{"id":1487557,"date":"2026-05-20T10:10:33","date_gmt":"2026-05-20T08:10:33","guid":{"rendered":"https:\/\/www.ie.edu\/insights\/?post_type=articles&p=1487557"},"modified":"2026-05-20T11:26:04","modified_gmt":"2026-05-20T09:26:04","slug":"global-turmoil-is-forcing-ceos-to-redesign-the-multinational","status":"publish","type":"articles","link":"https:\/\/www.ie.edu\/insights\/articles\/global-turmoil-is-forcing-ceos-to-redesign-the-multinational\/","title":{"rendered":"Global Turmoil Is Forcing CEOs to Redesign the Multinational"},"featured_media":1488542,"template":"","meta":{"_has_post_settings":{"highlight_sharing":"default","image_sharing":"default","headline_sharing":"default"}},"schools":[],"areas":[481],"subjects":[416],"class_list":["post-1487557","articles","type-articles","status-publish","has-post-thumbnail","hentry","areas-leadership","subjects-business-and-finance"],"custom-fields":{"wpcf-article-leadin":["Geopolitical fragmentation is forcing multinationals to rethink structure and strategy in an increasingly unstable global landscape, write Caterina Moschieri, Quy Huy, and Davide Ravasi.<\/span>"],"wpcf-article-body":["Global Turmoil Is Forcing CEOs to Redesign the Multinational<\/strong>\r\n\r\nFor decades, multinational corporations (MNCs) have operated on the assumption that globalization would continue to deepen, markets would converge, and efficiency would remain the primary driver of competitive advantage.\r\n\r\nFrom the war in Ukraine to intensifying U.S.-China rivalry and instability in the Middle East, today\u2019s disruptions are signals of a deep structural shift toward a fragmented, multipolar world. Globalization has not ended, but the conditions that once made it relatively stable and predictable have changed. Geopolitics has returned as a defining force in corporate strategy.\r\n\r\nFor multinational corporations, the operating environment has become more complex and structurally unstable. Geopolitical risk<\/a>, the restructuring of multinational organizations<\/a>, and the importance of local embeddedness and partnerships in politically sensitive environments<\/a> are becoming central strategic concerns for firms operating across multiple jurisdictions. Companies must now balance efficiency with geopolitical security. Supply chains can be disrupted overnight, markets can become politically inaccessible, and assets can turn into liabilities.\r\n\r\nUntil recently, companies operating across multiple markets worried primarily about strategic arbitrage and marginal efficiency gains. Today, they must also consider market access, asset security, political exposure, and long-term strategic positioning. CEOs are now expected to optimize global operations while remaining viable across a fragmented world.\r\n\r\nThe challenge is no longer about how to optimize a globally integrated system, but how to operate within one that is simultaneously interconnected and deeply divided.\r\n\r\nThe companies best positioned for this new landscape are those that remain globally connected while adapting to a world that is increasingly fragmented politically, economically, and strategically.\r\n\r\nGlobalization Without Stability<\/strong>\r\n\r\nWe are entering an era where governments have weaponized the very networks that once facilitated trade. Tariffs, export controls, and sanctions are now standard strategic tools. Dependencies \u2013 from semiconductor ecosystems to maritime straits \u2013 have transformed from competitive advantages into acute vulnerabilities.\r\n\r\nEven the digital world is fracturing. Regulatory regimes like the EU\u2019s GDPR and Data Act are forcing companies to localize data, redesign cloud infrastructure, and reorganize legal entities to ensure \"digital sovereignty.\" When a proposed undersea cable between Chile and Hong Kong was blocked due to geopolitical pressure, it became clear that even infrastructure has become a point of geopolitical rivalry.\r\n\r\nThe Old Playbook, Rewritten<\/strong>\r\n\r\nWhen geopolitical risk rises, companies have traditionally relied on three options: exit, relocate, or reorganize. All three still apply, but their logic has changed.\r\n\r\nExit: From Withdrawal to Optionality<\/em>. In a volatile environment, exiting a market is no longer a clean decision. Recent corporate withdrawals from Russia show how divestitures can destroy value, trigger legal complications, and create long-term strategic losses. As a result, many firms are moving toward a more nuanced approach: maintaining a calibrated, minimal presence. A legal entity, minimal operations, or retained partnerships can preserve market access and intelligence while reducing exposure. This strategy also preserves regulatory standing and leaves open the possibility of re-engagement if conditions stabilize.\r\n\r\nRelocate: From Cost Optimization to Risk Management. <\/em>Location decisions are no longer driven primarily by cost efficiency but by the tradeoff between cost and geopolitical exposure. Lower costs increasingly come with higher strategic risk. This explains the rise of re-shoring, near-shoring, and friend-shoring. Companies are bringing production closer to home or relocating to politically aligned countries to reduce exposure. A more sophisticated approach is also emerging: investing in \u201cmiddle-power\u201d countries such as India, Vietnam, and Malaysia. These markets offer relative neutrality, allowing firms to maintain global reach while reducing dependence on major power blocs. Yet the logic of friend-shoring is becoming increasingly unstable in the fluid geopolitical environment. Political alliances shift, strategic interests diverge, and regional tensions redraw the boundaries of economic cooperation. Even near-shoring becomes more complicated when neighboring countries belong to different blocs.