What Does it Mean to See Corporations as Political Actors
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  • 1. Journal of Business Ethics (2010) 94:333–352 Ó Springer 2009DOI 10.1007/s10551-009-0266-yBusiness and the Polis: What Does it Meanto See Corporations as Political Actors? ´ Pierre-Yves NeronABSTRACT. This article addresses the recent call in corporations as political entities, actors, institutions, orbusiness ethics literature for a better understanding of units could probably highlight some normative issuescorporations as political actors or entities. It first gives an related to business institutions and practices andoverview of recent attempts to examine classical issues in contribute to a better understanding of these issues. Itbusiness ethics through a political lens. It examines dif- could also sometimes lead to the formulation andferent ways in which theorists with an interest in the defense of radical propositions. It may also simply leadnormative analysis of business practices and institutionscould find it desirable and fruitful to use a political lens. to the reaffirmation of classical theoretical statementsThis article presents a distinction among four views of the in business ethics. In brief, treating corporations asrelations between corporations and politics: corporations political things could be theoretically useful and haveas distributive agents, corporations as political commu- potentially quite radical implications, but in somenities, corporate practices and policies as citizenship issues, cases it might be also quite banal or not very fruitfuland corporations as active participants in the political from a theoretical perspective (we should not put thisprocess. This article finishes with an examination of three option out too quickly). This is why I try to proposechallenges that need to be overcome by the theory of the in this article some theoretical avenues to investigatefirm as a political actor. and clarify the very idea of ‘‘corporations as political actors.’’ I first try to clarify what is at stake in this callKEY WORDS: business and government relations, busi- for a theory of the firm as a political actor. Thenness and politics, corporations and citizenship, organiza- I examine four political views of corporations andtions, political philosophy business institutions and the various theoretical insights possibly offered by these different views. I conclude taking into consideration three challengesIntroduction that need to be overcome by theorists interested in building a theory of the firm as a political actor.An interesting feature of the recent literature oncorporate roles and responsibilities is that there hasbeen a call for a better understanding of corporations The call for a theory of the firm as a politicaland the business world in general, as ‘‘political actoractors’’. When saying that there has been a call forsuch a conception of corporations as political actors, The study of ‘‘business and society’’ is characterizedI refer very broadly to a set of recent articles and by a certain ‘‘conceptual anarchy.’’ Academics,books that stress the importance of looking more NGOs, business people, corporations, and govern-politically at firms and business institutions and ments use many different ‘‘vocabularies’’ or ‘‘nor-practices. The question I want to ask in this article is: mative frameworks’’ for discussing and evaluatingwhat does it mean more precisely to look at cor- the responsibilities of corporations (Schwartz andporations this way, and what are the implications? Carrol, 2008). Philosophers like to refer to moreThe short answer is that it could mean a lot of things. abstract tools and concepts from moral theory forMoreover, depending on the interpretation that one applying them to business systems and interactions.makes of the ‘‘politicization’’ of corporations, it Whereas some like to use the language of sustain-could have very different implications. Treating ability to talk about environmental practices in
  • 2. 334 ´ Pierre-Yves Neroneconomic development, others refer to the now corporate citizenship tends to replace the language ofomnipresent language of corporate social responsibility CSR or at least, tend to be used as a synonym. Theywhich acts as a rejection of ‘‘orthodox’’ business also seem to recognize that some of their own viewsmodels, and is closely linked to the language of about corporate citizenship are compatible withstakeholder management which tries to expand, the classical definitions of CSR (2002, p. 162). Accordingobligations of businesses and managers to include the to this view, treating corporations as ‘‘citizens’’ meansinterests and opinions of a wide range of groups that corporations should acknowledge a broader so-affected, the stakeholders, by firm’s activities and cial role and corporate obligations should be extendedpolicies. Economists enter theses debates by framing to include multiple stakeholders beyond the tradi-the issues in terms of good corporate governance, which tional base of shareholders, such as workers, localcomes mostly from law and economics and is