US giants will fall in Europe without PR

There can be no company in the world more powerful than Microsoft. But its continuing battles with US and Brussels regulators are a daily reminder that even the most powerful company in the world has to be careful about who it ignores.

For years Bill Gates’ company went its own sweet way and spent no money on lobbying in Washington, so that when the time came to mobilise its friends against the famous anti-trust suit, it found it did not have any – and had pretty inadequate protection against the subsequent court mauling. Contrast that with Intel, a company which has never been a target for such scrutiny and hostility. The best PR they often say is that which is never seen. Intel’s smooth and seemingly effortless relationship with Washington would seem to be proof of that.

Microsoft ignored Europe’s legislators, so that while President Bush has eased it off its American hook, it is still in deep trouble in Brussels. Whichever way the dispute is finally resolved, the cost of legal time, to say nothing of the damage to image, must outstrip by a factor of 1,000 whatever a small PR unit would have cost.

Monsanto might well feel the same way. GM food never emerged as a big issue in the US but the company never bothered to make the case in Europe, and the board dominated by scientists was painfully slow to get its head around the seriousness of the subsequent protests. Now it has found that globalisation cuts both ways. It exports its seeds and in return the Americans are importing a sense of European unease.

Given that companies which operate globally are exposed to tens of thousands of potential complainants and pressure groups, a board can never know in advance where it is going to be caught. But as a part of their risk management processes companies must become much more systematic in anticipating trouble, rather than waiting for it to find them.

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