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Session 13ImplementationPGPM 2026–27 · 120 minutes
Corporate Governance, Ethics & Business Models
Who gains, who decides—and who can challenge?
Bring the course together by connecting strategic choices to accountability. Use Amazon’s business models to frame questions, then test governance designs in original decision exercises.
Session 13 · 120 minutes · two-hour synthesis session
Learning outcomes
By the end of this session, you should be able to:
- Use an agency lens to identify a conflict of interests, then compare a company-centred perspective. Practise this outcome.
- Diagnose ethical blind spots in goals, incentives, outsourcing and cumulative exceptions. Practise this outcome.
- Map how a business model creates revenue and allocates benefits, risks and the ability to challenge. Practise this outcome.
- Design an oversight process with informed independent challenge, credible escalation and evidence of consequences. Practise this outcome.
- Defend an Amazon board recommendation using historical case facts, a named owner and a review condition. Practise this outcome.
Explore the diagram and story lab · Prepare with the assigned readings
Use the activities to explain your reasoning and revise it against evidence. Formal assessment follows the course outline and instructor guidance.
Recall → connect → carry forward · Sessions 1–12
The strategy story so far: Sessions 1–12
Bring Sessions 1-12 together through fictional Nila Foods. A focused weekday-meal promise has led to questions about purpose, industry economics, capabilities, shared value, competitive positioning, complements, packaging access, borders and execution. The final session asks who sets the objectives, who can challenge decisions and who receives benefits or bears risk. A coherent and efficiently executed strategy still needs credible governance and ethical scrutiny.
One continuing classroom story. Nila Foods is a fictional Indian meal-service for working adults. Follow its choices from Session 1; later expansion ideas are proposals to test.
Session 1 · What is strategy?
Operational effectiveness improves similar activities; strategy requires positioning, trade-offs and fit. State objective, scope and advantage, then compare intended plans with emergent action using evidence.
Nila Foods: Nila proposes preordered weekday meals on clustered routes, declines instant citywide delivery and studies actual customer behaviour.
Session 2 · Framework for Strategic Analysis
Purpose and values guide what endures, while a quantified ambition opens a same-date gap from the baseline; closing that gap requires external and internal evidence.
Nila Foods: Nila separated easing meal burdens and honest food-safety disclosure from its growth target, then compared that target with its projected baseline.
Session 3 · Industry Analysis: The Fundamentals
Industry boundaries, PESTEL and five forces connect external change to price, cost and investment; complements and possible responses then raise questions about the wider game.
Nila Foods: Nila traced ingredient-price pressure, supplier bargaining, lunch substitutes and easy entry before asking whether a neighbouring seller could also help it.
Session 4 · Beyond the Five Forces
Value nets and PARTS show how co-opetition changes added value, while uncertainty shapes commitments; credible moves therefore require examining internal strengths.
Nila Foods: Nila considered sharing a collection point with a rival and testing the rules through a limited pilot while demand remained uncertain.
Session 5 · Internal Analysis & Resource-Based View
Resources and capabilities support advantage when they improve buyer benefits or relative costs and pass tests against rivals and substitutes; value-chain analysis then checks their economic contribution.
Nila Foods: Nila examined kitchen routines, route know-how and trust, asking which linked activities rivals could imitate and whether it could retain their benefits.
Session 6 · Creating advantage and shared value
Use the value stick to distinguish value created from value captured. Test shared value against both business and social effects, including burdens shifted elsewhere.
Nila Foods: Nila asks whether demand forecasts and reusable containers reduce waste and cost, including the return and cleaning work.
Session 7 · Business Strategy: Differentiation, Cost Leadership & Blue Ocean
Porter distinguishes cost leadership, differentiation and focus; Kim and Mauborgne test value innovation; Ghemawat and Pisano examine threats, commitments and capabilities.
Nila Foods: Nila compares dependable delivery and relative cost within its chosen segment. Its value curve and four-actions proposal must demonstrate new demand and viable economics before supporting a blue ocean claim.
Session 8 · Entrepreneurship, Platforms, Technology & Innovation
Eisenmann, Parker and Van Alstyne test platform participation and pricing; Bower and Christensen distinguish disruptive trajectories from sustaining improvements.
Nila Foods: To extend its offer, Nila asks whether customers and nutrition creators could benefit from one another. An experiment tests complement quality, retained use and cross-side effects; success alone would not establish disruption.
Session 9 · Corporate Strategy: Vertical Integration & Diversification
Porter tests attractiveness, entry cost and the better-off mechanism; Campbell, Goold and Alexander ask whether this parent beats alternative owners.
Nila Foods: The ecosystem need not be owned. Nila asks whether owning a packaging supplier would improve meal delivery enough to outweigh capital, coordination and harmful misfit; contracts and specialist owners remain alternatives.
