More Than Ever, U.S. Foreign Policy Depends on Corporations—and Vice Versa. In today’s turbulent geopolitical landscape, C-suite executives face unprecedented challenges that threaten their organizations’ success. “Geopolitics in the C-Suite” by Jami Miscik, Peter Orszag, and Theodore Bunzel offers invaluable insights into navigating these treacherous waters and emerging victorious.
Discover the strategies and mindset needed to lead your organization through geopolitical upheavals and secure a prosperous future. Read on to learn from the experts.
Table of Contents
Genres
Business, Politics, International Relations, Leadership, Risk Management, Strategy, Economics, Global Affairs, Decision Making, Crisis Management
“Geopolitics in the C-Suite” discusses the increasing importance of geopolitical awareness for top executives in today’s interconnected world. The authors argue that CEOs must be prepared to address geopolitical risks and opportunities, as they can significantly impact their organizations’ operations and profitability.
The article provides a framework for assessing and responding to geopolitical challenges, emphasizing the need for adaptability, scenario planning, and collaboration with diverse stakeholders. It also highlights the potential benefits of embracing geopolitical complexity, such as identifying new markets and fostering innovation.
Review
“Geopolitics in the C-Suite” is a timely and insightful article that serves as a wake-up call for business leaders. The authors’ extensive experience in geopolitics and economics lends credibility to their arguments, making this a must-read for any executive navigating today’s global challenges.
The article’s strength lies in its practical advice and real-world examples, which demonstrate how geopolitical factors can affect businesses across various industries. However, some readers may find the article’s focus on large, multinational corporations limiting, as smaller businesses may face different geopolitical challenges.
Nevertheless, the authors’ call for greater geopolitical awareness and adaptability is relevant to all organizations operating in an increasingly complex world.
Recommendation
This thought-provoking essay from financial experts Jami Miscik, Peter Orszag, and Theodore Bunzel explains how economic considerations have become integral to national security. Public policy decisions can arise from companies’ actions, but firms’ and governments’ objectives are often at cross purposes, making governance and implementation difficult. The authors advise policymakers to grasp, through dialogue and collaboration, the nuances of companies and industries to ensure both national security and economic success.
Take-Aways
- Economic leverage to achieve geopolitical ends is a new component of US foreign policy.
- Competition among great powers in an interlinked world has changed global diplomacy.
- Corporate leadership can influence foreign policy outcomes.
Summary
Economic leverage to achieve geopolitical ends is a new component of US foreign policy.
In the past, policymakers’ tools of diplomatic statecraft did not include economic leverage. The Cold War saw minimal trade between the United States and the Soviet Union. After the fall of the latter, American foreign policy promoted globalization. And after the attacks of September 11, 2001, diplomacy continued to focus on national security and military readiness.
“The centrality of economic competition to today’s foreign policy problems represents a qualitative break from the past.”
Since the 1980s, trade as a percentage of global GDP has nearly doubled, from 37% to 74%. This is largely due to heightened competition among the major nations in an interconnected global economy. Economics and technology play a central role in this rivalry, alongside military might.
Competition among great powers in an interlinked world has changed global diplomacy.
Geopolitical adversaries now find themselves enmeshed in a latticework of economic connections resulting from increased globalization. Governments use these links to achieve strategic goals. Consider the preeminence of the US dollar in global commerce, American control of essential internet plumbing, and US firms’ leadership in intellectual property rights ownership, all of which Washington, DC, has exploited.
“Geopolitical friction has also made life more confusing for companies operating in multiple countries with competing directives, sometimes forcing them to choose which set of rules to follow.”
Exemplifying this geopolitical and economic scrum are the efforts of the G-7, after Russia invaded Ukraine in 2022, to prevent shipping insurers from underwriting cargoes of Russian crude oil if these were sold for more than $60 per barrel. Other great powers apply similar tactics: For example, a 2010 collision between a Chinese trawler and a Japanese Coast Guard boat in contested waters led China to cease exporting to Japan rare-earth minerals essential to the manufacture of batteries and electronics.
Corporate leadership can influence foreign policy outcomes.
Central to cross-border economic and political squabbles, multinationals face challenges negotiating competing and conflicting rules across global jurisdictions. Russia’s invasion of Ukraine, for example, put many firms in a double bind: Continuing to do business with Russia would risk Western sanctions, but ceasing to do so would subject these companies to losses and penalties.
The height of this competition is between the United States and China, whose economies are the largest and most globally interconnected. Each seeks to design its economy to be robust to geopolitical ructions and capable of leverage. US efforts include widened export restrictions on advanced semiconductors, greater governmental monitoring of US firms’ investments abroad, and the subsidization of certain industries. The US commerce secretary now plays as critical a role in foreign policy as the secretaries of defense and state play. The COVID-19 pandemic occasioned supply chain dislocations, leading other countries to fortify their economies.
“Adapting to this new geopolitical reality demands a paradigm shift for policymakers…Going forward, the U.S. government will need to adopt a more collaborative approach.”
Onshoring and protectionism at the behest of governments place firms in a difficult position. Foreign policy prescriptions can disrupt corporations’ timelines. Similarly, governments cannot hope to design a one-size-fits-all set of commercial restrictions that would address businesses’ myriad nuances and complexities. Government and industry must communicate and cooperate, because economic security and intelligence are critical to national security worldwide.
About the Authors
Jami Miscik is a senior adviser at Lazard Geopolitical Advisory, where Theodore Bunzel is the managing director. Peter Orszag is the chief executive officer 0f Lazard.