Geopolitics and Business: Relevance and Resonance

• Title: Geopolitics and Business: Relevance and Resonance
• Author: Professor ÄŒedomir Nestorović, ESSEC Business School Asia Pacific, Singapore
• Published by: Springer, Germany
• Where to find it: https://link.springer.com/book/10.1007/978-3-031-45325-0

We all know that the world has seen more than its fair share of instability and change in recent years. Whether we’re looking at the advancements new technologies have wrought on our industrial capabilities, unpredictable circumstances and events brought about by climate change or health crises and, increasingly the shifting landscape of geopolitics and power. Often, the focus lies on how we must adapt to living with the consequences – how businesses might overcome or transcend the challenges such circumstances create and how leaders must adapt in order to do so. So it is refreshing to consider the opposite – namely how the actions of our industries might influence geopolitical matters.

Here is where Professor ÄŒedomir Nestorović‘s latest book “Geopolitics and Business: Relevance and Resonance”, provides a compelling analysis for industry leaders to consider.

According to the write up by publisher Springer, “This book sheds light on the intricate relationship between geopolitics and business and the essential interdependence between corporations and geopolitics. Despite apparent animosity, practical solutions and theories proposed by geopolitics find resonance within the business world, and vice versa. Concepts like critical theory, disruption, hegemony, strategic rivalry, and cost-effectiveness hold common ground in both realms, even though they have historically been disregarded.

Geopolitical authors have often overlooked the vital role played by businesses in shaping global affairs, while businesses themselves view geopolitics as a risk to be managed. These contrasting viewpoints have given rise to misunderstandings and misconceptions between the two spheres.“

Geopolitics and Business: Relevance and Resonance sets out to provide the means to bridge that gap. To find out more, we sat down with Professor Nestorović to explore his latest ideas…

Can you tell us about the inspiration behind your new business book? What motivated you to write it?

I have been teaching geopolitics for more than 30 years. During globalisation, the interests of the state and the interests of the corporations were aligned. Globalisation was irresistible and irreversible. The states did everything to facilitate trade, investments, movements of people, goods and capital. The election of Donald Trump eight years ago, Brexit, the Covid-19 pandemic and the war in Ukraine have dramatically transformed that relationship and businesses have to think now about the geopolitical issues, something they did not do in the past.

The honeymoon is over because states put pressure on corporations to choose the ‘right’ countries in which to invest and to avoid ‘bad’ countries. Because of these changes, it is necessary today to reassess the relationship between corporations and states and analyse how they can cooperate or challenge each other.

What are the key takeaways or main ideas that readers can expect to find in your book?

The main takeaway of the book is the question of responsibility. With the emergence of Corporate Social Responsibility, corporations are asked to resolve all of society’s problems: health, education, unemployment, social conflicts…. If they are asked to resolve societal and political issues, will they be given political power to do so?

Corporations do not ask to run countries, even if that did happen in the past, when the British East India Company and Hudson’s Bay Company ruled entire countries. Corporations could be consulted when decisions are made in their domains. Kellogg’s does not want to run the Ministry of Agriculture and Tesla does not want to run the Ministry of Industry, but they know something about agriculture and industry and this knowledge could be useful to states.

The second takeaway deals with power. Some corporations are more powerful than states in terms of revenues, number of employees or soft power they can deploy.

Who is the target audience for your book, and how do you believe it will benefit them?

The first target audience is students. They will learn about different branches of geopolitics and how do these branches interfere with international relations, geoeconomics or geostrategy. Students in business school are expected in their future life to take decisions in situations where geopolitical problems occur, would it be in their home country or abroad. They have to be equipped with concepts and tools how to assess a geopolitical risk and how to respond to it.

The second audience is the corporations. Corporations used to be shielded from the geopolitical risk by their states or by risk insurance companies. This is no longer the case, because the conflicts have become hybrid, wars are no longer officially declared, and social media has disrupted information creation and proliferation. All these issues push corporations to understand the contemporary world which is more VUCA (volatility, uncertainty, complexity, ambiguity) than ever. Corporations are not protected anymore, they are exposed and they have to make decisions of geopolitical nature.