con- communities, and the environment, and the out-cerned with structures of incentives and controls for comes of policies and programs directed toward thosemanaging fiduciary responsibilities and reducing societal relationships. The language of corporate cit-agency problems.1 izenship, then, should be associated with the defense, As noted in the ‘‘Introduction’’, recent studies in or maybe a better defense, of the set of corporatethe field suggest a desire to add to these various obligations usually associated with the concept ofnormative frameworks a new language with strong CSR (Birch, 2001; Dawkins, 2002; Logsdon, 2004;political connotations. Taking new realities into Logsdon and Wood, 2002; Post and Berman, 2001).2account, some theorists now urge that we seek a Corporate citizenship theorists (and critics) frombetter and richer understanding of the political the ‘‘second wave’’ have been more critical of thisaspects of businesses activities. Moreover, this ‘‘call’’ tendency to use the vocabulary of citizenship as acomes from very different perspectives and disci- (new) comprehensive framework to think, in a veryplines. It is revealing, for instance, that this move general way, about the roles of corporations in ourtoward a political understanding of economic orga- society. They refuse to see corporate citizenship as annizations is explicitly suggested in the title of a recent all-encompassing framework or as a concept thatcollaborative article, regrouping many young could do a better job in capturing what is actuallyscholars from different disciplines, called ‘‘Corpora- denoted by the concept of CSR (Crane et al., 2008a, b;tions as political actors,’’ in which the authors reflect Matten and Crane, 2005; Matten et al., 2003; Moonon the globalization process in which ‘‘corporations ´ et al., 2005; Neron and Norman, 2008a). Instead ofhave become political actors’’ in ‘‘postnational seeing corporate citizenship as an extension or aconstellations’’ (Rasche et al., 2008). A recent call reformulation of CSR, they suggest to take seriouslyfor articles for an upcoming special issue of the the political connotations of the idea of citizenship.Business Ethics Quarterly also invites scholars to con- Moon et al. argue, for instance, that corporate citi-tribute to a better understanding of the ‘‘political zenship should be used as a ‘‘metaphor’’ to illuminatemandate of the corporation’’. the roles corporations already play in the political Recent developments in the theory of corporate process of contemporary societies (2005). Crane andcitizenship also open the door for a more explicit Matten call for a ‘‘political view of the firm’’ in whichpolitical understanding of corporations. Corporate corporations are not seen as purely economic insti-citizenship theorists from the ‘‘first wave’’ have seen tutions but as actors firmly located within the polit-the use of the language of citizenship as a way to ical arena (2008). Crane et al. (2008a) contend thatachieve a better understanding and to articulate a debates on corporate citizenship have led to a morebetter justification of the idea of corporate social general debate that has just begun on the politicalresponsibility (CSR), broadly understood as the idea nature of the corporation. According to these au-that firms are required to benefit the societies in thors, the main benefit of applying the citizenshipwhich they operate in ways that go beyond the thinking to issues in business ethics is that it exposesproduction, in compliance with laws and regula- the political nature of debates about CSR and stake-tions, of goods and services as a part of the firm’s holder theory. It offers ‘‘a new perspective on thenormal profit-seeking activities. Wood and Logs- corporation’’ because ‘‘it unveils the political nature ofdon, for example, notice that the language of its involvement in society’’ and ‘‘helps to illuminate
  • 3. Business and the Polis 335certain dimensions that might otherwise go unex- economic sphere, with its own sources of legitimacy,amined’’. (Crane and Matten 2008, p. 29). and the political sphere, with its own, different, ´ In a similar vein, Neron and Norman suggest that sources of legitimacy. However, according to thesethe use of the language of citizenship may concern authors, this apolitical conception of the firm is bothonly some particular sets of corporate obligations in normatively and empirically untenable, and, hence,some specific relations, namely with governments and the need for a ‘‘politicization of the corporation’’regulatory agencies (2008a).3 The idea here is that (Matten, 2009; Scherer and Palazzo, 2007). Wethe best way to make sense of the metaphor of cit- should, as Hanlon suggests, overcome the ‘‘denial ofizenship is to take seriously the kind of the specific politics’’ in the fields of business ethics and CSRpolitical relations and activities that citizenship is studies (Hanlon, 2008).usually associated with. In brief, the theory of cor- One particularly provocative invitation to takeporate citizenship should, first, draw our attention to seriously the political nature of the firm is to bethe