Until recently, businesses and corporations could argue that their only real commitments were to maximise the return to their shareholders whilst staying within the law. However, the world has changed significantly during the last ten years and now most major corporations recognise that they have significant responsibility to local and global societies beyond simply making profit. This means that there is now an increasing concern with the question of how corporations, and their employees, ought to behave, and this leads us (...) to consider ethics as the appropriate theoretical and philosophical domain.I will bring into the debate two relatively recent approaches to ethics: Jürgen Habermas's discourse ethics ; and the critical realist approach of Roy Bhaskar. These are interesting for several reasons: they both draw on traditional ethical theories, although different ones; they bring in innovations of practical relevance; and they both share an over-arching critical perspective. After a critical introduction to both ethical theories, their similarities and differences are explored. The article ends by considering the extent to which they may be practically useful within business. (shrink)

It is a truism that some industries are controversial either because the processes employed or the resulting products, for instance, can potentially harm the well-being of people. The controversy that surrounds certain industries can sharply polarise public opinion and debate. In this article, we employ legitimacy theory and morality policy to show how one industry sector (the electronic gaming machine sector as part of the wider gambling industry) is subject to this reaction. We suggest that the difficulty in establishing legitimacy (...) surrounding CSR practices in this sector is related to morality policy, whereby ideology and personal values play important roles in dividing opinion. Thus, gambling is often framed as an activity that is morally and ethically problematic. To show how this can manifest, we examine the veracity of two state-funded studies in Australia used in the development of gambling policy and their subsequent adoption in academic research. We highlight methodological, analytical and reporting issues in these studies that normally should be identified by those using such findings. The significance is that when morality policy and conflict surrounding legitimacy are involved, then it can explain why adherence to normative research standards is potentially lowered. Our theoretical posture leads us to further speculate that the adoption and communication of CSR in electronic gambling will be contested by opponents of the industry. (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)

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)

As corporations are going global, they are increasingly confronted with human rights challenges. As such, new ways to deal with human rights challenges in corporate operations must be developed as traditional governance mechanisms are not always able to tackle them. This article presents five different views on innovative solutions for the relationships between business and human rights that all build on empowerment, dialogue and constructive engagement. The different approaches highlight an emerging trend toward a more active role for corporations in (...) the protection of human rights. The first examines the need for enhanced dialogue between corporations and their stakeholders. The next three each examine a different facet of empowerment, a critical factor for the respect and protection of human rights: empowerment of the poor, of communities, and of consumers. The final one presents a case study of constructive corporate engagement in Myanmar (Burma). Altogether, these research projects provide insight into the complex relationships between corporate operations and human rights, by highlighting the importance of stakeholder dialogue and empowerment. All the five projects were presented during the Second Swiss Master Class in Corporate Social Responsibility, held in Lausanne, Switzerland on December 12, 2008. The audience for this conference, which examined business and human rights, was composed of researchers, governmental representatives, and business and non-governmental organization practitioners. (shrink)

Moral legitimacy entails intrinsic value and helps executives convince firm’s stakeholders and the general public of the ethical acceptability of an institution or its activities or projects. Social license to operate is the social approval of those affected by a certain business activity, and it is receiving increasing attention, especially in the context of controversial projects such as mining and public works. Moral legitimacy provides ethical support to SLO. Drawing from the Aristotelian-Thomistic tradition and taking substantive justice and the common (...) good of society as the key references, this paper applies the Triple Font of Morality Theory and proposes four criteria which serve to evaluate moral legitimacy: contribution of the project or activity to the common good in a better way than other alternatives, morality of the means and procedures employed, ethical evaluation of the situation including stakeholder concerns and needs, and ethical evaluation of reasonably foreseeable consequences associated with the project and how to minimize possible damage or risks, and balance foreseeable negative consequences and benefits. The application of these criteria is illustrated through a project, presented as a case study, which certainly involved controversy and problems with SLO. The project was the construction of a rail tunnel for a high-speed train near the foundations of the Sagrada Familia, the well-known monumental church in Barcelona, Spain. (shrink)

Regulatory schema has shifted from government to governance-based systems. One particular form that has emerged at the international level is the multi-stakeholder voluntary code of conduct (MSVC). We argue that such codes are not only simply mechanisms by which various stakeholders attempt to govern the action of the corporation but also systems by which each stakeholder attempts to gain or retain some legitimacy goal. Each stakeholder is motivated by strategic legitimacy goal to join the code, and once a member, is (...) also required to assist in maintaining the institutional legitimacy of the code, resulting in “networked legitimacy.” We begin our analysis of these systems by first exploring the growth and structure of such MSVCs, and then building an analytical framework using strategic and institutional legitimacy as they apply to such MSVCs. We contribute to the codes of conduct literature by developing the construct of networked legitimacy from strategic and institutional legitimacy. We then apply our framework to the United Nations Global Compact, one of the predominant MSVCs today. In doing so, we: (1) demonstrate how different stakeholders are pursuing different types of legitimacy through their participation in the code, (2) examine the specific opportunities and risks in terms of what we have called “networked legitimacy” posed by the institutional design of actual MSVCs, and (3) create an argument for three pillars supporting the legitimacy of MSVCs. (shrink)

