Corporate Social
Responsibility and
Democracy
Ville-Pekka Sorsa
Hanken 19.5.2015
Purpose of the presentation
• ”Political Philosophy 101 for doctoral students interested
in CSR”
• Making sense of ’political CSR’ debates
• What does it mean to take a ’political’ approach to
CSR? What are ’political’ approaches good for?
• Moving from general political CSR debate to more
specific type of political – democratic CSR
• What kind of CSR and what role for it in democratic
societies, does CSR promote democratization, is
democraticness good for business etc.
• Background: forthcoming research project Is Corporate
Social Responsibility Good for Democracy?
Making sense of
Political CSR
What ‘political’ CSR? (1)
•
Normative and positive contestation of the instrumental
conception of CSR based on ideas of economic liberalism
(classical or neo-liberal) and/or modern systems theory
– …i.e., on business as calculative decision-making based on
voluntary membership and justified with (market-based)
efficiency
•
The (ostensible) rise of multinational corporations as background,
e.g. Whelan (2012):
– “As -- MNCs -- have become more numerous, more powerful,
and more variously engaged --, and as their global operating
context has changed --, so too have the normative
demands commonly made of them. Within the business
ethics and business and society literatures for example, the
belief that ‘globalization’ has increased the power of MNCs,
and concomitantly decreased the power of states, has
informed a body of work that normatively prescribes, and
positively describes and explains, the political duties
and activities of MNCs. This specific literature -- is here
referred -- as the ‘political’ perspective of corporate social
responsibility (CSR), or ‘Political’ CSR for short.”
What ‘political’ CSR? (2)
• Examples of approaches identified as ‘political’ CSR:
– New role of firms in global political economy /
corporations as governments (Palazzo, Scherer, Crane,
et al.)
– Extended corporate citizenship (Matten, Moon, Crane et
al.) and other civil society approaches to business (Den
Hond, De Bakker et al.)
– Analysis on political foundations of different conceptions
of CSR (Whelan, Mäkinen, Kourula, Fougére)
– Seeing business as polis / political theory of the firm
(Néron)
– Critiques of CSR as regulatory captures, CSR discourse
as greenwashing etc. (Banerjee, Barley et al.)
• These studies seem to represent quite different meanings
of both ‘political’ and CSR – how to make sense of it all?
Useful analytical distinctions
• How do understand different ’political’ approaches to
CSR?
– ’The political’ vs. politics
– Political interpretations of CSR vs. actual politics of
CSR
• How to understand different conceptions of CSR?
– Explicit vs. implicit CSR
– Corporate policies and practices using CSR discourse
vs. general social norms, expectations and demands
over business
What makes an approach
‘political’?
•
•
Often based on loose definitions or dualisms
•
Political vs. violent solutions, ‘economic’ calculation vs.
‘political’ deliberation
•
Analogies and metaphors (‘firms as governments’)
More series conceptualizations (required in research):
– Conceptual frameworks based on political philosophy
• e.g. normative analysis (critiques, justifications etc.)
rooted in political philosophy (Jukka’s presentation earlier
today?)
• Political CSR debates have especially drawn on
Habermasian and Rawlsian philosophy
– Research based on political theory and focused on politics
• In CSR debates, businesses have been seen to engage in
politics as distributive agents, communities of decisionmaking and participants in public policy processes (Néron)
’The political’ and politics (1)
•
’The political’ is an ontological, ’politics’ an ontic level concept
– Politics are things (policies, modes of governance, relations
between citizens, conflicts of interests, legitimate exercises
of the threat of violence, guarantees of rights etc.) in the
world that can have descriptive characteristics or plain
facts stated about their existence
– ‘The political’ refers to questions regarding what defines
the nature and meaningful structure of existence of such
things
•
”In contrast to mere political concepts, such as legitimacy,
rights, or sovereignty, the concept of the political is a radical
one, one that goes to the root, addressing as it were the
substance of politics, and not merely its attributes and
predicates” (Andrew Norris)
’The political’ and politics (2)
•
Different conceptions of ‘the political’ make us see different
types and forms of politics (foundationalism)
– Recall Whelan’s definition: ‘political duties and activities’ of
firms – what makes some duties and activities ‘political’?
– E.g. Carl Schmitt’s essentialism (‘the political’ as friend vs.
enemy & essence of state sovereignty), liberal aggregation
of interests, Parsons’s structural functionalism
•
However, ‘the political’ should be seen as a field of debate and
enquiry by its own right (post-foundationalism)
– Issues like real-life relevance, normative commitments and
social ontology should influence all definitions
– N.B. ‘The political’ cannot be defined scientifically or
without engaging in politics!
Examples
What is ’political’?
Explanation of key ideas
What is politics?
