CORPORATE STATECRAFT - Transatlantic Academy

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they operate, as well as to build a “global” brandseparate from national identity. How they do so isa suggestive area for further research especially soin respect of how they safeguard their corporatebrand from popular anger directed at their homecountry, as there are no ready channels to “improverelations” with the Demos.A Last Note on Systemic Challenges forCorporate Statecraft: There is a Lot MoreComingThis list of challenges to sustained business successis by no means exhaustive. Climate change willhave an existential impact on the global insuranceand construction industries. They are obligedto reassess their core assumptions about thenature of the risk they have to provision against,and are obliged to engage in the public policysphere to ensure that they are allowed to respondappropriately.The same could be said of the impact of globaldemographics (e.g. the aging of populations, theredistribution of spending power across regions)in shaping consumer markets and the nature ofagro food demand. The interconnectedness ofsocieties and the widely distributed capacity totravel are changing the tourism and hospitalityindustries and posing new pandemic risks. Theseand a multiplicity of other vertiginous changesin the environment, including in the digitaland nano environments, means that business isengaged in a new game altogether, one that shouldcreate a powerful self interest in ensuring not justeconomic dynamism, but also sustainable socialstability, equity in opportunity, predictability in riskmanagement, and viability of the rule of law.Articulating the notion of such a broad gaugedcorporate self interest will require leadershipculture of a new kind in the corporate world, onethat accepts the management of complexity inthe external environment as being as important abusiness function as resolving complication within.Corporate Statecraft 13
4The Core Competence of Corporate LeadersThe problemis that whilebusiness leadersare judged bytheir success insolving problemsand removingobstacles,complexity inthe externalenvironment is apersistent state,susceptible inmost cases onlyto management,through discourse,compromise,and “process.”Complication as expressed in the workingsof multiple connected cogs, wheels, andsprings in the mechanisms of a watch(or a corporation) is complexity contained in aframework. Complexity is complication withoutframework.The distinction is an important one in anydiscussion of corporations’ relationship with thebroader public realm because most decisionsthat business leaders are used to facing relate tosolving challenges within a defined universe — ofbusiness technology, labor relations, competitionand finance — all of which they understand indepth and for each of which they have managementmechanisms available. Their elemental goal is toensure predictability and smooth out any issuesthat stand in way of doing so. They have beenable to assume that the external environment, orthe framework of rules, resources, social forces,economic, and financial systems to which theyare exposed are managed by the state. But as thesway of the modern state becomes more tenuous,the complexity of the issues with which businessis obliged to cope escapes the old frameworks.The problem is that while business leaders arejudged by their success in solving problems andremoving obstacles, complexity in the externalenvironment (political, social, economic, security,and technological) is a persistent state, susceptiblein most cases only to management, throughdiscourse, compromise, and “process.” Businessdecisions now must take into account the erosion ofthe framework for managing complexity that theyhad relied on the state to provide, and get involvedin managing it themselves. Their instrument fordoing so is diplomacy.The External Dimension of Statecraft: TheConduct of Corporate DiplomacyFor the purposes of this paper, I would definediplomacy as the management of the risks posedby, and the maximization of opportunities latent in,power beyond an entity’s direct control.In functional terms, it is a loop consisting of:• The formulation of a “foreign policy” by anentity’s leadership that is then executed through:• The construction and maintenance ofpurposeful networks of influence in theexternal environment• The generation of intelligence (i.e. purposefuland focused information) generated throughthese networks• Branding, i.e. the establishment of positivepre-disposition to the interests andperspectives of the entity among thosenetworks (and beyond, as required through“public diplomacy”)• The anticipation of crisis, and themanagement of the unpredicted or theunpreventable• Constant course adjustments in both internaland external policy based on ongoingassessments of the entity’s long term interestsand the external environment.The Purpose and Conduct of CorporateDiplomacyThough it is difficult to gather organizational dataon this dimension of their hierarchies, relativelyfew corporations, to my knowledge, conducttheir diplomacy in such an integrated way. Theglobal energy majors have long histories, forbetter or worse, of a diplomacy that most closelyreflects the comprehensive model, though theyhave often failed to anticipate systemic changein polities where they were invested. Consumerfocusedcorporations, for their part, try to managesomething approximating a comprehensive14<strong>Transatlantic</strong> <strong>Academy</strong>
Page 5 and 6: 1Introduction: The State-Like Corpo
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Page 23 and 24: 5ConclusionThe reality ofperpetual
Page 25 and 26: 6ReferencesAllard, Nicholas W. “L
Page 27 and 28: Friedman, Milton. “The Social Res
Page 29 and 30: Pollach, Irene. “Online privacy a
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