The international order is changing, and fast. Multinational companies need to contend with global geopolitical turbulence through war in the Middle East, conflict in Ukraine and major shifts in US trade and foreign policy, all of which threaten to expose the fragility of global supply chains and other networks.
In this piece for MIT Sloan Review, UCL School of Management Director Professor Davide Ravasi and his co-authors argue that companies need to rethink organisation, supply chains and governance architectures in order to stay globally connected yet separate from geopolitical events.
By taking traditional options available to multinationals, mainly to exit a country, relocate or reorganise, and tweaking them to reflect current global tensions, companies can adapt quickly to fast-changing situations. For example, instead of completely exiting a country, as BP and others exited Russia after its invasion of Ukraine, companies could instead maintain minimal presence in countries through asset relocation or structural reorganisation to minimise economic fall out.
