Witold J. Henisz

From leading geostrategy experts comes an indispensable guide for executives seeking to thrive and create long-term value in the next era of global competition. How do executives position a company for growth when the geopolitical future is uncertain? Recent events in Ukraine and the Middle East and tightening restrictions on international trade and investment are reshaping the global business environment. History shows that any such era of change presents both challenges and opportunities. The C-suite’s ability to implement a geostrategy will determine which executives lead their companies into successful futures—and which get left behind. Learn from the ultimate authorities on geostrategic management. The authors behind Geostrategy by Design represent the best of real-world experience and respected academic research. From professional services firm EY, Oliver Jones and Courtney Rickert McCaffrey provide insight and analysis on how geopolitics is affecting companies around the world and how they are managing it. From the Wharton School at the University of Pennsylvania, Professor Witold J. Henisz’s research examines the impact of political hazards as well as environmental, social, and governance factors more broadly on the strategy and valuation of global corporations. Together, the authors use examples, from historical global turning points to recent political disruptions, to illustrate how geostrategy is essential to surviving and succeeding in the next era of globalization. A proven framework to embed geopolitical strategy into a company’s DNA. Learn how to implement four distinct activities required for a proactive geostrategy—and how to create a governance structure that weaves them together for long-term effectiveness. Scan: identify and dynamically monitor geopolitical, country, regulatory, and societal risks Focus: assess how these risks could affect the company Manage: integrate the political risks that are most material to the company into connected risk approaches Strategize: incorporate geopolitical considerations and other political risks into strategic decisions Govern: execute via a cross-functional geostrategic team and create a culture that embraces geostrategy Tomorrow’s companies need a geostrategy today. With the right geostrategy in place, executives will be better equipped to navigate geopolitical volatility and uncertainty—no matter what lies ahead.

Managers of multinational organizations are struggling to win the strategic competition for the hearts and minds of external stakeholders. These stakeholders differ fundamentally in their worldview, their understanding of the market economy and their aspirations and fears for the future. Their collective opinions of managers and corporations will shape the competitive landscape of the global economy and have serious consequences for businesses that fail to meet their expectations. This important new book argues that the strategic management of relationships with external stakeholders – what the author calls "Corporate Diplomacy" – is not just canny PR, but creates real and lasting business value. Using a mix of colourful examples, practically relevant tools and considered perspectives, the book hones in on a fundamental challenge that managers of multinational corporations face as they strive to compete in the 21st century. As falling communication costs shrink, the distance between external stakeholders and shareholder value is increasingly created and protected through a strategic integration of the external stakeholder facing functions. These include government affairs, stakeholder relations, sustainability, enterprise risk management, community relations and corporate communications. Through such integration, the place where business, politics and society intersect need not be a source of nasty surprises or unexpected expenses. Most of the firms profiled in the book are now at the frontier of corporate diplomacy. But they didn’t start there. Many of them were motivated by past failings. They fell into conflicts with critical stakeholders – politicians, communities, NGO staffers, or activists – and they suffered. They experienced delays or disruptions to their operations, higher costs, angry customers, or thwarted attempts at expansion. Eventually, the managers of these companies developed smarter strategies for stakeholder engagement. They became corporate diplomats. The book draws on their experiences to take the reader to the forefront of stakeholder engagement and to highlight the six elements of corprate diplomacy.

Managers of multinational organizations are struggling to win the strategic competition for the hearts and minds of external stakeholders. These stakeholders differ fundamentally in their worldview, their understanding of the market economy and their aspirations and fears for the future. Their collective opinions of managers and corporations will shape the competitive landscape of the global economy and have serious consequences for businesses that fail to meet their expectations. This important new book argues that the strategic management of relationships with external stakeholders – what the author calls "Corporate Diplomacy" – is not just canny PR, but creates real and lasting business value. Using a mix of colourful examples, practically relevant tools and considered perspectives, the book hones in on a fundamental challenge that managers of multinational corporations face as they strive to compete in the 21st century. As falling communication costs shrink, the distance between external stakeholders and shareholder value is increasingly created and protected through a strategic integration of the external stakeholder facing functions. These include government affairs, stakeholder relations, sustainability, enterprise risk management, community relations and corporate communications. Through such integration, the place where business, politics and society intersect need not be a source of nasty surprises or unexpected expenses. Most of the firms profiled in the book are now at the frontier of corporate diplomacy. But they didn’t start there. Many of them were motivated by past failings. They fell into conflicts with critical stakeholders – politicians, communities, NGO staffers, or activists – and they suffered. They experienced delays or disruptions to their operations, higher costs, angry customers, or thwarted attempts at expansion. Eventually, the managers of these companies developed smarter strategies for stakeholder engagement. They became corporate diplomats. The book draws on their experiences to take the reader to the forefront of stakeholder engagement and to highlight the six elements of corprate diplomacy.

In this volume Witold Henisz provides readers with a new set of tools for assessing the extent of political and regulatory risk faced by investment projects in a given country. The author measures political risk directly by examining the structure of a nation's political institutions and the preferences of the actors that inhabit them. He also provides a critical analysis of the effectiveness of one common political risk mitigation strategy, partnering with a local firm. Neither democracy (Russia), political stability (Zaire, until recently) nor low country risk scores (Indonesia in 1995) are sufficient for investor security. The failure of each of these measures points to the need for more objective methods of measuring risk. After implementing tests to show the validity of a new measures, Witold Henisz analyzes the efficacy of partnering with local firms. The results of this analysis suggest that partnership will often introduce more hazards than it solves. This framework for measuring risk and analyzing the efficacy of risk-mitigating strategies could easily be extended to make it applicable on a project-by-project basis. Policymakers, investment managers, business professionals and scholars will find this book extremely useful.