Sunday, 14 May 2017

Interdisciplinary Interaction of the Study of Strategic Business Insights with International Relations Theories

At the very outset, it may indeed be useful to examine the terms ‘strategic business insights’ and ‘International Relations theories’ and then move on to discuss their interdisciplinary interaction.

Starting with ‘strategic business insights’, we may examine each of the three words separately to understand the phrase.

Strategic thinking is defined as an individual’s capacity for thinking conceptually, imaginatively, systematically and opportunistically with regard to the attainment of some specific goal.

business (also known as an enterprise or a firm) is an organizational entity involved in the provision of goods and services to consumers.

An insight can be defined as an accurate and deep perspective of someone or something. It can be like a “neurological flash” or a “Eureka moment”.

Strategic thinking entails producing meaningful and useful insights. 

According to Vriens and Verhulst, a business insight is a “thought, fact, combination of facts, data and/or analysis of data that induces meaning and furthers understanding of a situation or issue that has the potential of benefiting the business or re-directing the thinking about that situation or issue which then in turn has the potential of benefiting the business”. For business strategy, the insights needed could be insights about the current situation, about the future or about how to bridge the gap between present and future. Examples of business insights can include a marketer's realization that a customer need is not being met adequately by existing products or functions or even an auditor’s realization that a pattern of transactions show fraud.

In order to come up with an insight, one needs to engage in identifying issues, collecting and categorizing information (facts), assembling resources, getting information from company magazine, getting secret information and then analysing by actively looking for relationships and patterns in data, continually asking questions and reframing to find new perspectives, engaging in repeated hypothesis-testing. Once the insight has been arrived at, it may have to be properly articulated and conveyed to whoever concerned.

A well-known anecdotal example of a business insight relates to the Ford Mustang car model released in the 1990s. To quote from the Sloan Review-

“After a redesigned Ford Mustang was released in the late 1990s, consumers reported finding the new car less powerful than previous incarnations. That feedback troubled Ford engineers, because the iconic vehicle’s power was objectively higher in this version than in earlier models.

To find out what was going on, Ford dispatched a team from a consulting company to ride along as Mustang owners drove their new cars. From their interviews and observations, the ethnographers — a team of social scientists dedicated to studying people in their natural environments — concluded that power was something drivers experienced strongly. They sensed it bodily when in contact with the car’s vibrations while they drove. They absorbed it audibly when exposed to the “voice box” of the car’s engine. And they grasped it visually when their eyes took in the Mustang’s look. The ethnographers concluded that car performance was fundamentally a sensory, bodily experience rather than just a set of horsepower statistics.

In light of that information, Ford engineers literally returned to the drawing board. They refashioned the exterior styling of the car so that it ‘looked fast,’ making the new Mustang much more like the iconic models of the 1960s.”

To sum up, Ford executives used insights gained from ethnographic observations when redesigning the Ford Mustang and developing a new marketing strategy for the car.

Now, coming to International Relations theories.

The term ‘geopolitics’ refers the political affairs between countries at the global level in which the role of non-state actors like international NGOs and MNCs may have a great role. Instances of conflict, cooperation and all other forms of interaction between states fall under geopolitics, be it wars, commercial or peace treaties, regular state visits or summits of international organizations like the United Nations (UN), European Union (EU) or any other.

The discipline of International Relations (IR) is a study of the same that seeks to not only observe these events but also provide conceptual frameworks, which are called IR theories, to understand these developments in an incisive fashion.

Mainstream IR theories are theories that are believed to subscribe to what are regarded as conventional approaches to explaining geopolitics. These include liberalism (premised on the idea that humans desire for a better world for themselves, which can lead to cooperation between states to that end) and realism (premised on the idea that human beings are insecure and therefore self-interested, leading states to conflict with each other for resources). The debate between the proponents of these two constituted the First Great Debate of IR, which was largely believed to have been won by the realists. Realism is a view of international politics that stresses its competitive and conflict side. For realism, the state marked the border between inside/outside, sovereign/anarchic, us/them. Accordingly, some people began questioning how the state came to be regarded as the most important actor in world politics, and how the state came to be understood as a unitary, rational actor. This approach critical of realism is not anti-state, it does not overlook the state, nor does it seek to move beyond the state. In many respects, it pays more attention to the state than realism, because instead of merely asserting that the state is the foundation of its paradigm, such an approach is concerned with the state’s historical and conceptual production, and its political formation, economic constitution, and social exclusions and how these impact geopolitics. Arguably, the greatest critic of idealism, EH Carr, also claimed that a simplistic realist model cannot sustain geopolitics. He recognized himself that the logic of pure realism can offer nothing but a naked struggle for power which makes any kind of international society impossible. Although he demolishes what he calls the current utopia of idealism, he at the same time attempts to build a new utopia, a realist world order.

This approach of moving beyond realism led to the rise of another IR theory, constructivism, which is still closely linked to realism and is in very many cases also regarded as a mainstream IR theory but it differs from liberalism and realism inasmuch as it adopts a post-positivist rather than a positivist approach.  The positivist methodology mainly believes in the verification of the samples and coming to the conclusion on the basis of the test only. They believe in the complete irrelevance of the personal value judgments of the observer. The positivist method also emphasizes the value of these empirical observations in determining the actual nature of reality. Positivism is an approach that simply holds that the goal of knowledge is simply to describe the phenomena that we experience. Post-positivism seeks to look for a possibly alternative understanding of the same.

