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BUSI 3704 A THE ENVIRONMENT OF

INETRNATIONAL BUSINESS
TOPIC REVIEW
What are the international Business
Implications of the Rise of ISIL?

Dr. Abdulghany Mohamed


December 2014

What are the international business implications of the rise of


IS/ISIL?
(1)Manifestations of the IS/ISIL
(a) What is the Islamic State /ISIL?
(b) What are the objectives/goals of the IS/ISIL?
(c) Where and when did the IS/ISIL emerge?
(d) What areas/countries are encompassed in the IS?
(e) Who are the key actors involved in the fight against the IS/ISIL?
(f) What inspired the IS/ISIL?
(g) How has the IS/ISIL echoed in other countries around the world?
(2)Dynamics of the IS/ISIL
(a) Who are the key actors of the IS/ISIL?
(b) What is the profile of the IS/ISIL actors?
(c) What activities have been undertaken by the key actors?
(d) What are the key factors that have given rise to the IS/ISIL?
(e) What is the role of technology in the ISIS saga?
(f) What is or has been the role of the mass media?
(g) What are the organizing principles/methods of the IS/ISIL?
(h) What have been the responses of disparate parties?
(i) What have been the roles of foreign governments, regional organizations (e.g.,
Arab League, Organization of Islamic States) and the United Nations?
(j) How have the IS/ISIL responded to the actions of the various parties?
(k) How has the IS/ISIL evolved since it formed?
(l) How do you foresee the IS unfold from now onwards?
(m)
Why has the IS/ISIL not spread to other countries in the MENA region?
(3)Impacts of the IS/ISIL
(a) What are the short-term impacts/outcomes of the IS/ISIL conflict?
(b) What are the medium-term impacts/outcomes of the IS/ISIL conflict?
(c) What are the long-term impacts/outcomes of the IS/ISIL conflict?
(4)Implications of the IS/ISIL for International business
(a) What are implications of the rise of IS/ISIL and the ensuing conflict for the
macro-environment(s) of International Business?
(b) What are implications of the rise of IS/ISIL and the ensuing conflict for the
industry environment(s) of International Business?
(c) What are implications of the rise of IS/ISIL and the ensuing conflict for the
organizational environment(s) of International Business?
(5)Conclusions & Recommendations
The questions above are reproduced and responded to (in point form) in the
tables below. The responses are not exhaustive. They are offered to
assist/guide the reader to reflect on/about the issues at hand and to enable the
reader to search for further responses or elaborate on the given responses.

Table 1: Manifestations of the IS/ISIL


Question

Answer
1

What is the IS/ISIL?

Islamic state of Iraq and Syria (ISIS), Islamic State of


Iraq and Levant ISIL), and now simply calling itself as
the Islamic State (IS) (is also known as Daesh/Daash
in Arabic), is a hardline Sunni Muslim movement, an
offshoot of al Qaeda.
The IS is led by one Abu Bakr al-Baghdadi, the selfdeclared Caliph
The IS/ISIS/ISIL has been fighting the Syrian
government since 2012. In June 2014, it launched
attacks in northern and western Iraq.

What are the


objectives/goals of the
IS/ISIL?

Where and when did the


IS/ISIL begin/start
What areas/countries
are currently
encompassed in the
IS/ISIL?
Who are the key
actors involved in the
fight against the
IS/ISIL?
Who are the Friends of
Syria?

It has declared an Islamic caliphate covering vast


swaths of territory/land that it has captured in parts
of Syria and Iraq.
To establish a caliphate that shall span the whole
region
Iraq/Syria
Iraq & Syria

(a) IS/ISIS/ISIL fighters including dozens of Saddam


Husseins ex-military officers and foreign
volunteer fighters including millennial rappers
from London, Canadian youth, etc.)
(b) States (Iraq, Syria, Some Mid-eastern countries,
USA, Canada, UK, Australia, France, etc.)
(c) Global & regional bodies (UN, Arab League)

What is the Free Syrian


Army?
Who are Al Nusra Front?
Who are the Khorasan
group?
What inspired the
IS/ISIL?
How has the IS/ISIL
echoed in other
countries around the
world?