This paper discusses the issue of legitimacy and, in particular the processes of building, losing, and repairing environmental legitimacy in the context of the Deepwater Horizon case. Following the Deepwater Horizon catastrophe in 2010, BP plc. was accused of having set new records in the degree of divergence between its actual operations and what it had been communicating with regard to corporate responsibility. Its legitimacy crisis is here to be appraised as a case study in the discrepancy between symbolic and (...) substantive strategies in corporate greening and its communication. A narrative analysis of BP’s “beyond petroleum”-rebranding and the “making this right”-campaign issued in response to the Gulf of Mexico disaster discusses their respective implications for corporate change. Further, the question is addressed why BP’s green image endeavors were so widely accepted at first, only to find themselves dismissed as corporate greenwashing now. The study concludes that where a corporation’s “green narrative” consistently evokes established narratives, its legitimacy will be judged against narrative, rather than empirical truth. Thus, the narrative will be more willingly accepted as speaking for the issuing company’s legitimacy, irrespective of whether it reflects substantive greening or not. (shrink)

Firms use algorithms to make important business decisions. To date, the algorithmic accountability literature has elided a fundamentally empirical question important to business ethics and management: Under what circumstances, if any, are algorithmic decision-making systems considered legitimate? The present study begins to answer this question. Using factorial vignette survey methodology, we explore the impact of decision importance, governance, outcomes, and data inputs on perceptions of the legitimacy of algorithmic decisions made by firms. We find that many of the procedural governance (...) mechanisms in practice today, such as notices and impact statements, do not lead to algorithmic decisions being perceived as more legitimate in general, and, consistent with legitimacy theory, that algorithmic decisions with good outcomes are perceived as more legitimate than bad outcomes. Yet, robust governance, such as offering an appeal process, can create a legitimacy dividend for decisions with bad outcomes. However, when arbitrary or morally dubious factors are used to make decisions, most legitimacy dividends are erased. In other words, companies cannot overcome the legitimacy penalty of using arbitrary or morally dubious factors, such as race or the day of the week, with a good outcome or an appeal process for individuals. These findings add new perspectives to both the literature on legitimacy and policy discussions on algorithmic decision-making in firms. (shrink)

Extant literature on Political CSR and the role of governments in the governance of business conduct tends to neglect key implications of the political-institutional macro-context for public deliberation. Contextual assumptions often remain rather implicit, leading to the need for a more nuanced, explicit and context-sensitive exploration of the theoretical and practical boundary conditions of Political CSR. In non-democratic political-institutional contexts, political pluralism and participation are limited, and governmental agencies continue to play the most central role in regulation and its enforcement. (...) Drawing on a qualitative case study on a nuclear energy project in the Hashemite Kingdom of Jordan, we show how both governments and MNCs co-create a context hostile to socially responsible business conduct in the sense of Political CSR. Utilizing rich qualitative data derived from interviews, public documents, and participant observation between 2008 and 2018, we specifically illuminate how—through which interactions and strategies—the multiple governmental and corporate actors involved counter civil society demands for public deliberation, indicating the limitations of Political CSR in non-democratic political-institutional contexts. We particularly contribute to the development of Political CSR by analysing the role of coercive and discursive forms of power. We thus offer a more nuanced perspective on the role of governments in constraining the room for public deliberation in the sense of Political CSR. (shrink)

This article examines corporate social disclosures (CSD) in an African developing economy (Mauritius) as provided in the annual reports of listed companies from 2004 to 2007. Informed by the country’s social, political and economic context and legitimacy theory, we hypothesise that the extent and variety of CSD themes (social, ethics, environment and health and safety) will be enhanced post-2004 and will be influenced by profitability, size, leverage and industry affiliation. We find a significant increase in the volume and variety of (...) CSD, although information in relation to social activities remains the most prominent form of disclosure. This is in contrast to previous studies which reported on the primacy of employee disclosures in developing countries. Using a pooled regression analysis, we also observe that size does explain variations in overall CSD and social disclosures, whilst leverage is positively related to changes in environmental and health and safety disclosures. There is no profitability relationship, and the effects of industry affiliation on CSD are non-significant or contrary to expectations. Overall, we assert that legitimacy, as a strategic and managerially driven approach favouring symbolic actions, is the prevailing motivation underlying the progression of CSD in Mauritius. (shrink)

Recent research has damped initial promises for democratic deliberation in social media arenas. Empirical studies find only low degrees of direct reciprocal interaction among participants, a lack of consensus orientation, and accelerated forms of communication that fail to meet traditional ideals of deliberation. In line with recent literature, we argue that traditional deliberative ideals are too narrow to embrace the potential contribution of social media for deliberation about (ir-)responsible business conduct. Instead, we propose to conceptualize social media as arenas for (...) everyday talk, that is, everyday communication practices through which participants informally discuss and express opinions about current issues, thereby contributing to a broader deliberative system. In adopting this lens, we ask: How can everyday talk in social media contribute to deliberation about (ir-)responsible business conduct? Drawing on the latest insights from online deliberation studies, we develop a framework for evaluating everyday talk and propose that its deliberative quality depends on social media appropriate forms of justification, interactivity, equality, and civility. We apply this framework with an analysis of 260,224 tweets about the role of business in climate change. Based on our findings, we critically discuss how everyday talk in social media can contribute to deliberation at the intersection of business and society. (shrink)