Session 10 · Alliances, mergers and acquisitions
Choose the route that supplies the needed capability after governance, uncertainty, price and integration costs. Ownership and synergy require an evidence-based mechanism.
Nila Foods: Nila compares a packaging contract, an alliance and acquiring a supplier; it tests control needs and integration risks before committing.
Session 11 · Global Strategy & MNC
CAGE identifies relevant cross-border frictions; adaptation, aggregation and arbitrage specify different responses with different organisational demands.
Nila Foods: For an overseas pilot, Nila would test menus and delivery windows locally while considering shared forecasting tools. The proposal needs evidence that its domestic advantage can travel and a suitable entry route.
Session 12 · Organisational Design
Execution depends on decision rights, usable information, incentives and culture; structure should address the coordination problem in the chosen strategy.
Nila Foods: Nila could delegate bounded order exceptions to cluster managers while retaining clear quality escalation. The team must test whether its authority, information and rewards support reliable meals as operations become more complex.
Why this leads to Session 13
Nila's original promises and value-creation hypotheses now become tests of accountability. Governance asks who oversees management and whether the chosen measures support enterprise health. Ethics asks what targets, incentives or outsourcing could make people fail to notice. The business model traces how customers, creators, suppliers, staff, delivery partners and owners receive value or bear risk. Use the earlier competitive and organisational analysis to specify an oversight mechanism rather than rely on good intentions.
Retrieve it before moving on
Retell the strategic chain that led Nila from preordered meals to possible partners, ownership and overseas expansion. Suppose managers are rewarded only for punctual delivery and a cook raises a food-safety concern. How should governance, incentives and escalation connect the original promise to credible accountability?
Compare your reasoning with a model answer
Nila's focus makes reliable meals, preorders and clustered routes reinforce one another. Purpose and a dated gap guide its ambition. Industry and co-opetition analysis test the economics and partner responses; internal and value analysis test capabilities, value capture and claimed waste benefits. Business positioning constrains growth. Creator complements, packaging ownership or alliance, and an overseas pilot remain proposals requiring evidence. Organisational design must give people usable information and clear authority to deliver any chosen route. Governance now asks whether the board's objectives and oversight support the enterprise, while ethics tests what a punctuality-only bonus hides. Give the cook a protected stop-and-escalate route, independent challenge and a named response owner. Review quality, economic and safety evidence alongside delivery performance. Trace consequences for affected parties, including risks transferred to partners. Review repeated exceptions and actual conduct; a profitable service and a written code do not establish ethical behaviour.
Carried forward · Session 12
Good execution still needs a defensible purpose
A team can execute an ill-chosen objective extremely well. Session 12 examined decision rights, information and culture. The final session asks who sets the objective, who can challenge it, whose interests are affected, and how a profitable business model can create incentives that deserve scrutiny.
The strategy connection: governance sets authority and accountability; ethics asks what conduct and consequences are defensible; the business model explains how activities create and capture value. These questions meet whenever a target shapes how people behave.
Core concept
The principal delegates. The agent sees more.
In an agency relationship, one party delegates work or decisions to another. Interests may differ, and the agent may know more about effort, quality or risk than the principal. The analytical problem is to design accountability under those conditions. Shareholders and managers are one example; boards and executives, or a platform and a service provider, offer others.
| Mechanism | What it can help reveal or align | How it can fall short |
|---|---|---|
| Independent oversight | A board or review body examines strategy, risk and management performance. | Formal independence is weak if directors lack information, expertise, time or willingness to challenge. |
| Incentive design | Rewards can connect managerial decisions with desired long-term outcomes. | A narrow measure may encourage gaming; a delayed reward may still omit harms borne by others. |
| Disclosure and assurance | Consistent reporting and independent checks reduce information gaps. | Audits depend on scope, evidence quality and the ability to investigate exceptions. |
| Decision and escalation rights | People know who approves sensitive choices and where concerns can travel. | A reporting channel is ineffective if raising a concern leads to retaliation or silence. |
Separate model from mandate: agency theory is an analytical lens. The Bower–Paine reading debates how to understand corporate leadership. Do not turn either into a universal statement of directors’ legal duties across jurisdictions.
