THE CORPORATE DIPLOMACY MANAGER COMPETENCES AND TRAINING

I. ROLE REQUISITES OF A CORPORATE DIPLOMAT

To master successfully corporate diplomacy competence, global managers have to add to the already high level of behavioral complexity of global management another layer of competencies which allow them to deal with external actors like foreign (host) governments and non-business stakeholders. This means knowing how to handle diverse business cultures as well as various public administrative cultures of different countries. In other words, a diplomatically aware global manager can be compared to a messenger whom transnational companies can send to different environments worldwide to solve complex political issues involving stakeholders outside a multinational company’s sphere of control.

1. International Business Acumen and Personal Maturity

Corporate diplomats need to have proven track records in international business to which they add diplomatic competencies. In other words, they have learnt to successfully manage people and tasks of a multinational company in different countries and have demonstrated mastery of inter-cultural awareness. They know how to minimize failures, overcome the inevitable role conflict, role ambiguity, and role overload typical of international assignments. They have learned to manage the inevitable stress and cultural fatigue due to cross-cultural differences. On a more subtle level, corporate diplomats know from personal experience that strategic choices in international conflicts and relations can be impaired if one is not aware of one’s own cognitive processes.

2. Career Development History

In order to successfully perform as a Corporate Diplomat , a global manager of a multinational company has to reach a high level of maturity, both professionally and personally. A Corporate Diplomat’s biography might for instance consist of a career profile including at least ten years of employment experience within a multinational company. During this time s/he has had a minimum of three to four job rotations shifting to different business units, such as positions at headquarters or at a large subsidiary as head of corporate HRM, Business Development, Merger and Acquisition, International Marketing or Corporate Communication and Information Office. The maturity needed for a Corporate Diplomat  is expected to correspond to the life experience of a person aged 40 to 50 or a little younger, depending on the number of professional experiences accumulated over time and a track record of success deals with external pressure groups in different countries.

3. Knowledge of International Relations and Diplomacy

In addition to the above mentioned track record of successful experience in international business management, the manager turned Corporate Diplomat should have acquired competencies pertaining to the world of bilateral and multilateral diplomacy and international relations. Particularly important requirements would be first hand knowledge and experience in the functioning of intergovernmental bodies, such as the World Trade Organization, the International Labour Organization, the Humanitarian Agencies of the UN and related organizations, the OECD, the United Nations Secretariat and General Assembly, and the Bretton Woods’ institutions (World Bank, IMF, and related regional banks). The Corporate Diplomat needs to have in-depth understanding of how the central governments, key ministries and departments of leading countries function, such as the United States of America, leading EU member countries, Japan and leading developing countries such as China, India, Brazil, Russia, and South Africa and the EU Commission and its related organizations.

4. Multicultural Mindset

Complementing his knowledge and mastery of international diplomacy, a Corporate Diplomat should also understand and appreciate the logic, ideological precepts and related intellectual underpinnings of governance systems that differ from the dominant form of Western capitalism. After all, many conflicts which a multinational company must solve are in countries with often very different legal, cultural, political and economic systems. Many leaders of developing countries and a large group of continental European and developed Asian countries do not necessarily share the belief in the supremacy of neo-liberal capitalism. They consistently reject Anglo-Saxon life style preferences and behavior which have become the increasingly dominant corporate culture of most global companies whether they are of US or non US origin. In other words, a Corporate Diplomat should be able to converse with opinion leaders and politicians representing at times diametrically opposing religious, political and cultural systems.

5. Political Skills, Mastering Political Negotiations and Handling of Media

Corporate Diplomats should know how to defend the interests of his multinational company be this in private and official discussions, in negotiations with foreign opinion leaders and government officials. They need to effectively manage interactions with the media or other communication channels such as newspapers and conferences. The same accounts for situations “at home” with NGO’s and pressure groups that might be hostile to the activities of the multinational company. In addition, decision making at multilateral negotiations, be they at the UN or other international bodies, have their own rhythm and procedures. Traditional “shooting from the hip” business practices would be fatal since most of these organisations proceed in circular logic using indirect means of influencing, an approach often despised by Western Managers as “unprofessional, untrustworthy and a waste of time”.

