Communications of the ACM
The Need For Corporate Diplomacy
Airbnb is one example of a "sharing economy" business that effectively used corporate diplomacy to defeat the recent Proposition F intended to restrict short-term rentals in San Francisco, CA.
Credit: Josh Edelson / AFP / Getty Images
Governments set rules; businesses operate by following these rules. This idealized notion of political economy is more inaccurate today than ever before. Business leaders, including technology entrepreneurs, must participate in rulemaking due to deregulation and liberalization, prominent global risks (such as climate change and migration) that do not respect national borders, and digital technology that is spewing new issues requiring new rules. Business leaders are expected to be corporate diplomats.
Corporate diplomacy is not about turning businessmen into part-time politicians or statesmen. Rather, it involves corporations taking part in creating, enforcing, and changing the rules of the game that govern the conduct of business. It goes well beyond delegating external communications and lobbying to a public relations agency or a law firm. Precise understanding of corporate diplomacy would help businesses compete more effectively in the global economy. This column clarifies corporate diplomacy, its benefits and challenges.
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