Business research and teaching institutions play an important role in shaping the way businesses perceive their relations to the broader society and its moral expectations. Hence, as ethical scandals recently arose in the business world, questions related to the civic responsibilities of business scholars and to the role business schools play in society have gained wider interest. In this article, I argue that these ethical shortcomings are at least partly resulting from the mainstream business model with its taken-for granted basic (...) assumptions such as specialization or the value-neutrality of business research. Redefining the roles and civic responsibilities of business scholars for business practice implies therefore a thorough analysis of these assumptions if not their redefinition. The taken-for-grantedness of the mainstream business model is questioned by the transformation of the societal context in which business activities are embedded. Its value-neutrality in turn is challenged by self-fulfilling prophecy effects, which highlight the normative influence of business schools. In order to critically discuss some basic assumptions of mainstream business theory, I propose to draw parallels with the corporate citizenship concept and the stakeholder theory. Their integrated approach of the relation between business practice and the broader society provides interesting insights for the social reembedding of business research and teaching. (shrink)

ABSTRACT:Many companies engage in dialogue with nongovernmental organizations about societal issues. The question is what a regulative ideal for such dialogues should be. In the literature on corporate social responsibility, the Habermasian notion of communicative action is often presented as a regulative ideal for stakeholder dialogue, implying that actors should aim at consensus and set strategic considerations aside. In this article, we argue that in many cases, communicative action is not a suitable regulative ideal for dialogue between companies and NGOs. (...) We contend that there is often an adversarial element in the relation between companies and NGOs, and that an orientation towards consensus can be in tension with this adversarial relation. We develop an alternative approach to stakeholder dialogue called ‘agonistic deliberation.’ In this approach, conflict and strategic considerations play a legitimate and, up to a certain point, desirable role. (shrink)

Business research and teaching institutions play an important role in shaping the way businesses perceive their relations to the broader society and its moral expectations. Hence, as ethical scandals recently arose in the business world, questions related to the civic responsibilities of business scholars and to the role business schools play in society have gained wider interest. In this article, I argue that these ethical shortcomings are at least partly resulting from the mainstream business model with its taken-for granted basic (...) assumptions such as specialization or the value-neutrality of business research. Redefining the roles and civic responsibilities of business scholars for business practice implies therefore a thorough analysis of these assumptions if not their redefinition. The takenforgrantedness of the mainstream business model is questioned by the transformation of the societal context in which business activities are embedded. Its value-neutrality in turn is challenged by self-fulfilling prophecy effects, which highlight the normative influence of business schools. In order to critically discuss some basic assumptions of mainstream business theory, I propose to draw parallels with the corporate citizenship concept and the stakeholder theory. Their integrated approach of the relation between business practice and the broader society provides interesting insights for the social reembedding of business research and teaching. (shrink)

In latter-day discussions on corporate morality, duties of commission are fiercely debated. Moral institutionalists argue that duties of commission—such as a duty of assistance—overstep the boundaries of moral duty owed by economic agents. " Moral institutionalism" is a newly coined term for a familiar position on market morality. It maintains that market morality ought to be restricted, excluding all duties of commission. Neo-Classical thinkers such as Baumol and Homann defend it most eloquently. They underpin their position with concerns that go (...) to the core of liberalism—the dominant western political theory that sustains the ideals of both the free market and the free, rational person. Those authors claim that liberalism calls for a fully differentiated market because it resents the politicization of the market. Fully differentiated markets exclude duties of commission. They also claim that full differentiation of the market closes the troublesome gap between moral motivation and moral virtue. Full differentiation redeems the promise of "easy virtue". In this paper moral institutionalism will be rejected from a Kantian point of view, mostly inspired by Herman's thesis on the invisibility of morality. Liberalism may perhaps ban the politicization of the market; it does not forbid its moralization. The idea of a fully differentiated market must also be rejected because it is either morally over-demanding (to the morally autonomous person) or morally hazardous (to the person with failing moral motivation). Contrary to what the moral institutionalists claim, right action, morally, is actually quite difficult in fully differentiated markets. (shrink)

In highly structured organisational fields individual efforts to deal rationally with uncertainty and constraints tend to lead, in the aggregate, to greater homogeneity in structure, culture and output. Drawing on institutional theory, this paper develops research propositions regarding the nature and scope of corporate social responsibility (CSR) engagement at trade/industry association level. The cases of the water and sewerage and film industries are used in order to test these propositions. The findings suggest that (a) trade associations in more homogeneous industries (...) are more likely to engage with CSR‐related issues; (b) trade associations in industries that face greater external scrutiny and threats to legitimacy are more likely to engage with CSR‐related issues; and (c) trade associations are more likely to engage with those substantive CSR issues that are of greater concern to the industry's most salient stakeholders. The findings also suggest that trade associations may have a greater tendency to engage in symbolic legitimation efforts through CSR if faced with the task of repairing industry legitimacy. (shrink)

