WHY YOUR COMPANY NEEDS A FOREIGN POLICY

MULTINATIONALS MUST ADDRESS GROWING GEOPOLITICAL VOLATILITY.

BY JOHN CHIPMAN

IN FEBRUARY 2014, RUSSIA INVADED THE UKRAINIAN PENINSULA OF CRIMEA, AND THE FOLLOWING MONTH, IT ANNOUNCED CRIMEA’S ANNEXATION. THIS SUDDEN ACT MARKED THE BEGINNING OF THE FIRST MAJOR STRATEGIC CRISIS IN EUROPE IN A GENERATION AND SERVED AS A WAKE-UP CALL TO BUSINESS LEADERS. As the crisis was unfolding, the Bank of England surveyed business executives on their views of systemic risk and in June published the striking results: 57% cited geopolitical risk as the greatest challenge facing their business, up from 13% the previous year. Subsequent Bank of England surveys have all ranked geopolitical risk as the most challenging risk to manage— above cyberattacks, financial disruption, and even an economic downturn. Geopolitics is back—just witness the recent Brexit decision, which will dramatically change the future shape of the EU as much…

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Harvard Business Review (Digital) - 1 Issue, September 2016

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