different ways corporations interfere in the found in the Crane et al.’s approach in which groupspolitical process and the shaping and reshaping of related to the firm are not seen as ‘‘stakeholders’’ buttheir regulatory environment and, second, aim to as ‘‘citizens’’ (2004). The authors propose, in whatprovide theoretical avenues that would allow us to could be considered as a radicalization of the stake-determine which political activities and relations holder paradigm, to use the lens of citizenship theorywith government regulators are appropriate or to look at the ways different groups interact in theinappropriate, permissible or impermissible, obliga- shaping and reshaping of ‘‘ethical institutionaltory or forbidden for corporations. arrangements for business,’’ leading to a reconcep- Even a more radical critic of corporate citizenship, tualization of stakeholder relations with the firm in afor example, van Oosterhout agrees with the idea fundamentally political language (2004, p. 108).that there is a need for a better understanding of the These are all examples of the recent call for apolitical aspects of the life and activities of business political conception of the firm and its activities.organizations. While radically rejecting the intro- However, it is worthy here to take a few steps backduction of the vocabulary of corporate citizenship, and recall that this ‘‘politicization’’ of corporationsvan Oosterhout suggests, nonetheless, that there is was at the heart of some of the most radical critiquesmuch to be gained by developing concepts and of the social responsibility of business, most notablytheoretical tools that can help us to truly transcend in Friedman’s charge against the idea (Friedman,what he calls the ‘‘confines of economic and political 2002). In the Friedmanian view, it is preciselyorganizations’’ (2008, p. 39). Underlying van skepticism toward the idea of ‘‘firms as politicalOosterhout’s proposition is the idea that we should actors,’’ which leads to a reaffirmation of the neo-not take for granted that there is a radical division classical view that firms’ main responsibility is tobetween the sphere of politics and the sphere of maximize shareholders profits. The reference toeconomic organizations. Or more specifically, that corporations as having ‘‘social responsibilities’’ is nowe should not take for granted that organizations more than an ideological and subversive way towith economic purposes are apolitical entities. politicize economic institutions. In order to put it Scherer and Palazzo follow the same path and crudely, this is, from a Friedmanian point of view, arefer to what they consider a new conception of very bad idea. Recent literature though, suggestscorporate responsibility in which the firm is seen as a that theorists do not hesitate to use this language of‘‘politicized’’ actor ‘‘democratically embedded’’ politics to think normatively about business.(2007, pp. 1105–1112). In another article writtenwith Baumann, they argue for what they call a‘‘political responsibility of the business firm’’ (Scherer Corporations and politics: four directionset al., 2006, p. 515). They suggest that our theo-retical understandings of corporate roles and respon- What should we think about the call for a bettersibilities have been obfuscated by a historically understanding of the political aspects of business life?developed de-politicization of the corporation in How should we welcome this invitation to thinkwhich there is a clear separation between the about the firm as a political actor? Why should we
  • 4. 336 ´ Pierre-Yves Neronthink, contrary to the Friedmanian skepticism, that it This ‘‘political’’ view of the nature of corpora-is a theoretically fruitful idea? My contention is that tions is extremely important for critics of classical orit is highly seductive but it is not clear how it could orthodox models of business. Take, for instance, thebe helpful and what it means exactly for the nor- so-called progressive corporate law movement. Formative analysis of business practices and institutions. Mitchell, Green and Millon, our classical views onThe agenda for a ‘‘political theory of the firm’’ is corporate responsibilities are biased from the startappealing but remains unclear. This is why, in this because they fail to realize the public nature ofsection, I try to provide some insights first by corporations (Mitchell, 1995). This is why one ofanswering these questions and then clarifying a little the crucial moves of the progressive corporate lawbit further what it means to use a ‘‘political lens’’ to theorists is to invite us to shift from a ‘‘contractarian’’examine issues in business ethics. I propose four view of the firm to favour what Millon calls adirections in which we might think politically about ‘‘communitarian’’ view:corporations and examine some of the implicationsof doing so. Communitarians tend to differ from contractarians in emphasizing the broader social effects of corporate activity. Contractarians focus on the corporation’sCorporations as distributive agents internal relationships, applying a cost-benefit analysis