Geo­pol­it­ics is a core task for busi­nesses – not an af­ter­thought

Imagine your most important supplier disappearing overnight because a trade conflict erupts between several countries. Or a security crisis escalates, making your largest export market inaccessible – not just temporarily, but indefinitely.

These may sound like extreme scenarios, but they’re no longer confined to risk assessments or worst-case strategic analyses. This is a new reality that many organisations are already facing.

Geopolitics is no longer something that only belongs in the foreign ministry. It has become a task for top management, and the winners of the future will be those who make geopolitics a core responsibility, says Unnar Theódórsson, postdoc at CBS and researcher in strategic HR and risk management.

“Globalisation and internationalisation have made the world smaller, so when there’s war or conflict, a pandemic, or pirates somewhere in the world, it directly affects Danish companies and their ability to perform. Trade policy is also used as a power instrument, alliances shift, and conflicts can suddenly hit both supply chains and markets,” he explains.

Ask yourself some tough questions

Unnar Theódórsson urges companies not to treat geopolitics merely as a risk management exercise, but rather as a strategic one.

“Companies need to integrate geopolitics into their strategy. The classic approach for many has been to make a Plan A and then a risk assessment. Now companies must accept that three or four alternatives are needed to safeguard against geopolitical developments.”

Making geopolitics a strategic exercise also requires top management to ask themselves some uncomfortable questions:

• How resilient is our economy if the world suddenly changes?
• Can our business model survive periods of low growth and high uncertainty?
• Do we have the competencies to act quickly and wisely when the situation becomes unpredictable?
• And do we even have access to the knowledge we need?

Building resilience requires far more than contingency plans, says Theódórsson:

“Supply chains must be mapped in detail, risks modeled and simulated, and business systems stress-tested to see where they break under pressure. You can’t predict the next crisis point, but you can train the organisation to respond wisely when it happens. It’s not just about risk diversification; it’s about building decision-making capability under uncertainty. The best leaders think in scenarios—not to guess the future, but to act faster when it changes.”
 

A gap between large and smaller companies

When asked whether Danish companies understand what it takes to protect their business against geopolitical uncertainty, Unnar Theódórsson responds:

“There’s a gap. The C25 companies are aware of it and act accordingly. But where we see less reaction to global developments is among smaller and traditional manufacturing firms.”

According to Theódórsson, this could change if smaller companies also recognise that the world is no longer as stable as in the 1990s. And they must make geopolitics a core task rather than an afterthought.

“The difference is whether you’re reactive or proactive. It’s necessary to stay ahead—not to be pessimistic, but to be realistic.”

Several international companies - including in Denmark - are now seeking knowledge to proactively prepare for geopolitical uncertainty, he notes:

“They’re bringing former diplomats and international policy experts onto boards. Others are creating specialised roles like Chief Geopolitics Officer. This isn’t window dressing; it’s essential,” he concludes.

He explains that Denmark is among the world’s most globally integrated economies and therefore also among the most vulnerable when the world order shifts.

“Trade and know-how are Denmark’s strengths. We don’t have many natural resources, but we excel at design, production, and connecting the dots. Because we interact so much with others, the demands on us are high. We need to be frontrunners in understanding and navigating geopolitics.”