Business

The Business Nightmare of Navigating Geopolitics

Given the unusual backlash that has hit Anheuser-Busch and its Bud Light beer brand over a marketing campaign featuring transgender influencers, the company has put its head up on the parapet to make a geopolitically important statement. Imagine the danger of that happening. How business leaders should engage with politics is a thorny question, especially in this feverish age.

Are you secretly trying to influence governments through public relations professionals and lobbyists, or are you going public with your political views?

Democracy and capitalism must go hand in hand. In theory, they are both about freedom to choose and develop our personal and mutual social interests. The rise of populism is testing this relationship.

In his recent book, The Crisis of Democratic Capitalism, Martin Wolff, chief economic commentator at the Financial Times, argues that the two work best for business when they complement each other and constrain each other. ing. “Democracy’s strengths are representation and legitimacy, but its weaknesses are ignorance and irresponsibility,” he wrote. “Capitalism’s strengths are dynamism and flexibility, but its weaknesses are insecurity and inequality.”

In business, eyes and ears need to speak. (And advise when to open.) Lobbyists traditionally fill this role. But while the ESG movement (short for Prioritizing Environmental and Social Factors) recognizes many responsibilities beyond bottom line and shareholder interest, inspiring (and reflecting) a more enlightened approach. , politics are getting cruder. As the debate over ‘awakened capitalism’ heats up, how will business leaders approach politics and government?

Gabriel Wildo is a China political risk expert at Teneo, a New York-based advisory and communications firm. He advises caution on policy issues, especially China at a time of heightened tensions between the United States and China. “We have to do our best not to offend either side.”

That puts many companies in particular trouble because they have strong commercial interests in both China and the United States.

Ray DalioThe founder of hedge fund Bridgewater Associates has been successfully bouncing between the two countries for decades. But after two recent visits to China, he concluded that “the United States and China are on the brink of war and dialogue is impossible.”

Anyone who saw a congressional committee’s bipartisan scrutiny of TikTok’s chief executive, Shou Chu, last month sees little room for nuance for anyone looking to tread in both markets. you’ll see.

Meanwhile, the Chinese government has stepped up its crackdown on foreign companies that say they are operating globally, but enter sectors deemed to be potential threats to national security. Concerns also persist over China’s threat to invade Taiwan, which Beijing claims as its own territory.

But while Wildow concedes that Washington’s sentiment is anti-China, business leaders worry about drawing attention to political issues because U.S. companies are heavily involved in globalized trade competition. I’m holding “A dire prediction about Taiwan can scare clients and attract more business,” he says. “I don’t.”

Getting the wrong attitude about China can have a very embarrassing reputational impact. For example, this country is the largest market for Volkswagen, with 100,000 employees. In 2019, Herbert DiessThe then-Volkswagen CEO told a BBC reporter that he was unaware of the re-education camps in Xinjiang where millions of Uyghurs are being detained, a video clip of which quickly emerged. spread to At the company’s annual meeting on Wednesday, activists and some shareholders continued to lash out at Volkswagen’s continued presence in the region and demanded an independent audit of its business operations in the region.

“My advice is, ‘Be prepared,'” says Wildau. “We have acted appropriately based on our Code of Conduct and Principles. No company should be involved in the incident.”

The UK has experienced severe turmoil, including the Scottish independence referendum in 2014 and the UK’s decision to leave the European Union two years later, which has clearly had a negative impact on businesses around the world. This is an informative case study of an executive trying to walk a tightrope.

“It’s easy for companies to get sick of politics,” said Toby Pellew, head of communications at London-based consulting firm Headland. “But when you are operating in a highly regulated environment, there are many touchpoints you need to have. not. “

Howard Davis is the chairman of NatWest, one of the UK’s largest banks, and a former director of Morgan Stanley and deputy governor of the Bank of England. He advises business leaders to be cautious and ensure that public interventions are closely aligned with their commercial interests. “My advice is to be very careful,” he warns. “Choose and promote your battles only when they are strictly related to your business interests. They are often more cynical than rational and will take advantage of you at even half a chance.Likewise, being hostage to a pressure group sucks.”

Especially for business leaders who feel they know how to get things done, the temptation to get in can be strong. Edelman’s Trust Barometer suggests that businesses are valued more highly than politicians.

Ian Cheshire is the former boss of multinational retailer Kingfisher, A member of the Board of Directors that oversees the Cabinet Office, the government department that supports the British Prime Minister.

When former Prime Minister David Cameron called on businessmen to publicly oppose Scottish independence, Cheshire responded. He also voiced his opposition to Brexit.

“There’s no point in getting into a debate that doesn’t have real insight,” says Cheshire. “But business can take the lead, and sometimes has the ability to act faster than governments.

Cheshire has spoken out against Brexit because it directly threatens the interests of the company, which has its biggest operations in Britain and France.

“I felt strongly about Brexit that it was bad for my business and bad for the country,” he said. “This is a sufficiently serious subject and my views on that concern were completely genuine.”

“But don’t expect to be popular when expressing your political views,” he added. “You will be stolen.”

Anheuser-Busch has been destroyed quite spectacularly. Even before the influencer scandal, Bud Light’s U.S. mass retailer sales were down 6.4% in the year ending March 24, according to Nielsen data. One marketing executive who took a leave of absence following the backlash said earlier this year that his mandate “means changing the tone, which is to have a truly inclusive campaign.”

This episode shows how hard good intentions can be and how commercially destructive it can be. Brendan Whitworth, the company’s North American chief executive, ultimately tried to keep both sides happy. In a statement titled “Our Responsibility to America,” he said, “We never intended to join an argument that divides people. We are in the business of bringing people together over a beer. ”

Going forward, Whitworth may choose to share his views only with close friends at the bar.

Matthew Gwither is a London-based business journalist and former editor of Management Today magazine.

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