Why every company needs a foreign policy

This was the thought provoking phrase posited by the World Economic Forum[i]. In an age where 40 years of British-European integration can be unravelled in a couple of years, or 70 years of U.S foreign and trade policy undone in a few tweets, this would seem sage advice. The international rules of trade are being rewritten, and at times, without the consultation of business. Many companies remain outwardly apolitical and whilst disruption brings opportunity, destruction of business as usual could necessitate a greater depth of political understanding. With various forms of ‘national branding’ under various forms of assault, those wishing to protect their own will need to actively project their own values.


Geopolitics has a very real business imprint; consider for example that global logistics spending is forecast to reach $10.6 trillion in 2020, with transport accounting for the majority of this[ii]. Also consider that some 65 percent of the total value of a company’s products and services comes directly from suppliers[iii]. It hardly needs noting that supply chains are increasingly international, which perhaps in part explains why 60 percent say their organisation faces more crises today than 10 years ago[iv]. Only 17 percent test their crisis planning

At present companies do not only lack a foreign policy, but rather any meaningful insight into their own operations. Just 6 percent of CPOs have full transparency of their entire supply chain, while 65 percent have limited visibility or none. Supply chain risks are therefore mostly unknown[v]. Such opacity does not bode well for those looking to maximize value, predict disruption and adapt with agility.

Another aspect that a practiced and principled foreign policy could address lies with consumers. Thanks to blockchain, RFID, the IoT and the media in general, consumer awareness of product history and origin is increasing. This collides with a more demanding Millennial cohort. 88 percent of Millennials believe employers should play a vital role in alleviating social concerns[vi]. Since, social concerns often travel beyond political borders, supply chains would seem an apt place to start crafting foreign policies – not just to build resilience in a world adjusting to the ending of the American century but to a new demand from consumers for sustainability, justice and fairness. Indeed, 86 percent of Millennials agree that ‘…the success of a business should be measured in terms of more than just its financial performance[vii].’

[i] bit.ly/2JmaOnx

[ii] bit.ly/2GoAcre

[iii] bit.ly/2F1YvOB

[iv] on.wsj.com/2MdZBq8

[v] bit.ly/2HbVZTb

[vi] bit.ly/2lHzP2s

[vii] bit.ly/2BCZ0glw


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