The best-selling Business and Society book at the graduate level, provides managerial perspective on the challenges arising in the environment of business. It provides a structured and disciplinary approach to addressing management issues of growing importance to the performance of companies. This approach brings together the disciplines of economics, political science, law, and ethics to provide a deeper understanding of the environment of business. This book is aimed for MBA and undergraduate courses in the Environment of Business, Business and Government, (...) Business and Society, Business and Public Policy. *Contains new conceptual material on nonmarket strategy and corporate responsibility and ethics. *27 new cases on companies including Microsoft, Nike, Federal Express, Echolon, Shell, Eastman Kodak, and Advanced Technologies Laboratories. *Conceptual frameworks based on the disciplines of economics, political science, law, and ethics, and applied to the environment of business in the United States and in other countries. *Emphasizes the formulation of effective and responsible strategies for managing in the firm's environment. *Addresses international and global issues. Contains. (shrink)

There is not, of course, a one-to-one relation between policy conclusions and the conclusions of positive economics; if there were, there would be no ...

ABSTRACT:Within corporate social responsibility (CSR), the exploration of the political role of firms (political CSR) has recently experienced a revival. We review three key periods of political CSR literature—classic, instrumental, and new political CSR—and use the Rawlsian conceptualization of division of moral labor within political systems to describe each period’s background political theories. The three main arguments of the paper are as follows. First, classic CSR literature was more pluralistic in terms of background political theories than many later texts. Second, (...) instrumental CSR adopted classical liberalism and libertarian laissez-faire as its structural logic. Third, new political CSR, based on a strong globalist transition of responsibilities and tasks from governments to companies, lacks a conceptualization of division of moral labor that is needed to fully depart from a classical liberalist position. We end by providing a set of recommendations to develop pluralism in political CSR. (shrink)

In a wide-ranging, provocative anatomy of modern society and its origins, novelist and historian John Ralston Saul explores the reason for our deepening sense of crisis and confusion. Throughout the Western world we talk endlessly of individual freedom, yet Saul shows that there has never before been such pressure for conformity. Our business leaders describe themselves as capitalists, yet most are corporate employees and financial speculators. We are obsessed with competition, yet the single largest item of international trade is a (...) subsidized market in armaments. We call our governments democracies, yet few of us participate in politics. We complain about "invasive government," yet our legal, educational, financial, social, cultural and legislative systems are breaking down. While most observers view these problems separately, Saul demonstrates that they are largely manifestations of our blind faith in the value of reason. Over the last 400 years, our "rational elites" have gradually instituted reforms in every phase of social life. But Saul shows that they have also been responsible for most of the difficulties and violence of the same period. This paradox arises from a simple truth which our elites deny: far from being a moral force, reason is no more than an administrative method. Their denial has helped to turn the modern West into a vast, incomprehensible, directionless machine, run by process-minded experts - "Voltaire's bastards"--Whose cult of scientific management is bereft of both sense and morality. Whether in politics, art, business, the military, entertainment, science, finance, academia or journalism, these experts share the same outlook and methods. The result, Saul maintains, is a civilization of immense technological power whose peoples increasingly dwell in a world of illusion. Already known to millions of readers as the author of novels which portray the overwhelming effects of this power on the modern individual by weaving together international finance, the oil and arms business, guerrilla warfare, drug traffic, and the world of art, here Saul lays aside the mask of fiction to speak in his own voice. Only by withdrawing from our addiction to "solutions," he argues, reclaiming the citizens' right to question and participate in public life, and recovering a common sense capacity for intelligent panic, can we find a way out of our permanent crisis. (shrink)

In a globalizing world, governments are not always able or willing to regulate the social and environmental externalities of global business activities. Multi-stakeholder initiatives (MSI), defined as global institutions involving mainly corporations and civil society organizations, are one type of regulatory mechanism that tries to fill this gap by issuing soft law regulation. This conceptual paper examines the conditions of a legitimate transfer of regulatory power from traditional democratic nation-state processes to private regulatory schemes, such as MSIs. Democratic legitimacy is (...) typically concerned with input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). In this study, we identify MSI input legitimacy criteria (inclusion, procedural fairness, consensual orientation, and transparency) and those of MSI output legitimacy (rule coverage, efficacy, and enforcement), and discuss their implications for MSI democratic legitimacy. (shrink)

This review essay analyzes the 2007 books of Naomi Klein and Robert B. Reich. Both books identify a political role for the private corporation in contemporary capitalism globally. The review article concludes with some remarks on the implication of both books for a future research agenda in management studies in general and the business and society field in particular.