The aim of this article is to discuss quantitative content analysis as established in communication sciences as a method for research in business ethics. We argue that communication sciences and business ethics are neighboring disciplines, which allow the transfer of quantitative content analysis from communication sciences to business ethics. Technically, quantitative content analysis can be applied through human as well as software coding. Examples for both applications are provided and discussed. We make reference to the software solutions ‘Leximancer’, ‘Crawdad’, and (...) ‘Wordle’, and examine their suitability and limitations with regard to ethical questions for researching business ethics. We recommend a mixed‐method approach, combining human and software coding. Furthermore, we propose a three‐step process that discusses quantitative content analysis as a method for business ethics, including an ethical research objective, and most importantly, concluding with ethical reasoning and interpretation of the quantitative results. (shrink)

The purpose of cause-related marketing (CRM) is to publicise and capitalise on a firm's corporate social performance (CSP) by enhancing its legitimacy in the eyes of its stakeholders. This study focuses on the firm's internal stakeholders - i.e. its employees - and the extent of their involvement in the selection of social campaigns. Whilst the difficulties of managing a firm that has lost or damaged its legitimacy in the eyes of its employees are well known, little is understood about the (...) extent to which managers and their social partners listen to and involve their employees in the legitimation process. Through telephone interviews with non-profit organisations and senior managers of service sector firms, the extent of employee involvement in CRM campaigns and the perceived benefits of doing so are investigated. Amongst other things, we find that (i) the extent of employee participation varies significantly across firms; (ii) larger CRM campaigns tend to be managed centrally with relatively less employee participation than smaller ones and (iii) financial services firms are more likely to make CRM decisions centrally, with relatively less employee participation than retail services firms. (shrink)

This paper investigates the impact of activism on a large, powerful corporation in Tasmania. Gunns Ltd was a large woodchip processor in Tasmania that fought a long-running battle with environmental activists regarding Gunns’ logging and processing activities. The study focuses on events in 2004–2005, when Gunns applied to build a pulp mill in rural northern Tasmania and began a legal case against activists. The research question is whether there is clear statistical evidence that these events were important, as is widely (...) believed, in the ultimate failure of Gunns in, just 6 years after being the largest and one of the most financially successful Tasmanian companies. We use a mixed methods approach that combines a detailed narrative informed by theory, to examine issues of corporate social responsibility and ethical behaviour, with an econometric time series analysis of the impact of activism on the market value of Gunns. Our analysis supports the contention that the events in 2004–2005 played a significant part in the decline of the long-run market value of Gunns over the subsequent period, through to its failure in 2011. We discuss the underlying causes for Gunns’ failure in terms of agency, stakeholder, legitimacy and leadership theories. Research frequently assesses effects such as those in the Gunns’ case through solely qualitative means. This paper integrates a quantitative analysis into a detailed qualitative narrative and theoretical interpretation of events, to provide additional precision to its findings. It contributes to research in CSR and the impact of activism. (shrink)

In this article, we outline a unique conceptual framework connecting legitimacy types (Suchman, 1995), theories of corporate responsibility (Brummer, 1991), and levels of organizational moral development based on Kohlberg's (1971) moral development stages. In addition, based on Global Reporting Initiative (GRI) categories, we found empirical support for our framework, by content analyzing Fortune 500 corporate citizenship reports from four different industries (i.e., chemicals, motor vehicle/auto parts, pharmaceutical, and utilities), at three data points (i.e., 2002, 2007, and 2012). Our analysis indicates (...) that motor vehicle/auto parts and chemicals industries are at a higher developmental level, and portray moral legitimacy along with social demandingness corporate responsibility in recent years; while the pharmaceutical and utilities sectors are at a lower developmental level, showing signs of pragmatic legitimacy, alongside classical and stakeholder corporate responsibility strategies. This article contributes to the current organizational moral development literature by developing and finding empirical support of a conceptual framework of organizational moral development, legitimacy, and corporate responsibility. In particular, our findings provide a deeper understanding of the differences in moral development levels across four focal industries over a 10‐year timespan. (shrink)

Relations between non-governmental organizations (NGOs) and companies have been the subject of a sharply increasing amount of publications in recent years within academic business journals. In this article, we critically assess this fast-developing body of literature, which we treat as forming a ‘business and society discourse’ on NGO–business relations. Drawing on discourse theory, we examine 199 academic articles in 11 business and society, international business, and management journals. Focusing on the dominant articulations on the NGO–business relationship and key signifiers they (...) rely on, we analyze the problem-settings of articles in order to reveal the statements that are acceptable and appropriate within this field. Our threefold aim is to (1) identify dominant articulations of NGO–business relations in business and society discourse, (2) expose those articulations that are silenced or suppressed by these dominant articulations, and (3) critically assess possible power effects of these discursive dynamics in the field of discursivity. While business and society discourse on NGO–business relations overall remains open to many different articulations, we also find that those articulations that focus on NGO–business partnerships and governance initiatives tend to privilege collaborative and deliberative ways of engaging and marginalize more adversarial subject positions. We call for more recognition of the potentially constructive role that can be played by conflict. (shrink)

