Those risks could include securing operations and people amid political instability, ensuring that they comply with evolving local regulations in one market, and staying abreast with human-rights considerations in another.įor many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. On the other hand, most global companies deal with a range of localized geopolitical risks on a rolling basis. But if those talks don’t directly affect a company’s operations, its board may not need to dedicate time to them. For example, the Iran nuclear talks have significant regional and global consequences. The business’s board can apply a materiality test to pinpoint what it should dedicate time to discussing. One way to initiate a more strategic approach is by assessing the risks that matter the most to a business. Not engaging in such discussions in the current geopolitical context would be malpractice. Global issues in strategic management wikipedia how to#Instead, boards can dedicate regular standing time to analyzing how to respond to the geopolitical risks that their enterprises face as part of a broader board effort to build more resilient companies. Global issues in strategic management wikipedia full#As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. But the discussions often focus on a specific investment, project, or market entry or exit. Many company boards already deliberate geopolitical risks to one degree or another. After consulting with top business leaders and legal, public-policy, and risk professionals at Fortune 500 companies in multiple industries, we suggest that company leaders can use a five-pronged approach to managing geopolitical risk. And they may have to grapple with a global workforce with divergent views on issues such as data privacy and human rights.Īny discussion of such potentially existential issues must start at the top. They may have to balance, given the risks, near- and long-term market priorities. Depending on the circumstance, a company’s leaders may have to weigh the effect that political or media scrutiny on the company’s operations in one area has on its holdings in other locales. Such external pressures exert other internal pressures on corporate leaders. Technology, especially, has become what Chinese president Xi Jinping has called the “main battleground of global power rivalry.” 4Ĭoco Feng, “Chinese president Xi Jinping seeks to rally country’s scientists for ‘unprecedented’ contest,” South China Morning Post, May 29, 2021, .Ĭompanies must consider how to harness capabilities such as 5G and AI without falling victim to geopolitically based regulatory or reputational cross fire. Many global companies are seeking their own form of “strategic autonomy” to navigate China–US relations. Marcin Grajewski, “The EU strategic autonomy debate: What think tanks are thinking,” European Parliament Think Tank, March 30, 2021,. “The new geopolitics of global business,” Economist, June 5, 2021, .Ĭhanneling the policy debates under way in the European Union, 3 The two countries account for 76 of the world’s 100 most valuable companies. Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States.
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