From War Room to Board Room: How Escalation Dynamics Impact Business

Current events in Europe and the Middle East demonstrate that conflicts around the world have the potential to disrupt domestic and international business operations. In fact, geopolitical risk was identified as one of the top three trends to affect how CEOs direct their organizations, with more than half citing it as one of the leading external disruptors.

For this reason, more executives are seeking ways to closely monitor, track and forecast geopolitical developments. Teams being asked to track geopolitical risks need to have a solid understanding of global politics, economics and game theory. In this blog, we explore how to correctly identify vertical and horizontal escalation — two phenomena that could have huge impacts on our businesses.

A war is a contest of wills between two belligerents; famously Carl von Clausewitz, the great Prussian theorist of war, proposed that “War is politics (or policy) by other means.”[1] Two sides seek to impose their will or gain their result through violence or the threat of it. This concept is at the heart of understanding escalation. In a conflict, both sides will seek to threaten to escalate the conflict beyond their opponent’s means, and therefore, resolve the conflict without actually taking those escalatory measures. When one opponent does not submit based on the threat, the other will escalate with more violence to compel the other to submit. 

Vertical Escalation

Vertical escalation is where one belligerent increases the violence or scale of the military means being used to a level higher than their opponent.[2] Think of this as going from limited air strikes to a massive, indiscriminate air campaign or deploying ground troops across a border.  An example of vertical escalation was the increasingly larger air campaigns by the United States against North Vietnam after limited offensives failed to end the war.[3] Vertical escalation is an attempt by one side to compel the other side to quit or acquiesce through imposing more cost. Vertical escalation can also take place when one side's escalation compels the other side to escalate higher. In classic deterrence theory, developed as governments wrestled with Cold War nuclear options, this idea is known as an “escalation ladder," where both sides might continue to escalate until reaching mutually assured destruction.[4]

Horizontal Escalation

Horizontal escalation is the propensity for conflicts to spill over from their geographic regions and their direct belligerents to other areas and other actors.[5] This often happens when one side does not have the means or the will to threaten or actually vertically escalate.  A good example of horizontal escalation was when Saddam Hussein began firing Scud missiles at Israel in 1991 in an attempt to fracture the Coalition opposing him in Kuwait.  Without sufficient means to resist the Coalition air offensive, Hussein sought to horizontally escalate the conflict by using his military means to bring a politically unhelpful belligerent, Israel, into the conflict.[6] 

We can see both of these dynamics at play in the Ukraine war. First, Russia tried to vertically escalate the frozen conflict of 2014 by overwhelming Ukrainian defenses in their initial invasion in early 2021. Next, Ukraine tried to vertically escalate the war through a massive counteroffensive in Summer 2022. Neither approach has worked, and neither side seems to have the means to vertically escalate. Instead, what we've seen over the past six months is a horizontal escalation of the war. Ukraine has begun to attack where the Russians are weak – i.e., oil production facilities, deeper airfields and against Russian naval forces in the Black Sea and Crimean Peninsula.[7] Russia has also escalated, but in less lethal ways.  GPS jamming across both the Black Sea and the Baltics against NATO and civilian traffic has increased in recent months.[8] 

What is the likelihood that horizontal escalation in the Ukraine War might endanger more of Europe? Fortunately, right now the likelihood appears low. With the entrance of Finland and Sweden into NATO, Russia has more Ukrainian allies on its northern front. This is likely to have a mitigating effect on any Russian attempts at overt intimidation of the Baltic countries. Perhaps more likely would be Russian horizontal escalation by meddling in Middle East crises to induce the United States to pay more attention to that region rather than the Ukraine. 

Recent actions by Israel and Iran can be seen as examples of both horizontal and vertical escalation. Last month, Israel executed a strike against Iranian operatives in the Iranian consulate in Damascus. In response, Iran vertically escalated the conflict again with a large and overt missile and drone strike, launched from Iran against Israel. Israel’s muted counteraction, with one limited strike against an Iranian nuclear facility, telegraphed their capability to act, but without moving either belligerent up the escalation ladder. 

Regardless, security managers can never take geopolitical conflict for granted. The propensity for conflicts to escalate horizontally and vertically does not always happen logically. Unanticipated political changes, sudden shifts in battlefield dynamics or significant world events can change how belligerents approach a conflict.  A sudden change in the military or political calculus might come with a new set of military targets and political objectives as one belligerent seeks an advantage over another. 

The takeaway for every business is to ask the right questions now: How could any of these escalation paths affect my organization? What is my business continuity plan if they do? Do I know where my people are? How can I keep my employees informed? By posing these types of questions today and evaluating how geopolitical conflicts may escalate, businesses can take a more proactive approach to keeping their people and operations safe.

The mission can feel daunting and the path forward unclear. If you’d like to continue this discussion, provide feedback or are looking for assistance, OnSolve is here to help.


[1] EWS On War Reading Book 1 Ch 1 Ch 2.pdf (

[2] CHAPTER TWO The Nature of Escalation from Dangerous Thresholds: Managing Escalation in the 21st Century on JSTOR

[3] 1965 - Operation Rolling Thunder > Air Force Historical Support Division > Fact Sheets (

[4] Reconstructing the Ladder: Towards a More Considered Model of Escalation (

[5] CHAPTER TWO The Nature of Escalation from Dangerous Thresholds: Managing Escalation in the 21st Century on JSTOR

[6] Thirty Years Since the Gulf War: How the U.S. Stopped Israel From Retaliating Against Iraq - Israel News -

[7] Ukraine’s attacks on Russian oil refineries deepen tensions with U.S. - The Washington Post, Ukraine strikes two more fuel depots in Russia, defying US warnings – POLITICO; Ukrainian attacks increasingly sap the power of Russia's Black Sea fleet | AP News;


Matt Rasmussen

Matt Rasmussen is a 23-year U.S. Army Veteran who currently serves as an Assistant Professor and Course Director at the U.S. Army War College. Matt’s most recent operational assignments were first as an infantry battalion commander and then as a hand-selected combat advisor battalion commander. During his Army career, Matt has served at every operational echelon from platoon to division, and deployed to Iraq and Afghanistan four times.