U.S. companies on Yale list suspend Russia business
Jeffrey Sonnenfeld Yale School of Management
Scott Mlyn | CNBC
Yale Professor who put together the following: list of major western companiesMultiple American brands that are still in Russia applauded the decision Tuesday by major American brands to stop doing business there due to concerns over Russia’s government. war on Ukraine.
“I’m feeling quite good about this!” CNBC’s Jeffrey Sonnenfeld shared his feelings with CNBC via email, after hearing that the announcement had been made. McDonald’s, Starbucks Coca-Cola were halting operations in Russia.
PepsiCoIt soon followed with an announcement of its own that it was suspending Russian sales for 7UP, Pepsi-Cola and Mirinda brand sodas while still continuing to sell essential products.
Earlier Tuesday, The Washington PostHad named the three first companies in the order they were announced in subsequent announcements in the headline to a story about the spreadsheet that Sonnenfeld and his research group at Yale Chief Executive Leadership Institute had created.
According to the newspaper, it was a “naughty or nice list” of spreadsheets. The spreadsheet currently includes 290 companies who have indicated that they are going to exit Russia or will suspend or cease business operations there. The site also includes companies with ongoing operations in Russia.
Sonnenfeld claimed in an interview that he has been in touch recently with representatives of four companies, who made their announcements Tuesday amid outrage about Russia’s aggression on Ukraine.
Sonnenfeld, speaking about their decision-making abilities, said that “I admire all the companies immensely.”
His statement was that their list had made a significant difference to the way the CEOs wanted do the right things. Sonnenfeld stated that the CEOs kept telling him they wanted to be affirmed by others and that their boards were monitoring actions of other large companies.
Sonnenfeld stated that they were scared of “tall poppy syndrome” as it is known in Australia and didn’t wish to be retaliated against.
Representatives for Coca-Cola and McDonald’s as well as Starbucks, PepsiCo, and Starbucks did not immediately respond to Sonnenfeld’s comments.
McDonald’s and Starbucks responded with pointing to statementsTheir respective CEOs for their Tuesday decisions.
Chris Kempczinski, CEO of McDonald’s, stated that the company has been in Russia for over three decades and is now an integral part in the “850 communities” in Russia. However, McDonald’s values dictates that we can’t ignore the human suffering in Ukraine.
Starbucks CEO Kevin Johnson saidRussia’s “horrific” attack against Ukraine has been condemned. “Through this dynamic environment, we will continue taking decisions that are true and value our mission and communicating with transparency,” he stated.
Sonnenfeld said, during his interview that when one company said it was leaving Russia, or that they had suspended business, it created a snowball effect.
“These four companies are the strongest, representing the foundational American values,” he stated about the companies who announced Tuesday that they would be suspending business.
“These brands have a history that goes back to perestroika 1990, when the Soviet Union was opening to Europe. And they were received with enthusiasm from all sides,” he stated.
Sonnenfeld explained that “this is why these businesses, given their heritage, were confused as to what they should do” in the wake of the invasion by Ukraine.
“They got lost in a time warp. They were searching for win-win solutions in a world that doesn’t have any middle ground.” he stated.
Sonnenfeld stated that he had spoken with three companies about the issue of Russian business and said they were trying to find a legal and practical solution. However, Russia is under international condemnation as well as severe economic sanctions by major Western countries.
He stated that “none of them were bothered by financial considerations.” He said, “They tried to find the right thing in complex geopolitical situations with loyalty and compassion for large workforces.”
Sonnenfeld claimed that he created his spreadsheet to provide a moral argument against Russia.
“The entire point of the legal sanction [by governments]He stated that the Russian economy can be stalled if it is combined with economic embargoes by employers.
He cited South Africa’s widespread corporate boycotts in conjunction with the global government’s action of the 1980s/90s as the reason that the country was forced to dismantle its apartheid regime, which had seen the Black minority population institutionalize legal, economic, legal and financial power over them.
Sonnenfeld forecast that Western companies’ actions “absolutely” will affect Russia.
He claimed that Russian President Vladimir Putin is “anchored upon two things”. One, he was willing to coerce the people with violence; and second, he gives the illusion that all areas are under his totalitarian rule.
Professor said that the illusion has been shattered by the fact that major Western businesses have left the country.
“The ruble fell almost to 80%. The inflation rate has reached almost 30%. Sonnenfeld stated that this is 10 days worth of world economic history.
Sonnenfeld observed that Russia has seen the exodus of large companies, such as Exxon, Shell, and BP from their business. This means “several hundred of billions” of dollars have been “written off” in Russia-related assets, which “separate of hundreds and billions in lost revenue.”
He stated, “It’s big deal.”
He said, “This was an extraordinary act of moral courage. “It is more impressive than anything that happened in South Africa,” said he.
He did note, however that about three-dozen Western companies are on his list and are “stupidly staying” in Russia. At the moment, it seems.