Witold Henisz

Witold Henisz
  • Deloitte & Touche Professor of Management in Honor of Russell E. Palmer, former Managing Partner
  • Professor of Management

Contact Information

  • office Address:

    3107 SH-DH
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: political and economic reform and transitions, political risk identification and management, project management, rise and fall of neoliberalism, stakeholder engagement

Links: CV, Corporate Diplomacy LinkedIn Group, Corporate Diplomacy Portal

Overview

Witold J. Henisz is the Deloitte & Touche Professor of Management in Honor of Russell E. Palmer, former Managing Director at The Wharton School, The University of Pennsylvania. He received his Ph.D. in Business and Public Policy from the Haas School of Business at University of California, Berkeley and previously received a M.A. in International Relations from the Johns Hopkins School of Advanced International Studies.

His research examines the impact of political hazards on international investment strategy including efforts by multinational corporations to engage in corporate diplomacy to win the hearts and minds of external stakeholders. In a National Science Foundation funded project he showed that markets value stakeholder engagement twice as much as the net present value of the gold ostensibly controlled by 19 publicly traded gold mining companies. He then assessed the contingencies that influence the choice of which stakeholder these firms should reach out to in order to positively influence valuation as well as how to best develop a cooperative relationship with that stakeholder. He draws upon these insights as well as examples from large scale construction management, sustainable tourism, development and military counterinsurgency in his forthcoming (April 2014) book Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders. His earlier work analyzed (1) the political and economic determinants of government attempts to redistribute investor returns to the broader polity; (2) the strategic responses by organizations to such pressure; and (3) the determinants of the success of individual organizations in withstanding such pressure. His research has been published in top-ranked journals in international business (Journal of International Business Studies), management (Academy of Management Review, Academy of Management Journal, Administrative Science Quarterly, Organization Science, Strategic Management Journal and Strategic Organization), international studies (International Organization and International Studies Quarterly) and sociology (American Sociological Review). This research has been profiled for managers in Harvard Business Review, Brunswick Review, Accountability.org, Motley Fool, TriplePundit, Investor Relations Web Report, The Public Affairs Council, The Penn Gazette and Knowledge@Wharton. He served as a Departmental Editor at The Journal of International Business Studies and is currently an Asssociate Editor at Strategic Management Journal.

Witold has won multiple teaching awards at the undergraduate and graduate levels for his elective courses that highlight the importance of integrating a deep understanding of political and social risk factors into the design of an organization’s global strategy. He has authored teaching cases on the experiences of AES Corporation in the Republic of Georgia, the management of the bankruptcy of Thai Petrochemical Industries, the development of the Rosia Montana gold mine in Romania and the financial valuation of sustainability initiatives at Newmont’s Ahafo mine in Ghana. He also teaches sessions on Corporate Diplomacy for multiple open enrollment and custom Executive Education programs at the Wharton School including a 3.5 day open enrollment program on the topic.

Witold has served as a consultant for Anglo Gold Ashanti, Rio Tinto, Shell Corporation, Maritime Financial Group, The World Bank, The Inter-American Development Bank, The Conference Board, Eurasia Group, and Philippine Long Distance Telephone Company (PLDT). He previously worked for The International Monetary Fund. He is currently a principal in the political risk management consultancy PRIMA LLC.

Summary of Research Papers and Downloads

Download POLCON Database (2017 release (with data to 2016) now available)

Consider using the CHECKS index of the Database of Political Institutions of the World Bank as a robustness check.
For more information on the relative strength and weaknesses of these and other datasets see the following external overviews: http://siteresources.worldbank.org/INTLAWJUSTINST/Resources/IndicatorsGovernanceandInstitutionalQuality.pdf
http://siteresources.worldbank.org/INTMOVOUTPOV/Resources/2104215-1148063363276/071503_Munck.pdf
http://www.nsd.uib.no/macrodataguide/topic.html
http://www.isadiscussion.com/view/0/datasets.html

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Research

  • Witold Henisz, Business, Inclusive Stakeholder Relations and Conflict.

