The decision was made immediately. Just two weeks into the conflict in Ukraine, the multinational divested itself of the entire area of services it provided to the Russian market from Argentina. The entire team was fired and the corporation deactivated its operations in that country. “He sold everything, including clients,” confirms a senior executive.
This was not the only case of companies giving up a portion of their income to stop providing services or exporting to Russia. The CEOs of two multinationals breathed a sigh of relief upon receiving the news at their local headquarters: their parent companies announced that their offices in Russia would cease to function and they would be part of the exodus of more than 500 companies from that country. What was the reason for such a reaction? What was the reason that notification reassured them? Beyond the distances, the top executives of these two global corporations had already received internal questions from employees, suppliers and even customersyes
“Not saying ‘bye Russia’ on time could mean the cancellation of its mark on people’s feelings, which responds to a new way of thinking,” he argues. Aldo Leporatidirector of the consultancy Porter Novelli Argentina and professor of “Reputation and Crisis Management” in the UCEMA and UdeSA MBAs. From his point of view, it is a phenomenon known as “cancel culture”. “It is a change of era in which an alarm clock is ringing for companies, screaming ‘Wake up, we want your greatest commitment!’ You don’t have to be a futurologist to guess that they can’t act as they did in almost normal contexts, when now they are living a complicated war with a clear aggressor. There isn’t much room for second opinions knowing that taking sides risks ‘politicizing’ your actions. For this reason, many companies recalculated and joined the business exodus”, he expands.
Exit. Since the conflict began, from entertainment companies to energy providers, they have made the decision to leave Russia temporarily or permanently. According to what was reported by Yale University, there are already more than 500 firms that have abandoned or restricted their business in that country. Maria Jose Murciadirector of the CESIS (Center for Studies for Sustainability and Social Innovation) of the Austral University and professor of the IAE Business SchoolHe believes that “we live in a globalized, interconnected world, and the corporate market is the most affected by geopolitical issues, it behaves like a political actor. If we look at each of the brands, we see that any one of them has more resource capacity, because they are more valuable than the GDP of many of our countries.” For Murcia, many multinationals “have the strength of a national state, which is why they gain the relevance they have. These brands orchestrate networks and value chains throughout the world, so that the solution they offer us appears in any market”.
In contrast, the specialist mentions the cases of “Shell, Renault and other companies had problems and have not discontinued their operations in Russia.” “Shell had to come out and justify the ‘difficult’ decision to stay in Russia, but then they reversed the policy under pressure because British Petroleum withdrew part of their operation and that caused Shell to do what it did,” she points out.
Time. How long will the multinational boycott of Russia last? Will it be permanent or transitory? John Marencor, CEO of Be Influencers, indicates that “companies are taking a position that would have to be seen how long it lasts. It is not clear to me if these strong actions are due to pressure or conviction.” The expert adds that “perhaps it is a new form of modern warfare, of absolute isolation from the Russian economy and population”. the vision of Jorge VarelaCEO and founder of the advertising agency Smoke Red, goes in the same direction: “Buenos Aires is 13,000 kilometers from kyiv and that distance, even in a digitally connected world, where time and space do not exist, seems to be one of the many reasons why Argentine brands, many of them globalized, did not get involved in actions or communication about this conflict, even in a world of brands with a purpose”, he indicates.
Likewise, he reasons that it is “difficult” to try a unanimous explanation, but “I do dare to say that in Argentina the urgent versus the important is the order of the day.” “As CEO of an Argentine company I think, How do I continue to function with inflation greater than 5% in Argentina? In a country with a 40% poverty rate, how can I sell my products and services? It is clear that corporate communication must be based on action. Perhaps the distance that separates us from kyiv, the situation or also the speed with which issues expire and arise. The truth is that Argentine brands have done little for the Ukraine-Russia war and it is neither bad nor good, but in this case we are prioritizing ‘what is urgent over what is important’, he completes. Leporati disagrees: “The new economic values, such as reputation and consistency, are above economic objectives. Committing to a war respecting the purpose and principles of the brand is going to cause losses in the short term, and if not, they were selling colored mirrors”. Unexpectedly, the Russian invasion in Ukraine also had an impact on the Argentine geography
by Marcelo Alfano
