open questions world order + case studies

Explain why the post–Cold War liberal world order is under stress. In your answer, refer to at least three structural factors and two geopolitical consequences.

The post–Cold War liberal world order is under stress due to several structural factors.

First, the return of great-power competition has challenged the idea that cooperation would replace rivalry. Countries like Russia and China openly contest Western dominance.
Second, economic interdependence has been weaponized, through sanctions, energy pressure, and trade restrictions.
Third, institutional fatigue has weakened global organizations like the UN and WTO, which struggle to enforce rules.

These factors lead to major geopolitical consequences. We see a return to power politics, where military strength matters more than international law, and increased fragmentation of global trade, as countries prioritize security over efficiency.

A European automotive company depends on a single supplier of semiconductors based in East Asia. Rising US–China tensions and a regional crisis disrupt production.

Using strategic risk management, explain:

• The nature of the risk

• Two mitigation strategies

• How resilience thinking would alter long-term strategy

Nature of the risk

The company faces a strategic geopolitical risk. Its long-term objectives are threatened by dependence on a single supplier in a politically unstable region affected by US–China tensions.

Two mitigation strategies

First, multisourcing, by developing alternative suppliers in different regions.
Second, near-shoring, by moving part of production closer to Europe to reduce geopolitical exposure.

Resilience thinking

Resilience thinking shifts strategy from short-term efficiency to long-term flexibility. Instead of optimizing costs, the firm designs supply chains that can absorb shocks, learn from crises, and adapt to future disruptions.

Discuss the concept of illiberal democracy. How does it differ from both liberal democracy and authoritarianism? Why are such regimes politically stable in the short term but risky in the long term?

An illiberal democracy is a system where elections exist but liberal protections are weak. Courts, media, and checks and balances are undermined, while power is concentrated in the executive.

Unlike liberal democracies, illiberal systems weaken rule of law and civil liberties. Unlike authoritarian regimes, they still hold elections and allow limited opposition.

They are stable in the short term because centralized power allows fast decision-making. However, they are risky in the long term because weakened institutions reduce accountability, increase corruption, and create political instability.

Explain how digital media and AI technologies have transformed public opinion formation. Why does low cognitive complexity increase vulnerability to manipulation

Digital media has changed public opinion from a collective process to a fragmented one. Algorithms personalize content, creating echo chambers and micro-publics. AI accelerates this by producing deepfakes and automated disinformation at scale.

Low cognitive complexity makes people more vulnerable because simplified “us vs. them” thinking reduces critical evaluation. When individuals seek clear enemies and simple explanations, they become easy targets for manipulation and conspiracy narratives.

“Peace is not the same as appeasement.”

Using the Munich Conference (1938) and a contemporary example, explain this statement and its relevance for international security today

The Munich Conference (1938) shows how appeasement can undermine peace. By allowing Germany to annex the Sudetenland without enforcing international law, European powers encouraged further aggression.

A contemporary parallel is the risk of peace agreements that reward territorial conquest, such as accepting forced border changes. While such deals may reduce violence short-term, they weaken deterrence and encourage future conflicts.

True peace requires law, enforcement, and credible security guarantees, not concessions to aggression.

A multinational logistics firm faces repeated disruptions in the Red Sea due to the Bab al-Mandeb crisis.

Using risk management and resilience theory, explain how the firm should move from reaction to anticipation

Initially, the firm reacts through rerouting, avoiding the Red Sea to maintain deliveries.

To move from reaction to anticipation, the firm should adopt resilience strategies: diversify routes, build inventory buffers, integrate geopolitical risk into planning, and avoid reliance on single chokepoints.

Resilience focuses on long-term adaptation, not just crisis response.

Compare liberal democracies, illiberal democracies, and competitive authoritarian regimes.

Why are illiberal systems particularly unstable in the long term?

• Liberal democracies: free elections, rule of law, independent courts, free media.

• Illiberal democracies: elections exist, but courts, media, and institutions are weakened.

• Competitive authoritarian regimes: elections are manipulated to ensure regime survival.

Illiberal systems are unstable long-term because they erode trust, weaken institutions, and remove peaceful conflict-resolution mechanisms.

Is there a relationship between democracy and quality of life?

Use empirical patterns and economic reasoning to support your answer

There is a strong relationship between democracy and quality of life. Most top-ranking countries in global indices are liberal democracies.

Democratic systems provide rule of law, transparency, and stable institutions, which attract investment and encourage innovation. Markets and businesses prefer predictability.

Authoritarian systems may grow quickly, but often suffer from corruption and instability. Democracy does not guarantee prosperity, but it strongly supports it.

A factory closes in a deindustrialized region. Populist actors blame immigrants and “global elites.”

Using cognitive complexity theory and populism, explain how economic hardship becomes political radicalization.