Business firms play an increasingly influential role in contemporary societies, which has led many scholars to return to the question of the democratisation of corporate governance. However, the possibility of democratic deliberation within firms has received only marginal attention in the current debate. This article fills this gap in the literature by making a normative case for democratic deliberation at the workplace and empirically assessing the deliberative capacity of self-organised teams within business firms. It is based on sixteen in-depth interviews (...) in six German firms which practice various forms of self-organised teamwork. The article argues that self-organised teamwork can create a space for authentic, inclusive, and consequential deliberation by suspending authoritarian control structures within business firms. Finally, the article proposes the consideration of firms not only as necessary parts of a larger deliberative system but also as deliberative systems in themselves. (shrink)

Exploration of the political roles firms play in society is a flourishing stream within corporate social responsibility research. However, few empirical studies have examined multiple levels of political CSR at the same time from a critical perspective. We explore both how the motivations of managers and internal organizational practices affect a company’s choice between competing CSR approaches, and how the different CSR programs of corporate and civil society actors compete with each other. We present a qualitative interpretative case study of (...) how a French children’s clothing retailer develops CSR practices in response to accusations of poor working conditions and child labor in its supply chain. The company’s CSR approach consists of superficial practices, such as supplier audits by a cooperative business-organized nongovernmental organization and philanthropic activities, which enable managers to silence more radical alternative models defended by other NGOs, activists, and trade unions. By this approach, the core business model based on exploitative low-cost country sourcing remains intact through self-regulated CSR. Through the case study, we develop a framework of dynamism in competing CSR programs. We discuss the implications of our study for CSR researchers, company managers, and policy makers. (shrink)

Transnational corporations have become actors with significant political power and authority which should entail responsibility and liability, specifically direct liability for complicity in human rights violations. Holding TNCs liable for human rights violations is complicated by the discontinuity between the fragmented legal/political structure of the TNC and its integrated strategic reality and the international state system which privileges sovereignty and non-intervention over the protection of individual rights. However, the post-Westphalian transition—the emergence of multiple authorities, increasing ambiguity of borders and jurisdiction (...) and blurring of the line between the public and private spheres—should facilitate imposing direct responsibility on transnational firms. Mechanisms for imposing direct responsibility on TNCs are considered including voluntary agreements and international law. However, I conclude that a hybrid public-private regime which relies onnon-hierarchical compliance mechanisms is likely to be both more effective and consistent with the structure of the emerging transnational order. (shrink)

This article analyses and systematises the repertoires of action and reaction within conflicts between corporations and adversarial campaigns. Particular attention is paid to the parameters that turn conflicts between corporations and their critics into productive or destructive exchanges. Are protest campaigns able to fulfil a function that goes beyond serving as a seismograph for civil society’s concern and discontent? Which are the circumstances that enable conflicts between protest campaigns and corporations to unfold their potential for correcting social deficiencies? The analysis (...) starts by outlining several typologies of confrontational and cooperative repertoires of action. Based on this starting point, a comprehensive analysis of more than 100 campaigns is presented, which systematises the dynamics of conflict between protest campaigns and corporations. An exemplary comparison of two particular conflicts completes the article in order to elaborate on the interplay between confrontation and cooperation. (shrink)

ABSTRACT:We discuss workers’ dignity in hierarchical organizations. First, we explain why a conflict exists between high-ranking individuals’ authority and low-ranking individuals’ dignity. Then, we ask whether there is any justification that reconciles hierarchical authority with the dignity of workers. We advance a communitarian justification for hierarchical authority, drawing upon Confucianism, which provides that workers can justifiably accept hierarchical authority when it enables a certain type of social functioning critical for the good life of workers and other involved parties. The Confucian (...) communitarian perspective shows that promoting workers’ good life or well-being is an important condition for protecting their dignity. (shrink)

This article examines the values that underlie notions of sustainability and corporate social responsibility, and how those values influence perspectives on who and what is included in decision-making. The author argues that the epistemologies of economic considerations in industrial practices, and how they are framed by science and technology, make it unlikely that practices towards sustainability will successfully avert expanding global crises unless the circle of inclusion is expanded to include other-than-human life.

