PowerPoint Presentation

Geopolitics and the Corporate Environment

Paul BrackenYale School of Management

March 16, 2015

Blumetti Classroom 2200

Anti-Japanese Riots in China

YOU WILL LEARNHow companies think about these problemsGet better at environmental scanningTools & frameworksNew vocabularyArt of scenario thinking

MARGIN CALLI CHALLENGE YOU, RIGHT HERE, RIGHT NOW:Practice reading your strategic environmentUse new vocabulary (environmental scan, scenario, red team, multiframing, projection, prediction, etc.)Look at problems from multiple frameworksORIGIN OF TODAYS TALKB School tools and frameworks are out run by global trends

Large distortions in public policy existThreat of criminal sanctions against corps.Corporate nationalismDeter investment in Africa7Environmental scanning (ES) is the systematic collection of information about trends, events, and relationships in a companys environment to assist in deciding future actions.ENVIRONMENTAL SCANNINGThe risk that an investment's returns could suffer as a result of political changes or instability in a country.

Impacts could stem from a change in government policy, legislative change, or foreign policy.

POLITICAL RISKBig Business (B) and Government (G)GBBGK Street, Washington DC

March 15, 2015

Currently in the U.S. Global competition is killing the middle classCompanies are restructuringIntense pressures on middle and upper middle class: unemployment; college & health care costsYoung people after college living at home, not starting families, buying homes

Threat of criminal sanctions against corps.Corporate nationalismDeter investment in Africa

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Mexico bribery scandal uncovered April 201216

Estimated Walmart Bribes in Mexico (2012 & prior):

$ 24 millionEstimated Walmart Compliance Spend since 2012:

$ 439 millionUkraine creditors form bloc to negotiate $ 17 billion bond restructuringLazard

Government of Ukraine

Blackstone Advisory Partners

Franklin TempletonGerman banks

MoscowKievBerlinNATOWashingtonKEY TAKEAWAYSBiggest political risk is your own governmentBiggest mistake is THOUGHTLESSNESSMassive distrust of business Yetbusiness is needed for economy and politicsExperts (law, accountants, IT) focus in ever greater detail of what they know -- not on strategic dynamics19