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Corporate Diplomacy

Building Reputations and Relationships with External Stakeholders

Witold Henisz

  • Profiles firms at the forefront of corporate diplomacy
  • Explores a fundamental challenge faced by managers of multinational corporations
  • Presents new tools to help develop smarter corporate strategies for stakeholder engagement

Managers of multinational organizations are struggling to win the strategic competition for the hearts and minds of external stakeholders. These stakeholders differ fundamentally in their worldview, their understanding of the market economy and their aspirations and fears for the future. Their collective opinions of managers and corporations will shape the competitive landscape of the global economy and have serious consequences for businesses that fail to meet their expectations.

This important book argues that the strategic management of relationships with external stakeholders what the author calls “Corporate Diplomacy” is not just canny PR, but creates real and lasting business value. Using a mix of colorful examples, practically relevant tools and considered perspectives, the book hones in on a fundamental challenge that managers of multinational corporations face as they strive to compete in the 21st century.

As falling communication costs shrink, the distance between external stakeholders and shareholder value is increasingly created and protected through a strategic integration of the external stakeholder facing functions. These include government affairs, stakeholder relations, sustainability, enterprise risk management, community relations and corporate communications. Through such integration, the place where business, politics and society intersect need not be a source of nasty surprises or unexpected expenses.

Most of the firms profiled in the book are now at the frontier of corporate diplomacy. But they didn’t start there. Many of them were motivated by past failings. They fell into conflicts with critical stakeholders politicians, communities, NGO staffers, or activists and they suffered. They experienced delays or disruptions to their operations, higher costs, angry customers, or thwarted attempts at expansion. Eventually, the managers of these companies developed smarter strategies for stakeholder engagement. They became corporate diplomats. The book draws on their experiences to take the reader to the forefront of stakeholder engagement and to highlight the six elements of corporate diplomacy.

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About the Author

Witold Henisz

Witold Henisz is the Deloitte & Touche Professor of Management in Honor of Russell E. Palmer, former Managing Director at The Wharton School of The University of Pennsylvania. His research examines the impact of political hazards on international investment strategy including efforts by multinational corporations to engage in corporate diplomacy to win the hearts and minds of external stakeholders. His research has been published in top-ranked journals in international business, management, international studies and sociology and he is the author of the book Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders. Witold has won multiple teaching awards at the graduate and undergraduate levels and also teaches extensively on the topic of Corporate Diplomacy in open enrollment and custom executive education. He is currently a principal in the political risk management consultancy PRIMA LLC whose clients include Anglo Gold Ashanti, Rio Tinto, She ... More

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