Transnational Trendsetters:
Communicative Rationality and Ethics
as success factors for Corporate Citizenship1
By Frank W. Heuberger
The pioneers of corporate citizenship cannot be adequately described by
subjecting them to the logic of the market or the overriding importance of the
“Business Case”. Their values and ethical maxims set them apart from their
competitors’ and PR and sponsoring experts’ activities. They recognize the
legitimate claims of stakeholder groups and integrate them into in-house
debates and decision-making processes and are thus pioneers and
participants in the process of shaping a civil society, which is setting out to
establish a new balance of responsibility between state, business, and civil
society.
1. The strongest market economy as “lead culture”(Leitkultur)
With some exceptions, the current German debate on Corporate Citizenship
is dominated by programmes, best practice presentations and sustainability
and/or CSR reports of the major players and trans-national companies. Their
representatives dominate the stage at chat rounds, award ceremonies, and
meetings of foundations. There are still occasional references to German
traditions dating back to the 19th century, where medium-sized enterprises did
lasting service, but the established socio-ethical motivation of “do good, but
don’t talk about it”, while shunning media-effective public appearances in
the puritan manner, is beginning to fade. Even the success story of the
German social state and social market economy are cited increasingly less
often.
1 A German version of the essay is published as: Frank W. Heuberger: Transnationale
Trendsetter. Kommunikative Rationalität und Ethik als Erfolgsfaktoren für Corporate Citizenship.
In: Backhaus-Maul, Holger et al. [Hrsg.]: Corporate Citizenship in Deutschland. Wiesbaden,
Verl. für Sozialwiss., 2008, 497-512
CCCD – Centrum für Corporate Citizenship Deutschland
Kollwitzstraße 73 ● D-10435 Berlin ● www.cccdeutschland.org
Kontakt: info@cccdeutschland.org
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
A new self-confidence is gaining ground; Corporate Citizenship is getting a
public face. The new focus is: putting on a display, receiving recognition, and
benefiting from it. It therefore comes as no surprise that the CC and CSR
activities of companies such as DaimlerChrysler, IBM, BMW, Microsoft, BASF or
Nokia2 are at the centre of public perception. These companies are
international players, acting in accordance with international standards and
expectations where their core activities are concerned; in addition they meet
society’s expectations of their role as corporate citizens. Unsurprisingly, despite
the many differences between societies and cultures in their many corporate
sites spread out all over the globe, an Anglo-American style is emerging in CC
policies, simply following the lead culture of the strongest market economy
used to success. For these, the good corporate citizen image is embodied by
the strategic implementation of Corporate Citizenship in management. It
would, however, be wrong to assume the majority of international businesses
or the big US companies express their social commitment at the level of
sophisticated CC strategies. Here again, we find a broad range, from almost
coincidental philanthropy down to an integrated strategy of Corporate
Citizenship and how to implement it into business operations in order “to
make the world a better place”.
2. From “Social Marketing” to the “Welfare-Mix“
For an American company, there has never been any conflict between
voluntary self-regulation and the clear pursuit of business-related self-interest
for the purpose of profit maximisation. Germany, though, is still undergoing an
important learning process concerning just how to legitimise such a win-win
strategy and establish it as an integral new part of modern corporate ethics.
To get there, Corporate Citizenship will first need to be given “visibility” and
then to be “sold”. This may not really explain why many CC programmes in
German companies tend to be associated with PR and marketing
departments, rather than being introduced in a top-down approach by the
company management, which also oversees implementation in accordance
with the guiding principles of the undertaking. It does, however, help one
understand why cooperation between companies and civil societies has so
far hardly turned into a genuine partnership in the sense of providing mutual
benefit. Instead of which the players of the “two worlds” only rarely have a
level playing field.3 In Germany, there is still a system of “social marketing”
2
3
Cf. e.g. nominees and award-winners in the “large companies“ category of the Freedom
and Responsibility initiative (“Freiheit und Verantwortung“; www.freiheit-undverantwortung.de); the IBM press release, dated 27/11/2006 pointing out that IBM has
won the “Overall Corporate Social Responsibility Award” for the second time, or the
February issue of “Manager” magazine on “Good Company Ranking” which puts BASF,
Henkel and BMW among the leading four.
