New types of attacks are constantly being thrown at people: Russia is faking hundreds of videos about Kamala Harris in order to force its preferred president, Donald Trump, into power in America. Militias are managing to sink tankers with Iranian missiles. Viruses are paralyzing vital networks. Drones from hardware stores are attacking apartment blocks. And now, at the same time, thousands of receivers are exploding on the belts and in the pockets of those who, according to intelligence reports, belong to a terrorist militia.
At this point, it is not about morality, international law or self-defense. It is about ever new, ever unpredictable risks, especially for companies in a world with almost no borders. In addition to country and investment risks in globalization, there are disasters such as floods or large-scale fires in climate change, damage to reputation through lies and propaganda, attacks on networks and data, but also personal attacks in ways never imagined. Bodyguards are no longer enough.
There have always been threats to economic activity. In the 17th century, the British stole seeds from the cinchona tree in Peru to obtain quinine – the trading companies needed the medicine against malaria in the tropical colonies as a “tool of imperialism”, as historians note. Pirates and highwaymen also attacked traders centuries ago. The relentlessness, the crossing of borders, the use of digital capabilities and the breadth of the consequences make the attacks more dangerous today than ever before.
In recent years, the focus has been on the theft of intellectual property, often committed by the Chinese. To resist this, some people were satisfied with locating sensitive production and development in Singapore, the Fort Knox of Asia. Other risks were added: large-scale, often state-run industrial espionage, because transformation and leaps in development were taking place ever faster. The unpredictable justice system in China and India became a travel risk for many German executives. In 2011, the flooding of the Chao Phraya in Thailand taught Japanese and South Korean electronics manufacturers that climate change and its storms can now disrupt supply chains for months. In 2019, very few companies – and countries – were prepared for the pandemic and its consequences for production and employees. Mercedes was not the only one to feel the power of social media in China. If a buyer hits his dilapidated luxury car with a hammer in front of the camera while millions watch, sales plummet.
Since Wednesday, the Taiwanese manufacturer Gold Apollo has been suing for enormous damage to its reputation because it was not the manufacturer of the pagers that were used as explosive weapons in Lebanon, bearing its company logo. Until Tuesday, no one in the company could have imagined the misery the producer would fall into.
Experts speak of asymmetric warfare, of polycrises, of internal conflicts and their consequences. Others simply speak of atrocities. Anyone who believes that none of this has anything to do with corporate governance could be seriously mistaken.
Because more than ever, board members and managing directors need advice, must weigh up risks beyond the creditworthiness of customers and – where these risks can no longer be assessed – become even more cautious. All of this does not necessarily have to lead to “near-” or “homeshoring”, the relocation of production to the home country. But politically driven risk assessment is becoming more important every day for business leaders. But it is not a specialist area for business economists.
In this respect, however, Germany and Europe are anything but bad. Beyond all the tax debates, the dispute over dilapidated infrastructure and the focus on subsidies, the security of Germany as a location in a shaky world could be a good argument for investors.
– What unconventional threats should companies be aware of in today’s globalized world?
Table of Contents
The Evolution of Threats: How Companies Must Adapt to Unpredictable Risks in a Globalized World
In today’s world, businesses face an unprecedented array of risks that threaten their very existence. From cyberattacks to reputational damage, and from physical attacks to environmental disasters, companies must navigate a complex landscape of ever-evolving threats. This article will explore the nature of these risks, their consequences, and the importance of adaptability in corporate governance.
The Rise of Unconventional Threats
Gone are the days when threats were primarily physical and predictable. Today, companies must contend with novel forms of attacks, such as deepfake videos, drone strikes, and exploding devices. The Russian disinformation campaign targeting Kamala Harris is just one example of how nation-states are using advanced technology to sway political outcomes. Moreover, militias are sinking tankers with Iranian missiles, and viruses are crippling critical infrastructure. These unconventional threats require a fundamental shift in how companies approach risk management.
Globalization and the Borderless World
In a world where borders are increasingly irrelevant, companies must confront the reality of global risks. The old paradigm of country and investment risks is no longer sufficient. Today, companies must also consider the impact of climate change, reputational damage, cyberattacks, and personal attacks on their operations. The relentless nature of these threats, coupled with their unpredictability, makes them more dangerous than ever before.
A Brief History of Threats
Threats to economic activity are not new. In the 17th century, the British stole cinchona tree seeds from Peru to obtain quinine, a vital medicine for colonial endeavors. Pirates and highwaymen also targeted traders centuries ago. However, the speed, scale, and consequences of modern threats have transformed the risk landscape. Industrial espionage, once a primary concern, has given way to more sinister threats, such as large-scale cyberattacks and state-sponsored sabotage.
