Executives as Business Diplomats: Evidence from American, German and Swiss Multinational Companies

Date: Jan. 25, 2011 (Tue)
Time: 12 noon
Venue: 801, 8/F, Cheng Yu Tung Building, CUHK
Speakers: Prof. Raymond Saner and Prof. Lichia Yiu

BUSINESS DIPLOMACY

Global companies must be competitive in the business they are in and at the same time show dexterity in managing multiple stakeholders at home and abroad. While it is of key importance to have the right products and services at the right price, global companies need increasingly to be equipped with new competencies in dealing successfully with obstacles emanating from outside of their direct sphere of control. Often these operational obstacles outside of the “normal” business transactions stem from complex sets of relationships in an ever changing business landscape.

Recent examples of such cases are the compromise on intellectual property rights concerning HIV/AIDS medication (e.g. Abbot Inc. and other pharmaceuticals vs Thai and Brazilian government), the violent conflicts around water rights (Suez and Bechtel in Bolivia and Argentina , powerful consumer backlash against child labour (Nike) and contaminated products (Coke Cola), destruction of production equipment (sabotage of Shell Oil’s pipelines in Eastern Nigeria by dispossessed and oppressed minority tribes), hostage taking (Sinnoc in Ethiopia).

Facing such challenges, global companies require a new set of relational competencies that most global managers have no prior learning or training in. The competencies needed to deal with non-business counterparts such as foreign governments, multiple domestic and foreign pressures groups or domestic civil society groups like tribal leaders or NGOs predispose that global companies acquire organizational competency in Business Diplomacy Management. This competency ca help build bridges and networks between global companies and the complex political landscapes within which they conduct business. Many needed attributes of a Business Diplomacy Manager are comparable to the competency profile of a political diplomat other attributes are unique to the context of international business.