Research Summary
Research Summary
Corporate Diplomacy
Description
Michael Watkins is defining a top management function of increasing importance: the conduct of corporate diplomacy. Senior executives conduct the business equivalent of international diplomacy when they negotiate to sustain or transform relationships with influential external parties in support of business strategy. These parties include other firms but also investors, public-interest groups, governments, and the media. Examples of strategically important negotiations undertaken by senior managers include the following examples of corporate diplomacy:
* Negotiating mergers, acquisitions, joint ventures, and alliances
* Building coalitions to influence government legislation and regulation
* Designing and executing persuasion campaigns targeted at the media, analysts, and public opinion
* Managing serious disputes with key customers, suppliers, alliance partners, and other interest groups
Through these examples of corporate diplomacy runs the common thread of managing external interdependencies with various constituencies and other outside players. The fate of one's firm depends on how effectively one diagnoses these interdependencies and how skillfully one brings them into alignment with business strategy (and/or shapes strategy to succeed given this external environment).