Religious fundamentalism?
Radicalization?
Neighbouring countries are serving as refuges for
people fleeing the conflict
Some neighbouring countries have joined the West in
airstrikes to prevent the ISIL from overflowing into
their countries

Table 2: Dynamics of the IS/ISIL


Question

Answer

Who are the key


actors of the IS/ISIL?

What is the profile


of the IS/ISIL
members?

What activities have


been undertaken by
the key actors?

IS fighters (about 15,000 comprised of ex-Saddam


Husseins military officers and foreign fighters
recruited from across the world)
Iraqi & Syrian states including Iraqi & Syrian
government forces
Foreign governments (US, Canada, UK, Australia,
France, etc.)
Global & Regional bodies (e.g., UN, Arab League)

(1) IS actors:
(a) Conduct and coordinate military campaign
(commanding 15,000 fighters from across the
globe) against Iraqi/Kurdish & Syrian military
forces and now against the US and its allies
(b) recruit fighters from around the world
(c) raise funds from supporters abroad (individuals
& groups)
(d) manage millions of dollars of revenue daily
amassed through drug trafficking, illegal sale of
antiquities and proceeds from the black market
sale of oil products obtained from the
sites/oilfields it has seized
(e) finance arms purchases
(f) operate protection rackets that exploit local
economies in areas they control
(g) raise ransom money in exchange for captured
foreigners
(h) establish and administer a tax collection system
(i) law enforcement in captured areas
(j) manage municipal services in several cities
(k) kill captive hostages
(l) persecute religious minorities
(2) US & Allies:
(a) Air strikes against IS/ISIS/ISIL in both Iraq & Syria
Early in September, US President Barack Obama
unveiled a strategy to defeat the IS insurgency
by creating an international anti-IS coalition and
conducting airstrikes against IS targets in Iraq
and Syria.
(b) Humanitarian support for minorities targeted or
besieged by ISIS/ISIL
(c) Choking of financial support to IS.
4

A major meeting (Conference on Combatting the


Financing of Terrorism) was held on November
9th, 2014 in Bahrain. Countries taking part in the
conference were Saudi Arabia, the UAE, Kuwait,
Oman, Qatar, Egypt, Lebanon, Jordan, Morocco,
Iraq, Belgium, Canada, the Czech Republic,
China, France, Germany, Italy, Norway, the
Netherlands, Turkey, Russia, Spain, the UK, the
US, Switzerland, Japan, New Zealand and India.
International agencies in attendance were the
Arab League, United Nations, GCC Secretariat,
International Monetary Fund, the Middle East
and North Africa Financial Action Task Force and
the EU Commission.
(d) Blocking foreign fighters from going to fight
alongside IS
(e) Monitoring & de-radicalizing returning jihadis
(f) Providing military support to Iraqi forces, Kurdish
Peshmerga troops, and some Syrian rebels (e.g.,
Free Syrian Army) that are fighting against
Syrian President Bashir Assads forces and
against other rebel groups
(3) Global and Regional Bodies:

The group has been named a terrorist


organization by the UN and the European Union
(EU)

What are the key


factors that have
given rise to the
IS/ISIL?

What is the role of


technology in the
ISIS saga?

Legacy of authoritarianism in the MENA region that


prioritized stability (and rent seeking/corruption)
and ignored economic development and youth
employment
Leadership deficit in the MENA region
Civil war in Syria
Gaping sectarian divisions
Western interventions
The Internet and social media (e.g., Twitter, Facebook,
YouTube, etc.) have been used extensively to by ISIS in
its propaganda campaigns, fund raising, and
recruitment of volunteer fighter around the world

What is or has been


the role of the mass
media?