  • Witold Henisz and Edward Mansfield, The Political Economy of Financial Reform: De Jure Liberalization vs. De Facto Implementation.

  • Lite Nartey, Sinziana Dorobantu, Witold Henisz, A Participatory Approach to Stakeholder Engagement: Defining a Hierarchy of Strategic Action.

  • Witold Henisz, Lite Nartey, Sinziana Dorobantu, Proactive Stakeholder Engagement and Stakeholder Preferences for Firm Investments.

  • Lite Nartey, Witold Henisz, Sinziana Dorobantu (2018), Status Climbing Versus Bridging: Multinational Stakeholder Engagement Strategies, Strategy Science, Forthcoming.

    Abstract: Multinational corporations seeking to overcome the “liability of foreignness” through partnerships with stakeholders in their overseas markets face an important tension in choosing between two alternative strategies. Firms who build relationships with high-status local stakeholders may experience increased cooperation and reduced conflict with other stakeholders. However, the short-term benefits of this status climbing strategy may be difficult to sustain because stakeholders with low-status, particularly those outside the formal political structure, are more likely to increase their conflict as the firm becomes increasingly distant from them. An alternative strategy of bridging structural holes in the host country stakeholder network also faces theoretical limits as access to scarce information and resources is likely to engender conflict with other stakeholders. The status climbing strategy is more attractive where insider connections dominate (i.e., the rule of law is weak) while the bridging strategy is more attractive in countries with stronger rule of law. In other words, as the rule of law strengthens, we show that multinational entrants focus more on what they know rather than whom they know. Our analyses use a hand-coded dataset of almost 52,000 media-reported stakeholder interactions that capture the network of relationships among 4,623 stakeholders from 19 gold-mining companies operating 26 mines in 20 countries, and the evolution of these networks from 1993 until 2008.

  • Katarzyna (Kate) Odziemkowska and Witold Henisz (Under Review), Webs of Influence: National Stakeholder Fields and Corporate Social Performance.

    Abstract: We explore the extent to which cross-national variation in firm-level corporate social performance (CSP) can be explained by differences in the position or attributes of environmental and social stakeholders in the media-reported structure of socio-political networks across countries. We argue that managers perceive these differences as material because they heighten the risk of either institutional change at the national-level or direct material conflict targeting their firm. Our work represents a significant theoretical shift in research exploring comparative CSP, which to date has focused on cross-national variation in the institutional environment. Drawing on field theory, we argue that the prominence of environmental and social stakeholders within a country’s overall socio-political network and the heterogeneity of such stakeholders are associated with managerial perceptions of the probability of institutional change. Managers also respond to the threat of direct pressure as evidenced by material mobilization by stakeholders who had previously focused their attentions on discourse with other stakeholders. We also argue and find that the effects of these variables on CSP are moderated by characteristics of the stakeholder and business fields which constrain or enable stakeholders’ institutional vs. extra-institutional mobilization. We draw upon a novel dataset of 250 million media-reported events to construct comprehensive national socio-political networks as well as fields of stakeholders with interests in environmental and social issues as well as fields of corporations. We empirically demonstrate that both across country, and within country variation across time, in our stakeholder and corporate-level field constructs are associated with changes in CSP by individual firms among a sample of 3,563 firms spanning 42 countries.

  • Sinziana Dorobantu, Witold Henisz, Lite Nartey (2017), Not All Sparks Light a Fire: Stakeholder and Shareholder Reactions to Critical Events in Contested Markets, Administrative Science Quarterly, 62 (3), pp. 561-597.

