Corporate Diplomacy Essay

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Corporate diplomacy is the intersection of international business and international relations. Since the days of the East India Company and other joint-stock companies, the role of business in relationships between countries has intensified, and in the 20th century the spread of transnational corporations brought about an awareness of the effects and responsibilities attendant to this larger role. Sony had become, in some sense, the public face of Japan on the international stage, or in the international department store; Coca-Cola and McDonald’s had assumed the same role for the United States. With great power, as another transnational icon would have it, came great responsibility. In the 21st century, corporate diplomacy is poised to become a prominent part of public diplomacy.

Public diplomacy, since the Cold War era, has been discussed as the segment of international relations conducted outside of government. Asian exchange students in Midwestern high schools, Peace Corps volunteers working in Belize, European youths backpacking across the continent—these are all examples of public diplomacy. But so are American movies playing in Germany, French comic books in school libraries, and Japanese video games in living rooms around the world. Though the term public diplomacy was first coined as a euphemism for propaganda—government-sponsored or at least government-approved— the phrase has uprooted itself from its euphemistic soil and become attached to a living and more literal truth. Public diplomacy is something that simply happens, planned or not—the development of recording media in the late 19th and early 20th century greatly accelerated the exportation of cultural goods like music, movies, and later television, software, video games, and so forth.

Government may not be directly involved in public diplomacy, then, but remains interested in it. In its propagandist use, public diplomacy was associated with the United States Information Agency. When the USIA folded in 1999, the State Department instituted the Award in Corporate Excellence, given to companies that practice and promote social responsibility and pro-American attitudes overseas. There are joint ventures between business and government to counter anti-Americanism abroad, on the theory that such prejudices are bad not only for American foreign relations but for American business interests.

Corporate diplomacy, that component of public diplomacy practiced by corporations, is more deliberate than those cultural exports, which were produced for domestic audiences first (though the international audience is increasingly of concern in the crafting of blockbusters and television shows). Particularly since the end of the Cold War and the fall of communism— and the many fresh and emerging markets that have since been opened to global business—businesses have seen the competitive advantage of working diplomatically rather than trying to do business in the same way all over the world. The simplest example of this is the use of non-beef sandwiches by American fast food chains in India, but corporate diplomacy has advanced far beyond just adapting products to local concerns. Foreign-owned companies stand out less, less likely to be bastions of their home country’s values imposed on a local population of employees and customers; American-based oil companies do business with Iran and Russia with a good deal more success than the American government, even while that government often makes their work more difficult.

Corporations are doing more than opening plants in other countries, they’re instituting outreach programs, investing in infrastructure, easing the cultural friction where their bubble of culture floats through the sea of the world. One of the classic examples of the difference between corporate diplomacy and government diplomacy is the American embassy in Baghdad … where only 3 percent of the staff speak Arabic. Business concerns would never let this happen at a Baghdad McDonald’s, a Baghdad Gold’s Gym. Milton Friedman’s famous declaration that the only social responsibility of business is to increase its profits without breaking the rules is either proving outdated or redundant—perhaps there is an extent to which social responsibility is the best way to increase profits.



  1. Shaun Riordan, The New Diplomacy (Polity, 2002);
  2. Robert D. Schulzinger, U.S. Diplomacy Since 1900 (Oxford University Press, 2001);
  3. Ulrich Steger, Corporate Diplomacy: The Strategy for a Volatile, Fragmented Business Environment (Wiley, 2003);
  4. Robert Trice, Miyako Hasegawa, and Michael Kearns, editors, Corporate Diplomacy: Principled Leadership for the Global Community (Center for Strategic and International Studies, 1995).

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