Location of politics
Rawls
Legitimate use of
coercive (state) power
based on reasonable
pluralism, rights and
liberties
Legitimacy is set by principles
of a freestanding conception of
justice based on freedom,
equality and fairness that
citizens affirm
Public use of reason over
the nature of societal basic
structure
Reasoning in the
public sphere
Habermas
Legitimate use of
coercive power based
on deliberation (as
symbolic medium of
self-representation of a
society)
Legitimacy is dependent on
consensus based on civil
society discourse and public
opinion
Struggle for power based on
argumentation between
equal citizens
Deliberation in the
public sphere
Gramsci
Hegemony over
societal, intellectual and
moral leadership
Hegemony = ideas,
institutions, material settings
etc. through which governing
power wins consent to its rule
from those it subjugates (e.g.
modern states and firms!)
Hegemonic struggles
Wherever legitimacy
or leadership is
formed or contested
Laclau
“Moments of
antagonism where the
undecidable nature of
the alternatives and
their resolution through
power relations
becomes fully visible”
Moments of antagonism =
violent decisions in which
(socially contradictory)
alternatives are eliminated on
the basis of no objective fact
or telos that could compel
general acceptance
Identity formation: plays of
equivalence/simplification
and difference/complication
(always based on excluding
something and establishing
a violent hierarchy between
the two resultant poles)
Conflicts in which one
confronts a
threatening world
that needs to be
repulsed or subdued
Implicit vs. explict CSR
• By ’CSR’, one can refer to two quite different kinds of
things / research objects (Matten & Moon)
• Explicit CSR refers to (voluntary) corporate programmes
and policies explicitly articulating some responsibility over
social, environmental etc. matters
– N.B. Doesn’t necessarily have anything to do with
responsibility in a strict sense
• Implicit CSR refers to the responsibilites firms have in the
broader society (whether CSR discourse is used or not)
– Social expectations businesses face and channles
through which they are held responsible
– Theoretical approaches needed to address the nature
and significance of responsibilities (e.g. new
institutional theory)
• These aren’t mutually exclusive, e.g. explicit CSR as
corporate definitions of their own responsibilities
Example research agendas
Rawls
Explicit CSR
Implicit CSR
Civil society integration/mobilization on
basis of CSR discourse
Normative critique: businesses should respect societal basic
structure (and not to engage in politics of it)
Public reasoning over moral division of labour in the basic
structure of different societies (if businesses are justified in the
first place)
Habermas
Civil society integration/mobilization on
basis of CSR discourse
Normative critique: firms and markets should be kept out of
politics
(Scherer & Palazzo : if firms become like states, they need
deliberative legitimacy)
Gramsci
Recognition of CSR as an idea potentially
producing and maintaining leadership
and/or legitimacy (e.g. CSR &
neoliberalism)
Corporate self-regulation (stakeholder-oriented or otherwise) as
a hegemonic mode of global governance
Laclau
CSR as empty signifier and related
identity plays (us/them, this/that
responsibility, we are/aren’t responsible)
Political mobilization on basis of corporate irresponsibility
How do changing responsibilities shape antagonisms between
capital and labour?
Another example
•
My research (in JSFI) on multi-level politics of socially
responsible investment in Finnish pension insurance companies
•
SR as empty signifier + new institutional theory interpretation
of explicit SR (legitimation of actual practices)
•
Main antagonisms: numeric vs. other evaluations, profitability
vs. other concerns, insider vs. outsider control
•
Findings: SR discourse has much political significance – in
symbolically reinforcing legal and practical (MPT) status quo,
not going ’beyond’ them
Institutional frames
for SR
Definition and differentiation of
responsibilities
Mobilization in investment practice
National political
economy
Parliamentary committee calls for SR as
investment targets, employers interpret as
’anchor ownership’
Legitimation of constant overweight of domestic
assets in equity portfolio
Industry SR standards
(TELA)
Legal responsibilities, compliance with law and
international standards (human rights, PRI & GC)
Legitimation of active corporate engagement
and (box-ticking style) analysis of investee firms
Organizational SR
principles
Pension sustainability, satisfaction of own
employees, ethical commitments
Legitimation of screening tobacco firms and
cost containment
CSR and Democracy
Why democracy?
”Democracy has been defended on the grounds that it
comes closest among the alternatives to achieving one or
more of the following fundamental values or goods: rightful
authority, political equality, liberty, moral self-development,
the common interest, a fair moral compromise, binding
decisions that take everyone’s interest into account, social
utility, the satisfaction of wants, efficient decisions. Within
the history of the clash of positions lies the struggle to
determine whether democracy will mean some kind of
popular power -- or an aid to decision-making--.”
David Held (2006)
What democracy?
• Literally ”rule by the people”
– Self-government and self-regulation
– Theories of democracy differ in how they see ’people’
(demos), ruling (and participation in it), obedience etc.
• Key modern principle of political legitimacy and justification
– ”The consent of the people” (Held)
– Varying roles in normative political philosophy: in some
strands it is a precondition for all politics, in others one
form of politics
• Different ways to approach ideal types:
– Forms of decision-making (models of democracy)
– Principles of decision-making
– Democracy as democratization
Dimensions of democratization
• A litmus test of democracy: can everyone potentially
affected by a decision participate in making it as equals
• Dryzek (1996): the ’democraticness’ of any such political
setting (deliberative, representative etc.) can be assessed
through 3 dimensions:
1.