    Abstract: This paper examines when and how a critical mass of social and political stakeholders mobilizes against a corporate organization and the impact of such mobilization on the organization’s market value. Our study employs a dataset of more than 51,000 media-reported events describing the interactions among almost 2,300 political, social, and economic stakeholders and 19 gold-mining firms trading on the Toronto Stock Exchange and operating mines in emerging markets around the world. We first examine the conditions and dynamics that explain whether an isolated, stakeholder-initiated negative statement or action—a “spark” or critical event—goes unnoticed or escalates into a cascade of stakeholder reactions targeting the firm. Second, we examine whether such sparks and the ensuing cascades of stakeholder reactions affect shareholders’ valuation of the firm. We argue and show empirically that both stakeholders’ and shareholders’ reactions following critical events are largely influenced by stakeholders’ prior beliefs about the target organization and by peer stakeholders’ reactions to the critical event. Stakeholders with positive beliefs about the firm before the critical event mobilize to defend it, and those with negative prior beliefs reinforce their opposition. Shareholders also take note of the other stakeholders’ prior beliefs and react negatively to critical events if the firm has a history of conflict with its stakeholders. Thus unconnected or loosely connected stakeholders who reveal their beliefs about a firm through public statements and actions influence each other’s reactions to critical events and shareholders’ assessments of the firm’s value.

  • Witold Henisz (2016), The Dynamic Capability of Corporate Diplomacy, Global Strategy Journal, 6 (3), pp. 183-196.

    Abstract: Plain language summary Corporate diplomacy is the ability to win the hearts and minds of external stakeholders in support of an organizational mission. As compared to the narrow support function of external affairs, corporate diplomats play a central role not just in sensing risks and opportunities in the external environment, but also in shaping short- and long-term strategic responses across all functions of their organizations. Managers interested in creating long-term sustainable value for shareholders and society—especially in emerging markets—need to enhance their skills as corporate diplomats. Technical summary Success in corporate diplomacy (i.e., the ability to win the hearts and minds of external stakeholders) requires a complex set of seemingly incompatible routines and processes that together constitute a dynamic capability. The article draws explicit parallels between the technological environment in which the theory of dynamic capabilities was first developed and the stakeholder environment. Firms must sense opportunities and threats that emanate from the external stakeholder environment across multiple countries, sectors, and issue domains. In order to actually seize these opportunities or avoid these threats, however, the organization must actually engage with stakeholders in a manner perceived as genuine and caring and implement initiatives that address their issues of concern. Such responses require short- and long-term strategic change within the core of the organization. Copyright © 2016 Strategic Management Society.

  • Witold Henisz, Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders (Greenleaf, 2014)

  • Witold Henisz, Sinziana Dorobantu, Lite Nartey (2014), Spinning Gold: The Financial and Operational Returns to External Stakeholder Engagement, Strategic Management Journal, 35 (12), pp. 1727-1748. 10.1002/smj.2180

Teaching

Past Courses

  • MGMT209 - POL & SOC ENVIRON OF MM

    Are you well prepared to manage or analyze business challenges and competitive threats in a variety of political and social environments? For example, what should you do to dissuade or counter an individual critic armed with a camera phone a YouTube account? Or a decentralized grassroots organization that seemingly pops up overnight, appears to have no single leader or headquarters, and yet is quite successful in capturing media attention? Or a government official who because of a tight reelection campaign or an internal challenge from a populist general turns on you? Lone individuals, small activist groups and unexpected political shifts have done extensive damage to the reputations - and value - of multinationals in recent years. And yet most companies don't plan for, or even think about, investing in building the kinds of solid relationships with community leaders, governments, NGOs, and other key players that can help them avoid such crises and, when necessary, draw upon their reservoir of stakeholder capital to respond quickly and decisively when a challenge or threat emerges. This semester-long class provides an integrative perspective towards the management of these risks and opportunities. It highlights that better assessment of stakeholder opinion, understanding of how stakeholders impact firm value and of how to infuse stakeholder relationships with trust to unlock that value are increasingly critical elements of a firm's long-term success, particularly in emerging markets. Firms must also focus o n continual improvement in their stakeholder engagement, reinforcing their actions with strategic communications and via organizational culture. The course will give students a combination of practical tools and the latest academic thinking in the emerging field of corporate diplomacy.

