Session 6: Geopolitics and Nonmarket canvas

Question 1

What are stakeholders?

Answer 1

everyone who is directly or indirectly affected by a company’s choices and actions. Companies are part of a system that extends beyond shareholders.

Question 2

How are the relations with market and non-market stakeholders governed?

Answer 2

 Market: interactions with stakeholders are intermediated by private contracts. Voluntary and involve economic transactions
 Non-market: Interactions intermediated by governments, media, public or certain groups therein.

Question 3

What is de-globalization?

Answer 3

process of weakening interdependencies between countries.

Question 4

What are the two manifestations of de-globalization?

Answer 4

• Quantitatively (lower levels of FDI)
• Institutional logic

Question 5

Name three political objectives complemented by economic rationale?

Answer 5

1. Geopolitics and national security
2. Ideology and values
3. Uncertainty and volatility

Question 6

How is geopolitics and national security complemented by economic rationale?

Answer 6

• Trade war US and China: emerging systemic confrontation
• Russia’s war of aggression: acceleration of global bloc formation

Question 7

How is ideology and values complemented by economic rationale?

Answer 7

• Logic of de-globalization prefers de-coupling / de-risking based on:
   Shared values and norms
   Rule of law
   National security interests

Question 8

How are uncertainty and volatility complemented by economic rationale?

Answer 8

• Logics of economic rationality and deglobalization co-exist in US and EU
   Volatility
   Creates uncertainty for companies regarding strategic direction

Question 9

Name three ways in which geopolitics affects companies?

Answer 9

1. Supply (chain) disruption
2. Market access challenges
3. Technological restrictions

Question 10

What are the two types of costs in geopolitical strategy?

Answer 10

1. Operational costs: economic pressures
2. Reputational costs: societal pressures for responsible and sustainable business conduct

Question 11

What are the three drivers of the costs of exit?

Answer 11

• Relative importance of local market
• Irreversibility of response
• Potential technology loss and creation of global competition

Question 12

What are the drivers of costs of staying?

Answer 12

• Negative media coverage
• Competitors decisions to exit