In the year 2000 BDI BDA DIHK ZDA (employers organisation and the Chamber of Trade
and Industry)and Wirtschaftswoche magazine set up the initiative „Freedom and
Responsibility“, intended to promote social commitment of companies in Germany by
2
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
(giving publicity to the achievements of an assumed social-ethical
responsibility of a corporate culture) existing side by side with exclusively
profit-driven activities of management (F. Heuberger/M. Oppen/S. Reimer
2004), instead of a systematic integration into corporate strategy. There is still
too much fundamental conflict between business benefit calculations as an
integral part of the logic of the market and the logic of communication, i.e.
the result of negotiation processes regarding the legitimate interests and
demands of stakeholders. In this narrow business management view, meeting
stakeholder demand is regarded as merely damaging the pursuit of
entrepreneurial profit, without recognizing its inherent opportunities to be a
source for new success. And yet particularly for the major companies,
assistance is available which will smooth the path to becoming a “Global
Corporate Citizen” and whose importance in changing German corporate
culture as well should not be underestimated.4 At the same time, accepting
these international guidelines and standards and integrating them into
company policy, is hardly material suitable for public self-presentation.
Following these ideas has already become so much part of entrepreneurial
thinking, that it hardly merits effective PR work any more. But this is not the
whole picture.
In recent years, a genuine partnership between businesses and non-profit
organisations has emerged, with the pioneer of ethical corporate
management, medium-sized generics manufacturer, betapharm, providing a
particularly striking example. Initial involvement in cooperation with a nonprofit organisation has developed far beyond mutual benefit and attempts to
fill a gap in the German health supply system, using a whole host of measures,
projects, the establishment of foundations and institutions, skilling and further
education initiatives. This makes the company a pioneer in the current
thinking of “welfare mix”. According to betapharm’s own statements, the
company has both completed the transition “from sponsor to partner to
citizen” (Kinzl, 2007:34) and increased efficiency in some areas of the German
health system. A 2003 betapharm initiative was instrumental in incorporating
the right to socio-medical post-treatment for children into law, as an
additional benefit under the code of social law (right to health insurance).
The latter embodies acceptance of a new approach introducing plurality
into the health sector, requiring as a necessary prerequisite a new balance of
means of public events and an annual award. The award ceremonies of the early years
typically only rewarded the companies themselves, while the partner organisations
simple received a mention as recipients of the good deeds done by a business and were
ignored when it came to the prizes being awarded.
4
This includes the UN Global Compact (1999), the UNEP Global Reporting Initiative (2002), the
OECD guidelines for multinational companies and the Green Book of the EU Commission
“European Framework Conditions for Corporate Social Responsibility” (COM/2002/347).
Recently, a body with international experts has started work on the ISO Standard 26.000 on
Social Responsibility. By the end of 2008 an agreed standard is to be reached. The 2006 first
draft alone attracted 2200 individual written comments (cf. www.iso.org.).
3
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
both tasks and responsibility between state, market, and society. The basis for
this exemplary societal focus is a holistic view of mankind which has become
a benchmark for corporate culture and business operations in equal terms.
The alleged contradiction between “social marketing” and primary business
interests could be evened out by way of refocusing the company towards
the basic principle of “People in Focus” which all employees took seriously.
The unique feature of a Corporate Citizenship approach which fully integrates
the staff, makes betapharm stand out in the generics market and leads to
more than a sustainable increase in performance and motivation among
employees; it even facilitates the emergence of a genuine community
feeling, and pride in oneself and one’s employer. This comprehensive strategy
gives betapharm an exceptional position in the partnership they enjoy with
non-profit organisations, which is exemplary, particularly for a German SME.
3. A Promising Phased Model to Assess the Potential of Corporate Citizenship
The current flood of events involving Corporate Citizenship, the award
ceremonies, best practice presentations, interviews, and reports in the
specialist press, makes two things abundantly clear: the German debate still
lacks clear lines and definitions on the issue, and the quality and character of
CC programmes in companies still differs widely. When leading
representatives of German business discuss their role and tasks within modern
society, or when they are asked directly about possible lists of tasks
companies can fulfil as they assume wider responsibilities, their words tend to
remain extremely vague. A certain element of confusion seems to be
spreading; the many good examples of corporate social responsibility
become enmeshed in the thicket of terminological inexactitude, unclear
positioning, and meaning for everyday business. It is frequently hard to discern
just what a company intends with its commitment and how seriously, and at
what level, social responsibility is practiced. But the difference in the quality of
involvement does not reflect business sector, company size, budget, or the
funds committed. Instead it emerges in the extent to which the commitment
has penetrated the company and how well it ties in with an actual corporate
philosophy. Put into simply: the more Corporate Citizenship there is in a
company’s everyday business, and the more staff members are involved in
implementing the programmes, the more credible is the social responsibility,
which in turn makes the company’s performance in the market more
strategically effective. Little research has so far been devoted to what makes
companies choose to travel down this path. Entrepreneurial decisions in this
field too often appear to be taken at random and are opaque. This inevitably
raises the question, whether there is a theoretical approach or a conceptual
framework to structure a company’s social commitment, analyse it according
to performance criteria and assess its potential. A framework concept
developed by the ‘Center for Corporate Citizenship’ at Boston College
4
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
“Stages of Corporate Citizenship: A Developmental Framework” could also
provide valuable assistance for the German debate.