6. Role Versatility and Tolerance for Ambiguity

As a Corporate Diplomat , global managers have to manage several levels of loyalties as well, be that in relation to the CEO, different board members, their own staff, customers, suppliers, host government, home country government and local and headquarters labor union representatives. They have to be boundary spanners, which means crossing borders seamlessly, advocates, initiators, mediators, interpreters and negotiators in a multitude of cultural settings as is the case with the political diplomat.

7. Mastering Analytic Tools: Stakeholder Analysis, Balanced Scorecard, Stakeholder Mapping and Scenario Planning

In addition to their highly developed interpersonal and social skills, a Corporate Diplomat will need to master various analytic tools in order to anticipate potential impact of investment in different countries. Well-known strategic planning tools for business development could be employed here with a stakeholder focus.The Corporate Diplomat needs to put forward viable alternatives to possible stakeholder demands. They need to look for economically sound collaborative solutions. This is essential since social activism is spreading and IT provides non-business stakeholders inexpensive and far-reaching ways to organize and to exert pressures on global companies. Lastly, Corporate Diplomats must be reminded of Satow’s definition of diplomacy as the application of intelligence and tact, the latter being unfortunately so often thrown over board in the name of “time is money”.

Competencies of Corporate Diplomacy Management

1. Knowledge of diplomatic instruments
2. Capacities in influencing the diplomatic process
3. Knowledge of key international businessrelated legal standards
4. Capacities in influencing standard setting at key international organizations (WTO, ILO, UNEP, WIPO, OECD)
5. Knowledge of the functioning of international law and arbitration
6. Knowledge of the impact of "Corporate Reporting to Stakeholders"
7. Knowledge of the history and logic of non-U.S. economic theories and practices
8. Knowledge of the influence of international financial institutions (IMF, WB, Paris Club, London Club, U.S. FRB, BIS)
9. Knowledge of the structure and decisionmaking process of supranational organizations (UN, EU, NAFTA, ASEAN)
10. Capacity to influence these supranational organizations through direct or indirect means
11. Knowledge of the interplay between economics, politics, and culture by region or country
12. Capacity to promote a proactive perspective in the region regarding business diplomacy
13. Knowledge of the decision-making process of key countries (domestic and foreign)
14. Capacity in conducting political risk analysis regarding key stakeholders of the investment project
15. Knowledge of the mechanisms of international crisis management and corresponding role of diplomacy and government
16. Capacity to intervene on behalf of the company
17. Mastering public speaking and media (keynote speeches, TV interviews, press conferences)
18. Managing a corporate diplomacy information system that supports strategic planning regarding stakeholder management
19. Managing and influencing international negotiations (bilateral, multilateral, plurilateral)
20. Mastering diplomatic practices and protocol
21. Mastering analytic tools, e.g., stakeholder analysis, scorecard on stakeholder satisfaction, scenario planning

II. TRAINING

In order to appropriately play their political role internally and externally and engage in mutually satisfactory multicultural interactions, global managers need to be trained in the several fields of Corporate  Diplomacy.