Franchise – how many people participate in decisionmaking
2.
Scope – how many domains of life are under
democratic control
3.
Authenticity – the degree to which democratic control
is substantive, informed and competency engaged
• In order to qualify as democratic, no trade-offs between
the dimensions or abandonment of democratic principles
are allowed
Note: democracy vs. radical
democracy
From Laclau and Mouffe’s radical democratic perspective, neither
liberal democracy nor even deliberative democracy can ever
amount to a truly political approach because their normative foci,
on aggregation of interests and the construction of consensus
respectively, decentre or sidestep the problems of difference,
undecidability, negativity and antagonism. Rather than seeing
consensus or the aggregation of interests as the measure of
success for politicisation, radical democracy implies that we should
look to the ways that a political process not only helps to expose
difference and dissent but also, in doing so, leads us to confront,
as problematic and in need of revision, our own self-identifications
and understandings of the world.
(Edward & Willmott 2011)
Towards ’democratic CSR’
•
The challenge: businesses are not democracies
– …and for many philosophies (e.g. liberal theory) they are not
even political settings
– All three dimensions of democraticness are very limited
– For example joint-stock companies and cooperatives may
differ in how democratically they can act ’internally’. Yet, in
neither case are there guarantees for including stakeholders or
that acting democratically will continue.
•
The most suitable option: democracy as democratic legitimacy
– The challenge of the state: all businesses are nationally
mandated entieies
•
Potential applications in CSR studies:
– Democratic justification for & legitimacy of corporate
responsibilities & explicit CSR programmes
– Democratic decision-making over corporate responsibilities
– The role of CSR discourse in democratic politics
Where can you find democratic
politics of CSR?
•
Rawls: where free and equal citizens reason publicly over what
the societal basic structure businesses have to respect should
be like
•
Habermas: in the civil society (’life-world’) that seeks
consensus over corporate responsibilities in ’ideal speech
situations’
– However, the consensus must be binding for the economic
system in order to be a matter of democratic deliberation
•
Gramsci: where popular legitimacy is sought for the ruling
corporations
– Note: democracy as a way to promote legitimacy of
capitalist hegemony
•
Laclau & Mouffe (radical democracy): where difference, dissent
and conflict is celebrated in addition to liberty and equality in
corporate matters
Is CSR good for democracy?
• Friedman (neoliberal): possibly, and that’s exactly why
you shouldn’t do CSR
• Rawls (liberal): possibly, as long as it is citizens, not
firms, engage in politics of CSR
• Habermas (critical theory): possibly, if it means genuine
democratization of organizations (wither markets and
firms)
• Gramsci (post-Marxist): perhaps, if it makes corporations
more legitimate – but then again, that’s just another
way to strengthen hegemony
• Laclau (post-foundationalist): yes, if it marks a shift to
new forms of self-government, i.e. wither markets and
firms – and that’s a big ’if’
CSR and hegemony
Consider, for example, a central claim of mainstream `strategic CSR’: Porter and Kramer -commend the idea of `win-win’ in which securing corporate profitability is conceived as perfectly
compatible with social development and the reduction of inequity. This grounding presumption of
much `strategic CSR’ is clearly contestable. Yet, as almost anyone who has taught business ethics,
whether to executives or business students, will confirm, it is very difficult to call this notion into
question without encountering defensive vehemence and ridicule provoked by any challenge to this
sacred cow. In liberal democracy, the idea that different interests can be aggregated is a fiction,
and yet is so central to liberal democratic thinking that doubting this possibility elicits vigorous, and
at times acerbic, defence --. An equivalent fiction, we submit, is present in deliberative democracy
where a normative investment, or identification, with the idea of consensus enables the fictitious
nature of the grounding of this discourse to be obscured through claims that deliberative
democracy is a pragmatic turn to democracy over philosophy.
[Social theory of hegemony] and radical democracy raise an alarm whenever a perspective is
presented as commonsense, as `pragmatic’ or as “just being realistic‟. It warns us that we are
approaching the locus of signification where difference and undecidability are hidden and the
discourse is stabilised through hegemonic practices involving emotional investment. The point, we
suggest, is well illustrated by Willke and Willke’s -- revealingly excessive and patronising
commentary on Palazzo/Scherer’s refutation of the relevance of the liberal democratic model where
they opine that “it seems unwise to call for a politicization of the corporation in view of what is
happening in Russia, Venezuela or Bolivia... Have they considered the possible effects of
`democratic accountability‟ when the `demos’ (are lead [sic] to) believe they should boycott Jewish
shops?” --. It is therefore unsurprising that challenges to commonsense encounter dismissiveness,
defensiveness and even anger.
(Edward and Willmott 2011)