Risks Beyond Intellectual Property
In recent years, companies have focused on protecting their intellectual property from theft, particularly by Chinese entities. Some have relocated sensitive production to Singapore, considered the Fort Knox of Asia. However, the risks have multiplied. State-run industrial espionage, unpredictable justice systems, and supply chain disruptions due to environmental disasters have become significant concerns. The COVID-19 pandemic has further exposed companies to the risks of global interconnectedness.
The Importance of Adaptation in Corporate Governance
Board members and managing directors must recognize the gravity of these threats and adapt their risk management strategies accordingly. It is no longer sufficient to focus solely on creditworthiness or traditional security measures. Companies must assess risks beyond their immediate control, such as reputational damage, cyberattacks, and environmental disasters. In an era of polycrises, asymmetric warfare, and internal conflicts, corporate governance must evolve to address these unpredictable risks.
Conclusion
The modern business landscape is characterized by uncertainty and unpredictability. Companies must acknowledge the existence of new, unconventional threats and adapt their risk management strategies to stay ahead. This requires a fundamental shift in corporate governance, one that prioritizes adaptability, resilience, and foresight. Only by recognizing the evolving nature of threats can companies hope to survive and thrive in an increasingly complex world.
SEO Keywords: risk management, corporate governance, globalization, cyberattacks, reputational damage, environmental disasters, unconventional threats, adaptive governance.
Meta Description: Learn how companies must adapt to unpredictable risks in a globalized world, including cyberattacks, reputational damage, and environmental disasters, and the importance of adaptability in corporate governance.
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– What are the key unpredictable risks companies face in the new era?
The New Era of Unpredictable Risks: How Companies Can Stay Ahead of the Curve
In today’s globalized world, companies face an unprecedented array of risks that can have devastating consequences on their operations, reputation, and bottom line. From state-sponsored cyberattacks to terrorist attacks, and from intellectual property theft to reputational damage through social media, the threats are numerous and constantly evolving.
In this article, we’ll delve into the new era of unpredictable risks and explore how companies can stay ahead of the curve. We’ll examine the latest trends in risk management, the importance of geopolitics in business decision-making, and the need for a holistic approach to mitigating risks in an increasingly complex world.
The Rise of Asymmetric Warfare and Polycrises
Asymmetric warfare, a term coined to describe the unconventional tactics used by non-state actors, has become a major concern for companies operating globally. The use of fake videos, deepfakes, and propaganda to influence public opinion and sway political outcomes is on the rise. Similarly, polycrises, or multiple, interconnected crises, have become a new reality. The COVID-19 pandemic, for instance, has highlighted the vulnerability of global supply chains and the need for companies to be prepared for unexpected disruptions.
The Importance of Geopolitics in Business Decision-Making
Geopolitics plays a crucial role in business decision-making, and companies can no longer afford to ignore it. The rise of nationalist sentiments, trade wars, and protectionism has created new risks and opportunities for companies operating globally. Understanding the geopolitical landscape is essential for companies to make informed decisions about investments, partnerships, and market expansion.
The Need for a Holistic Approach to Risk Management
Traditional risk management approaches focus on financial risks, such as market volatility and creditworthiness. However, in today’s world, companies need to adopt a holistic approach that takes into account political, reputational, and operational risks. This includes assessing the risks associated with intellectual property theft, cyberattacks, and terrorism, as well as the impact of climate change, natural disasters, and pandemics.
The Role of Corporate Governance in Risk Management
Corporate governance plays a critical role in risk management. Board members and managing directors need to be aware of the new risks and take a proactive approach to mitigating them. This includes ensuring that risk management is integrated into the company’s overall strategy, assigning clear responsibilities for risk management, and establishing a culture of risk awareness throughout the organization.
The Importance of Specialist Advice
Risk management is no longer a specialist area for business economists. Companies need to seek expert advice from geopolitics specialists, cybersecurity experts, and other specialists to navigate the complex risk landscape.
Conclusion
The new era of unpredictable risks requires companies to adopt a proactive and holistic approach to risk management. By understanding the geopolitical landscape, assessing the risks associated with intellectual property theft, cyberattacks, and terrorism, and adopting a holistic approach to risk management, companies can stay ahead of the curve and minimize the impact of disruptions. Corporate governance plays a critical role in risk management, and companies need to ensure that they have the right expertise and resources to navigate the complex risk landscape.
Keywords: risk management, geopolitics, corporate governance, asymmetric warfare, polycrises, intellectual property theft, cyberattacks, terrorism, climate change, natural disasters, pandemics, supply chain disruptions.
Meta Description: In today’s globalized world, companies face an unprecedented array of risks. Learn how to stay ahead of the curve with a holistic approach to risk management, geopolitics, and corporate governance.
Header Tags:
The New Era of Unpredictable Risks
The Rise of Asymmetric Warfare and Polycrises
The Importance of Geopolitics in Business Decision-Making
The Need for a Holistic Approach to Risk Management
The Role of Corporate Governance in Risk Management
The Importance of Specialist Advice
* Conclusion