The Boston Centre has been working with over 350 major US and foreign
companies for years and under its Director, Brad Googins, has acquired the
reputation of a leading think tank in Corporate Citizenship matters. On the
basis of systematic data collections and years of consulting experience, P.
Mirvis and B. Googins have developed a staged model intended to provide
orientation aid to both CC experts, practitioners, consultants and trainers in
assessing the CC measures a company has adopted. This is not about having
strict yardsticks to which business must adhere in its commitment; instead it
focuses on the opportunity to compare what other companies do and
therefore understand the status of one’s own programmes, to see possible
directions, potential objectives, and which obstacles or supporting factors are
likely to occur on a company’s chosen path (P. Mirvis/B. Googins 2006). For
their staged model, P. Mirvis and B. Googins refer to both a developmentalpsychological and an organisational-sociological approach, by which they
try to explain the level and quality of Corporate Citizenship as distinct stages
of organisational learning.
Dimensions
Stage 1:
Elementary
Stage 2:
Engaged
Stage 3:
Innovative
Stage 4:
Integrated
Stage 5:
Transforming
Citizenship
Concept
Jobs, Profits &
Taxes
Philantropy,
Environmental
Protection
Stakeholder
Management
Sustainablity or
Triple Bottom
Line
Change the
Game
Strategic
Intent
Legal
Compliance
License to
Operate
Business Case
Value
Proposition
Market
Creation or
Social Change
Leadership
Lip Service,
Out of Touch
Supporter, In the
Loop
Steward, On
Top of It
Champion, In
Front of It
Structure
Marginal:
Staff Driven
Functional
Ownership
Organizational
Alignment
Issues
Management
Stakeholder
Relationships
Transparency
Defensive
Unilateral
Reactive,
Policies
Interactive
Flank
Protection
Public
Relations
CrossFunctional
Coordination
Responsive,
Programs
Mutual
Influence
Public
Reporting
Visonary,
Ahead of the
Pack
Mainstream:
Business Driven
Pro-Active,
Systems
Partnership
Alliance
Assurance
Defining
MultiOrganization
Full Disclosure
Stages of Corporate Citizenship (Mirvis/Googins 2006: 3)
Stages 1 to 5 (Elementary, Engaged, Innovative, Integrated, Transforming) of
the model are developed following seven dimensions which are regarded as
denoting the quality of Corporate Citizenship within a business. The
assessment of the different interactions of these dimensions produces the 5
stages typified as normative, allowing transitions from one stage to next to be
construed. To counter initial false expectations or fears and avoid application
5
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
errors in this model, the authors point out that it would be erroneous to assume
that a company could be clearly allocated to any one stage. On the
contrary, even simple trials in applying the model suggest that most businesses
are not at just one stage with their measures. In reality, they show a
differentiated behaviour in some aspects of, say, an integrated stage 4 – for
example regarding the equal consideration given to economic, ecological
and social criteria in corporate conduct, or they are really in stage 3 or even
in the elementary initial stages of stage 1, when different dimensions of the
matrix are applied. A company can perform well in CSR reporting, and yet
cut itself off completely when it comes to transparency issues (P. Mirvis/B.
Googins 2006: 2).
The seven dimensions, dynamic and interlinked, which form the five stages of
a sequence of distinguishable CC levels and are the core part of the model
can be characterised concisely:
Dimension Citizenship Concept: How does a company define Corporate
Citizenship? How comprehensive and wide-ranging is its commitment? What
matters in the first dimension, though, is not simply how a company limits its
individual CC activities, but what development potential there is for a
company to perceive its role and tasks within society, and how it changes
over time.