In varying ways (depending on media organizations


home country policy) the mainstream media have
reported about the ISIS and endeavoured to shape the
discourse about the group.

What are the


organizing
principles/methods
of the IS/ISIL?
What have been the
responses of
disparate parties

Conventional armed combat


Urban guerrilla warfare
Administration of seized lands

What have been the


roles of foreign
governments,
regional
organizations (e.g.,
Arab League,
Organization of
Islamic States) and
the United Nations?
How has the ISIS
responded to the
actions of the
various parties?
How has the IS/ISIL
evolved since it was
formed?

Iraqi and Syrian forces battling ISIS


Western states and allies airstrikes to defeat ISIS
Humanitarian agencies (e.g., the Red Cross & Red
Crescent Federation, Medicins Sans Frontiers, UN,
etc.) in support of victims of war (injured people,
refugees and displaced persons, etc.)
West & allies have launched military airstrikes against
ISIS
West and allies have provided humanitarian support to
besieged civilians/populations, injured people, refugees
and internally displaced persons

Changed military strategy in light of airstrikes by


Western countries

Growth of the group as its rank and file and


increased over time
Acquired more arms from purchase and capture
Seized more territory in Iraq and Syria
Some groups have joined/pledge allegiance to the
ISIS (e.g., a group in Egypt formerly known as
Ansar Beit al-Maqdis has pledged alliance to ISIS
and has renamed itself Wilayat Sinai.

How do you foresee


the IS/ISIL unfold
from now onwards?
Why has the IS/ISIL
not spread to other
countries in the
MENA region?

Table 3: Impacts/Outcomes of the IS/ISIL Conflict


Question

Answer

What are the shortterm


impacts/outcomes
of the IS/ISIL
conflict?

Social Impacts:
Deaths and human suffering
A rising tide of refugees and internally displaced
people
Destruction of property
Cultural Impacts
Destruction of Sufi sites and architecture
Assault on cultural diversity

Political Impacts:
The rise of ISIS is a development that is contrary
to what the youth of the MENA region had
agitated for (i.e., political reform). It is thus a
serious setback for democratic reform in a
region that is crying out for it.
The cry for freedom by the Syrian people has
been muffled by the rise of ISIS because its
surge has bolstered the Syrian regimes claim
that it has been fighting foreign Islamists
extremists all along.
Common cause against ISIS is bring some
geopolitical shifts that might reshape
international cooperation and could influence
Iran nuclear talks as US and Iran tone down
their rhetoric against each other
Iraq may not survive as a single country/state
Economic Impacts:
Decline in aggregate economic performance
Disruption in Oil & gas production (& exports)
Disruption in other industries
Destruction of infrastructure

What are the


medium-term
impacts/outcomes
of the IS/ISIL
conflict?

What are the longterm


impacts/outcomes
of the IS/ISIL
conflict?

Table 4: Implications of the IS/ISIL for International Business


Question
Implication
s for the
macroenvironme
nt(s)

Political

The current fight against ISIS does not necessarily


guarantee political reforms aspired by the people in
the region.

Military support for the Kurdish forces (Peshmerga)


may bolster Iraqi Kurdish claims for
autonomy/independence which is also a major
concern for the Turkish government that has been
fighting the Kurdish forces in Turkey (Kurdistan
Workers Party, the PKK)
New measures will have to be taken to resuscitate the
various economies that have been stalled or destroyed
during the Arab Spring uprisings and the in the fight
against the ISIS.
Laws and regulations may change (some may foster
a conducive business climate while others may
institute new constraints)
Challenges in establishing laws that balance national
security/public safety and respect for human rights

Economic

Legal

Social

Cultural
Technological
Ecological
Implication
s for the
Industry
environme
nt(s)