Economic hardship increases insecurity and stress, lowering cognitive complexity. People seek simple explanations.

Populism exploits this by framing politics as “the people vs. the elites,” blaming immigrants or globalization. This narrative reduces nuance and increases susceptibility to misinformation.

Over time, economic grievances become political radicalization.

Explain how AI and digital media have transformed public opinion into a strategic battlefield.

Why is cognitive resilience now a political priority?

AI and digital media have turned public opinion into a strategic battlefield. Deepfakes, automated disinformation, and algorithmic amplification allow manipulation at scale.

Cognitive resilience is now critical because the main target is the human mind. Democracies require shared reality and trust. Without digital literacy, critical thinking, and verification tools, democratic decision-making collapses.

Why has international business shifted from efficiency to resilience?

For decades, international business focused on efficiency, using global supply chains, just-in-time production, and lowest-cost sourcing.

This model is now under stress because geopolitical conflict, pandemics, sanctions, and chokepoint disruptions have made supply chains fragile. Efficiency maximizes profit in stable environments but fails under shock.

As a result, firms now prioritize resilience, meaning flexibility, redundancy, and security. This includes multisourcing, near-shoring, inventory buffers, and geopolitical risk analysis.

Efficiency is no longer enough when the global system is unstable.

How does geopolitics directly affect corporate strategy today?

Geopolitics now shapes where companies invest, source, produce, and sell.

Sanctions, trade wars, and conflicts can suddenly block markets or suppliers. Technology controls, such as export bans on semiconductors, limit innovation and expansion. Energy and logistics disruptions raise costs and uncertainty.

As a result, corporate strategy increasingly includes geopolitical risk assessment, scenario planning, and alignment with political blocs rather than purely economic logic.

Business strategy and foreign policy are now deeply interconnected.

A European chemical company relied heavily on cheap Russian gas. After the Ukraine war, energy prices spike and supply is cut.

Explain:

• the type of risk involved

• two mitigation strategies

• one long-term resilience shift

The firm faces a strategic geopolitical and energy risk, threatening cost structure and competitiveness.

Two mitigation strategies include diversifying energy suppliers (LNG imports, renewables) and near-shoring production closer to stable energy sources.

Long-term resilience requires energy independence, investment in green energy, and reducing exposure to politically unstable suppliers.

Explain how sanctions function as both a political and economic weapon.

Sanctions are designed to change state behavior by restricting access to markets, finance, technology, or resources.

Politically, they signal condemnation and deterrence. Economically, they disrupt trade, raise costs, and isolate targeted countries.

However, sanctions also affect companies by increasing compliance costs, forcing market exits, and fragmenting global trade. This makes sanctions a central concern in international business planning.

Why are global chokepoints a major concern for multinational firms?

Chokepoints like the Suez Canal, Bab al-Mandeb, and Strait of Hormuz concentrate global trade flows.

Disruption at these points can delay shipments, increase costs, and create global ripple effects. Because around 90% of world trade moves by sea, even small disruptions have large impacts.

Firms must account for chokepoint risk through rerouting, corridor diversification, and resilience planning.

How does hybrid warfare affect international business without formal war?

Hybrid warfare uses cyber-attacks, disinformation, energy coercion, and economic pressure below the threshold of war.

These actions disrupt markets, damage trust, manipulate public opinion, and destabilize supply chains without military invasion.

For companies, this means constant exposure to uncertainty even in “peaceful” environments, making geopolitical awareness essential.

Explain “friend-shoring” and why it is replacing globalization.

Friend-shoring means relocating production and supply chains to politically aligned and trusted countries.

It replaces pure globalization because security risks now outweigh cost advantages. Governments encourage firms to reduce dependence on rivals or unstable regions.

Friend-shoring increases resilience but raises costs and reduces efficiency, reflecting the new trade-off between security and globalization.

Why is strategic risk management essential for multinational firms?

Strategic risk management helps firms connect global political, economic, and technological trends to long-term business decisions.

It allows companies to identify risks, assess impact, choose mitigation strategies, and monitor changes over time.

Without strategic risk management, firms react too late, suffer losses, and lose competitiveness in volatile environments.

How can geopolitical risk become a competitive advantage?

Firms that anticipate geopolitical risks can adapt faster than competitors.

By diversifying supply chains, investing early in resilience, and aligning with stable markets, companies turn disruption into opportunity.

Resilience becomes a strategic asset, not just a defensive measure.

Why is resilience now a core concept in international business education?

Resilience reflects the reality that crises are no longer exceptional. Conflict, pandemics, climate shocks, and technological disruption are permanent features of the global system.

International business education now emphasizes resilience to prepare future managers to operate under uncertainty, complexity, and political risk.

Understanding resilience is essential for long-term success.