This article is concerned with the moral permissibility of corporate political activities under the existing legal framework in the United States. The author unpacks and examines the standard case for and against the involvement of business in lobbying and electoral activities. And the author provides six objections against the standard arguments and proposes that the wrongness of corporate political activities does not have much to do with its potential social consequences but rather with nonconsequentialist considerations. The author’s ultimate aim is (...) to make sense of the intuition that corporate political spending is morally objectionable. The author argues that his case against corporate political spending fares better than the standard case. What is wrong with the current system of regulation of corporate lobbying and campaign finance is that it is inconsistent with the principles of political equality and consent. By taking advantage of this unfair regulatory framework, business firms are making a contribution to undermine the basis of a robust democratic regime at both the societal and the corporate level. (shrink)

A number of scholars have highlighted the role of employers in shaping the development of the welfare state. Yet the results of this research have often been ambiguous or disputed because of insufficient attention to theoretical, conceptual, and methodological problems in the study of political influence. This article considers three of these problems in turn: the failure to distinguish and investigate multiple mechanisms of exercising influence, the misspecification of preferences, and the inference of influence from ex post correlation between actor (...) preferences and outcomes. We demonstrate the importance of each through a reexamination of the early development of the American welfare state. The striking feature we suggest is neither business dominance nor weakness but marked variation in influence over time and across institutional settings. (shrink)

This article explains the rationale for study of the governance challenges of corporate political activity. The topic is important, especially in light of the U.S. Supreme Court’s 2010 Citizens United decision, but understudied to date. The authors review the literature bearing on this topic. The authors separate consideration of the topic into macro-level and micro-level issues. The macro level concerns the societal perspective. At this level, key research questions concern whether corporate political activity be allowed, and how it should be (...) regulated. The micro level covers managerial and shareholder control over corporate political activity. At this level, key research questions include concern whether the firm should practice political activity and how to regulate practice through professional self-regulation, ethical guidelines, and corporate governance systems control. The remainder of this article contains focused summaries of the articles selected for this Special Issue. Each article is introduced and evaluated against the key research questions at the macro or micro levels of analysis. (shrink)

This article reviews the literature on corporate political action (CPA), integrating the perspectives of nine basic social science theories. Theoretical and empirical research grounded in these nine theories have described the characteristics of firms that engage in CPA (who), their rationale (why), and their methods (how). To a much lesser extent, the literature has also addressed how CPA changes over time (when) and the settings in which CPA is done (where). Reexamining the CPA literature this way directs us toward fundamental (...) research questions that have not yet been addressed. (shrink)

A proposed global theory of corporate political activity (CPA) analyzes the complex resource allocation choices involved in integrating politically relevant cross-border and multilevel strategies for multinational enterprises (MNEs). Cross-border CPA is “horizontal” allocation of scarce corporate resources by MNEs to politically relevant strategies across multiple countries. Globalization reshapes CPA among multiple levels functioning below, at, and above national governments. Subnational communities and international policy regimes, supranational quasigovernmental institutions, and supranational nongovernmental organizations all affect businesses. Multilevel CPA is “vertical” allocation of (...) scarce corporate resources to politically relevant strategies among subnational, national, regional, and global levels. Furthermore, in each country and at each level, business-relevant policies are determined in multiple policy arenas, shaped by widely differing nonmarket institutions, corruption conditions, and stakeholder demands for corporate social responsibility. Multiple policy “arena” allocation adds to the analytical complexity of the CPA strategizing problem. Implications for scholarship and practice are presented. (shrink)