This article extends our understanding of the firm–nongovernmental organization relationship by emphasizing the role of language in shaping organizational behavior. It focuses on discursive and rhetorical activity through which firms and NGOs jointly – and not always consciously – define boundaries for socially acceptable corporate behavior. It explores the discursive legitimation struggles of a leading Finnish forest industry company StoraEnso and Greenpeace during 1985–2001 and examines how these struggles participated in the definition and institutionalization of corporate social responsibility. I find (...) a mixture of rational and moral struggles as a key feature of this legitimation work and show how different manifestations of these struggles act as a central mechanism that redefines what the boundaries of corporate responsibility are in a specific setting at a given point of time. The study illustrates how the actors’ ability to sense the public’s views contribute to rhetorical difficulties of the industry and unintended societal consequences for the activists, and how the rational and moral struggles build up in time to trigger changes in the actors’ sensemaking and actions. (shrink)

How is the (il)legitimacy of manager compensation constructed in social interaction? This study investigated discursive processes through which heavily contested executive pay schemes of the Finnish energy giant Fortum were constructed as (il)legitimate in public during 2005–2009. The critical discursive analysis of media texts identified five legitimation strategies through which politicians, journalists, and other social actors contested these schemes and, at the same time, constructed subject positions for managers, politicians, and citizens. The comparison of two debate periods surrounding the 2007–2008 (...) financial crisis revealed significant differences in the discursive strategies and the corresponding moral struggles linked to legitimation of executive compensation. The analysis highlights a change in moral reasoning by social actors as they adapt their justifications to a changing social context. This study has important implications for our understanding of the ethical aspects and socio-political embeddedness of manager compensation. In particular, it adds to our knowledge of organizational legitimacy by showing how discursive strategies and the corresponding morality constructions used to (de)legitimate business activities can shift quickly as a result of a change in the social and political climate surrounding the legitimation struggle. (shrink)

This article explores the concept of cultural competence and its relevance as an organizational resource in ethical disputes. Empirically, we aim to reveal the cultural competences that a global forest industry company, StoraEnso, and a global environmental nongovernmental organization (NGO), Greenpeace, utilized in forestry conflicts during 1985–2001. Our study is based on data which were collected from corporate and NGO communication outlets and which have gone through a detailed discourse-semiotic analysis. Our reinterpretation of the discourses identified three cultural competences: (1) (...) the ability to understand changing consumer preferences and values, (2) the ability to utilize culturally determined positions of expertise, and (3) the ability to maintain trust and credibility in the community through open communicative practices. We argue that these competences are relevant in industry–NGO disputes for both parties. However, maintaining them all simultaneously is a difficult task, since various discourses which aim at upholding them can sometimes have contradictory effects. (shrink)

If it can be argued that companies should engage with social justice advocacy, what factors might deter them from doing so? This question is pursued in a qualitative research study with participants from corporate and social justice organisations. Six inhibiting factors are identified: a lack of understanding of social justice concepts; fear of reputational risk; short-term profit orientation; a compliance mindset; disconnectedness from operating environment; and recognition that business purpose will determine its societal engagement. This research extends the theoretical and (...) practice boundaries of corporate social responsibility, while also advocating for an intensified engagement of management education with social justice in practice. (shrink)

We propose that corporations should be subject to a legal obligation to identify and internalise their social costs or negative externalities. Our proposal reframes corporate social responsibility as obligated internalisation of social costs, and relies on reflexive governance through mandated hybrid fora. We argue that our approach advances theory, as well as practice and policy, by building on and going beyond prior attempts to address social costs, such as prescriptive government regulation, Coasian bargaining and political CSR.

Heightened interest in business-conflict linkages has materialized with the advent of globalization and the rise of multinational corporations (MNCs). We examine business-conflict linkages in this article both theoretically and empirically. Theoretically, we examine three streams of the relevant academic literature: the academic business and society literature, the practitioner business and society literature, and the international business political behavior literature and argue that there is room and indeed need for their cross fertilization and integration in research on business-conflict linkages. We then (...) consolidate the three streams into a matrix that reconciles relevant dimen- sions and which can serve as a typology of intervention strategies of business firms in conflict zones. Empirically, the article makes use of the integrative matrix in the context of an interpretive research methodology to examine the perceptions and behavioral orientations of a sample of MNCs in Lebanon in an actual conflict context. (shrink)

In this article, we discuss and compare various positions in leadership theory through the perspective of Kierkegaard’s modes of existence. After a brief presentation of the three modes of existence—aesthetic, ethical and religious—and a description of the ironic–reflective interpretation of the change process, we synthesize leadership theories into the three main positions of instrumental, responsible and spiritual. Later, we compare and integrate the different positions in leadership theory with the three modes of existence. We argue that the various positions in (...) leadership theory represent different modes of existence. This means that leaders anchored within the aesthetical mode of existence tend to prefer the instrumental position, leaders anchored in the ethical mode of existence tend to prefer the responsible position, and leaders anchored in the religious mode of existence tend to prefer the spiritual position. In accordance with this line of reasoning the ironic–reflective interpretation of Kierkegaard’s three modes of existence gives a relevant explanation for development of leadership theory, and we delve deeper into some key dimensions in the expanding contexts of ontology, epistemology, ethics, the image of man and organizational ends. We conclude that it is necessary to start a process of transition in the mode of existence and in leadership theory in order to cope with the underlying patterns of the natural, cultural and economic crises we are facing today. (shrink)

