Firms formulate business strategy and while executing it, they need to go for lots of campaign. Sales & marketing are well-known such campaigns because these are pre-announced. Whereas firms also carry out activities known only to their boardroom. Some of these are legal, some are beyond the pale of law and some are even go beyond that, which is geoeconomics.
Investing in other companies is allowed by the company ordinance of most countries subject to restrictions such as that investment must not exceed 30% threshold breeching which requires the investing company to make an offer to the remaining shareholders. Then we have takeovers & mergers that could put the company at crosshairs with the investment authority of the country as regards to resulting oligopoly or monopoly. Although confrontational in nature these are allowed to proceed with certain amendments. Embolden firms easily go ‘beyond the pale’ operations unbridled due to secrecy surrounding these. One such action is poaching critical executives out of the turf of opposing firms.
Well everything is fine at the end of the day. We forget about these after the public storm regarding the morality has run its course. Yet the firm is not sure about its progress in the future as regards to competition coming from beyond the shores. Realisation dawns that firms must pressure the government to intervene in geoeconomics. The irony is that firms slowly transfer their business strategy over to the shoulders of the government. Most governments do not shy away instead become willing partners to execute the firm’s business strategy as if it is their own.
Noble intention of assisting business at the beginning morphs into national priority where imposing trade restrictions as regards to the firm’s international opponents is Okayed. Taxes are levied, duties are doubled and various geoeconomics tools such as quotas and rules regarding prior licence to be obtained before importation are mandated. Firms that are still unable to compete even after the imposition of such trade barriers seek and get outright bans on the products of the opponents exporting from abroad.
Still there is no turn around in the fortune of the firm in question. Regrettably now both the firm and the state are caught in the cleft stick. All available legal pathways are exhausted. What remains is geoeconomics tools bordering on illegality or that could bring censures from the World Trade Organization (WTO).
Never mind that. The country can get away with it. So firm & state together unveil a new hardball tactics of imposing sanctions against the firm in general and its C-level officers against whom the state can move by arresting and incarcerating at will. The arrest of Ms. Meng Wanzhou, the board deputy chairperson and daughter of the founder of Huawei, who was detained upon arrival at Vancouver International Airport on December 1, 2018, by Canadian Authorities is a case in-point.
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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