CORPORATE DIPLOMACY (INTERVENTION, BARRIERS, TRANSMISSION CABLES, FACILITIES AND MODERATORS)

Author: Rui Manuel Monteiro, MBA, University of Porto, Portugal 2013

CORPORATE DIPLOMACY INTERVENTION (Ranked by Importance)

1. Engage with Multiple Stakeholders : Firms create mechanisms to engage with multiple stakeholders that affect their performance.
2. Create a Positive Environment About the Business and Its Impact on society: Act in a way that creates positive impacts on society, in various forms, due to the existence of foreign businesses.
3. Create Social Capital, Accumulate Contacts and Build Social Influence: Firms proceed in such a way as to gain recognition by society due to their economic activity.
4. Support a Triple Bottom Line Business Culture: Firms act in order to incorporate not only the economic element but also the social and environmental elements while doing their business.
5. Negotiate, Promote Long Term Commitments, Aim for Win-Win Situations: Firms negotiate collaborative deals that produce win-win situations in all dimensions of their activity.  
6. Protect the Corporate Brand and Reputation: Firms act in order to protect their good reputation with all the stakeholders with which they relate.
7. Creating Alliances With Key Players in the Global Marketplace: Firms create key alliances with various players, in a variety of forms in order to increase their international projection.  
8. Increase Transparency of Decision-Making: In terms of their reasons and modus operandi firms act transparently in relation to all parties, directly and indirectly related to their business.
9. Enhances the Adaptation Process to Other Cultures: Firms act in order to better integrate the host country and, thus, become better able to respond to its specificities.
10. Leverage capabilities through economic diplomacy: Maximize the potential of firms through promotion and sponsorship, namely by State and other entities.
11. Act in International Forums: Participation and intervention of companies in international institutional arenas, various types of forums, namely associative.

BARRIERS (Ranked by Importance)

1. Demands and Expectations of Stakeholders: Demands and expectations of stakeholders with which firms relate and that affect their performance.
2. Liabilities of Outsidership: Disadvantages relating to the fact that companies are not within certain networks, such as economic, knowledge, etc.  
3. Governments and International Organizations: Impediments arising from both national and international entities with which firms relate, and that can affect their capacity to act.  
4. Liabilities of Foreignness: Disadvantages, intrinsic to the foreignness status of non-national companies’ vis-à-vis local companies, to their business in the host market.  
5. Negative or Suspicious Attitudes and Local Competition Attacks: Negative or suspicious attitudes, from the start, as well as acts of collusion by national economic agents against them.
6. Social Concerns : Host countries’ fears that foreign firms will worsen and exploit social conditions.
7. Lack of Experiential Knowledge: Foreign companies lack of experiential knowledge, specifically at an operational level.

TRANSMISSION CABLES

1. License to operate: Allows firms to obtain conditions, to work, from society and respective players, in order to operate in the host market in a completely integrated manner.
2. Access the Right Networks: Promotes firms’ access to various types of networks, that will allow them to leverage knowledge, opportunities, etc.

FACILITIES (Ranked by Importance)

1. Place the Corporation in the International Arena: Widen their sphere of influence on an international level in various dimensions.
2. Favourable Investment Climate: Create conditions that are favorable to the entrance of firms in the host market and to operations thereafter.
3. More Fruitful Relations With the Host Environment: Create conditions so that firms can maximize their win-win game with various stakeholders with which they relate in the host market.  
4. Forge Networks - Insidership Access: Firms access to certain networks, economic, knowledge, influence etc., in the host country.
5. More Sympathetic Relation:  Create conditions for more pleasant relationships between local players in relation to foreign firms.
6. Access Full Market Knowledge: Allows access to relevant data, from various fields, which is essential for firms to act and maximize their capabilities.  
7. Decrease of Foreignness Status Costs: Decrease the intrinsic disadvantages (costs) related to a firms foreignness when compared to local firms.
8. OvercomeCosts of Doing Business Abroad: Allows firms to minimise some costs relating to their foreignness when doing business abroad.  
9. Advocate International Operations by Advancing Business Interest: Allows firms to leverage their potential on the international market via changes in the economic context in which they operate, endorsed by themselves or by other entities.
10. Overcome Conflicts and Generate Future Rewards: Create conditions that decrease disagreements and reach win-win solutions with the various stakeholders the firm relates to.  

 MODERATORS (Ranked by Importance)

1. Market Conditions: The economic cycle and market dimension has an impact on the approach of firms regarding matters of business diplomacy framework.
2. Country of Origin Effect: The type of image the home country projects which is associated by default to the companies of that country.
3. Sector of Activity: The sector of the firm, with more or less (real or potential) impact on the host country, increases the demand to employ business diplomacy practices and vice-versa.
4. Importance of Culture regarding business relationships: The culture of the host country affects the level of demand regarding the need of engagement of business diplomacy practices.
5. Alternative Attitudes regarding the principles of corporate diplomacy: An attitude of relativism, detachment or misinterpretation regarding the concept and respective goals of business diplomacy.
6. Relative Corporate Dimension: The size of the firm affects the impact of it in the host country hence it increases the need to employ business diplomacy practices and vice-versa.
7. Level of Engagement of Firms Abroad: The level of internationalisation of the firm (ranging from indirect export to foreign direct investment), affects the impact of it in the host country and hence the level/need of engagement of business diplomacy practices.