Goodwill ambassadors?
It's no secret that nations' foreign policies and the interests of their biggest companies as often intertwined. Consider the role of the United Fruit Company and Standard Oil in determining US foreign policy in Latin America through the late 19th and 20th centuries, where governments were toppled and dictators raised up at the behest of that company. And certainly Exxon and Texaco have been major determinants of US policy in the Middle East and elsewhere over the past 50 years.
But now there is a new twist, according to a Wall Street Journal article ("Trying to Turn Its Image Around, U.S. Puts Top CEOs Out Front", 2/17/06). As that article states, "U.S. companies are jumping into the type of overseas public diplomacy long shouldered by the federal government." Prodded by a new and growing White House initiative, large American companies are taking on visible foreign aid roles. Most visible is the earthquake relief in Pakistan, where Pfizer, Citigroup, UPS, General Electric and Xerox were all tapped for cash and/or in-kind aid. Similar initiatives have taken place in Guatemala (reforestation and mudslide clean-up).
This movement is just starting, and on the plus side it makes use of corporate resource to bring aid to devastated areas and to raise the profile of the US. The idea is that American megacompanies can help their images while helping that of the US government by running their own aid programs (when the US government is too cheap to help out).
But it is a curious move in a world where corporations are getting less and less identified with nation states. Cross border mergers, a steady internationalization of the management of top companies, and an increasing dependence on non-US sales, investments, and operations mean that even the most all- American companies are starting to have more employees and investments outside the US than inside.
Indeed, being too closely associated with the US (KFC, McDonalds) can open companies up to boycotts and property damage. American foreign policy, as currently in Iraq, can lead to problems for US companies elsewhere.
For the companies that are involved, the article notes "some of their motives are simply to improve their own image in important global markets. Some company chiefs also worry that a growing reliance on private-sector largess could strain corporate resources or drag companies into areas where they don't belong."
In the end, using big US companies to supplement foreign aid programs seems bound to backfire. For many years, US foreign policy has been constrained by economic interests, and the biggest companies have their say even when other principles may be involved, and this is to some extent independent of administrations. For example, our interest (and those of major US companies) in China (manufacturers and treasury note holdings), Saudi Arabia (oil), and Nigeria (oil) have muffled US concerns about human rights in those countries.
Having the biggest companies work as agents of the US abroad will require further payback in terms of shaping foreign policy. And what's good for Citigroup and Pfizer may often be at odds with what is good policy for the country.