Dimension Strategic Intent: what is the purpose behind a company’s
Corporate Citizenship plans? What does it intend to achieve? How high on
the corporate agenda is it? Eventually, this dimension aims at anchoring
Citizenship within the corporate strategy, within products, services and
corporate culture, even, ultimately, in company dynamics, so it will impact
the overall business conduct.
Dimension Leadership: does the management support Corporate Citizenship?
Are company leaders personally involved in CC efforts? All research in this
area rates management participation as crucial for the development of
Corporate Citizenship in a company. The leadership shown by management
is assessed, whether its words are translated into action and become role
models.
Dimension Structure: how does the company manage responsibility for CSR
internally, and which organisational potentials can be observed? This
dimension looks into the structural and HR development undergone by CSR
commitment. Frequently, there is first a marginalised group or a “OneMan/Woman-Show“, which gradually turns into a responsible, crossdepartmental committee whose efforts and projects slowly enter into the
heart of business operations.
Dimension Issues Management: how does a company handle issues and
problems in the arena of Corporate Citizenship? How defensive or pro-active
is the reaction towards programmes and their implementation, or to public
perception and how are the chances are rated? This dimension assesses the
style of management and its internal corporate development.
6
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
Dimension Stakeholder Relationships: this dimension is geared towards
integrating stakeholders, interest groups such as NGOs, into CC activities, and
ultimately into overall business practice. This is all about communication,
openness, ultimately it concerns the creation of mutual trust relationships for
everyone’s benefit, including that of society at large.
Dimension Transparency: how open is or should a company be where its
financial, social and ecological relations and liabilities are concerned? From
a development perspective, transparency is the criterion which enables a
conclusion to be drawn as to when, and to what extent, a company discloses
its business activities (P. Mirvis/B. Googins 2006: 4).
The staged transition, from which the defined “stages” are derived, is
determined for each company on the basis of internal and external
challenges which are so varied and individually specific, they are hard to
conceptualise. These include legal rules, competitive pressure, industryspecific factors, cyclical fluctuations, and many other factors. All the same,
Mirvis and Googins identify certain recurrent patterns in the sequences of
these stages – and they concentrate on these. So they aim at internal
organisational experiences and questions going to the limits, which have to
occur at every one of the stages reached in a company’s Corporate
Citizenship process, thus acting as a catalyst for moving on to the next stage.
These developmental-psychologically set catalysts for such transitions in a
company are: credibility as a Corporate Citizen (transition from stage 1 to 2),
the capacity and willingness to meet internal as well as external expectations
(transition from stage 2 to 3), the coherent and orderly character of all CC
efforts (transition from stage 3 to 4) and, ultimately, the obligation to anchor
Corporate Citizenship in corporate strategy and corporate culture, thereby
institutionalising it (transition from stage 4 to 5) (P. Mirvis/B. Googins 2006: 3).
Businesses with a CC strategy fully integrated into corporate conduct are at
stage 4 and what sets them apart (only stages four and five of the model are
illustrated here), more than anything, are internal dynamics aimed at
extending CC efforts to diverse, if not all, business operations and they
attempt to do this in a controlled manner. This includes clear programme
guidelines, identification and review of indicators suitable for assessment, e.g.
by use of an “balanced scorecard” and its four areas, financial management
perspective, customer perspective, internal process perspective and
learning/development perspective, as well as other measuring and
evaluation methods. A careful review and assessment of CC programmes
also reveals weaknesses in corporate policy, in other words it reveals where
mistakes have been made, and their extent, which objectives were not met
or where communication processes and integration of stakeholders led to
undesirable results. Typically, companies at this stage, working to achieve
genuine penetration of Corporate Citizenship in the overall business process,
do not sweep mistakes under the carpet. On the contrary, they see mistakes
as part of a learning process and disclose these to the public by including
them in sustainability or CSR reports. This can already be seen as an indicator
7
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
for an internal shift and fusion in the meaning of Corporate Citizenship from a
pure “business case” towards a “social case”. P. Mirvis and B. Googins
discovered that in many companies reaching the integration stage, the
primary interest in the profit aspects of Corporate Citizenship is overtaken by
comprehensively value-based business actions, the so-called value
proposition. If a company works on the basis of central ideas, values, ethical
maxims, and if Corporate Citizenship becomes part of a sense of values
which can only be adequately expressed in operative business, the
evaluation of Corporate Citizenship is qualified by purely economic indicators
(P. Mirvis/B. Googins 2006:11).
