President's Message
Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad


To FINEX members and friends,

PRESIDENT’S REPORT
November 2017 Issue

We are now on the final stretch of 2017. This year has been one of the busiest and exciting for both FINEX and the country.

Earlier this month, our country was once again placed in the limelight as we hosted this year’s ASEAN Summit. The summit provided us to showcase what our country can share to the world and the creativity of the Filipino people. Indeed, the recent hosting of the ASEAN summit placed our country

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The practice of brinkmanship
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Mr. Reynaldo C. Lugtu, Jr.By Reynaldo C. Lugtu, Jr.

MANILA BULLETIN (Business Option)
October 12, 2017

The practice of brinkmanship

Business Option is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Tuesday & Thursday in Manila Bulletin, business section.

Just a few days ago, Russian lawmaker Anton Morozov, who just returned from a visit to Pyongyang, delivered a message from the North Koreans that they are preparing to launch another missile in the near future.

In mid-September, the US military flew bombers close to North Korea to show that Donald Trump “has many military options to defeat any threat.” Kim Jong Un responded, vowing to take the “highest level of hard-line countermeasure in history,” bringing North Korea and the United Statesto a new level of brinkmanship.

The term “brinkmanship” has gained widespread use since the aggressive verbal tussle and actuations between Trump and Kim which started a few months ago. A cursory search in Google on “brinkmanship and Trump or North Korea returns with more than 250,000 entries. Brinkmanship has its roots in foreign policy practice from a 1956 Life magazine interview with former US secretary of state John Foster Dulles, wherein he said that, in diplomacy, “if you are scared to go to the brink [of war], you are lost.” Adlai Stevenson, an American politician and diplomat retorted that Dulles’s “brinksmanship” comment was reckless.

Henceforth, brinkmanship is defined as a “foreign policy practice in which one or both parties force the interaction between them to the threshold of confrontation in order to gain an advantageous negotiation position over the other” by Britannica.com.“The technique is characterized by aggressive risk-taking policy choices that court potential disaster.” The term was repeatedly used during the Cold War period which was characterized by deep tensions between the US and Soviet Union.

The practice of brinkmanship is not limited to foreign policy. In fact, it has been employed in human interactions since the dawn of human history, from politics to business to negotiations. That’s why its definition was expanded as “the art or practice of pushing a dangerous situation or confrontation to the limit [or brink] of safety specially to force a desired outcome,” according to Merriam-Webster.

Of late in Philippine politics, President Duterte upped the brinkmanship game as he recently challenged both Supreme Court Chief Justice (CJ) Ma. Lourdes Sereno and Ombudsman Conchita Carpio-Morales to resign with him at the same time. CJ Sereno camp replied with a rejection on President Duterte’s resignation challenge.

In business, Boston Consulting Group founder, Bruce D. Henderson introduced brinkmanship in business consciousness in his 1967 Harvard Business Review article titled “Brinkmanship in business” to mean succeeding in business by being unreasonable” or “non-logical.”  Non-logical implies “reasoning which leads to decisions that could not be predicted or reached except by an arbitrary subjective process.”

He outlined three kinds of activities applicable in business where brinkmanship can play an important role such as in negations, in achieving mutual self-restraint or cooperation between competitors, and in inhibiting aggressive action of competitors.

Since brinkmanship is all about “pushing a dangerous situation or confrontation to the limit [or brink] of safety,” any wrong move, may it be intentional or not, can be mutually dangerous, if not, outrightly disastrous. It’s like accidentally pulling the trigger.

Wars and threat of wars arise from pulling the trigger of brinkmanship. A patent example is Nikita Khrushchev’s brinkmanship which almost brought the US and Soviet Union to nuclear war when he secretly placed ballistic missiles in Cuba to defend it from the US and to extend Soviet power in the region. John F. Kennedy subsequently stopped the crisis by ordering blockade around Cuba, forcing the Soviet Union to withdraw its missiles.

Businesses engage in brinkmanship to maximize their positional advantage and test the other party’s resolve. We have been witness to the recent spate of repartee between Uber and the Land Transportation Franchising and Regulatory Board (LTFRB) which endangered the commuting public’s interest. Uber gave in at the end by paying 190 million pesos.

We hope and pray that the scuffle between the U.S. and North Korea does not push anyone of them to pull the trigger.

(The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .) https://business.mb.com.ph/2017/10/11/the-practice- of-brinkmanship/

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