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The writer is a member of the think tank of the American Enterprise Institute
Globalization benefits companies in at least one important way: It allows companies to search for talent. Although this was rare half a century ago, today, a foreign-born CEO is not very noticeable. For example, Pepsi is run by the Spanish Ramon Laguarta. Indian-born Satya Nadella leads Microsoft, and easyJet CEO Johan Lundgren is Swedish. in England, 46% Foreigners are among the top 100 CEOs of FTSE 2018.
However, the era of borderless enterprises may be over. Geopolitical tensions are increasing, putting the business in trouble. Suddenly, the nationality of the company and executives became important again.
The so-called loyalty of executives is loyalty to shareholders, but as geopolitical confrontation intensifies, the issue of national loyalty will surface. The CEO of a European company that operates globally recently told me that his views on top managers from all over the world are starting to differ. “When the world is turbulent, can we bring peace to the company? All confidentiality issues may seem a little different,” he said.
Executives may think of themselves as citizens everywhere, but companies may be harmed because of their location. This was evident at this year’s World Economic Forum in Davos, where the Covid-19 pandemic forced the forum to suspend face-to-face meetings.President Xi Jinping to his virtual audience caveat Resist threats or intimidation to others, even though Beijing Imposing punitive tariffs In Australia’s winemakers, it seems that they have pressure The chief executive officer of telecommunications group Ericsson lobbied Huawei in Sweden.
In March, after the United States, the European Union and the United Kingdom imposed sanctions on the treatment of Uighur Muslims, Beijing accused H&M and Nike. Boycott cotton Produced in Xinjiang.Chinese online maps and retail websites remove brands and Huawei time out Download of branded applications.
Company strategy may also be affected.In an interview in 2007, former German Chancellor Helmut Schmidt described what the government of Mohammad Reza Shah wanted shortly before the Iranian revolution. Purchase of shares in Daimler-Benz. “Ayatollah is waiting in Paris. Obviously, power will change… Schmidt said: “I found that Daimler-Benz is a jewel of German industry and eventually fell into the hands of Iran. This is not suitable. “He asked Deutsche Bank to buy shares: “I said that buying shares is in patriotic interest. . . And because they are good patriots, they did it. “
A similar situation may happen again today. Compared with the “patriotic” German-led Deutsche Bank in the 1970s, global boards and foreign executives may be less willing to help. In addition, they may think that by the 2020s, leaders of Western companies should not only be loyal to shareholders, but also to the motherland of the company, as long as it can provide a democratic, rule of law, and safe business environment.
Foreign-born decision makers may have a strong loyalty to their country of origin, which may cause them to run counter to their companies.think about it $1.2 billion Momentus, a California-based space transportation startup, recently Branch office Consulted with Russian CEO and co-founder Mikhail Kokorich (Mikhail Kokorich) on US national security issues. According to a person familiar with the matter, Kokorich did not obtain permission to access controlled technical information or hardware. Securities and Exchange Commission filing.
The fact that some countries do not get along does not mean that companies should discriminate against certain nationalities. But this does mean that they should adapt to a reality in which they can be attacked as agents of the state. Business leaders may wish to revise Davos’s world view of disappearing borders and nationalities.
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