ABSTRACT:Existing research on certifiable management standards (CMS) and corporate social responsibility (CSR) tends to focus on large companies and is characterised by disagreement about the role of these standards as drivers of CSR. We contribute to the literature by shifting the analytical focus to the behaviour of small and medium-sized enterprises (SMEs) that subscribe to multiple CSR related standards. We argue that, in respect of motive and commitment, SMEs are not as different from large companies as the literature suggests, as (...) they are guided by similar institutional and economic motives. Results, based on ISO 9001, ISO 14001 and OHSAS 18001 certified SMEs in Greece, demonstrate that later adopters are more susceptible to coercive and mimetic motives and are less likely to commit fully to the CMS requirements, while earlier adopters react to normative motives and considerations of internal efficiency gains and tend to carry out CMS requirements with greater diligence. (shrink)

Corporate social responsibility is a complex discipline that not only demands responsible behavior in production processes but also includes the concepts of communicative transparency and dialogue. Stakeholder dialogue is therefore expected to be an integrated part of the CSR strategy :323–338, 2006). However, only few studies have addressed the practice of CSR stakeholder dialogue and the challenges related hereto. This article adopts a postmodern perspective on CSR stakeholder dialogue. Based on a comprehensive single case study on stakeholder dialogue in a (...) global dairy company, we focus on the complexity of CSR dialogue with multiple stakeholders. Drawing on a critical reflexive methodology :1265–1281, 2007), we develop the research question: How is CSR multi-stakeholder dialogue practiced, experienced, and articulated in an empirical context? The purpose is to understand the underlying assumptions, expectations, and principles guiding CSR multi-stakeholder dialogue in an empirical setting, as we focus on how key stakeholders articulate and anticipate the values of stakeholder dialogue and how the actual stakeholder dialogues are enacted. The findings of the study differ significantly from the ideals of transparent and agenda-free stakeholder dialogue. Rather, the study shows an overall tension between ideal and practice, supporting the progressive importance of the dialogue process in itself as an essential part of the end goal. The implication of this is a growing pressure on creating transparency about the positioning and negotiation of roles throughout the dialogue process. (shrink)

According to Palazzo and Scherer, the changing role of business corporations in society requires that we take new measures to integrate these organizations into society-wide processes of democratic governance. We argue that their model of integration has a fundamental problem. Instead of treating business corporations as agents that must be held accountable to the democratic reasoning of affected parties, it treats corporations as agents who can hold others accountable. In our terminology, it treats business corporations as “supervising authorities” rather than (...) “functionaries.” The result is that Palazzo and Scherer’s model does not actually address the democratic deficit that it is meant to solve. In order to fix the problem, we advocate removing business corporations from any policymaking role in political CSR and limiting participation to political NGOs and other groups that meet the standards we set out for a politically representative organization (PRO). (shrink)

Drawing upon John Rawls’s framework in The Law of Peoples, this paper argues that MNEs have a responsibility to promote well-ordered social and political institutions in host countries that lack them. This responsibility is grounded in a negative duty not to cause harm. In addition to addressing the objection that promoting well-ordered institutions represents unjustified interference by MNEs, the paper provides guidance for managers of MNEs operating in host countries that lack just institutions. The paper argues for understanding corporate responsibility (...) in relation to the specific institutional environment in which MNEs operate. (shrink)

The focus of this paper is institutional change and the changing role of business in Germany. Back in the 1980s, the German institutional framework was characterized by implicit mandatory and obligatory regulations that set a clear context for responsible corporate behavior. Today, this framework has eroded and given way to a situation in which corporations explicitly and voluntarily take responsibility for social issues. This shift from implicit to explicit corporate social responsibility is an indication of a major institutional change epitomized (...) by the deconstruction of ‘old’ and the reconstruction of ‘new’ institutions. In the course of this change, corporations, state actors, and civil society organizations compete for their ideas and interests in what we call a fight for myths. The paper traces this fight for myths and the changing understanding of corporate responsibility in Germany. (shrink)

Can private companies legitimately regulate sharing markets, and if yes, how? Whereas scholars have either criticized sharing platforms for expanding into private and public arenas or welcomed them to counterbalance encroaching government regulations, studies document their unbridled popularity. On the basis of a special version of social contracts theory pioneered by James Buchanan, we develop a heuristics that helps guide reasoning about the legitimacy of the sharing economy’s regulatory function. First, we discuss the conditions under which free and responsible individuals (...) deliberately subject themselves to rules without their prior direct participation, that is, exit, voice, and constitutional limits. Second, we suggest sharing platforms can use novel ordo-responsibilities to establish a sharing constitution that takes these conditions into account. Third, we argue that sharing platforms can legitimately do so within an enabling institutional environment in society, the provision of which relies on the joint efforts of sharing platforms, political actors, and civil society. (shrink)

ABSTRACT:The notion of “democracy” has become a much-debated concept in scholarship on business ethics, management, and organization studies. The strategy of this paper is to distinguish between a principle of organization that fosters participation and a principle of legitimation that draws on consent. Based on this distinction, we highlight conceptual shortcomings of the literature on stakeholder democracy. We demonstrate that parts of the literature tend to confound ends with means. Many approaches employ type I democracy notions of participation and often (...) take for granted that this also improves type II democratic legitimation. We hold this to be a mistake. We provide examples of the ambiguity of organizational procedures and show that under some circumstances a decrease in the degree of participation may actually increase legitimation because a governance structure that results in higher productivity can provide higher benefits for all parties involved, serve their interests and therefore meet their agreement. Less type I democracy may mean more type II democracy. We believe this to be an important insight for judging the legitimacy of both capitalistic firms and competitive markets. (shrink)