This article assesses some of the implications of globalization for the scholarly debate on business ethics, CSR and related concepts. The argument is based, among other things, on the declining capacity of nation state institutions to regulate socially desirable corporate behavior as well as the growing corporate exposure to heterogeneous social, cultural and political values in societies globally. It is argued that these changes are shifting the corporate role towards a sphere of societal governance hitherto dominated by traditional political actors. (...) This leads to a discussion of the ambivalent results of such a process for a responsible corporate role in a globalized world. While assessing the current reception these changes have received in the management literature, the contributions of the four articles in this Special Issue are framed and evaluated. The argument closes by highlighting avenues of future research on this new challenge. (shrink)

In the work of Karl Polanyi, the negative effects of a self-regulating market economy are described as being limited by societal forces such as the policies of the welfare state. With the decline of the modern welfare state since the late 1970s, social activities of business firms are increasingly regarded as an important complement to or even as a substitute for welfare state policies by a part of the literature. However, and controversially, another stream of argumentation regards these activities as (...) being aimed at advancing the reach of market forces. To fully grasp the ambiguous nature of the social activities of business, in this paper I provide an account of affirmative as well as of critical interpretations of these activities throughout the history of modern capitalism. On this basis, the power of critique to disentangle the diverse motivations that underlie the social engagement of business is highlighted as a condition for facilitating a role of business in society that balances economic and social considerations. (shrink)

Smith defines the business enterprise primarily as the endeavor of an individual who remains fully embedded in the broader society and subject to its moral demands. For him, the conceptions of the local community and its normative framework, of the enterprise, and of the individuals within it need to be aligned with each other and developed together. Over time, four processes have, however, led to a widening gap between the business world and the local community. These are the dissemination of (...) the corporate model, the transformation of the entrepreneurial role toward an agency role, changes in the ownership structure, and changes in the relation to the local community. This article presents Smith’s integrative conception of business and its contributions to the development of integrative theories of organizations and of business–society relations in the twenty-first century. Among others, it discusses the necessity to develop a normative-relational dimension of organizations that addresses the relations between the organization, its members, and the normative framework of the local community. This integrative approach of business–society relations challenges current business ethics research which often suggests that solutions to the current scandals lie either within the framework, the organization, or the individuals. (shrink)

With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporation's long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a company's long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension (...) funds' trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds' beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to "socially responsible investing" and when applied to corporations, it is termed "socially responsible corporate conduct." We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients', i.e. pension funds', best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies' stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

'Corporate Social Responsibility (CSR) is conceptualized in many ways. We argue that one cannot be indifferent about the issue of its conceptualization. In terms of methodology, our position is that any conceptual discussion must embed CSR in political theory. With regard to substance, we link up with the discussion on whether CSR must be defined on the basis of a tripartite or a quadripartite division of business responsibilities. We share A. B. Carroll's intuition that a quadripartite division is called for (...) as a basis to define CSR. However, defending the quadripartite division of business responsibilities requires that the distinctions between economic, legal, ethical and discretionary business responsibilities be made intelligible. Carroll's account is defective in this respect. We argue that contemporary Neo-Kantian political ethics is able to make sense of these distinctions, because of its specific interpretation of liberalism. Interestingly, from a conventional liberal perspective this interpretation of liberalism is atypical, as it extends public morality beyond the domain of the law. (shrink)

: We discuss the role that transnational corporations should play in developing global governance, creating a framework of rules and regulations for the global economy. The central issue is whether TNCs should provide global rules and guarantee individual citizenship rights, or instead focus on maximizing profits. First, we describe the problems arising from the globalization process that affect the relationship between public rules and private firms. Next we consider the position of economic and management theories in relation to the social (...) responsibility of the firm. We argue that instrumental stakeholder theory and business and society research can only partially solve the global governance issue, and that more recent concepts of corporate citizenship and republican business ethics deliver theoretically and practically helpful, fresh insights. However, even these need further development, especially with regard to the legitimacy of corporate political activity. (shrink)

Modern society is challenged by a loss of efficiency in national governance systems values, and lifestyles. Corporate social responsibility (CSR) discourse builds upon a conception of organizational legitimacy that does not appropriately reflect these changes. The problems arise from the a-political role of the corporation in the concepts of cognitive and pragmatic legitimacy, which are based on compliance to national law and on relatively homogeneous and stable societal expectations on the one hand and widely accepted rhetoric assuming that all members (...) of society benefit from capitalist production on the other. We therefore propose a fundamental shift to moral legitimacy, from an output and power oriented approach to an input related and discursive concept of legitimacy. This shift creates a new basis of legitimacy and involves organizations in processes of active justification vis-à-vis society rather than simply responding to the demands of powerful groups. We consider this a step towards the politicization of the corporation and attempt to re-embed the debate on corporate legitimacy into its broader context of political theory, while reflecting the recent turn from a liberal to a deliberative concept of democracy. (shrink)