Constructivism is believed to mark the precursor to other post-positivist IR theories, known as the critical IR theories that seek to provide a more nuanced and deeper understanding of certain facets of the society that manifest themselves in geopolitics  such as class, gender and the likes. Critical IR theories include the Marxist, post-structural, post-colonial and feminist IR theories. Mainstream IR theories premise themselves on the conception of anarchy (no over-arching sovereign entity) in geopolitics, while critical theories reflect on the social structures that recreate and maintain a particular anarchy in the interest of the informal hierarchies that inevitably emerged, seeking a radical overhaul of these hierarchies in the interest of human emancipation.

Now, coming to the link between IR theories and strategic business insights. Both international politics and business require a strategic mindset, and businesses constitute a large share of the economy, which drives much of international politics, and likewise, the vice versa is also true – of international political developments like wars having economic outcomes, like wars in the Middle East affecting crude oil prices, which is why the term ‘international political economy’ has also evolved. Insights about businesses, especially big businesses with bearing on politics, have much relevance in understanding geopolitics. Retired British military officer Lieutenant Colonel Sir Archibald David Stirling’s private military company KAS International, for instance, was indirectly backed by those in power in Britain, and was believed by many to be advancing British foreign policy interests in the Middle East and Africa (as depicted in the documentary ‘Who Pays Wins’ by Adam Curtis), and insights about that business can help understand British foreign policy to some extent. The conceptual frameworks or theories that have been developed to understand and explain international politics are indeed also useful as thought processes to gain insights in the domain of business strategy.

For instance, the idea of class consciousness advocated by the Marxist theory can give us an insight into why Ratan Tata, who heads the Tata group, differed with former chairman of the holding company of the group Tata Sons, Cyrus Mistry, over not giving up on loss-making businesses outside India for Ratan Tata wishes to be seen in the class of international capitalists rather than only Indian capitalists.

Or alternatively, the idea of cooperation and collaboration enshrined in the IR theory of liberalism or the English school stressing on international, inter-governmental organizations can give us an insight into how even competing firms in the same industry can come together to form associations to represent the common cause of that industry, like the National Association of Software and Services Companies (NASSCOM) in the context of the Indian software industry.

Similarly, smart advertising tools to show the competitors in poor light, as we saw in the “cola wars”, such as between Sprite and Mountain Dew in the early 2000s, can be ascribed to realism.

The anecdotal example relating to the Ford Mustang dating to the 1990s cited earlier in this essay to explain the concept of a business insight exemplifies a constructivist approach, relating to people’s perceptions of the quality of a product. It would, in fact, be interesting to note that there have been several research papers written, comparing realism and constructivism in the context of business strategy, such as ‘A Constructivist Approach to Manage Business Process as a Dynamic Capability’ by Brazilian researchers Rogerio Tadeu de Oliveira Lacerda, Leonardo Ensslin, Sandra Rolim Ensslin and Ademar Dutra published in the journal ‘Knowledge and Process Management’ in 2014 and before that, ‘Strategic management and the philosophy of science: The case for a constructivist methodology’ by Raza Mir and Andrew Watson published in the Strategic Management Journal in 2000  (to which Kai-Man Kwan and Eric W. K. Tsang wrote a rebuttal titled ‘Realism and Constructivism in Strategy Research: A Critical Realist Response to Mir and Watson’ published in the same journal in 2001).    

Likewise, the concept of “social businesses” enunciated by Bangladeshi microcredit financing expert Muhammad Yunus (explained in his book ‘Creating a World without Poverty’), which seek to utilise corporate structures of competition with the objective of empowering the poor, can be seen through the prism of post-structuralism.  Post-structuralism in business strategy has been explored in some detail in the research paper ‘Critical Approaches to Strategic Management’ by David L. Levy, Mats Alvesson and Hugh Willmott. If feminism is employed to understand geopolitics, it has been employed in the domain of business strategy too, to not only discuss women as entrepreneurs or in business spaces but to develop a broader gendered understanding of business strategy. Some research papers to this effect include ‘Feminist Insight on Gendered Work: New Directions in Research on Women and Entrepreneurship’ by Kiran Mirchandani, published in the journal Gender, Work & Organization’ in 1999, ‘Women entrepreneurship: research review and future directions’, by Vanita Yadav and Jeemol Unni published, in the Journal of Global Entrepreneurship Research in 2016 and ‘Female Entrepreneurs: Social Feminist Insights For Overcoming The Barriers’ by Turkish scholars Rana Ozen Kutanis and Serkan Bayraktaroglu in 2003. If some IR theorists have felt it necessary to call out the Eurocentrism in approaching the discipline calling for a post-colonial approach, R.I. Westwood and Gavin Jack wrote a position paper titled ‘Manifesto for a Post-Colonial International Business and Management Studies: A Provocation’ in the journal ‘Critical perspectives on international business’ and the book ‘Ethnic Communities in Business: Strategies for Economic Survival’, edited by Robin Ward and Richard Jenkins also discussed post-colonialism in business strategy.

This essay has sought to take a broad overview of what strategic business insights and IR theories are, and how they relate to each other, citing some true-life examples from the business world and even mentioning some actual academic work done in business strategy circles employing IR theories, without detailing the contentions advanced, owing to the level of detail associated with each such academic endeavour, which if delved into, would indeed make this essay very lengthy.


Karmanye Thadani
Knowledge Council

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