Original practice examples
Find the mechanism before you prescribe a remedy
The five labels below follow Bazerman and Tenbrunsel’s reading. Each classroom example is invented.
| Blind spot | A signal in an invented organisation | A practical challenge |
|---|---|---|
| Ill-conceived goals | A service team is rewarded only for closing tickets, so it closes unresolved complaints. | Inspect reopened cases and customer resolution; ask what the target encourages people to omit. |
| Motivated blindness | A manager avoids examining a star seller’s unusually low complaint rate. | Ask a reviewer without a sales bonus to sample the underlying customer experience. |
| Indirect blindness | A firm assumes a contractor’s harmful practice is solely the contractor’s concern. | Trace who benefits, who sets the pressure and who can inspect the work. |
| Slippery slope | Small exceptions to a quality check gradually become the accepted routine. | Record exceptions and review cumulative drift against the original standard. |
| Overvaluing outcomes | A risky shortcut is praised because the launch happened to succeed. | Review the decision using information available at the time, including the possible downside. |
Business model lens
Follow the money—and the consequence
A business model links a customer proposition to activities, resources, partners and a revenue–cost logic. The ethical inquiry adds a second map: who receives value, who supplies essential inputs, who carries the risk and who can contest a decision?
Marketplace
A platform can help buyers and sellers find one another. Ask how access, rankings, fees and dispute resolution affect each side. A rule that raises platform income might weaken participant trust.
Advertising
Advertising can fund a useful service. Ask whether users can distinguish paid placement, understand material data uses and make meaningful choices. Revenue alone does not settle those questions.
Integrated service
Combining activities can improve convenience. Ask which information should flow across units and where consent, professional independence or safety require boundaries. Synergy needs a specific mechanism.
Make the analysis testable: for one model, write “Revenue increases when ___; this may encourage ___; the affected party is ___; we would detect the problem by ___.” Treat the statement as a hypothesis to investigate.
Case evidence · Amazon in 2024
What would you put on the board agenda?
The case provides business-model facts, not findings of misconduct. Use the facts below to frame governance questions. These questions do not assert that Amazon adopted the hypothetical practices in the exercises.
| Case observation | Question for deliberation | Information to request |
|---|---|---|
| More than 60% of Amazon-store sales came from independent sellers in 2023 (p. 1). | How should a platform assess rules that affect both its own economics and seller participation? | Seller outcomes, buyer experience, dispute patterns and the assumptions behind a rule change. |
| The case reports more than 200 million Prime members worldwide by 2023 (p. 2). | How does leadership evaluate a bundle across short-term revenue and continuing customer value? | Benefits used, reasons for cancellation, service quality and the economics of incremental benefits. |
| Advertising generated more than $47 billion in 2023 revenue (p. 2). | Which measures would reveal whether monetisation changes the customer proposition? | Ad relevance, clarity of paid placement, customer feedback and durable purchase behaviour. |
| Amazon acquired One Medical in 2023 (p. 3). | Where should professional judgement or sensitive information have protected boundaries? | Decision authority, access controls, quality review and a credible escalation process. |
Board challenge: investment or managerial empire building?
A diversified firm proposes another expansion. Defend a long-term investment case, then argue the strongest case against it. Ask for milestones, an independent review, downside exposure and a credible exit criterion. A long horizon should improve the evidence required, not remove it.
Decision workshop
An attractive target. An inconvenient complaint.
Decision studio · original exercise
Design a board review that can hear bad news
Build a review for the hypothetical subscription proposal. Feedback examines whether oversight, incentives and information reinforce one another. There is no automatic ethics score.
Your board briefing
Select your rules to reveal their strengths and blind spots.
This draft is not submitted. Copy it into your class preparation notes.
Course synthesis
Your final strategy should survive a difficult question
Analysis · Sessions 1–6
What is the problem? Which industry forces, resources and value-creation mechanisms support your diagnosis? What evidence would contradict it?
Formulation · Sessions 7–11
How will the firm compete, what should it own, which partners does it need and where should it operate? Identify a real trade-off.
Implementation · Sessions 12–13
Who decides, who learns and who can challenge? Explain how the controls and governance support the strategy without hiding its consequences.
Prepare the final reflection
Identify a strategic belief you changed during the course. Explain the evidence or discussion that changed it, then show how your new view affects a real managerial decision. Follow the instructor’s submission instructions.
Exit question: if your recommendation achieves its financial target but weakens the relationships that sustain the business, what would you change—and how would you know early enough to act?
Knowledge check
Can you defend the decision?
Test your grip on the session’s core ideas, including the workshops and simulations above. Each answer explains itself.
See it · explain it · test it
Governance: inspect the target and its consequences
A renewal dashboard can look healthy while hiding why customers stayed. Start with the mechanism that earns revenue, follow the incentives it creates and ask whose evidence reaches an informed reviewer. Good intentions and good financial results cannot independently establish defensible conduct.
Revenue is an input to judgement, not the whole judgement
- 1. Business model: Who pays for value?
- 2. Goals + incentives: What gets rewarded?
- 3. Actions + effects: Who carries risk?
- 4. Independent review: Who can challenge?
- 5. Decision + revisit: What evidence next?