In our time, innovation is considered an important way to address societal problems. That we expect so much from innovation to solve the challenges of our time, makes the question what could count as ‘responsible innovation’ more pressing. And that is what this thesis is about. The aim of this thesis is to offer philosophical reflections on responsible innovation in the business context. Since that is still a quite broad topic, the main title suggests its further focus: deliberation and food. (...) The first focus originates from the idea in the academic literature on responsible innovation, that innovators should not just assess by themselves what ‘responsible’ is, but should invite others to think along with them about the social and ethical aspects of innovation. Chapter 2 to 4 zoom in on this aspect of responsible innovation. The second focus has to do with the specific context of application, namely food and the food industry. Chapter 4 and 5 relate the topic of responsible innovation to this context. The question I raise in chapter 2 is whether the ideal of inclusive deliberation is suitable for innovation processes in businesses. I argue that this is not so easy, and provide different reasons why companies might not be willing to involve societal stakeholders into their innovation processes. First, the requirement of deliberation can be tension with the ability of companies to exploit their innovations commercially within a competitive market. Second, deliberation requires a certain degree of transparency about the innovation strategy of a company. Companies might not be willing to provide this transparency, because they fear knowledge leakage to other companies. Third, companies are controlled most often by people with a financial stake. Therefore, we can expect that financial considerations are decisive in the investment decisions of companies. This could conflict with the ideal of responsible innovation to ‘democratize’ innovation processes. Hence, I suggest that scholars should modify the ideal of deliberation in order to make it suitable to the business context, or they should suggest changes in the governance and regulation of markets so as to make deliberation more workable. Chapter 3 discusses the place of conflict and self-interest in deliberation. It starts with a discussion of the literature on stakeholder dialogue. In this literature, the ideal dialogue is presumed to aim at consensus. This also implies that participants avoid conflict and set self-interested considerations aside. I argue that this ideal of dialogue is problematic, especially for a dialogue between companies and NGOs. I show that companies can never completely set aside their profit-orientation, and hence that this ‘self-interest’ always influences their input in a dialogue. Furthermore, conflict and criticism can be necessary to make clear that societal problems require more attention, whether from the general public or from companies. Since the market is an imperfect institution, we need critical citizens and stakeholders such as NGOs to assess the behavior of companies. A certain degree of conflict between companies and NGOs may therefore be more desirable than a focus on consensus. For these reasons, I develop an alternative approach to dialogue in which conflict and self-interest have a legitimate place, and can even play a productive role. In chapter 4, a case-study is conducted to better understand how participants in a dialogue deal with conflicts. In this case-study, I analyzed different dialogues organized by the foundation ‘Ik Kies Bewust’, which issued a front-of-pack health label. In my analysis, I investigate the conflict between, on the one hand, the value of public health and healthy food, and, on the other hand, the commercial interests of companies. In the responses of companies to this conflict, three patterns became visible. First, companies frame their critics as not constructive, because, in their view, they only criticize but do not help to improve the label. Second, they stressed that they are really and genuinely motivated to make food healthier or to make a healthy food choice easier. Thereby, they seemingly tried to counter the image that they are just motivated to make profit. Third, they called on the government to take more control over the label, because this would make the label more reliable and more broadly adopted. I qualify these responses as defensive, which means that the conflict between commercial considerations and public interests is suppressed or ignored. An active response would require to recognize and confront the conflicts and dilemmas that companies face. The case-study makes clear how difficult it can be to engage in dialogue with critical stakeholders. In chapter 5, I reflect on how food innovation can be responsible. In trying to answer this question, I take a certain detour, by starting a discussion about the place of food in a life well-lived. For this purpose, I use the philosophy of Albert Borgmann. On the basis of my analysis of his philosophy, I argue that there are good reasons for engaging with food in active way, for example by growing your own vegetables and home-cooking, instead of consuming food merely passively. I also draw some implications for food innovation. In my view, people responsible for food innovation should critically assess whether new products or services enhance engagement or disengagement. Is it desirable, for example, to develop even more and better pre-packaged meals, or should we stimulate consumers to cook by themselves? I argue that it would be problematic if our overall pattern of dealing with food is characterized by disengagement and convenience, and hence that food innovation should not only go in this direction. (shrink)