ABSTRACT:Organization theory and business ethics are essentially the positive and normative sides of the very same coin, reflecting on how human cooperative activities are organized and how they ought to be organized respectively. It is therefore unfortunate that—due to the relatively impermeable manmade boundaries segregating the corresponding scholarly communities into separate schools and departments, professional associations, and scientific journals—the potential symbiosis between the two fields has not yet fully materialized. In this essay we make a modest attempt at establishing further (...) connectivity by surveying the terrain covered by the two disciplines jointly, as if the boundaries between them did not matter. We commence by providing a concise overview of the organization theory discipline for interested non-specialists from the field of business ethics. Next, we proceed to point out four research themes commonly investigated by members of both communities, and also a variety of organization-theoretical perspectives on each. In the final part of this essay we explore what organization theory has to offer business ethics, and what the boundaries of that potential contribution are. We warn skeptical readers in advance that the spirit and tone of our essay is most definitely upbeat, as we are convinced that the potential for symbiosis between the two fields is vast and inspiring, even though it has only been unleashed partially and incidentally thus far. (shrink)

In this paper, I analyze the moral responsibili- ties that companies have with regard to the development of their sector, especially when there are path dependences that can lead sectors on more or less morally accept- able paths, e.g., with regard to market access for disad- vantaged groups. The interdependencies between companies in a sector are underexplored in the literature on corporate social responsibility (CSR). Reflections on the normative status of profit-seeking and on the normative bases of CSR, however, provide (...) us with reasons for seeing sector-related responsibilities as an important component of CSR. Based on a case study of a financial institution, I analyze various morally relevant ways in which the strategic decisions of companies relate to those of other companies in their sector. I argue that companies have a co-responsibility to contribute to the development of the moral dimensions of their sectors, especially when they deal with vulnerable customers. (shrink)

This case study discusses the scope of responsibilities and the basis of legitimacy of multinational corporations in a complex operating environment. In January 2013 a precedent was set when Shell was held liable in The Hague for oil pollution in the Niger Delta. The landmark ruling climaxed the ongoing dispute over the scope of Shell’s responsibilities for both the company’s positive and negative impact. Shell’s was considered a forerunner in corporate social responsibility and had even assumed public responsibilities in a (...) context of a public responsibility void. However, the company remained a regular target of civil society activism and legal proceedings concerned with malpractice. The court case attracted international attention for its novelty and increasing media and civil society pressure required immediate action. How can Shell respond to this negative publicity to keep its license to operate? What is the scope of the company’s responsibilities in such a controversial human rights context? Students are expected to discuss these questions going beyond a simple moralistic or liability thinking. They are encouraged to take into account the complex structural processes that connect persons and institutions in very different social and geographical positions. The experiences of Shell are an excellent case in point since attention is drawn to the background conditions of globally operating companies, in which the isolation of perpetrators based on causality is not realistic. The case also reveals the particular challenges, which MNCs face in the context of increasing demands to take on public responsibilities while respecting their economic mandate. (shrink)

Corporate sustainability reports are supposed to provide a complete and balanced picture of corporate sustainability performance. They are, however, usually voluntary and thus prone to interpretation and even greenwashing tendencies. To overcome this problem, the Global Reporting Initiative (GRI) provides standardized reporting guidelines challenging companies to report positive and negative aspects of an organization’s sustainability performance. However, the reporting of “negative aspects” in particular can endanger corporate legitimacy if perceived by the stakeholders as not being in line with societal norms (...) and values. Starting from the theoretical lenses of economics-based disclosure theories and socio-political theories of disclosure, the focus of this study therefore was to analyze the communicative legitimation strategies companies use to report “negative aspects,” i.e., negative ecological and social impact caused by corporate activity. Using qualitative content analysis of GRI-oriented sustainability reports from companies listed on the US Dow Jones Industrial Average Index and on the German DAX Index, we identified six legitimation strategies. We discuss these strategies regarding to symbolic and substantial management of legitimacy. We show that symbolic legitimation strategies aiming at modifying the perception of legitimizing stakeholders dominate in the reports at hand. Such persuasion, however, does not meet the requirement of impartiality as postulated by the GRI guidelines. Building upon this conclusion we propose a concise characterization of “negative aspects” and develop a GRI-compliant schema of reporting about them. In doing so, we offer a way to improve the overall “balance” of sustainability reporting contributing to a true and fair view in sustainability disclosure. (shrink)