  • MGMT611 - MANAGING EST ENTERPRISE

    The management of large, established enterprises creates a range of multi-facet challenges for the general manager. A general manager needs to understand the internal workings of a firm, how to assess and create a strategy, and how to take into account increasing, globalization. While these issues are distinct, they are very much intertwined. As a result, this course will provide you with an integrated view of these challenges and show you that effective of an established enterprise requires a combination of insights drawn from economics, sociology, psychology and political economy.

  • MGMT715 - POL & SOC ENVIRON OF MM

    All successful firms go global. This course provides a broad introduction to international business. You will learn about who loses and who gains from trade, what are the effects of tariffs and non-tariff barriers, the World Trade Organization (WTO), regional trading blocs, and NAFTA. The course then turns to the international financial architecture, focusing on exchange rate risk. We then move to multinational firm strategies, including a discussion of the reasons for why firms choose to do business globally through trade or FDI, international tax strategy, joint ventures, technology transfer, different ways to be a multinational firm, and ethical dilemmas. The class is a mix of lectures and cases that allow students to synthesize the extensive materials on multinational management, international institutions, economic policies, and politics with a goal towards formulating multinational firm strategy.

  • MGMT720 - CORPORATE DIPLOMACY

    Are you well prepared to manage or analyze business challenges and competitive threats in a variety of political and social environments? For example, what should you do to dissuade or counter an individual critic armed with a camera phone a YouTube account? Or a decentralized grassroots organization that seemingly pops up overnight, appears to have no single leader or headquarters, and yet is quite successful in capturing media attention? Or a government official who because of a tight reelection campaign or an internal challenge from a populist general turns on you? Lone individuals, small activist groups and unexpected political shifts have done extensive damage to the reputations - and value - of multinationals in recent years. And yet most companies don't plan for, or even think about, investing in building the kinds of solid relationships with community leaders, governments, NGOs, and other key players that can help them avoid such crises and, when necessary, draw upon their reservoir of stakeholder capital to respond quickly and decisively when a challenge or threat emerges. This semester-long class provides an integrative perspective towards the management of these risks and opportunities. It highlights that better assessment of stakeholder opinion, understanding of how stakeholders impact firm value and of how to infuse stakeholder relationships with trust to unlock that value are increasingly critical elements of a firm's long-term success, particularly in emerging markets. Firms must also focus o n continual improvement in their stakeholder engagement, reinforcing their actions with strategic communications and via organizational culture. The course will give students a combination of practical tools and the latest academic thinking in the emerging field of corporate diplomacy.

  • MGMT932 - PROSEM IN MGMT

    This quarter-length doctoral seminar deals with major streams of management research in technology strategy and innovation. We will focus on both classical topics such as technological change and industry evolution and new emergent topics such as ecosystems and platforms. The focus will be to understand the link between technologies and firms in terms of both strategy choices and performance outcomes.

  • MGMT955 - FOUNDATIONS MULT MGMT.

    The goal of the course is to provide you with a foundation in some of the major research areas that underpin the study of Multinational Management. International Business (and the study of MNCs) is an interdisciplinary field. As such, our survey of the seminal articles in the field will span a number of different theoretical and empirical approaches (i.e., economic, managerial, organizational and institutional). Much of our seminar discussions will focus on identifying and developing interesting research questions raised by this interdisciplinary literature, which offers many opportunities for systematic empirical study.

  • MGMT960 - INSTITS. & MULT. MGMT.

    This course builds on the foundational material presented in MGMT 955 with a deeper focus on current research examining institutional influences on multinational management. These include regulative supports (e.g., laws, regulations, contracts and their enforcement through litigation, arbitration of incentive compatible self-regulation) but also normative (e.g., socially shared expectations of appropriate behavior, and social exchange processes) and cognitive (e.g., creating shared identity to bridge differences in values, beliefs and framing) elements of the institutional environment. We will examine not only strategic responses in the market environment but also influence strategies of multinational and domestic firms that seek to alter the institutional environment in which they operate. We will draw not only upon the international business literature but also related literatures including political economy, law, finance, communications, institutional theory, strategic corporate social responsibility, tourist management, construction management, management of extractive industries, negotiations, social movements and network theory (really!).