\r\n\r\nReorganize: The (Re)Emergence of Polynational Structures. <\/em>The most interesting transformation is organizational. The traditional multinational structure \u2013 built on centralized decision-making and globally integrated operations \u2013 is giving way to a new model: the \u201cpolynational organization.\u201d This model consists of semi-autonomous regional units with strong local leadership, localized supply chains, and deep integration into national ecosystems. It is not fragmentation, but strategic decentralization. Companies such as Nestl\u00e9 and HSBC are already moving in this direction, distributing decision-making across regions and embedding operations within local systems to reduce exposure to political shocks. The result is greater resilience. Polynational organizations can adapt more quickly to regulatory changes, absorb regional disruptions, and operate across competing geopolitical blocs.\r\n\r\nThree Strategic Shifts Beyond Exit, Relocation, and Reorganization<\/strong>\r\n\r\nBeyond exit, relocation, and organizational redesign, three broader shifts are beginning to reshape the multinational corporation: ownership as strategy, geopolitics as a core capability, and resilience as a measure for performance.\r\n\r\nOwnership as Strategy<\/em>. Organizational redesign is extending beyond structure into ownership and governance. Companies are increasingly localizing ownership \u2013 bringing in local investors, listing subsidiaries domestically, or partnering with host governments. These moves signal alignment with local interests and help reduce political risk. In sensitive sectors, governance design can determine market access. Companies must be able to demonstrate not only operational compliance, but also political legitimacy.\r\n\r\nGeopolitics as a Core Capability. <\/em>A second significant shift is that the management of geopolitics is moving from the periphery of the organization to its core. Leading companies are building capabilities to monitor political risk, anticipate disruptions, and respond in real time.\r\n\r\nThis includes specialized tools, dedicated teams, and scenario planning. But the most advanced firms are going further \u2013 engaging in \u201ccorporate diplomacy.\u201d They are actively managing relationships with governments across multiple jurisdictions, aligning investments with political priorities, and positioning themselves as neutral actors in contested environments. Firms that treat geopolitics as a compliance issue will fall behind. Those who treat it as a strategic capability will define the next phase of globalization.\r\n\r\nFrom Efficiency to Resilience. <\/em>For decades, companies optimized for efficiency \u2013 minimizing costs, centralizing operations, and eliminating redundancy. Today, resilience has become equally important. This means diversifying supply chains, building redundancy into operations, decentralizing decision-making, and increasing local embeddedness. It also means accepting greater complexity.\r\n\r\nPractices once considered inefficient \u2013 redundancy, duplication, decentralization \u2013 are now seen as sources of resilience.\r\n\r\nMultinational corporations are now being forced to operate across fragmented geopolitical systems, where market access, political alignment, and regional exposure can change rapidly. The challenge is no longer simply how to remain globally integrated; it is how to remain adaptable across multiple political and economic environments at once.\r\n\r\nA New Logic of Competition<\/strong>\r\n\r\nThe current geopolitical landscape reflects a fundamental shift in globalization. Countries are competing more aggressively \u2013 through trade, technology, and industrial policy \u2013 while remaining deeply interconnected.\r\n\r\nFor multinational corporations, this creates a new logic of competition. The winners will not be those who choose between global scale and local responsiveness. They will be those who achieve both through organizational designs that combine connectivity with autonomy. In this environment, strategy and structure can no longer be separated.\r\n\r\nAnd in a world shaped by geopolitical uncertainty, the ability to continuously adapt that design may be the ultimate source of competitive advantage.\r\n\r\n \r\n\r\n\u00a9 IE Insights."],"wpcf-audio-article":["https:\/\/www.ie.edu\/insights\/wp-content\/uploads\/2026\/05\/Moschieri-Audio.mp3"],"wpcf-article-extract":["Geopolitical fragmentation is forcing multinationals to rethink structure and strategy in an increasingly unstable global landscape, write Caterina Moschieri, Quy Huy, and Davide Ravasi.<\/span>"],"wpcf-article-extract-enable":["1"]},"_links":{"self":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles\/1487557","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/types\/articles"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media\/1488542"}],"wp:attachment":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media?parent=1487557"}],"wp:term":[{"taxonomy":"schools","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/schools?post=1487557"},{"taxonomy":"areas","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/areas?post=1487557"},{"taxonomy":"subjects","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/subjects?post=1487557"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}