Geopolitics Is Rewiring Corporate Strategy

As we saw in an earlier article, geopolitics is back, and neither corporations nor business schools can ignore it. But the longer the conversation goes, the more the center of gravity appears to be moving away from headline events and toward the systems that make business possible - systems that were once assumed to be neutral. The HEC Lab for Business & Geopolitics is being built with that shift in mind: not to turn managers into diplomats, but to help organizations see how coercion travels through economic ties, and how to respond without improvising every time.

When resilience requires building a market

The first move appears deceptively simple: map dependencies with the same seriousness that firms apply to performance and compliance. The emphasis goes beyond inputs and suppliers, to financial networks and digital dependencies. These connective tissues often stay invisible - until they fail. The point is not to list risks, but to understand how they can be transmitted through the organization and how they might be attenuated.

Mapping leads to a second, harder question: what options exist if a link is cut, not because of the firm’s own behavior, but because pressure is applied elsewhere in the system? In some sectors, substitutes are plentiful. In others, scale and business models push toward concentration, and resilience cannot be purchased off the shelf. We can frame this as a market-creation problem and alternatives may only appear when firms cooperate and align with public policy. A concrete illustration is the need for shared digital infrastructure in Europe - something states cannot deliver alone, and no single firm can build unilaterally.

Firms as social forums: dialogue as a governance task

The Lab’s mandate is also social. One lesson drawn from a conference organized on June 2, 2025 is that firms function as social forums for employees - and increasingly for customers as well. In that sense, civil society is not outside the company, it is inside it. Geopolitical uncertainty therefore creates a governance obligation and organizations must be able to hold credible dialogue with stakeholders about exposure, values and trade-offs.

That same logic extends outward. Even in a ‘shattered’ world, cross-border links do not disappear. Instead, they become more adversarial. Yet, we argue that business still helps keep relationships alive and can contribute - alongside NGOs and academics - to the informal connective tissue sometimes described as track-two diplomacy: non-official channels that maintain ties for the long run. What is striking is how rarely business schools participate, despite the fact that coercion often operates through the infrastructures firms build and run.

The ‘boring utility’ that can stop a business: payments

To make the argument tangible, let’s look at a deliberately unglamorous example: payment systems. In normal times, they are treated as utilities. The only expectation is that cards swipe, transfers clear and the system works. But the sector’s economics tends to be highly concentrated, with a small number of consortiums dominating market share in certain countries. If a firm builds its operations around one or two vendors, exclusion can become suddenly possible - because those vendors may be required by their authorities to cut access.

This illustrates a broader change in mindset, a kind of ‘broken mirror’ which delineates the end of an assumption - that interdependence is automatically safe, and that yesterday’s neutral infrastructures will remain neutral tomorrow. The managerial question should be what parts of the operating model could be turned into pressure points?

Procurement becomes geopolitics: second sources and political diversification

Once the possibility of exclusion is taken seriously, routine decisions look different. Procurement  is no longer only a search for the cheapest reliable partner and, instead, becomes an exercise in scenario planning. Managers and leaders need to secure credible second sources that will not respond to the same pressures at the same time. Where suppliers are concentrated and tied to the same states, firms may find themselves suffering from conflicts they did not start and cannot influence.

The objective is to identify where concentration and jurisdictional alignment create single points of failure - and then to build options before they are needed. That is a practical capability, and it is one of the reasons a business-facing geopolitics initiative can be useful: it connects power dynamics to the organizational realities of how firms buy, build, finance and operate.

The expertise problem: knowing what you don’t know, and who to trust

Another vulnerability is cognitive. When organizations are caught between states, they can become ‘roadkill’, not only because they lack expertise, but because they struggle to discern who has it. That creates a demand for judgment, the ability to cross fields, evaluate arguments and avoid being paralyzed by competing claims. This is described as a space where a business school can add value precisely because it can integrate perspectives that rarely meet inside firms.

At the operational level, that judgment must translate into reflexes. Executives need teams that can pause when something looks routine but carries geopolitical exposure. They should feel authorized to escalate concerns that do not show up in standard KPIs. To put it bluntly, many leaders and managers in Europe and the West are learning this in real time, so the priority is to build competence fast, without pretending certainty.

These traps have shown up in real corporate histories: alongside Apple and its China experience. The article also gestures to the controversies executives cite when they look back on exposures in regions that have exploded into war overnight (Ed., see Lafarge’s experience in Syria). The takeaway is not a retrospective blame exercise, but a capability gap. Decisions are often made inside a familiar competitive frame, and leaders do not yet have the reflex - or the internal expertise - to detect when a counterpart is pursuing a different long‑term objective. That is precisely why due diligence has to expand beyond conventional KPIs, and why organizations need people who can credibly escalate “this looks routine, but it isn’t.”

If coercion now runs through economic ties, then the most valuable work is often unglamorous. It sits in maps of dependence, in procurement redesign, in market-building for alternatives, in stakeholder dialogue, and in the disciplined assessment of expertise. In that sense, the HEC Lab’s contribution is less about predicting the next crisis and more about helping leaders recognize the levers they already touch - before those levers are pulled by someone else.