This article shows how the ethical framing of the contemporary issue of modern slavery has evolved in UK construction, a sector in which there is a high risk of labor exploitation. It also examines how these framing dynamics have inhibited the emergence of a common framework of action to deal with the issue. We draw on both framing theory and the literature on the discursive construction of moral legitimacy. Our longitudinal analysis reveals that actors seeking to shape the debate bring (...) their own moral schemes to justify and construct the legitimacy of their frames. Actors cluster their views around five evolving frames: human rights issue (later shifting to hidden crime), moral issue, management issue (later shifting to human moral obligation), social justice issue, and decent work issue—which promote particular normative evaluations of what the issue is, who is responsible, and recommendations for action. Our study contributes to a dynamic and political understanding of the meaning making of modern slavery. We identify the antecedents and conditions that have forestalled the emergence of new patterns of action to tackle modern slavery in the UK construction sector thereby evidencing the effects of the interplay of morally competing frames on field-level change. (shrink)

The corporate social responsibility literature has increasingly explored relationships between civil society and social movements, including non-governmental organizations, and corporations, as well as the role of NGOs in multi-stakeholder governance processes. This paper addresses the challenge of including a plurality of civil society voices and perspectives in business–NGO relations, and in CSR as a process of governance. The paper contributes to CSR scholarship by bringing insights from feminist literature to bear on CSR as a process of governance, and engaging with (...) leaders of women’s NGOs, a group of actors rarely included in CSR research. The issues raised inform contributions to the CSR literature relating to the role of women’s NGOs with regard to the gender equality practices and impacts of corporations, and with respect to defining the meaning and practice of CSR. The paper frames marginalized NGOs as important actors which can contribute to pluralism, inclusion and legitimacy in CSR as a process of governance. It identifies several key barriers to the participation of women’s NGOs in CSR, and concludes by making suggestions for future research, as well as practice. (shrink)

ABSTRACT:The primacy of shareholder demands in the traditional theory of the firm has typically excluded marginalised stakeholder voices. However, shareholders involved in social shareholder engagement purport to bring these voices into corporate decision-making. In response to ethical concerns about the legitimacy of SSE, we use the lens of discourse ethics to provide a normative analysis at both action and constitutional levels. By specifying three normative questions, we extend the analysis of SSE to identify a political role for shareholders in pursuit (...) of the common good. We demonstrate the desirability for SSE to promote regulatory/institutional change to guarantee marginalised stakeholders a voice in corporate decisions that affect them. The theory of SSE we propose thus calls into question the stark separation of the political and economic spheres and reveals an underlying tension, often overlooked, within the responsible investment literature. (shrink)

Every time another corporate scandal captures media headlines, the ‘bad apple vs. bad barrel’ discussion starts anew. Yet this debate overlooks the influence of the broader societal context on organizational behavior. In this article, we argue that misbehaviors of organizations (the ‘barrels’) and their members (the ‘apples’) cannot be addressed properly without a clear understanding of their broader context (the ‘larder’). Whereas previously, a strong societal framework dampened the practical application of the Homo economicus concept (business actors as perfectly rational (...) and egocentric utility-maximizing agents without any moral concern), specialization, individualization and globalization led to a business world disembedded from broader societal norms. This emancipated business world promotes a literal interpretation of Homo economicus among business organizations and their members. Consequently, we argue that the first step toward ‘healthier’ apples and barrels is to sanitize the larder, that is, adapt the framework in which organizations and their members evolve. (shrink)

Every time another corporate scandal captures media headlines, the ‘bad apple vs. bad barrel’ discussion starts anew. Yet this debate overlooks the influence of the broader societal context on organizational behavior. In this article, we argue that misbehaviors of organizations (the ‘barrels’) and their members (the ‘apples’) cannot be addressed properly without a clear understanding of their broader context (the ‘larder’). Whereas previously, a strong societal framework dampened the practical application of the Homo economicus concept (business actors as perfectly rational (...) and egocentric utility‐maximizing agents without any moral concern), specialization, individualization and globalization led to a business world disembedded from broader societal norms. This emancipated business world promotes a literal interpretation of Homo economicus among business organizations and their members. Consequently, we argue that the first step toward ‘healthier’ apples and barrels is to sanitize the larder, that is, adapt the framework in which organizations and their members evolve. (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)

We critically assess integrative social contracts theory (ISCT) and show that the concept particularly lacks of moral justification of substantive hypernorms. By drawing on Habermasian philosophy, in particular discourse ethics and its recent application in the theory of deliberative democracy , we further advance ISCT and show that social contracting in business ethics requires a well-justified procedural rather than a substantive focus for managing stakeholder relations. We also replace the monological concept of hypothetical thought experiments in ISCT by a concept (...) of practical discourse to better govern business activities on the macro-level of organizational actors such as firms, governments, and NGOs. (shrink)

This study explores why and how firms respond to social demands through philanthropic giving in the context of a severe natural disaster. Drawing on Marquis and Qian's organizational response model to government signals, we integrate resource dependence theory and institutional theory to build a two-step model of organizational response to social needs, in situations of disaster relief. We argue that firms depending more on the government for support are more likely to donate in disaster relief, while firms who receive more (...) scrutiny from the government and the general public and firms having more slack resources are likely to donate more. Evidence from Chinese listed companies' donations to the 2008 Sichuan earthquake largely supports our predictions. This study provides a more precise understanding of the corporate philanthropic decision process, decoupling the drivers of philanthropic giving, and those determining the amount given. Theoretical and practical implications are suggested. (shrink)