The Vulnerability Problem of Business Ecosystems Under Global Decoupling

Current dialogue on de-globalization and global decoupling is pervasive but seems to focus merely on the reasoning behind the phenomenon from the perspectives of geopolitical and international relations, such as protectionism, technological nationalism, and the varieties of capitalism. Advancing this dialogue in inter- national business (IB), we focus on the vulnerability problem of multinational enterprises (MNEs) under global decoupling. This commentary aims to improve MNEs’ability to adapt to challenging exogenous shocks (i.e., de-globalization movements as an exogenously occurring event that can affect MNEs’business globally but cannot be resolved by their management and activities). Assuming that global decoupling occurs as an intermittently adjusting process in the transitioning period after a challenging shock, we adopt multi-layered thinking to discuss what salient contexts can exacerbate global decoupling and how MNEs can resolve the vulnerability problem of operating loosely coupled systems. For example, personal protective equipment products have been manufactured through optimal global value chains. But the global shortage of these products shows evidence that inter- national lockdowns since the COVID-19 pandemic have negatively affected the functioning of loosely coupled ecosystems. So, how can MNEs’globally operating business ecosystems adapt to unprecedented global decoupling? Answering this question helps IB scholars take into account different factors and associated business patterns regarding the loosely coupled governance structures of MNEs that pursue resilience under global decoupling