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MSA Document Analysis- Company Foreign Policy v2

The document discusses the necessity for companies to adopt a corporate foreign policy in response to increasing geopolitical risks and challenges faced by multinationals. It outlines the decline in U.S. intervention, the rise of economic sanctions, and the importance of strategic alliances to navigate these complexities. Recommendations include prioritizing geopolitical risk awareness, investing in long-term relationships, and promoting regional collaboration to enhance resilience and sustainability in global operations.

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3 views

MSA Document Analysis- Company Foreign Policy v2

The document discusses the necessity for companies to adopt a corporate foreign policy in response to increasing geopolitical risks and challenges faced by multinationals. It outlines the decline in U.S. intervention, the rise of economic sanctions, and the importance of strategic alliances to navigate these complexities. Recommendations include prioritizing geopolitical risk awareness, investing in long-term relationships, and promoting regional collaboration to enhance resilience and sustainability in global operations.

Uploaded by

amatuer3293
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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WHY COMPANIES NEED A

CORPORATE FOREIGN POLICY


Group : Abhishek Gautam (03) Kunal Parikh (26) | Pankaj (34) | Prabhjot Singh (35) | Varsha Verma (53)
CONTENTS
• Traditional Mindset
• Current Geopolitical Risks
• Forces Driving Company Foreign Policy
• Principles of Strategic Alliances That May
Help
• Real World Examples
• Building Strategy
• Action Plan
• Our Recommendations
.
Companies don’t need Foreign
policy (Traditional Mindset)

• They are not governments .


• Business focus on business.
• They do engage at different level of govt stakeholders
• They do help society.
• It may impact their image, so neutral to policies and
open to Ideas
Core Challenges for Multinationals – Current Geopolitical Risk
57% of executives cited geopolitical risk as their greatest challenge in 2015, up from 13% in 2014.
Reasons for Unrest:

Brexit's impact on Russia's annexation of ISIL advances disrupting Advancements in Artificial The shift towards economic
trade and EU Crimea in 2014 stability in the Middle Intelligence (AI) & sovereignty and protectionist
stability. destabilizing Europe. East and West Africa Cybersecurity Breaches policies & widening
economic disparity

Traditional tools like stakeholder engagement and CSR are insufficient in addressing these risks.

The weakening of multilateral institutions and agreements has led to a rise in bilateral deals.
Forces Driving the Need for Corporate Foreign Policy

DECLINE IN U.S. INTERVENTION INCREASED ECONOMIC SANCTIONS RISE IN SOUTH-SOUTH TRADE


Reduced willingness to act as a global U.S. and EU sanctions restrict global trade Growing economic interactions among
stabilizer. Delayed response to crises like opportunities .Forcing reevaluation of emerging markets and the need for
Ukraine and Syria. trade strategies. multinationals to adapt
.

Define the interest Collect and analyze the Find regional and Create an Environment
external intelligence local allies to succeed
Principles of Strategic Alliances which May Help!!

1 Geopolitical Due Diligence Caution !!


❑ Assess local, regional, and transnational risks: Don’t Ignore Home & Near Abroad Risk
❑ Understand political, economic, and cultural dynamics.
❑ Continuously Monitor Trends to anticipate future shock

2 Corporate Diplomacy
❑ Develop your own foreign policy stance
❑ Engage stakeholders broadly: Governments, local elites, civil society, and competitors.
❑ Build trust and relationships to enhance political license to operate.

3 Crisis-Ready Structures

❑ Develop flexible contracts and partnership frameworks.


❑ Enable quick adaptation during geopolitical shocks.
Applying Strategic Alliance Tools: Real-World Examples
**Examples from Case

MTN in Nigeria Vale in Argentina

Challenge : MTN’s $5.2 billion fine for failing to Challenge: Losses due to exchange rate controls and
comply with Nigerian government security measures . inflation making operations commercially unviable.

Strategic Alliance Solution Strategic Alliance Solution

Geopolitical Due Diligence: Understand Nigeria’s security Regional Sensitivity: Focus on understanding Argentina’s
priorities, particularly its fight against Boko Haram. economic policies and their impact on business operations.

Stakeholder Diplomacy: Strengthen relationships with Nigerian Crisis-Ready Frameworks: Include exit strategies in
authorities to ensure compliance and prevent future disputes. agreements to minimize losses from volatile environments.

Crisis-Ready Agreements: Partner with local telecom firms to Engage Local Partners: Work with Argentine stakeholders to
share operational risks and responsibilities. align operations with local economic conditions.
Building a Resilient Strategy

Adopt Transnational Perspectives:


• Avoid being perceived as overly aligned with home
Adopt countries.
• Example: Carrefour repositioned as a global brand
during tensions in China. Geopolitical Tools:
Country risk reports
Regional political analysis
Engage in Regional Initiatives: Sanctions compliance frameworks
• Support regional economic cooperation to enhance
Engage credibility. Diplomatic Tools:
• Example: Brazilian firms leveraging the Pacific Alliance Stakeholder mapping
while managing Mercosur relations. Relationship-building strategies
Crisis communication protocols
Invest in Local Relationships:
• Work closely with regional stakeholders to navigate
Invest instability.
• Example: Oil firms focusing on Kurdish-administered
Iraq amid broader instability.
Action Plan for Strategic Alliance Management

Short-Term Medium-Term Long-Term

❖ Form geopolitical risk ❖ Establish diplomatic frameworks for ❖ Institutionalize foreign policy as
teams. high-risk regions. part of corporate governance.
❖ Partner with local experts ❖ Strengthen alliances based on ❖ Train leadership in geopolitical
for risk analysis. regional stability trends. risk management.

Visionary Outcomes What Successful Strategic Alliances Achieve

Resilience: Adaptation Growth: Capturing Reputation: Enhancing Sustainability: Long-term


to geopolitical shocks opportunities in trust and credibility in partnership success in
emerging markets. global operations. volatile regions
Recommendations- Closing Thoughts
➢ Prioritize Geopolitical Risk Awareness

➢ Invest in Long-Term Relationship Building

➢ Leverage Technology for Proactive Risk Management:

➢ Promote Regional Collaboration

➢ Embed Agility in Strategic Alliances

➢ Build Expertise in Local Markets

➢ Emphasize Ethical Operations

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