According to Mirvis and Googins, the highest stage, “transforming”, is
characterised by how deeply commitment to Corporate Citizenship has
infused a company, and to what degree it has become binding. This is where
ethical issues appear for the first time, involving the opportunities and limits for
a company to engage in socially sustainable activities given that there are
social and ecological problems on a global scale. This means: what can a
company do on its own to help solve issues such as fighting poverty,
respecting human rights, fighting against child mortality, climate change, or
illiteracy?
A genuine approach to these global problems, for which there is no simple
solution, does not just confront every single individual with the impact of his or
her actions, it also requires businesses to look for new models of organisation,
communication and management, which may help address these problems
by means of entrepreneurial action. In the past, top managers with broad
social vision, often coupled with a true spirit of invention have helped bring
about developmental change in a society; in Germany there were the great
achievements of Robert Bosch, or in the USA, Bill Gates. Social responsibility by
entrepreneurs may be coupled with a desire to “make the world a better
place”, leading to cooperation with any willing partner along the way. The
unspoken force behind this is a societal model, where transparent, visionary,
entrepreneurial action is geared towards, and achieves, understanding and
agreement with all relevant interest groups and stakeholders, in a spirit of
universal civil orientation. That is exactly what civil society means. In essence,
it is neither national nor European, but intended to be a global civil society. It
can have practical impact as a regulating idea (D. Rucht 2002), but stage 5 is
an ideal suggestion, although a considerable number of internationally active
CEOs commit their corporate policy to this vision (P. Mirvis/B. Googins
2006:12).
4. The Role of the State in Corporate Citizenship for Germany
What are the lessons for Germany in the Mirvis/Googins model? The brief
illustration of stages 4 and 5 of the model was chosen, not because it
accurately reflects current corporate reality, since this does not apply to
either Germany or the USA, but because these stages illustrate clearly what
8
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
Corporate Citizenship is – or might be – all about. If Corporate Citizenship is
value-based in the sense of resting on ethical maxims, the artificial character
of separating “business case” and “social case” becomes immediately
obvious. This then loses its benchmarking function (M. Porter/M. Kramer 2006).
At the same time, based on communicative-rational interests, stakeholder
needs are increasingly relevant for entrepreneurial decisions.
However in the German context, some important modifications should to be
taken into account. These are needed to supplement the model, thus
demonstrating its usefulness. It is not unusual for a debate on Corporate
Citizenship in a US context to underestimate, or completely ignore, the role
played by governmental framework legislation and political influence. Major
US companies in particular have always been accustomed to providing a
range of services, which in a German context would be called “welfare”
services, e.g. in the field of child care. They are also used to negotiate
stakeholder groups’ demands and expectations in direct dialogue, without
input from the state. In Europe, especially in Germany, the situation is looking
different. Here the state is acting both as legislator and moderator or enabler
or networking agent, and is therefore a not insignificant partner for industry’s
CC/CSR policies. Apart from providing business-friendly taxation policy, the
state is expected to set up mediation and support structures for Corporate
Citizenship, to fund research on the issue or to establish a recognition culture
for committed companies, which is effective from a publicity point of view.
In Germany, the state plays a prominent role in helping to shape corporate
CC policies in at least three of the dimensions in the Mirvis/Googins staged
model. In areas such as the dual system of vocational training, in labour law,
environmental protection and in worker’s rights to co-determination, the state
defines some of the crucial factors of the “Dimension Citizenship Concept”.
This already reveals some differences compared with American working
conditions. In Germany, the relationship with stakeholders (“Dimension
Stakeholder Relationships”) is strongly influenced by the state for the simple
reason that third sector activists and NGOs are publicly funded to the tune of
60% or more. The shape of the future relationship between industry and the
non-profit sector depends on growing mutual trust and mutual learning, but
even more on what amounts to future state financial support. This again is in
stark contrast to the USA. As concerns the “Dimension Transparency” here in
Germany there are, if not stricter rules, then stricter controls, and companies
shown to be corrupt, suffer immense damage. Simultaneously, moral pressure
brought to bear by NGOs, such as Transparency International is increasing by
leaps and bounds. Putting forward civil society as a central idea for Germany,
raising the issue of how corporate organisation, entrepreneurial strategy, and
understanding of society all fit together, inevitably takes into account the
dynamic impact, and influence of state action on the development of
Corporate Citizenship.