to a relatively narrow range of more or less readily mo-The first possible desirable way to look at business netizable interest. Communitarians see corporations aswith a political lens is to focus on the impact of the more than just agglomerations of private contract; theyfirm on the society as a whole. Corporations are are powerful institutions whose conduct has substantialamong the most powerful social entities in our world public implications. Thus, for example, assessing theand are, sometimes, depicted as the key institutions costs of the reorganization of a corporation like Time is not just a matter of adding up possible costs in workerof our time. Their ‘‘pervasive presence’’ and impact layoffs and potential gains to Time shareholders. It ison human lives rival that of history’s most powerful also necessary to take into account the general public’semperors, czars, and kings.4 They control vast hu- possible interest in the various publications’ continuedman, organizational, and financial resources, trans- editorial independence. (Millon, 1993, p. 1379)national borders and affect every human life. Theyshape flows of capital, natural resources, and labor; This ‘‘communitarian’’ view is probably verythey influence national governments and local close to what a lot of theorists have in mind whencommunities; and they support (directly and indi- they refer to the need for a political view of the firm.rectly) everything from education to the arts and Millon’s basic point here is that firms are not merelysports. Moreover, in the process of globalization, private associations with purely economic goals butbusiness organizations are even taking on broader, social or public institutions that are related to, andmore complicated roles in society. have an impact on, many other important social Here, firms could be viewed as being ‘‘political’’ in institutions that realize important social goals. Inthe sense that they have an impact on society as whole brief, what progressive corporate law and stake-and often serve larger purposes than profit maximi- holder theorists are trying to do here is to empiricallyzation. They have significant distributive effects because turn Friedman on his head. From this point of view,they are able to impose a heavy imprint upon society Friedman is simply wrong at the beginning about theas a whole. This could be called the ‘‘stakeholder’’ nature of corporations. As a matter of fact, it isview of the corporations as political actors. One of the simply not true that firms’ activities are limited to therecurrent themes in stakeholder theory is the market. They are ‘‘political’’ from the beginningimportance of not overlooking the ‘‘public’’ nature of because they are social institutions created by polit-the modern corporation, which should not be ical communities and serve larger purposes thanunderstood simply as a ‘‘private’’ association but as a profit-seeking.social institution whose activities and policies have an Of course, stakeholders, CSR, and progressiveimpact on a plurality of stakeholder groups and not corporate law theorists are right in pointing to theonly on shareholders’ welfare.5 ‘‘public’’ nature of firms as social institutions of capitalist
  • 5. Business and the Polis 337societies.6 Corporations are certainly powerful create ties, cooperate, regulate conflicts, and coordi-political actors in this sense. After all, if politics is nate their efforts through different ‘‘political’’about giving an answer to the immense question of mechanisms of collective decision making.9‘‘who must do what for whom?’’, then there is no This view of corporations as small political com-doubt today that businesses are successful political munities is implicit in Christopher McMahon’sactors.7 Moreover, as they enter new arenas, such as suggestion that the task of justifying the existence ofhealth care, education, and even military operations, the firm in our economic systems is analogous to thewhere tough choices and tradeoffs among multiple task of justifying the existence of the state (McMa-goods are commonplace, conflicts between economic hon 1994, 1995, 2007). From this point of view, it isobjectives and other public worthy aims is likely to possible to make what Joshua Cohen calls ‘‘parallelincrease. It is why it is surely right to ask ourselves, as case arguments’’ according to which it is plausible tothese theorists do: what are the responsibilities of claim that workers stand in relation to economicthese ‘‘social institutions?’’ and what are their capac- enterprises in a similar way as citizens stand in rela-ities in certain domains of social and environmental tion to the state.10 If political theorists have beenaction? concerned with the exercise of legitimate authority The main problem with this first view of the firm by the state, then they also must be concerned withas a political actor is that it is hard to see how it could the way that economic organizations, especially largebring a refreshing perspective on debates about corporations, are organized.11firms’ roles and responsibilities. CSR and stake- In his study on what he calls the ‘‘political theoryholders theorists and critics of the modern business of organizations’’, McMahon appears to make twofirm are incessantly making this point. Moreover, claims about the political aspects of business orga-the problem is not that it is a false view. The nizations. First, that given their size and organiza-problem lies in its normative scope. Firms could tional resources, some important political decisions arecertainly be understood as ‘‘social institutions’’, in left to be made by corporations; and second, thatthis stakeholder theory sense, because their policies firms are analogous in some way to political com-and activities have significant distributive effects on munities. These claims draw our attention to twomany groups in our societies. The problem is that it different meanings of corporations as political actorsshould be, in fact, a relatively noncontroversial that I want to highlight here. The first claim is aboutstarting point. Even neoclassical economists arguing the external effects of corporate activities and cor-for the Friedmanian view could agree with this responds broadly to what I call the view of ‘‘cor-starting point while insisting on the idea that the porations as distributive agents.’’ In this view, somefact that corporations are ‘‘social institutions’’ is important ‘‘political’’ decisions are made by corpo-precisely at the basis of the best strategy to justify rations in the sense that they have an impact on whothe profit orientation of firms in competitive gets what, when, and how in our societies. Themarkets.8 second claim draws our attention to another political aspect of firms because it is a claim about the internal organization of corporations and leads us to the viewCorporations as political communities of corporations as political communities. It is a claim about those who are ‘‘inside’’ the firm.It appears to be possible to look politically at the As such, ‘‘political theorists’’ of the firm appear tobusiness world in a different way, viewing firms as have some reasons to draw our attention to issues ofbeing themselves ‘‘small’’ political communities. The authority in such relations. It is often claimed, in thevery basic idea here is the following: the modern economic literature on the theory of the firm, thatbusiness firm is not only an organization for making the main distinction between firms and markets isdecisions in a market economy. Economics organi- the exercise of authority within the firm (Hsieh,zations are, sometimes, huge communities ‘‘popu- 2008). Contrary to competitive market relationslated’’ by hundreds and thousands of employees with structured by the price mechanism, intrafirm relationsa variety of interests, values, and different conceptions are administrated relations that are governed by theof the good life. These ‘‘organizational citizens’’ rules that structure the bureaucratic hierarchy of the
  • 6. 338 ´ Pierre-Yves Neronorganization (Heath, 2007, p. 359). McMahon power, collective action and decision making.wants to take seriously the normative aspect of this One could argue, as Walzer did a long time ago, thatfeature of intrafirm relations while asking the ques- the analogy works better with cities. Cites, similartion of the foundations of the authority exercised by to firms, ‘‘are created by entrepreneurial energy,managers in such hierarchical bureaucratic structures enterprise, and risk taking; and they too, recruit and(1994). hold their citizens, by offering them and attractive Of course, the association suggested by McMahon place to live’’ (Walzer, 1984, p. 295). In drawing thisbetween the state and the firm as both being similar Walzerian analogy, one is led to see the differencespolitical units is probably too strong, and could be between firms and political communities similar tocontested. Phillips and Margolis, for example, criti- states and cities as matter of degree (Moriarty, 2005).cize this analogy as being misleading (1999). As they For example, it is true that state membership is notpoint out, states and firms (and associations in gen- the same as organizational membership. The vol-eral) could also be viewed as having very different untariness is more important when we think aboutfeatures and purposes. They insist on three major the latter than when we think about the former,differences between states and large corporations: because the possibility of exit is greater in corpora- tions. However, at the same time, one should not– Exit: freedom to exit from a state is quite differ- exaggerate the possibility of exit in corporations. ent than freedom to exit from a corporation. Exit from a corporation could be easier in some Freedom of exit is a fundamental normative degree than exit from a state, but it could also be component of what organizational membership painful. It involves research costs in finding a new means, just as its impossibility is constitutive of job as well as transition costs in making the move state membership. from one job to another.12 As Moriarty puts it: ‘‘It is– Aims and purposes: It is appropriate to expect obvious that leaving one’s country is difficult. It is organizations to promote specific aims and goals, perhaps not appreciated how difficult leaving one’s but not for a state. job can be. For many workers, leaving a job means– Mutual assessment of contribution: the mutual eval- losing seniority, retirement funds, health benefits, uation of members of economic organizations is job-specific skills, community ties, and friends. Most different from the evaluation of members of a will need to find new jobs, and these can be hard to state, which should be viewed as a community find.’’ (Moriarty, 2005, p. 460). If there are such of equals. Firms tolerate a greater level of meri- important limits to the freedom of exit from cor- tocracy and it should be the case. porations, then one should regard voice as a signifi- Philips and Margolis’ message is clear. Even if we cant alternative. Where the costs of exit are veryagree with McMahon that we should care about the high, workers should be able to rely on voice, theway large corporations are organized, the analogy capacity to express dissent, and contest some ofwith the state is too strong. We should not under- corporate policies without exiting (Hsieh, 2005).estimate some important features of the state, most ˆ In recent articles, Nien-he Hsieh goes in the samenotably those related to its coercive power. The direction by drawing some attention to issues of dis-problem of protecting citizens from abuse and tributive justice in the organized production of goodsexploitation by the state might differ in some ways and services, which he perceives as an underestimatedfrom the protection of worker interests in the topic in contemporary political philosophy. Heworkplace. As Moriarty puts it, the point is that we reviews contemporary studies on the various demandsall know that there is a difference between Saddam that workers can legitimately make to managers andHussein and Montgomery Burns (Moriarty, 2005). examines claims about meaningful work and worker Despite these criticisms, it seems appealing to refer participation in firms’ governance structures. Whileto firms, not necessarily as quasi-states, but as some insisting on the requirement to go beyond parallelsort of political communities. After all, similar to case arguments, Hsieh suggests that the need forpolitical communities organized through some efficient decision making in contemporary economicvariety of government, corporations are sites of organizations involves the possibility of substantial
  • 7. Business and the Polis 339arbitrary interference from managers in the lives of management and organizational strategies to over-workers. This feature, according to him, should draw come agency problems do not only always rely onour attention to the legitimacy of power and authority the good engineering of external incentives but alsoin corporate structures (Hsieh, 2005, 2006, 2008). on building a strong organizational culture that Here, it should be noted that my aim is not promotes trust.13necessarily to articulate and to defend these claims. It To see firms as some sort of political communitiesis rather to show how the idea of corporations as offers a promising way to overcome some of thepolitical communities points in some refreshing major weaknesses of agency theory, or at least todirections. When Hsieh asks what justice requires in shed some light on under examined aspects of theeconomic production and evaluates the moral rich and complex life of modern economic organi-importance of ‘‘voice’’ beside ‘‘exit’’ and the notion zations. It is so because it might help us tell betterof ‘‘meaningful work,’’ he gives us a good idea of stories about these complex organizations. To sug-what it could mean to take a political look at what is gest that firms are somehow small political com-going on inside the firm. My primary concern, munities explains partly in which ways organizationshence, is to illuminate the style of analysis and such as firms matter for their members. It allows usnormative reasoning suggested by the view of firms to describe groups similar to the group of employeesas political communities, and how the use of a as members of a community with an organizationalpolitical lens can contribute to a better understand- culture, some common values, and specific commoning of some forms of participation in economic goals. The fact is that these members are not only aenterprises and some under-theorized intrafirm part of a useful division of labor but persons withrelations (such as the contestation of managerial values and a particular conception of the good life.decisions and authority). Moreover what a community such as a firm provides Take, for instance, the classical accounts of the is not only a job but also community ties and friends.theory of the firm. One clear advantage of using a For many of us who spend most of our life in thatpolitical lens in viewing intrafirm relations is that it kind of community, it is an important source ofmight help to highlight some neglected aspects in meaning.14the economic theory of the firm in which corpo- Here again, my aim is not to develop an alter-rations