Working Paper | HBS Working Paper Series | 2011

Managing Political Risk in Global Business: Beiersdorf 1914-1990

by Geoffrey Jones and Christina Lubinski

Abstract

This working paper examines corporate strategies of political risk management during the twentieth century. It focuses especially on Beiersdorf, a German-based pharmaceutical and skin care company. During World War I the expropriation of its brands and trademarks revealed its vulnerability to political risk. Following the advent of the Nazi regime in 1933, the largely Jewish owned and managed company, faced a uniquely challenging combination of home and host country political risk. The paper reviews the firm's responses to these adverse circumstances, challenging the prevailing literature which interprets so-called "cloaking" activities as one element of businesses' cooperation with the Nazis. The paper departs from previous literature in assessing the outcomes of the company's strategies after 1945. It examines the challenges and costs faced by the company in recovering the ownership of its brands. While the management of distance became much easier over the course of the twentieth century because of communications improvements, this working paper shows that the costs faced by multinational corporations in managing governments and political risk grew sharply.

Keywords: History; Risk Management; Business History; Multinational Firms and Management; Corporate Strategy; Intellectual Property; Cooperation; Business and Government Relations; Germany;

Citation:

Jones, Geoffrey, and Christina Lubinski. "Managing Political Risk in Global Business: Beiersdorf 1914-1990." Harvard Business School Working Paper, No. 12-003, July 2011.