A proposed business model creates incentives and actions, which produce revenue and stakeholder consequences. An informed review challenges both the target and its effects, then changes the proposal or its safeguards.
One concept, three contexts
Hypothetical · original teaching scenario
Nila Learn: a green renewal dashboard
Fictional Nila Learn sells subscriptions. A growth team is rewarded for renewal revenue and quietly makes cancellation difficult. Renewals rise while support complaints accumulate. The manager celebrates the target and delegates complaint handling to a contractor. This scenario is not a claim about any named company.
Student task: trace the incentive, identify the affected learner, and request cancellation-journey evidence as well as unit economics. A reviewer outside the growth bonus chain needs an escalation route that the manager cannot silently suppress.
Discuss and defend your interpretation
Would a profitable outcome justify the cancellation design? Give the strongest economic defence, then assess it using informed choice, long-term trust and evidence available before the result.
Give a claim, supporting evidence, a trade-off and one observation that could change your view.
Global example · Patagonia ownership announcement, 2022
Patagonia: separate economic value from control
On 14 September 2022, Patagonia announced a structure allocating voting stock to the Patagonia Purpose Trust and nonvoting stock to the Holdfast Collective. Its announcement describes directing money left after reinvestment toward environmental work. Patagonia’s ownership announcement.
Teaching inference: ownership design can protect a stated purpose while retaining an operating business. It does not settle every trade-off or independently establish environmental outcomes. Ask who challenges investment, growth and distribution decisions.
Discuss and defend your interpretation
Which evidence would let a reviewer assess both financial continuity and the stated environmental purpose? Distinguish decision authority, financial benefit and measured impact.
Give a claim, supporting evidence, a trade-off and one observation that could change your view.
Indian example · Tata Code of Conduct, 2015 edition
Tata: a concern needs a route, not just a value
The 2015 Tata Code of Conduct addresses stakeholders beyond investors and includes routes for raising concerns with protection against retaliation. These are published commitments; their presence is not proof that every concern is handled effectively. Tata’s 2015 code, core principles and raising concerns.
Teaching inference: compare a commitment with operating evidence—awareness of the route, access to a reviewer, response records and protection after escalation. This is a governance exercise, not a statement of current legal duties.
Discuss and defend your interpretation
If a high-performing manager controls all complaints about the manager’s own team, what independent route would you propose? What evidence would show that staff can actually use it?
Give a claim, supporting evidence, a trade-off and one observation that could change your view.
Reading-to-practice map
Local resource names are shown so you can find the assigned material. PDF page numbers refer to the supplied files; access licensed originals through your library or assigned course pack.
Bower & Paine (2017) · corporate leadership and accountability
Source file: The error.pdf
PDF pp. 4–8 examine premises and consequences of shareholder-centred agency thinking; pp. 9–12 develop a company-centred alternative. Compare their arguments with an agency diagnosis; do not turn a reading’s normative proposal into a universal legal rule.
Bazerman & Tenbrunsel (2011) · blind spots and safeguards
Source file: Ethical Breakdown.pdf
PDF pp. 4–9 connect goals, motivated and indirect blindness, gradual drift and outcome bias. For one exercise, identify a mechanism and a safeguard that could reveal it before a favourable result masks the problem.
Gupta & Rodriguez (2024) · assigned case
Source file: Amazon in 2024.pdf
Case pp. 1–3 supply facts about retail, sellers, Prime, advertising and healthcare. Frame governance questions from those facts. Business-model facts are not findings of misconduct and do not prove your proposed safeguard was adopted.
Use your assigned course pack · Assigned preparation
The local folder numbering predates the current V0.3 sequence. This map follows the content of the readings and the canonical Session 13 topic. The existing required readings remain in place.
Four diagnostic decisions
Choose an answer, inspect the explanation and try again. These checks assess the reasoning in the stated scenarios, not the quality of an entire real company.
0 / 4 correct
Preparation
Readings for Session 13
Required case
Gupta, S., & Rodriguez, M. L. (2024). Amazon in 2024. HBS 9-514-025, revised 16 July 2024. Use your assigned course pack. Case figures on this page refer to that historical period.
Required article
Bower, J. L., & Paine, L. S. (2017). The Error at the Heart of Corporate Leadership. Harvard Business Review.
Required article
Bazerman, M. H., & Tenbrunsel, A. E. (2011). Ethical Breakdowns. Harvard Business Review.
Before class: read both articles and revisit the Amazon case. Bring one governance question, one possible blind spot and a concrete safeguard. Your recommendation should name an owner, evidence and a review condition.
This page offers original teaching explanations and exercises alongside brief attributed reading guides. Read the assigned articles through the library or course pack. Exercises are learning aids, not forecasts or reports of Amazon decisions.