International Relations in International Business
ONE DAY SEMINAR – RESEARCH MEETS PRACTICE
FRIDAY 30 NOVEMBER 2012
THE HAGUE – THE NETHERLANDS
CLINGENDAEL – THE NETHERLANDS INSTITUTE FOR INTERNATIONAL RELATIONS
Goals of the seminar: practitioners and researchers meet to:
- Define business diplomacy (and compare with related concepts)
- Confront research with business diplomacy practice and vice versa
- Identify the key questions for a research agenda and for practice
Introduction to the theme:
The role of international business has increased enormously over the past decades as many national barriers have been removed. Goods, services, information and knowledge have spread across country borders. International business has flourished, and multinational corporations (MNCs) have become major players in the global economy. This is reflected in the fact the number of MNCs worldwide grew from about 7000 in 1969 to over 63 000 by 2000, representing 80% of industrial production worldwide, and altogether having more than 800,000 foreign affiliates.
But doing business internationally means also dealing with differences between countries in terms of formal and informal institutional arrangements (Hillman & Keim, 1995). To survive in today’s global environment as an MNC requires skills and resources for managing complex interactions with national and local governments, international institutions, and global and local social movements; being efficient and competitive is no longer sufficient (Muldoon, 2005). The actual situation that MNCs face is complex; global companies need to manage rapidly changing political economic business environments, thereby dealing with multiple stakeholders such as host-governments and NGOs (Saner et al., 2000).
International businesses need to establish long-term relationships with stakeholders and develop cooperative strategies. As the example of Shell in Nigeria illustrates, multinationals sometimes experience problems with the management of obstacles outside their direct sphere of control (Saner, Yiu & Sondergaard, 2000). But MNCs also have to deal with the fragmentation of international rule sets and the return of traditional risks like expropriation and nationalization. These issues go beyond the continuing challenges of efficiency and competitiveness. Furthermore, MNCs are not only economic actors. They often, willingly or unwillingly, also play an important role in politics, e.g. with regard to environmental issues, human rights and education.
“Many of the global challenges now confronting international business are issues and matters of diplomacy,” as Muldoon (2005, p. 355) puts it. But are international businesses prepared for these challenges? Do they possess the skills and resources? And what are those skills and resources exactly?
The literature mentions terms like business diplomacy (Muldoon, 2005), business diplomacy management (Saner et al., 2000), the business-government interface (Hillman & Keim, 1995), corporate diplomacy (Ordeix-Rigo and Duarte, 2009), strategic political management (SPM) (Hillman, 2003), and corporate political strategy (CPS) (Oliver & Holzinger, 2008). We define business diplomacy for the time being as establishing and sustaining relationships by international businesses (by top executives or their representatives) with foreign government representatives and other economic and non-economic stakeholders with the aim to build and sustain legitimacy (safeguard corporate image and reputation) in a foreign environment.
Scholarly empirical work on business diplomacy is relatively scarce. Far more is needed to fully understand the concept, clearly define it, and understand its consequences.
This seminar aims to feed the debate on business diplomacy by bringing together researchers and practitioners, by presenting recent empirical work as well as practitioners’ views and experiences.
This is a call for papers on business diplomacy research. Although there is a need for empirical work, we welcome conceptual work as well. Example questions and topics (not exhaustive) that papers could address are:
∑ What is business diplomacy and does it differ from concepts such as CPS, SPM, and Public Relations?
∑ How is business diplomacy organized? (who are involved, how is it organized/coordinated, what are the skill sets needed? What kind of people are best suited to business diplomacy?)
∑ What are the strategies for business diplomacy? What is their impact? Can business diplomacy be considered as ‘diplomacy’? And what are the dilemmas MNCs face in acting as ‘diplomats’?
Extended abstract (2 pages) submission due: 15 August 2012
Notification of acceptance due: 31 August 2012
Full paper submission (and confirmation of participation) due: 1 October 2012
Selected papers will be considered for a special issue on business diplomacy for the Hague Journal of Diplomacy (HJD).
Editorial team: Shaun Riordan (Clingendael Institute) - Huub RuŽl (University of Twente) - Jennifer Kesteleyn (Ghent University)
Organizing team: Jan Melissen (Head of Clingendael’s Diplomatic Studies Program - Clingendael Institute) and Ragnhild Drange (Clingendael Institute)
Hillman, A.J. (2003). Determinants of political strategies in U.S. Multinationals. Business & Society. 42 (4): 455-484.
Hillman, A., Keim, G. (1995). International variation in the business-government interface: institutional and organizational considerations. Academy of Management Review. 20 (1): 193-214.
Muldoon, J.P. (2005). The Diplomacy of Business. Diplomacy and Statecraft. 16: 341-359.
Ordeix-Rigo, E., Duarte, J. (2009). From Public diplomacy to corporate diplomacy: increasing corporation’s legitimacy and influence. American Behavioral Scientist. 53 (4): 549-564.
Oliver, C., Holzinger, I. (2008). The Effectiveness of Strategic Political Management: A Dynamic Capabilities Framework. Academy of Management Review. 33 (2), 496–520.
Saner, R., Yiu, L., and Sondergaard, M. (2000). Business Diplomacy Management: A Core Competency for Global Companies. Academy of Management Executive, 14 (1): pp. 80-92.