A theory on the civil society would need to find concepts for both state
action and civil society influence and integrate a staged theory of Corporate
9
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
Citizenship. Since the early 90’s of the previous century, the “concept of civic
involvement“ has initiated a debate which was at first limited to social
science experts, but increasingly found its way into the media. It involved a
realignment of social tasks and responsibilities as shared between
government institutions, civil society representatives and business. Ultimately,
the question we need to answer concerns how, and to what extent,
everyone can participate in generating social welfare under conditions of
globalisation. Giving up sovereignty in areas such as education causes
significant changes in government measures and tasks within the framework
of the civil society. Welfare-state-oriented fair distribution of wealth, flanked
by strengthened civic-minded participation, is declining, which also leads to
different expectations of what the state should do. This is also and particularly
true as regards the role of the state vis-à-vis companies acting in a sense of
corporate social responsibility. Here, too, the influence of the state needs to
be readjusted. Waving farewell to the idea of a state with comprehensive
responsibility; moving instead to greater autonomy, design authority and
citizen self-responsibility, will also allow corporate citizens greater opportunities
to participate in society. These expectations are not the result of the
structural-financial dilemma of public coffers alone; another, equally
important factor is the realisation of the complexity of social learning
processes, which makes them evade state interference to an increasing
extent. The sovereign role of the state in planning has become a sluggish
instrument, increasingly unsuited to providing adequate answers to the
growing differentiation and individualisation of the citizens’ needs and wants.
That is why there is now a search for a new division of tasks and responsibilities,
which basically paves the way for companies to act as co-producers for
social, cultural or other societal benefits beyond the primary business
objectives.
Accordingly the staged model, which has emerged from within the liberal
economic context of the US, requires significant modification in the
dimensions of “Citizenship concept” and “Stakeholder relationships” to meet
the demands of the German debate on redefining the relationship between
the tasks for governments and those for an organised civil society. Only a
model which has been supplemented as above would offer companies the
freedom necessary to test their social commitment, while at the same time
embedding companies in a communicative context, where they can come
to terms with social stakeholders and achieve understanding about corporate
decisions.
5. The Communicative-rational and Ethical Modification of Market Logic
Setting aside the need to include government action, politics and a civil
society gaining in strength into a German variant of the “stages”, the model
allows further conclusions to be drawn. Accepting the theoretical exceptions
of the social science paradigm of a historically evolving communicative
10
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
rationality, as well as the articulation through rational communication of the
legitimate rights of societal stakeholder groups, the sequence of the stages
particularly illustrate
a) increasingly explicit and comprehensive societal referencing;
b) a decline in exclusively profit-oriented or exclusively philanthropic
motivations to act;
c) greater consideration
proposition”)
of values
and
ethical
maxims
(“value
d) a broader basis for decisions on entrepreneurial activities relying on
negotiating communication with stakeholders;
These features indicate that the most developed forms of Corporate
Citizenship are not only the result of market rationality, but are actually
modified because of the way they are anchored in communication and
ethics. This means that economic advantages might be lacking on the one
hand, or present on the other; they are not, however, predictable or
calculable. Perhaps this should be termed the ethical paradox of the
strategic anchorage of Corporate Citizenship in a company. Should the
inclusion of stakeholder groups be based on purely strategic business
considerations aiming to get a competitive edge, and not on an ethical
basis, there will be hardly any genuine trust and cooperation between the
“partners”. The stakeholder groups would feel exploited and seen as just an
item in business calculations. Short-term profits are possible this way, but no
more will accrue once the stakeholders have realised their position as a
means to the end of profit maximisation. At this moment they will pull back,
possibly damaging the company in the process. If, on the other hand, a
company puts its cooperation with the stakeholders on an ethical basis, if the
processes of communication-led decision-making emerge from genuine
moral obligation and openness, stakeholders may still be exploited in the
market, but no dependence could be placed on this happening (T. Jones
1995 u. J. B. Barney/M. Hansen 1994). Purely strategic stakeholder relationships
are not moral, while morally-based stakeholder relationships are not a priori
open to instrumentalization, but are promising for the future. Their derivation is
not market logic, but represents honest interests, based on trust, in jointly
looking for the best solutions for both business and society. Accordingly,
Corporate Citizenship is always an investment in the social capital of society,
i.e. in social relationships structured in networks which are based on trust,
cooperation, and mutual support. This makes Corporate Citizenship an
investment in the non-economic chances for economic success which should
not be underestimated. “Stakeholder value” only emerges when business
and stakeholders can debate and ultimately agree on the long-term survival
of a socially and politically responsible company as a public entity. Using the
Habermas-type discourse as a way of testing statements or demands by
argument and dialogue, aiming to achieve a consensus everyone can
11
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
accept, would have major consequences for businesses, stakeholder
communities and the public at large – provided the rules of discourse are
followed.
