Business diplomacy in practice :a grounded theory study in management among professional diplomats : a dissertation presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Management at Massey University, Albany, Auckland, New Zealand

Abstract

Background: How can diplomacy contribute to the success of businesses and to better management and business practices in today’s complex and interconnected world? Diplomacy has been associated with business and commercial activities for thousands of years. However, due to the modern events of globalisation and increased geopolitical risks facing businesses, management scholars have been looking at the concept of diplomacy and have tried to apply it to management and organisational settings.

Aims and Significance: Despite the growing attention to business diplomacy, the literature remains limited and lacks clear empirical research that provides a practical understanding and conceptualisation of this subject. Therefore, this study looks at diplomacy from managers’ and diplomats’ perspectives in relation to business and management. Diplomacy continues to evolve in its practices, skills, and policies, and so do today's businesses. Investigating the range of professional diplomats’ responsibilities and knowledge could give managers and management researchers an understanding of the intricate complexity of the diplomat's task, which will enhance their own work. This research aims to address this issue by answering the question: 𝘏𝘰𝘸 𝘥𝘰 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭 𝘥𝘪𝘱𝘭𝘰𝘮𝘢𝘵𝘴, 𝘪𝘯 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘢𝘯𝘥 𝘨𝘰𝘷𝘦𝘳𝘯𝘮𝘦𝘯𝘵𝘴, 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘥𝘪𝘱𝘭𝘰𝘮𝘢𝘤𝘺? 𝘈𝘯𝘥 𝘸𝘩𝘢𝘵 𝘢𝘳𝘦 𝘵𝘩𝘦 𝘬𝘦𝘺 𝘦𝘭𝘦𝘮𝘦𝘯𝘵𝘴 𝘢𝘴𝘴𝘰𝘤𝘪𝘢𝘵𝘦𝘥 𝘸𝘪𝘵𝘩 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘥𝘪𝘱𝘭𝘰𝘮𝘢𝘤𝘺 𝘪𝘯 𝘱𝘳𝘢𝘤𝘵𝘪𝘤𝘦? The research objective is to examine the role of diplomacy in business and management and to investigate its related core elements that can help businesses and managers be successful in today’s business environment.

Method: To address this issue, an interpretative-exploratory study was conducted using the Straussian grounded theory approach. Using semi-structured interviews as the data collection method, twenty-one official diplomats, CEOs, businesspeople, and managers from both the private and public sectors were interviewed. Participants were asked to describe their understanding of diplomacy and what constitutes its basic elements and practice.

Findings: The study found that business diplomacy is a process of multiple integrated qualities. In particular, the findings indicate that business diplomacy is the capability to professionally and systematically manage and influence multiple stakeholders, as well as the operating environment, to advance business interests and to create favourable conditions for the firm. Consequently, the theory of Multi-Stakeholder Managing and Influencing (MSMI) in business diplomacy was developed that offers new insights into the area. MSMI suggests that business diplomacy is achieved through the integration of multiple qualities, namely: interaction and engagement, core knowledge competencies (CKC), multiperspective consideration, and power-authority building (PAB). MSMI also suggests that these qualities are closely interrelated and co-dependent on each other.

Conclusions: The findings of this study contribute to our developing a scholarly understanding of business diplomacy, its meaning in practice, and what constitutes its core elements. As one of the earliest empirical studies in business diplomacy, this study broadens and deepens our views by offering new insights and theory. The findings contribute theoretically and practicably to the body of knowledge by suggesting that business diplomacy constitutes multiple qualities, is recognised and valued by participants, and is found to create long-term value for businesses. This has implications for businesses and universities as it encourages them to incorporate business diplomacy as a strategic tool to be learned and practiced at the organisational level. This study serves as a starting point for further empirical research in business diplomacy, and future researchers are encouraged to carry out larger-scale studies on different populations and industries to replicate and validate the theory.