Business Diplomacy: a tool to manage the increased power and influence of Multinational Corporations

Abstract

In the last century the International Community has undergone multiple transformations. One of the most noticeable is how Multinational Corporations have appropriated part of the power belonging to traditional state actors and governmental institutions, and have gradually started to take up more space within the global decision-making sphere. In this context, the paper seeks to analyze the consequences of these changes, and how Business Diplomacy is slowly becoming the tool multinationals require for managing and adapting to such transformations. Accordingly, the research question of this paper focuses on understanding how and why Business Diplomacy has emerged as a tool for managing the complex relationships Multinational Corporations have with different stakeholders, and how Corporate Social Responsibility can be used for the purpose of executing BD strategies. Since the execution of diplomacy has traditionally been subject to state actors, the paper begins by examining the evolution of the field of diplomacy, and how it is adapting to the new circumstances taking place within the international arena. For this reason, several configurations of diplomacy are identified and distinguished between one another, depending on the functions they serve. Accordingly, the first part of the paper studies the factors which forced the emergence of new forms of diplomacy, and the role MNCs have had in the evolution of the global society in response to globalization...