This paper addresses recent calls to study the role of the state in private regulation. Integrating current scholarship on the state as a catalyst of private regulatory regimes with prior literature on regulatory failure and self-regulation, it identifies and problematizes unsettled assumptions used as a starting point by this growing body of research. The case study traces the evolution of public debates and the interaction of different regulatory initiatives dealing with corporate social responsibility issues in Canada’s mining industry. Findings reveal (...) the conditions under which the state is more likely to encourage firm-level, fragmented initiatives than facilitate and promote industry-wide regulatory strengthening and consolidation. I discuss the need for greater analytical precision regarding the variation in regulatory policy preferences across time and branches of government and the interaction between public and private regulatory initiatives. The conclusion outlines suggested areas for future research as well as the likely outcome of Canada’s current CSR policy framework. (shrink)

The authors give a critical reading of the research interests of state-of-the-art corporate political activity (CPA) literature. They demonstrate that a noncritical tendency in the literature to view CPA as a strategic activity, aimed at making profit, may encourage firms to sociopathic behavior in their political activities. Using psychiatric literature, the authors explore the nature of sociopathic CPA. They draw on a recent discussion initiated by virtue theorists, exploring firm moral agency in order to suggest the opening of several new (...) research areas, within CPA literature, more sensitive to moral questions. (shrink)

Variance theories have dominated corporate political action (CPA) research because the pioneering works in the 1970s and 1980s. Process theories offer an entirely new perspective on CPA research, as they are able to explain processes across a number of levels of analysis and link actions to contexts. We add to the existing CPA literature by offering a process model that can be useful especially in historical and evolutionary analysis. Our model depicts CPA as a complex system in which a firm’s (...) actions are affected by various factors across organizational, industry, and institutional levels of analysis. As political actions also influence these factors, the process is in essence systemic and path dependent. Our model supplements existing research by offering the possibility to explain the long-term consequences of CPA vis-à-vis wider societal changes and by promoting longitudinal research strategies. In addition to the theoretical model, we provide a historical analysis of the evolution of the Finnish paper and pulp industry to illustrate the applicability of the framework. (shrink)

This article is concerned with the moral permissibility of corporate political activities under the existing legal framework in the United States. The author unpacks and examines the standard case for and against the involvement of business in lobbying and electoral activities. And the author provides six objections against the standard arguments and proposes that the wrongness of corporate political activities does not have much to do with its potential social consequences but rather with nonconsequentialist considerations. The author’s ultimate aim is (...) to make sense of the intuition that corporate political spending is morally objectionable. The author argues that his case against corporate political spending fares better than the standard case. What is wrong with the current system of regulation of corporate lobbying and campaign finance is that it is inconsistent with the principles of political equality and consent. By taking advantage of this unfair regulatory framework, business firms are making a contribution to undermine the basis of a robust democratic regime at both the societal and the corporate level. (shrink)

The United Nations Global Compact has generated a lively debate among academics, activists, and policy practitioners. Given the scope and ambition of this program, and the prestige of the United Nations associated with it, its supporters believe it will fundamentally reshape how businesses practice corporate social responsibility. Its critics view it as a flawed program because it does not impose verifiable obligations and does not compel its participants to adhere to their program obligations. We present an approach to study CSR (...) programs grounded in rational-choice institutionalist theory, building on previous work viewing CSR programs as clubs which can produce reputational benefits for members as well as positive societal externalities, provided that they incorporate institutional mechanisms to prevent member shirking. This perspective puts the focus squarely on the institutional rules of the UNGC and their impacts on member behavior. While we conclude that the UNGC has not yet demonstrated a capacity to generate across-the-board improvements in CSR performance beyond what member firms would have done otherwise, we are hopeful that its sponsors and leaders can undertake worthwhile changes in program design to align member incentives with program objectives. (shrink)

Trade associations operate under the premise of advancing the shared interests of their member firms. How well do they fulfill this role? This article measures the activity of 148 major industry trade associations over time and relates this activity to the performance of the relevant industries and dominant firms within them. Findings suggest that trade association spending increases when the profitability of the four largest firms in an industry decreases, but spending is unrelated to the profitability of the industry overall. (...) This implies that large firms exert control over trade association agendas and may use these communal organizations to advance their own interests rather than the shared interests of the entire industry. Moreover, it points to the need for further development of the currently anemic management literature on the activities of trade associations. (shrink)