Answer

Buyers
bargaining
power

Suppliers
bargaining
Power

Societal cleavages (e.g., Sunni vs Shite; secular vs


Islamists, Islamists vs Christians and Yezidis, etc.) will
become more pronounced in the short term but in the
long-term there is potential that these chasms in the
region may be mended (and/or accentuated) with
political ramifications.
Value changes?
New revolutionary songs & art have emerged
Expose the limits of technology in the context of digital
divide within and across nations
New ways of protecting/preserving the environment
may be introduced?
Civilians being killed means the elimination of the
consumers;
Persecuted civilians (prospective consumers) will
remember who supported them during the
protests/rebellions/civil wars
Some civilians caught up in the civil war and in the
war against ISIS have either fled their respective

Threat of
Substitutes

Implication
s for the
organizatio
nal
environme
nt(s)

countries or are internally displaced


Such disruption of peoples lives means labour
supply will be severely affected when the war is over;
creating labour shortage that will in turn constrain
economic recovery and international business

Potential
Entrants

IS/ISIL may bring closer societies across the planet


and may reveal substitutes that may have been
ignored
This may lead managers to discover new markets
hitherto not considered and hence raise the
possibility of discovering substitutes for the current
products/services
New entrants that were blocked by former/replaced
rulers may be given a chance to enter into Syria & Iraq

Industry
Competitors

Competition may increase gradually as new entrants


overcome their hesitation to (re)enter the MENA region.

Organizational
Structure

Forms and structures adopted by organizational will


depend on the type of political economies that shall
emerge from the ashes of the current wars

Organization
Strategy
Organizational
Practices

Again, organization strategies will depend on the type of


political economies that shall emerge from the ashes of
the current wars
Organizational practices may be affected depending on
who takes control e.g., after ISIS is defeated

Organizational
Reputation

Organizations that supported the deposed regimes may


have their reputation tarnished

Organizational
Performance

Organizations may take longer to regain their


profitability

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Table 5: Conclusions and Recommendations


Question
What preliminary
conclusions can be drawn
from the IS/ISIL conflict?

Answer
The IS/ISIS/ISIL has been doubly disruptive:
(a) It has disrupted a century-old Middle Eastern order
that was already under historic strain (i.e., it
threatens to take over not only Iraq & Syria but also
other states/countries in the region).
(b) It has challenged our basic assumptions about the
nature of threats and our ability to contain them
(states are now confronted not only by other hostile
states (e.g., US vs Iraq) or terrorist groups (e.g., alQaeda) but also by state-like terrorists (e.g., the IS)
Unlike the hitherto experience of the traditional terrorist
groups, the very factors that have given IS its power and
credence are also its vulnerable areas:
(a) The IS owns tanks (captured from its enemies) but
these can also be easy targets for destruction e.g.,
by coalition air strikes
(b) It has captured oilfields that are helping it raise
revenues from sale of oil, but these can be bombed
or recaptured
(c) Is command posts can be destroyed/dismantled by
its enemies
(d) IS conventional military forces that are fighting and
overpowering many Iraqi & Syrian forces in the
battlefield are prone to be attacked and defeated by
the coalition forces and its allies.
There is a risk that ISIS might get hold of weapons of mass
destruction (e.g., active materials used for medical
purposes or chemical weapons) that could pose serious
risks for people in the region and beyond
Rising anti-immigrant, anti-muslim sentiments in western
countries
Societys values are under scrutiny as ruthless dictators are
brought down or cut to size.

What
recommendat
ions can be
made for:

Civilians in
affected
countries

What should the civilians do or continue to do to achieve


their goals/objectives (survival against ISIS brutality & cry
for political/democratic reforms?

Home
country
public
authorities
Civil
Society
Organizatio
ns/NGOs

How should home country public authorities respond?


Listen to the demands for more freedom & liberty?

How should domestic/international CSOs/NGOs respond to


the fight against ISIS and to the changes underway in the
MENA region generally?

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Foreign
Governmen
ts
Business
Organizatio
ns

Continue to support democratic change & economic


development appropriate for the changing environment?

How should domestic and international/foreign business


organizations respond to the current turmoil in the
region?
Move in cautiously on a country-by-country basis?

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