As we know, Habermas makes a distinction between communicative action
and discourse as two types of communication. Communicative action
naively postulates that statements are true, whereas the discourse views
claims to validity as problematic and makes them a subject for debate.
Discourse as a formal procedure (intended to examine the claims regarding
truth, veracity and the intelligibility of statements) is not an end in itself, but
serves to legitimately restore and re-enable communicative action, including
the acceptance of legitimate claims (Habermas1981). A discourse can only
be successful if certain pre-conditions are met, resembling those presupposed
by a deliberative democracy, enabling all people to be comprehensively
involved in society at large. One of the most important prerequisites is not to
exclude anyone from deliberations, even if he or she might only be potentially
affected by the results of the discourse. All kinds of coercion are to be
excluded; clarity and the need to reason an argument hold sway (Habermas
1996: 277-292). Obviously, corporate decision-making can never be
negotiated with more than part of the public sphere, just as the pursuit of
profit will always be at the heart of a company’s affairs – but accepting the
rules of discourse in the stakeholder dialogue will significantly widen the basis
for decisions and assure the company of a publicly legitimised and supported
“license to operate”.
Genuine social commitment of businesses therefore needs more than a
demonstration of following the mechanisms of the market. It actually needs a
balancing of the legitimate interests of the representatives of the three sectors
of the social order, i.e. the market, the state, and (civil) society5. Currently,
market logic appears to require the sole right to enter into all spheres of
society. Should this dominance become exclusive, the market would destroy
its own foundations. Successful Corporate Citizenship embodies a successful
integration of business action into ecological, cultural, and social
responsibilities and takes into consideration political rules, democratic
consultancy and decision-making processes with civil society stakeholder
groups. This is a process which puts into perspective the validity of economic
logic in the spirit of the civil society (Meyer 2002: 11).
The areas of social order, the market, the state, the (civil) society, and its
control media money, power and solidarity also give rise to special and
legitimate rationalities of action which cannot be reduced to a single entity.
In reality, one functioning rationale always presupposes the existence of
5
The National Network for Civil Society (BBE) is a nationwide network linking organizations
and associations from the third sector (non-profit organizations) and civil society, from
business and work life and federal and community institutions. The cooperation within the
network is based on mutual trust and partnership, relying primarily on dialogue, cooperation
and practical stimuli for the promotion of commitment and civic engagement without one
sector dominating the other (www.b-b-e.de).
12
Transnational Trendsetters: Communicative Rationality and Ethics
as success factors for Corporate Citizenship
another. A company with a Corporate Citizenship system at stages 4 or 5 will
already have a civil society model in the background, where a
communication-based process determines the distribution of tasks and
obligations in the framework of a new welfare mix, but without neglecting or –
worse – ignoring, entrepreneurial interests. Neither a liberal market position, a
budget-based or self-regulatory civil society position is dominant; instead
there is a process of discursive negotiation of legitimate claims.
From a German perspective, the Mirvis/Googins stages – despite restrictions
due to cultural specifics – go beyond clearly defining and differentiating the
character and level of corporate social involvement. They enable a greater
emphasis to be given to the complex set-up of the civil society, where even
companies still have to find their place, and where the roles of state and
politics are as yet as little defined as those of the civil society6. If a
strengthened civil society is to become empirical reality, businesses will need
to open up and support self-responsibility, volunteering, and a willingness to
commit on the part of the staff. The company will need to turn to a
communication-based assumption of responsibility within society at large (M.
Bürsch 2006). Strengthening civil society to become a leitmotif for modern
democracy requires companies to recognise that neither the state or civil
society, nor the market with its inherent rationalities have the right to demand
all areas of social order be subjected to its logic (C. Offe 2002: 71). Corporate
Citizenship properly understood, bears within it a social model which has
already left behind the unilateralising logic of the market, and is confidently
looking forward to the prospect of long-term success.
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