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How to win friends and influence people in international business.

How to win friends and influence people in international business

It is rarely easy for a foreigner fully to understand another nation’s politics. Jimmy Carter and Mikhail Gorbachev, for example, were unpopular in their own countries for much of their period in office, but often viewed quite positively abroad. For Ronald Reagan and Vladimir Putin, the opposite is the case. Ex-KGB man Putin, in particular, is considered with much suspicion in the West for his harsh treatment of political opponents, clampdown on freedom of the press and sabre-rattling in defence policy. Yet domestic polls consistently rank him the most popular politician in Russia. The reason, to use the often-quoted line of Bill Clinton, is probably ‘The economy, stupid.’

Buckley (Financial Times, 15 Nov 2007) draws attention to the fact that Russian national wealth is now back to levels last enjoyed before the collapse of the Soviet Union, largely because of the high prices the country is able to command for its oil and other natural resources. Russia has vast reserves at a time when world demand is rising rapidly. Reluctant to rely too heavily on the extraction of natural resources, Putin is now trying to encourage more refining and processing activities within Russia and to develop a high-technology sector.

For the moment, the strategy is based on mobilizing the state-controlled ‘national champions’ and Kremlin-friendly private oligarchs. But the backing of foreign investors would also be helpful to bring in the required capital and expertise. In this context, the cavalier way in which Putin treated some of the Western multinationals that invested in Russia early in the country’s oil boom may begin to count against him. Too many in the West are concerned about the Putin model of state-directed capitalism and are hostile to further state involvement in the Russian economy.

Never underestimate the extent to which people in big business like to ‘cosy up’ to those who either hold the levers of power or soon hope to do so – whether in their own country or abroad. By the beginning of January, the top British donors to the US Democrat party in the 2008 election cycle were from the advertising agency WPP, the drug giant GlaxoSmithKline, the defence company BAE Systems, British American Tobacco, AstraZeneca and BP. And the staff of which UK companies were backing the Republicans? Well, the US Federal Election Commission website revealed that exactly the same six companies topped the list, in exactly the same order!

The payments were not made directly by the companies but by individual employees and their immediate families or by the companies’ voluntary staff groups. Direct corporate donations are illegal in the USA.

The Times reported that WPP’s high level of contributions to both parties was related to the British group’s ownership of ten political lobbying firms in Washington. It quoted a WPP spokesman as emphasizing that no corporate money had been given to either party, but that the firm had ‘a large number of politically active staff’.

Payton (Financial Management, Nov 2007) examines corporate lobbying activities in the USA and Europe. The author reports that investors are increasingly interested in companies’ lobbying activities, which they hope will protect the firm’s long-term interests while remaining consistent with its stated aims. The article, which discusses past and present lobbying, urges all companies to explain to investors how their activities in the corridors of power tie in with business goals.