1. History of international relations and diplomacy (actors, rules, process of diplomacy, difference between traditional and post-cold war modern diplomacy); global security questions (terrorism, drugs, environment, nuclear safety, disarmament) and political analyses of key countries and regional groupings;
2. Roles and functioning (legal and political) of intergovernmental organizations such as the UN family institutions (particularly WTO, WIPO, IFM), the European Union, and the various trading blocks (ASEAN, NAFTA, EEA) and understanding their impact on international business;
3. Basic knowledge of key national legal systems (public law, constitutional law, administrative law, private law and criminal law), international law and principles of treaty making (soft and hard law); legislation by international organization (particularly as they affect international business), Humanitarian law and Human Rights, international arbitration, mediation and judicial settlements;
4. Evolution of the world economy especially from colonial to pre-and postindustrial periods; understanding different explanatory schemata of world development as seen through at times opposing ideological lenses depending on country, political system, religion, socio-economic status;
5. Understanding and influencing the decision making process at supranational organizations like United Nations, European Union, NAFTA, ASEAN etc.,
6. Ability to be a gracious host to a wide variety of interlocutors from all parts of the world and all strata of society; “Culture” appreciation including all forms of art of western and nonwestern societies;
7. Cross-cultural awareness regarding norms and values governing decision making and conflict resolution processes of other countries;
8. Understanding the management of international crisis and the role of diplomacy in solving such crisis (e.g. terrorism, war, environmental pollution etc);
9. Skills in presenting and representing one's own company and country of origin at international gatherings and official meetings, getting respect while at the same time respecting other delegates’ personality and dealing with media and informal pressure groups; 
10. Strategy, tactics, and procedures of negotiations at bilateral, multilateral, multi-bilateral, and multi-institutional level as well as appropriate negotiation behavior in multiple and multicultural settings and the art of coalition building;
11. Understanding and mastering the use of diplomatic instruments, protocol, etiquette and practice.

III. IMPLEMENTING CORPORATE DIPLOMACY MANAGEMENT AT FIRM LEVEL

Diplomatic know-how at the firm level has to be a strategic core competence . A core competence represents the sum of learning across individual skill sets and individual organizational units. Thus a core competence is very unlikely to reside in its entirety in a single individual or small team. Diplomatic know-how should hence be seen as a company-wide responsibility shared by top management and the respective heads of business units. In order to realize this core competence,  global companies should create a Corporate  Diplomacy Management function consisting of the following elements namely:

 A. A Corporate Diplomacy Office which would be similar to Public Affairs but expanded to include the diplomatic functions described above and placed under direct supervision of the CEO.

B. Corporate Diplomacy Managers as staff members of the new Corporate Diplomacy Office consisting of specially trained business managers and seconded by foreign service officers.

 C. Corporate Diplomacy Liaisons located in key subsidiaries of a global company directly reporting to the top manager of the subsidiary and the central Corporate Diplomacy Office at headquarters.

D. Corporate Diplomacy Management Information System which contains information pertaining to Corporate Diplomacy (including the profiles of active non-business stakeholders at the global level and in potentially conflictual areas).

E. Formalized link with the Strategic Planning Function of a global company in order to develop a business-related socio-political perspective (e.g., stakeholder analysis, managing hostile stakeholders, stakeholder satisfaction audit).

F. A Mandate to strengthen the overall organizational capacity in corporate diplomacy management. Positioning the new Corporate Diplomacy Office under the direct supervision of the CEO should facilitate the gate keeping function of this new unit whose function is to scan the environment, interact with non-business stakeholders and engage in diplomatic missions under close direction of the CEO. Linking the new office to liaisons in the different subsidiaries should also guarantee that headquarters and subsidiaries closely cooperate in this sensitive field of operation. Further strengthening of values and ethics linked to business diplomacy could be  expected from CEOs who take an active interest in this strategically important function and accordingly support the new office’s operations through appropriate rewards and sanctions and corresponding internal communication campaigns.

Conclusion

Growing internationalization has become increasingly complex. Managing effectively the interface between multiple business units and their respective host-country governments requires business competencies which go well beyond the basic skills range of today’s transnational manager. What is needed are the development of a new competency –Corporate Diplomacy Management -- and a new organizational role – Corporate Diplomacy Manager. Global managers need to be competent in corporate diplomacy and successfully represent the wider interests of a global company at international organizations, non-governmental organizations, communities, media and multiple host governments. Corporate Diplomacy Managers, in contrast to lobbying firms and public affairs functions, offer a better synergy of business interests, corporate values and the management interface with external constituencies and pressure groups. Corporate Diplomacy Managers straddle both worlds of business and diplomacy making a global company more proactive and less crisis prone to the outside world. Synergy between business and diplomacy requires the full attention of global companies today. Global companies can successfully implement their global strategy and preserve their reputational capital by ensuring adequate supply of diplomatic know-how. This could be done through in-house training & development and through the setting up of a Corporate Diplomacy Management Office under the direct supervision of the CEO.