Geopolitics

Geopolitics concerns questions in relation to the strategic importance of geographic locations, their relationships with each other, and the changing pattern of such relationships over time. For example, the European colonial legacies and geopolitical incidents such as the two world wars, cold war, the fall of the Berlin Wall, and the 9/11 terrorist attacks have contributed to the shaping of the existing global business environment. The acts of various national and international institutions, the strategic location of a country and its relationships with other nation-states, and the military and economic powers of countries have also been identified as factors possibly affecting a country's economic and political relationships. Additionally, the demographic characteristics of the population of a specific geographic area and its cultural/historical relationship with the rest of the world are commonly thought to be other influencing factors.

[Page 746]Despite an ongoing and obvious link between geopolitics and international business, the study of geopolitics appears to be a relatively new addition to the international business literature. Nonetheless, examining the concept of geopolitics in the global business context is particularly critical at this time, as we are living in a world with a rapidly changing and intrinsically intricate geopolitical order.

It is widely recognized that there is no universally accepted definition of geopolitics, which results in the term being abused by many without fully understanding its meaning. Geopolitics, in general, denotes international relationships from an evolutionary, historical perspective emphasizing the role of national power and national interests in shaping the global political order. Etymologically, the word denotes location-specific factors that affect political disposition. However, since its first use by the Swedish geographer Rudolf Kjellen in 1900, the study of geopolitics has been viewed, evaluated, and contributed to from different perspectives. In 1917 Kjellen used the term to describe the geopolitical basis of national power. Karl Haushopher, a German political scientist, further expanded this idea as a relationship between political phenomena and geography. He considered geographic variables to have a direct bearing on national power.

During the inter-war period, the concept of geopolitics was used by Haushopher, Carl Schmitt, and other German geopoliticians to develop “geostrategy” as a military science. At that time, the importance of geographic location and size and their impact on the political power of a nation were at the core of the German geostrategy. This was reflected in the subsequent policy of expansionism by Nazi Germany. Later, Harold and Margaret Sprout advanced the theory of geopolitics. According to the Sprouts, geography affects all human and nonhuman, tangible and intangible phenomena. They believed that every political community had a geographic base that might affect most of the transactions among nations. They raised the issue of “transactions” as a vital ingredient of the geopolitical domain, making it easier to relate to the business and politics literature.

Geoeconomics

Geographic proximity or physical distance has always been considered as an external environmental factor affecting the political relationships among nations. Accordingly, there is a likelihood of greater communication with neighboring nations than with physically distant ones. Following the oil crisis of 1973, the emergence of a new set of geopolitical and geo-strategic relationships was recognized in the international relations literature. Of special importance are the increasing scarcity of key resources globally and enhanced risk of their movements—especially of the supplies of oil and vital raw materials from producers to consumer nations. Hence, the control of resources and the resource-import relationship have added a vital dimension to the study of geopolitics.

...