What do you think makes this topic particularly relevant or timely in today’s business world, or for the years ahead?

For centuries, classical geopolitics dominated the field. This branch of geopolitics is based on materiality, on facts, and national interest. The personification of the classical approach was Henry Kissinger and his realistic approach was studied for decades. Since the 1990s, a new approach called the critical and feminist approach of geopolitics has appeared.

The first one has to deal more with philosophy and sociology than political science, military or economy. It puts the emphasis on knowledge creation and power of discourse or the narrative. The narrative is extremely important in winning the public opinion, especially in the times of social media.

I believe that in the future not only it will be impossible to ignore corporations in the geopolitical debate, but corporations are the only actors which can bring the three branches of geopolitics together.

Can you discuss any specific case studies or real-world examples from your book that illustrate its principles in action?

One example is McDonald’s in Russia and Israel. Russia is under sanctions but food is not part of the sanctions. It is therefore the decision of McDonald’s to stay or to pull out. Contrary to Russia where McDonald’s decides, the case of Israel is different, because the decision is made by the franchisees. It can happen that the McDonald’s operator in Israel gives food for free to the Israeli Army, and that the operators in Kuwait or Oman raise money for the Palestinians.

Many people have never seen an American soldier but they have seen Starbucks and McDonald’s, so for them it is the closest identification with American policy and power. This way, the corporation embodies the state and shares the good and bad sides of this identification.

How does your book add to/expand existing discussions on this topic?

In this book I try to implement a reconciliation of the different branches of geopolitics by taking the pragmatic approach where corporations are the central part of geopolitics.

Geopolitics is at work in the corporation because some corporations like Coca-Cola, Nestle, Unilever or Apple are present in more than 175 entities. This is comparable to the People’s Republic of China which has the highest number of diplomatic representations (embassies in consulates) in the world (176 countries). Employees do not choose other employees in the company and they need to work, adapt and accommodate with other political/religious or ethnic situations on the workplace.

For many of them, they will never go to Russia, Somalia or Taiwan but they can work with people from these countries and existing or potential conflicts can be imported in the workplace. This is something the state usually overlooks and leaves the corporation alone in resolving the issues.

Can you provide some practical tips or strategies from your book that readers can immediately apply to improve their business or career?

It is difficult to predict what can happen between the states but decisions are not taken by robots or artificial intelligence. They are taken by people, and people take decisions according to their own geopolitical mindset.

My advice is that if a corporation or a reader wants to know what happens in China, Russia or the United States, that corporation or reader must understand the geopolitical mindset of these countries. That mindset does not come from thin air, it is associated to one of the three branches in the book. By reading the book, it is possible to see the underlying reasons for people in authority to attack one country or population.

Once the underlying reason has been identified, the corporation or the reader can make a decision to confront it on the same grounds or to displace it and adopt a point of view which can be disruptive compared to the underlying reason. 

Finally, what book written by another author would you consider essential reading for your audience and why? 

There are many books written by proponents of the three branches of geopolitics. I would single out a few books written by people from the business side.

The first one is written by Mirko Papic called ‘Geopolitical Alpha.’ (2020) In this book he takes the point of view of a corporation which wants to invest somewhere and deals with the all kinds of risks, including the geopolitical risk.

It is close to a book written by Joachim Klement called ‘Geo-Economy, the Interplay of Geopolitics, Economics and Investments.’ (2021) His position is mainly concentrated on the impact of geoeconomics and geopolitics on financial markets.

Finally there is a book written by Mike Rosenberg called ‘Strategy and geopolitics: Understanding Global Complexity in a Turbulent World.’ (2023) In this book the author takes the point of view of business strategy and how corporations can navigate the turbulent waters by referring to tools and concepts coming from business strategy.

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