How have MNCs structured their corporate and regulatory affairs strategy to meet the demands of the new economic climate?

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Answered by: Zina, An Expert in the World News - General Category
Global corporations often invest a significant amount of money in hiring and retaining quality corporate affairs professionals. These companies also allocate a sizeable amount of money each year to corporate contributions - money specifically allocated for philanthropic and sponsorship projects through partnership with non-profit and non-government organisations worldwide. One question that may spring to mind is this: Why do this?

Given the decline of the world's economies, Corporate and Regulatory Affairs professionals within leading MNCs have looked to alternative means of communicating their issues and objectives, through increasing their philanthropic activities and raising their profiles among educational institutions. The primary purpose of this change in direction has been to harness good will in an economic climate that precludes the previously documented high consumer spend and that has led to abject poverty in certain regions. Also, through strategically planned philanothropic partnerships with social government departments and charities, companies hope to engender loyalty among consumers and secure a seat at the table with regulators.

In developing strategic alliances with education institutions, corporates recognise that many people have returned to tertiary education to maximise their market worth in a declining job market. They also recognise that many of these institutions have strong relationships with corporates and regulatory experts though their endowment programmes. In this way they hope to strengthen their Corporate and Regulatory Affairs function through effective issue communication to future allies. Investing in education also sends out a clear message that a corporate is investing in the future of the region and its people, a proven and almost foolproof strategy for engendering goodwill with regulators and industry influencers.

An example of the can be seen by the increase in endowment to leading business schools and global charities aimed at infrastructure improvement in regions badly affected by the decline. Corporate giants like Coca Cola, Mars and Cadbury Schweppes have been vocal about their CSR achievements and partnerships with NGOs, and they are quickly followed by companies not known for their non-profit alliances - law firms, accountancy giants and management consultancies.

In the Middle East, law firms have actively engaged in promoting the hiring of nationals and offering opportunities to women, visibly communicating a move away from what has been traditionally considered a male-dominated industry. Philip Morris has a strategy in place to enable its corporate affairs team to partner with health organisations on issues such as contraband products, product specification and youth smoking prevention programmes, and these will enable them to reach the very people who are regulating tobacco control. The company has also worked with customs departments to build their technical capacity to control the illegal movement of goods, which has provided them with an avenue to reach finance regulators and communicate their views on issues such as import duty and tobacco tax structures.

In short, companies now have a greater understanding of the importance of diversification when it comes to effective issue communication, and global non-profits can help them reach audiences that would not usually be open to their message.

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