Recent events reveal that crisis management extends to fielding political ...

Crisis management is widely accepted as a must for any company operating in the international arena, but very few operators give enough thought to fielding crises that fall into the 'acts of god and foreign governments' category.

Crisis management is widely accepted as a must for any company operating in the international arena, but very few operators give enough thought to fielding crises that fall into the 'acts of god and foreign governments' category.

Among such unforeseen circumstances, I would list the decision last week by the UK government to extradite the former Chilean dictator General Pinochet to Spain to face charges of torture, kidnapping and murder of Spanish citizens. Or the recent refusal by Italy to extradite Kurdish guerrilla leader Abdullah Ocalan who has been accused by the Turkish government of murdering 30,000 people. The Chilean Foreign Minister Jose Miguel Insulza is believed to have warned British ministers that trade, and particularly defense contracts with Britain, could be harmed.

Admittedly British exports to Chile in 1997 were only #221 million, around 1.6% of the market, but Chile is of strategic importance as an entry point for many European operators into the Latin American market.

The Spanish business community is also concerned about the effect that the issue will have on arms trade between Spain and Latin America, a concern heightened by the fact that the Chile Confederation of Commerce president, Walter Riesco, has called for a boycott on all Spanish imports. Lobbying by the business community has to date proved to no avail. Even the former British Prime Minister Margaret Thatcher has argued against the decision to extradite Pinochet, and the British Chamber of Commerce in Chile has been lobbying the UK government to let Pinochet escape justice for the sake of exports.

Globalization, it seems, can be a prize with a sting in its tail - localized political dilemmas having a direct impact not only on foreign sales, but potentially on the reputation of exporters. The decision by Italy not to extradite Ocalan on the basis that Turkey retains the death penalty has already had a direct impact on the reputation of international companies with a stake in both nations

Italian tire manufacturer, Pirelli, for example, which operates in Turkey, has been subject to a boycott that forced it to close for a couple of days. Yet, the irony is that despite being a global brand, Pirelli is to all intents and purposes a Turkish company. Pirelli's shareholding is predominantly Turkish, as is its staff.

When seeking to negotiate a political minefield of national interests, then, it is prudent to focus not only on the heritage of a successful international brand but also to clearly communicate a company's loyalty to the local markets in which it seeks to operate.

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