Magazine article The Futurist

Tomorrow's Global Businesses

Magazine article The Futurist

Tomorrow's Global Businesses

Article excerpt

By the year 2000, managing the external affairs of businesses -- the relations between a firm and its customers, competitors, stockholders, suppliers, and the larger society -- will become a far more complex assignment than it is today. It may even be transformed beyond recognition.

In most larger companies and corporations today, three people share external-affairs responsibility. The chief executive officer represents the firm within the industry and at the higher levels of state and national government. A vice president for public affairs and a vice president for public relations, both of whom report to the CEO, fill out the team. (In regulated industries, such as transportation companies or utilities, the chief legal officer becomes an important fourth member of this external-affairs hierarchy.)

Even though external-affairs duties account for a good deal of business time spent by CEOs, such tasks are often seen as a distraction, a sideshow that deflects energies from the main job of running the business.

In the future, however, globalization will blur the boundaries between what is considered internal affairs and what is considered external affairs for corporations. As joint ventures spread, as more manufacturing is done "offshore," as R&D centers are distributed around the world, and as more work is contracted to people in remote locations, it will grow ever more difficult to draw a sharp line between "the company" and its suppliers and customers. The difficulties of dealing with "the government" will also increase as businesses face regulations from an array of governments around the world.

As a result of these changes, external affairs will become increasingly important to businesses. In many cases, it will make the difference between the success or failure of a business.

In conducting business across cultures, it will be recognized that communication must not be divorced from content. How one addresses a sensitive issue will become as important as what action one proposes: That is what diplomacy is about.

Skill in business diplomacy will increasingly be required. Far from being a sideshow, success in negotiating with governments or in joint ventures with other businesses around the world will determine the fate of many corporations. Control over external relations will become as important to businesses as is control of the company's finances. …

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