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 this paper, the Executive Head of the Global Compact shares some of his own reflections on the evolution of the Global Compact initiative – United Nations Secretary-General Kofi Annan’s voluntary corporate citizenship initiative in the area of human rights, labor, the environment and anti-corruption. Two main themes are addressed. The first considers the Global Compact’s institutional context, examining how such an initiative is even possible in the historically hierarchical and traditionally business-unfriendly UN. The second concerns the voluntary nature of (...) the initiative and how it interacts with regulatory approaches. It explains what the Global Compact has to offer as a voluntary initiative, as well as how it can make a unique and complementary contribution to regulation-backed initiatives. The paper concludes with a brief consideration of what the future holds for the Global Compact. (shrink)

This study provides preliminary empirical evidence that shareholder activists target companies because of their size as well as specific stakeholder-related practices. The data show that shareholder activists target companies with shareholder resolutions demanding changes in corporate behaviors for companies producing problematic products and where environmental concerns exist. Furthermore, companies in specific industries are targeted based on poor employee and community-related practices. Activists, that is, are selective in their targeting of companies, choosing the most visible (largest) companies and those whose practices (...) raise specific issues of interest to society. (shrink)

From an analysis of the role of companies in multi-stakeholder networks and a critical review of stakeholder theory, it is argued that companies practise two different types of stakeholder management: they focus on their organization’s welfare (organization- focussed stakeholder management) or on an issue that affects their relationship with other societal groups and organizations (issue-focussed stakeholder management). These two approaches supplement each other. It is demonstrated that issue-focussed stakeholder management dominates in multi-stakeholder networks, because it enables corporations to address complex (...) problems and challenges in cooperation with stakeholders. Since deliberation is the key to issue-focussed stakeholder management, it helps to cope with numerous and at times contradictory stakeholder demands and enhances the legitimacy of corporate activities. (shrink)

Shareholder resolutions filed by socially concerned investors are a rich and underused source of data for research in social issues in the business and society field. This article examines how shareholder activists use the resolution process to advocate for issues related to social justice and corporate activities. After briefly reviewing the justice and shareholder activism literatures, the authors report the results of a study of 1,719 shareholder resolutions filed during the 1999—2005 period by members and affiliates of the Interfaith Center (...) on Corporate Responsibility, a coalition of approximately 275 religious organizations and other partners that seeks to use their investments to achieve social change. Among the findings is that the majority of justice-related resolutions dealt with employment and economic development issues. The authors conclude with a discussion of implications for corporate managers, shareholder activists, and management researchers. (shrink)

The Forest Stewardship Council (FSC) is a global private governance system overseeing the sustainability and biodiversity of the world forestry system through certification of forests and forestry processes and products, and is perceived as the strongest of the various certification schemes available (Domask, Globalization and NGOs: Transforming Business, Government, and Society , 2003 ; Gulbrandsen, Global Environmental Politics , 2004 ). It has seen more success in developed than developing countries in terms of amount of forest certified and number of (...) chain-of-custody certificates issued, raising questions as to its ability to promote biodiversity Gulbrandsen, Global Environmental Politics , 2004 ). A number of challenges have risen to the pragmatic and moral legitimacy of the FSC as a global governance system: alternative certification schemes, output and market access, cost of certification, plantations, and illegal logging. I examine each of these challenges as they pertain to the dimensions of pragmatic and moral legitimacy of the FSC. I conclude with a discussion of theoretical implications for global governance systems using ecolabel schemes, as well as a discussion of practical implications for the FSC in particular. (shrink)

Interactions between corporations and nonprofits are on the rise, frequently driven by a corporate interest in establishing credentials for corporate social responsibility (CSR). In this article, we show how increasing demands for accountability directed at both businesses and NGOs can have the unintended effect of compromising the autonomy of nonprofits and fostering their co-optation. Greater scrutiny of NGO spending driven by self-appointed watchdogs of the nonprofit sector and a prevalence of strategic notions of CSR advanced by corporate actors weaken the (...) ability of civil society actors to change the business practices of their partners in the commercial sector. To counter this trend, we argue that corporations should embrace a political notion of CSR and should actively encourage NGOs to strengthen “downward accountability” mechanisms, even if this creates more tensions in corporate–NGO partnerships. Rather than seeing NGOs as tools in a competition for a comparative advantage in the market place, corporations should actively support NGO independence and critical capacity. (shrink)

The authors apply marginalization theory to develop a model of boycotts that incorporates both individual motives and corporate strategic issues. Overall, their analysis of more than 25,000 individual evaluations of 59 companies suggests that members of marginalized groups are more likely to boycott. Individuals are less likely to boycott companies about which they are knowledgeable and more likely to boycott companies that are organized boycott targets. In addition, the authors find systematic differences in the types of boycotts associated with strategic (...) issues that are supported by members of marginalized groups. Overall, boycott supporters tend to be upwardly mobile members of marginalized groups. (shrink)

Multinational corporations (MNCs) are the frequent target of nongovern-mental organizations (NGOs) in their advocacy efforts. In this article, the author examines NGO advocacy as it occurs in the NGO network and, using insights from the political science literature in conjunction with the resourcebased view of the firm, posits that NGO intranetwork conflict will result in a skewing of corporate social responsibility practices by the multinational corporation toward the MNC's developed country stakeholders. This skewing is a product of the asymmetric accountability (...) of NGOs (upwardly accountable to donors, downwardly accountable to recipients). Developing country government and MNC strategies in the face of such skewing are discussed. (shrink)

This article contributes to the literature on legitimacy by highlighting its paradox and constraints. While an optimal level of legitimacy-seeking behaviours may be necessary for organizational effectiveness, an excessive focus on legitimacy may lead to stakeholder mismanagement and have the opposite effect. These insights emerged from a longitudinal qualitative study of large-scale changes in public-sector health care in a Canadian province (1994-2002). In 1994, subordinate health care organizations underwent government-driven reforms to promote market-based logics of efficiency and cost reduction. Initial (...) years post reforms were characterized by a singular focus on government-driven priorities and inattention to other stakeholders. However, instead of giving benefits of legitimacy, these behaviours led to anger and activism from non-institutional stakeholders such as staff and community due to a decline in quality and patient satisfaction. Eventually, greater attention to stakeholder concerns ended the stand-off. These findings also elaborate Suchman's (Academy of Management Review 20(3), 571-610, 1995) framework on legitimacy and explain that legitimacy may occur for reasons other than institutionalization of values and be temporary in nature. (shrink)

The United Nations Global Compact is with currently more than 6,000 voluntary participants the world’s largest corporate citizenship initiative. This article first analyzes three critical allegations often made against the Compact by looking at the academic and nonacademic literature. (1) The Compact supports the capture of the United Nations by “big business.” (2) Its 10 principles are vague and thus hard to implement. (3) The Compact is not accountable due to an absence of verification mechanisms. This article discusses these three (...) allegations and argues that they rest on a misunderstanding of (a) the nature of the Compact as well as its mandate and (b) the goals it tries to achieve. From this discussion of what the Compact is not, the article then outlines a perspective that classifies the initiative as a necessary supplement to incomplete state and nonstate regulatory approaches in order to illustrate what the Compact is. (shrink)