  • MGMT970 - APP METHODS MGMT RES

    Students taking the course will be introduced to the seminal readings on a given method, have a hands-on discussion regarding their application often using a paper and dataset of the faculty member leading the discussion. The goal of the course is to make participants more informed users and reviewers of a wide variety of methodological approaches to Management research including Ordinary Least Squares, Discrete Choice, Count Models, Panel Data, Dealing with Endogeneity, Survival/failure/event history and event studies, experiments, factor analysis and structural equation modeling, hierarchical linear modeling, networks, comparative qualitative methods, coding of non-quantitative data, unstructured text and big data simulations.

Awards and Honors

  • Excellence in Teaching Award (Electives), Wharton MBA Program, 2015
  • Fellow of Academy of International Business, 2014-Present
  • Best Conference Paper Prize at Strategic Management Society Annual Meeting, 2013
  • Helen Kardon Moss Anvil Award Nomination, 2013
  • Excellence in teaching award, MBA Division (elective), 2012
  • Helen Kardon Moss Anvil Award Nomination, 2012
  • Helen Kardon Moss Anvil Award Nomination, 2011
  • Teaching Commitment and Curricular Innovation Award, 2011
  • Nominated for Best Paper for Practical Implications at the 2011 Strategic Management meeting, 2011
  • Finalist, Best Applied Paper in International Management (The Robert H. Schaffer Award) at the 2011 Academy of Management meeting, San Antonio TX, 2011
  • Best Paper 2010 Engineering Project Organization Conference, South Lake Tahoe, CA, 2010
  • Excellence in teaching award, Wharton Undergraduate Division, May, 2008
  • Excellence in teaching award, Wharton Undergraduate Division, May, 2007
  • Finalist, Aspen Institute’s 2006 Faculty Pioneer Award (one of eight finalists out of 100 nominees), 2006
  • Bronze Prize ($10,000) in International Finance Corporation / Financial Times 2006 Essay Competition on Topic of “Business and Development: The Private Path to Prosperity” (one of six prize winning essays out of over 500 submissions in total), 2006
  • Faculty teaching award (electives), MBA for Executives Program, Class 31East, 2006-2007
  • Outstanding Reviewer Award, International Management Division, Academy of Management (one of 38 out of 656 reviewers so recognized), 2005
  • First Runner Up, Haynes Prize for Outstanding Scholar in International Business under the age of 40 at 2005 Academy of International Business Annual Conference, 2005
  • Faculty teaching award (electives), MBA for Executives Program, Class 28East, 2004-2005
  • Finalist, Best Paper at 2002 Academy of International Business Annual Conference, 2002
  • Finalist, Haynes Prize for Best Paper by a scholar under the age of 40 at 2002 Academy of International Business Annual Conference, 2002
  • Outstanding Reviewer Award, International Management Division, Academy of Management, 2000 (one of 8 out of 250 reviewers so recognized), 2000
  • Richard N. Farmer Award for best dissertation in International Business, Academy of International Business, 1999
  • Finalist, The Free Press Doctoral Dissertation Award, Business Policy and Strategy Division, Academy of Management, 1999
  • Best Doctoral Student Paper, Telecommunications Policy Research Conference, 1998
  • Teaching Commitment and Curricular Innovation Award, Wharton MBA Program, 2015
  • Teaching Commitment and Curricular Innovation Award, Wharton MBA Program, 2015

In the News

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Latest Research

Witold Henisz, Business, Inclusive Stakeholder Relations and Conflict.
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In the News

How Strong Stakeholder Bonds Can Help Firms Avoid a Crisis

The best way to handle a crisis is to avoid it. To do that, companies must invest the time in building relationships with stakeholders.

Knowledge @ Wharton - 2016/10/20
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Awards and Honors

Excellence in Teaching Award (Electives), Wharton MBA Program 2018
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