A number of business ethics theorist have highlighted the potential for economics to contribute to the advancement of business ethics. In response, this article emphasizes the insights of a particular area of economics that could provide such expansion and development. Subjectivist economics may yet provide an effective analytical framework through which to investigate and evaluate business decision making, and hence the ethics of business. Integrating the concepts of uncertainty, time and imagination, subjectivist economic theory contributes to a greater appreciation of (...) economic choice and behaviour. While such notions are often effectively omitted from modern economic analysis to aid formal representation, business ethicists could utilize such concepts more effectively than their colleagues in economic theory. Significantly, the well-known economists who have championed the insights of subjectivist economics have themselves recommended its extension to an analysis of ethics. (shrink)

This paper addresses the question of whether and how public action via civil society and/or government can meaningfully shape industry-wide corporate responsibility behaviour. We explore how, in principle, ICR can come about and what conditions might be effective in promoting more ethical behaviour. We propose a framework to understand attempts to develop more responsible behaviour at an industry level through processes of negotiation and coalition building. We suggest that any attempt to meaningfully influence ICR would require stakeholders to possess both (...) power and legitimacy; moreover, magnitude and urgency of the issue at stake may affect the ability to influence ICR. The framework is applied to the retail banking industry, focusing on post-crisis experiences in two countries—Spain and the UK—where there has been considerable pressure on the retail banking industry by civil society and/or government to change behaviours, especially to abandon unethical practices. We illustrate in this paper how corporate responsibility at the sector level in retail banking is the product of context-specific processes of negotiation between civil society and public authorities, on behalf of customers and other stakeholders, drawing on legal and other institutions to influence industry behaviour. (shrink)

In highly structured organisational fields individual efforts to deal rationally with uncertainty and constraints tend to lead, in the aggregate, to greater homogeneity in structure, culture and output. Drawing on institutional theory, this paper develops research propositions regarding the nature and scope of corporate social responsibility (CSR) engagement at trade/industry association level. The cases of the water and sewerage and film industries are used in order to test these propositions. The findings suggest that (a) trade associations in more homogeneous industries (...) are more likely to engage with CSR‐related issues; (b) trade associations in industries that face greater external scrutiny and threats to legitimacy are more likely to engage with CSR‐related issues; and (c) trade associations are more likely to engage with those substantive CSR issues that are of greater concern to the industry's most salient stakeholders. The findings also suggest that trade associations may have a greater tendency to engage in symbolic legitimation efforts through CSR if faced with the task of repairing industry legitimacy. (shrink)

The dominant framing of the political corporate social responsibility discussion challenges the traditional economic conception of the firm and aims to produce a paradigm shift in CSR studies wherein the traditional, apolitical view of corporations’ roles in society is replaced by the political conception of CSR. In this paper, we show how the major framing of the political CSR discussion calls for a redirection to take international hard legal and moral regulations, as well as the need for the boundaries between (...) business and politics into account. (shrink)

This contribution delves into the concept of ‘corporate sovereignty’, where companies, akin to states, function not only as economic entities but also as political actors exercising a novel form of sovereignty. Although business ethics typically approaches corporate power from ethical, legal, and economic perspectives, these viewpoints prove inadequate in conceptually grasping the specific form of power, namely sovereignty. In an era of escalating corporate influence and contested state authority, political theology becomes indispensable. The political theology of Carl Schmitt, though not (...) prominently featured in business ethics, provides valuable insights into how corporate power manifests in contemporary reality, particularly as ‘corporate sovereignty’. Schmitt contends that sovereignty reveals itself in exceptional circumstances, a concept paralleled by companies exercising sovereignty. Political theology unveils the political concepts and power dynamics behind corporate sovereignty, necessitating a broader approach in business ethics where political philosophy and theology play a crucial role. (shrink)

Business ethics scholars have proposed strategies for mitigating the ill effects brought on by a wealth maximization business strategy by urging managers to either embrace corporate social responsibility (CSR) or to manage according to stakeholder theory. In this article I argue that these strategies are often ineffective in bringing about the behavior they promote because it is antithetical to the nature and logic of capitalism. I examine the organizing principles of capitalism and the role it assigns to capitalists, and juxtapose (...) these with the behavior prescribed by three normative frameworks: strategic management theory (SMT), the CSR initiative, and stakeholder theory. Unlike the behaviors prescribed by the CSR initiative and stakeholder management theory, the behavior prescribed by SMT is consistent with the role of capitalists as defined by the organizing principles of capitalism, and SMT's “rules” have instilled habits that have, in turn, been able to mold managers’ aspirations and purposes. CSR and stakeholder theory must not only combat the habits instilled by the entrenched SMT, they must also find some way of instilling habits that run contrary to those defined by the nature and logic of capitalism itself. (shrink)