Business Leadership in the Age of Nationalism and Populism and the Rocky Road Ahead
What does the Age of Nationalism and Populism Imply for Businesses Worldwide?
We are in the Age of Nationalism and Populism. Hitherto, for the last five decades or so, globalization and globalism ruled the roost and businesses everywhere had to expand overseas either in search of new markets or for setting up manufacturing centres where they could capitalize on availability of raw materials and cheap labour to derive profits.
Indeed, the general consensus among Western policymakers and business leaders was that globalization was here to stay and it is better for as many nations in the world as possible to jump on the bandwagon.
However, since the times of the Great Recession in 2008, the world seems to be retreating behind walls and barriers to free trade and free movement of capital and people.
The situation has become such that Trade Wars have broken out between nations and everywhere and anywhere immigrants and foreigners are not as welcome as they were earlier.
This is the central challenge of the times for business leaders and much depends on how well they navigate the transition from globalization to nationalisation and from laissez faire economics to populism.
Some Recent Events and Trends that should Worry all Business Leaders
Take for example the recent news items in India where Chief Ministers of two prominent and industrialized states, Andhra Pradesh and Madhya Pradesh, have piloted laws that mandate compulsory reservation for locals in the private sector to up to nearly 75%.
What these laws mean is that migrants from other states are no longer welcome for employment in these states and if the private sector firms cannot find enough local talent available to fill the jobs, then they must train them in order to make them fit for employment.
Thus, this is a prime example of how nativity and purely local imperatives are driving the employment and industry in many states in India.
Indeed, this is the situation in the United States as well where President Trump wants American firms to place America First and then look overseas.
This is the reason why the Indian Information Technology bellwether, Infosys, is hiring more Americans to staff its offices in the United States. If these trends persist, we might soon be witness to the spectacle of domestic firms employing native labour alone and selling to domestic consumers alone without any overseas or foreign exposure. Thus, nationalism and populism are very much the case at the moment.
What can Business Leaders do to Address the Challenges?
So, in this scenario, what should business leaders do to either alleviate the situation or adapt to it?
To start with, if they are globally minded, they can lobby their respective governments to not fall prey to nationalist and populist sentiments and instead, ask for the status quo to continue.
While such lobbying efforts might not sway the sentiment, it is entirely possible that business and industry lobbies are well and truly powerful to withdraw their funding of the political parties and the politicians to ensure that they fall in line.
However, this is something that requires collective action and unprecedented cohesion among the various industry players.
Another alternative would be to adapt to the situation and reorient the business strategies to reflect the new realities.
This is something that every business leader worth their money has learnt over the years wherein they convert adversity into opportunity and ensure that they stay on top of the game and ahead of the curve.
However, international gatherings of business leaders in Davos have focused on how to adjust and at the same time ensure that globalization stays in the scheme of things. Therefore, there is a best of both worlds possibility here.
Cultural Challenges, Automation, and Coping Strategies
On the other hand, there are specific cultural challenges that business leaders are facing with the backlash against globalization and the emergence of populism.
They no longer can send expatriate managers overseas and expect them to be received well especially as the anti foreigner sentiment has taken root in many countries.
In addition, there is increasing scrutiny of the salaries and the perks they give to their senior managers.
Having said that, there are many things that are still constant and they are to do with how capitalism as the engine of the economy is not being questioned.
In other words, there is a certain acceptance that the economic model is fine and all that is being envisaged are a few changes to the way the engine works.
Of course, there is also a feeling that automation would make many jobs obsolete and hence, there are many converging and diverging trends that business leaders have to grapple with.
These are the central challenges of the times before them and it remains to be seen as to how well they can cope with the fast paced and fluid trends that are affecting their businesses and impacting their employees and other stakeholders.
Navigating the Rocky Road Ahead with Values
The way out or the route to navigate the rocky road ahead lies in a conscientious approach to running businesses rather than jettisoning their foreign operations and leaving their employees in the lurch.
Moreover, cultural challenges must be dealt sensitively lest they offend any and all of the stakeholders.
On the other hand, pluralism and diversity must not be abandoned and this is again another challenge that business leaders face in the present times. To conclude, while the future is unknown, there are many known aspects that business leaders can use to find a better way to address the challenges.
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