What is the relevance of global politics and international relations for companies, managers, and work? How will it impact your company and why should you care? This chapter identifies how changing global order thrusts upon all global businesses to respond to and actively manage geopolitics. Companies have to balance corporate interests with broader security externalities that their governments emphasize because geopolitics and economics are closely intertwined. Geopolitical risk arises when states prioritize national security and limit how companies leverage their assets in generating economic rents. A key factor shaping how a company will be impacted by the risk is its corporate nationality. Geopolitical risk in a given market is higher for companies from perceived rival countries than those from friendly ones. In order to assess the impact of geopolitical risk on their firm, companies, managers, and employees can focus on a structural perspective that emphasizes four levers that reshape the basic market structure for global companies: market access, level playing field, investment security, and institutional alignment. Ultimately, while navigating geopolitical tensions is increasingly a part of the job for many managers, it can also come at a cost to the company.

Geopolitical forces are fundamentally altering the landscape of e-commerce and digital trade. Cross-border e-commerce is increasingly fragmented along geopolitical lines, as e-commerce companies are forced to reckon with the security implications of their operations. This includes governments’ concerns about data security and sovereignty. When foreign firms collect extensive data on the behavior of the country’s customers, there is potential for those data to be exploited in shaping consumer behavior or spreading information in the country. Additionally, when a foreign firm plays an important role in the domestic economy, local governments have limited means to encourage those firms to act in the “national interest” or broader societal and economic goals beyond maximizing profits. Because of these concerns, governments have adopted policies to shape the behavior of e-commerce companies. This includes shaping market access, level playing field, investment security, and institutional alignment. E-commerce companies have adopted various strategies to manage corporate nationality and geopolitical tensions, including masking country of origin, diversifying supply chains, relocating control rights, focusing on alternate markets, and corporate diplomacy.