opportunity for faculty and students to examine the impact of trade policies on companies’ income statements. Strategic reactions to public policies can be identified and analysed.

Questions:

• How would new tariffs affect Target’s bottom line if the company did not react?

• What might prevent Target from passing on additional import duties to customers?

• Should Target alter its product sourcing? If so, which countries should be preferred?

• How should Target deal with what it calls “tariff uncertainty”?

• What can Target learn from precedent cases?

Stefan Legge, lecturer, University of St Gallen

International business management

Japanese auto sector’s $18bn Mexico bet grows risky under Trump tariff threat

Summary: Donald Trump’s implementation of heavy tariffs on Canada, Mexico and China has triggered swift retaliation, escalating the risk of a full-blown trade war among the world’s largest economies. While the immediate economic consequences are significant, the ripple effects on global supply chains and international investments are even more profound. A striking example is the potential disruption to Japan’s automotive industry, which has invested $18bn in Mexico for vehicle assembly and component manufacturing.

Japanese automakers — currently the largest car producers in Mexico — are now reconsidering their investment plans in the country. The proposed US tariff of 25 per cent on all assembled vehicles and car parts imported from Mexico could force these companies to rethink their manufacturing and supply chain strategies. If Japanese automakers decide to pull back from Mexico, the economic fallout would be severe, first for Mexico, which relies heavily on this industry, and then for Japan, which would face significant disruptions to its global supply chain. This situation highlights how trade policies can have far-reaching and immediate impacts on global industries, supply chains, and economies.

Classroom application: This article provides a practical lens for analysing the critical intersection of trade policy, global supply chains and international business strategy. It should allow students to explore how trade wars disrupt cross-border investments, reshape manufacturing strategies, and impact economies. By examining the potential withdrawal of Japanese automakers from Mexico, students can apply theoretical frameworks from the course to real-world scenarios, enhancing their ability to navigate complex trade dynamics and make informed decisions in a globalised business environment.

Questions:

• How might escalating trade wars between the US, Mexico and China reshape the global competitive landscape for industries like automotive manufacturing?

• What are the potential long-term consequences for countries like Mexico when foreign investors reconsider their manufacturing and supply chain strategies due to trade policy changes?

• What factors should Japanese automakers consider when deciding whether to stay in Mexico or relocate their operations?

• What are the potential risks for Japan if its automotive companies are forced to restructure their global supply chains?

• What ethical responsibilities do multinational corporations have to the countries in which they operate, especially when considering relocating operations due to trade policy changes?

Fahd Jamil, UC Irvine

Leadership

Article ‘The one thing you needed to do last week’

Tags: Leadership, micromanagement, efficiency, trust

Summary: Elon Musk’s request for government workers to document what they did in the previous week caused widespread confusion and concern, and global media attention. Musk’s approach is the epitome of aggressive micromanagement behaviour fuelled by the belief that teams cannot deliver efficient outcomes without direct supervision and hands-on managerial intervention. In contrast, Jensen Huang of Nvidia takes a proactive approach by encouraging employees to jot down the five most important tasks they are working on, known as T5Ts, to foster a culture of focus, prioritisation and transparency throughout the company.

Classroom application: This article provides an opportunity to discuss the role of managers in daily team operations and to what degree team efficiency is dependent on close monitoring and managerial interventions (micromanagement).

Questions

• What assumptions about the manager/employer role are driving Musk’s and Huang’s management approach?

• What role is trust playing here and why do you think a lot of managers lack trust in their teams?

• What are the effects of micromanagement on team members’ commitment to their work and identification with the organisation?

• What is determining the right degree of freedom for a team — particularly in an ever faster changing environment?

• What benefits do you see in writing down and reflect about priorities and achievements? And to what degree should they be monitored by line managers?

• What does it take to move from a micromanagement to a more trusting leadership style?

Stefan Krummaker, Professor of leadership practice, Queen Mary University of London

Mergers & acquisitions

Microsoft to shut down video-calling pioneer Skype

Tags: Digital acquisition, videoconferencing

Summary: Despite enthusiastic announcements with promises of significant synergies and earnings growth typically made by executives on both sides of deals, three quarters of mergers and acquisitions fail to live up to expectations. So-called “killer acquisitions” are notoriously difficult to identify. 

Classroom application: This article invites faculty and students to explore the incentives for the acquiring company to potentially “kill the target” to avoid competition (“killer acquisitions”). It also encourages participants to devise measures that could be put in place to prevent such practices that might be of particular interest to antitrust authorities.

Questions:

• After Nokia, is this another example of a European business laid to rest by a US “killer acquisition”? Why was Skype a threat to Microsoft?

• Alternatively, is Microsoft’s decision to shutter Skype the result of poor integration after years of lagging behind in a fast-developing lucrative market?

• Skype was far ahead of its time (Zoom became popular years later during Covid). Is this one of the greatest missed opportunities for Microsoft? 

• Would the world have seen the birth of Zoom if Microsoft-Skype integration had been a success?

• What are the special research methods to apply to identify “killer acquisitions”?

• What measures should be put in place to address such practices?

• What are the similarities, if any, between this case and the Visa-Plaid affair?

Krishnan Ranganathan, guest faculty, Indian business schools

Got feedback on professors’ picks or willing to contribute? Get in touch at bschool@ft.com or add your selected articles and questions in the comments below.