are seen as a nexus of contracts. In this view, native to agency theory. It is to illustrate the style ofthe firm is understood as a set of principal–agent analysis suggested by the ‘‘firms as political things’’relations that necessarily create agency problems. perspective. My point is that in allowing us to focusThe main objective of the governance structures of on such themes as community ties, trust-building,the firm is then to overcome these agency problems loyalty, belonging, culture, and leadership in termsby providing the appropriate set of incentives. of what Gary Miller calls ‘‘political leadership,’’ itHowever, in some versions of the theory, it is easy to might provide some insights to better understandfind a quite pejorative view of the ‘‘agents’’ who are how hundreds and thousands of agency problems aresupposed to act in the interest of the principal. While solved on a daily basis by huge organizations (Miller,reading the literature on ‘‘agency theory,’’ one could 1993, Chap. 11).have the feeling that ‘‘agents’’ similar to employees Of course, the use of the idea of firms as politicalare simply depicted as lazy opportunists who will communities should not lead to an overestimation ofavoid working whenever the boss isn’t looking the degree of harmony and trust in firms. The life of(Heath, 2009). economic organizations is also about conflicts. Dif- The problem with this view is not only that it fails ferent groups inside the firm can have highlyto provide a proper account of agents’ moral moti- divergent interests and cooperation is not easy tovations but also that it fails to provide an appropriate enforce. However, is also this is also what the idea ofunderstanding of the rich life of complex organiza- corporations as political communities is about. Ittions. It generally fails to explain why employees do should also be understood as a way to focus on thesenot only respond to external incentives but also de- different conflicts, not only between shareholdersvelop some moral allegiances to their business and managers, but also among many differentorganizations. It fails to explain why successful stakeholders.15
  • 8. 340 ´ Pierre-Yves Neron One of the most radical theoretical ways to follow should not undermine the insights provided by anthis path and to see corporations as political com- ethics of roles.munities is probably to be found in the Crane et al.’s Another possible problem with this view is that itapproach of ‘‘stakeholders as citizens’’. In a way that often presupposes that seeing the firm as politicalcould be reminiscent of some republican accounts of communities will lead to the justification of somethe workplace, the authors suggest that we push the specific normative conclusions, namely those usuallystakeholder theory a little bit further in theorizing the defended in stakeholder theories. For instance,groups usually referred to as stakeholders as ‘‘citizens.’’16 Crane et al.’s (2004) account of firms’ key stake-This shift from stakeholders to citizens undoubtedly holders as ‘‘citizens,’’ it clearly leads to a radicalsuggests a focus on the political dimensions of eco- critique of the shareholder view of the firm and tonomic organizations. Corporations, in this view, are the defense of what could be associated with aseen as communities of ‘‘internal’’ citizens in constant democratization of the firm. However, it is inter-relations with ‘‘external’’ citizens such as NGOs and esting to note that an economist such as Hansmannconsumers. (1996), while analyzing the different structures of This is highly seductive. The language of citi- ownership in his impressive book The Ownership ofzenship is a powerful and inspiring one. However, Enterprise has also argued that ‘‘one theme that hasthis attempt to politicize the relations between dif- emerged with particular force is the importance offerent firm groups using the vocabulary of citizen- viewing the firm as a political institution’’ (1996, p. 287ship could also be problematic. One could doubt my emphasis). Of course, Hansmann’s theory is farwhether it really helps to clarify the nature of obli- from the theory of corporate citizenship or the ideagations that arise within these specific relations. For of workplace republicanism and could eventuallyexample, Crane et al. contend that ‘‘thinking about lead to a radical critique of stakeholder theory. But itcorporations as dealing here with ‘citizens’ rather is extremely significant that he, too, refers to thethan simply ‘consumers’ or ‘employees’, etc. brings firm as a ‘‘political institution’’ without drawingup several issues.’’ (2004, p. 110). Note the language. radical propositions for change in the structures andAccording to this approach, we should not refer to patterns of ownership or defending the ‘‘stakeholderkey groups affected by the firm’s activities as ‘‘sim- firm.’’ The firm here is labeled as a political insti-ply’’ employees or consumers but as citizens. It tution by Hansmann because his account stresses theclearly suggests that our usual language is insuffi- importance of the costs of collective decision makingcient, and it posits the language of citizenship as a among different groups of ‘‘patrons’’ with different‘‘richer’’ one. In some sense, it is obviously true. As I interests. In some sense, he essentially agrees withnoticed earlier, it is true that individuals who have a James March’s famous conception of the firm as ajob in a firm are not only employees who accom- political coalition. The composition, goals, andplish some kind of work. They have rich back- ownership structures of the firm are not given; theygrounds, ideas, values, and a conception of the good are negotiated, and determined through a set oflife; they may also disagree with some of their firm’s political decision-making mechanisms inside thepolicies or decisions. However, it is also true that the firm.18 This is why Hansmann is able to illuminatelanguage of citizenship is very general and highly the importance of the costs of collective decisionabstract, in the sense that it does not capture very making as one of the main explanatory factors inwell the variety of roles and functions of moral agents ownership patterns. Firms, in Hansmann’s frame-in a complex institutional division of labor; and the work, are political communities that regroup dif-rights and obligations that derivate from those roles ferent actors who are precisely seeking to reduce theand functions. It is, in fact, very useful to refer to the costs of politics.group that provides labor as ‘‘simple’’ employees or A thoughtful examination of these debates onto the group that provides financial capital as ‘‘sim- ownership and the cost of collective decision makingple’’ shareholders because it helps to clarify the is, of course, beyond the scope of this article.nature of the relation in which they are involved.17 However, this overview highlights the various pos-The introduction of a language with strong political sible uses of a political language to talk about eco-connotations (e.g., the language of citizenship) nomic organizations. Moreover, it highlights also the
  • 9. Business and the Polis 341differences in scope and potential radicalism of the do so at the supermarket or at a shareholder’s meeting.project. Why? Because corporations respond (Hertz, 2001, p. 191). Of course, it is not necessary to be as enthusiasticCorporate activities and policies as citizenship issues as Hertz about the political effects of shopping and shareholder activism to take this ‘‘mutation’’ in cit-The first two views of corporations as political things izenship’s activities and behaviors seriously. Craneinsist on a distinction between the internal organi- and Matten take a more modest stance and suggestzation of the firm and external relations with soci- that to apply citizenship thinking to the businesseties as a whole. A third way to look at the political world doesn’t consist simply in taking a citizenshipnature of business is to examine some corporate concept ‘‘from outhere’’ and apply it to corporationspolicies, structures, and practices as ‘‘citizenship is- (2008, p. 32). It obscures the fact that corporationssues’’ while also looking at broader societal issues. themselves are subtly and sophistically involved inHere, by ‘‘citizenship issues,’’ I refer to corporations’ this reshaping of citizenship in general. They sug-policies, structures, and practices that seem to be at gest, rightly, that we should see some reactions tothe basis of political reactions from citizens or groups corporate power through this citizenship, henceof citizens. Hence, corporations are not seen meta- political, lens. When NGOs and local communitiesphorically as ‘‘citizens,’’ but as a growing matter of complain about some corporate operations, cer-concern for real citizens. Their operations are then tainly, it should not be viewed only as a marketseen as ‘‘citizenship’’ issues. disoperation or as public relations failures by cor- It is important here to note that individual citi- porations themselves but also as ‘‘examples of a cit-zenship refers not only to a legal status or to what izenry unhappy about the inequitable distribution ofthis status means for the identity of those who enjoy power to ‘corporate citizens’ ‘‘(2008, p. 29).it, but also to a set of attitudes or virtues.19 Citi- As the view of corporations as political commu-zenship does not refer only to a politico-legal status nities draws our attention to some political aspects ofand to an aspect of personal identity, but also to a what is going on inside the firm, this view of corporatepractice. Citizens are expected to behave in certain policies and practices as ‘‘citizenship issues’’ suggestsways (engaging responsibly in public discourses, that what is going on inside the firm also matters forrespecting the rights of others, seeing the big picture, larger political communities. Not only social andetc.) and to engage in some types of activities (vot- environmental impact of firms, but also the politicaling, participating to a certain degree in public decision-making process, organization, and structuresdebates, etc.).20 of firms are crucial for broader political communities. This third suggested way of looking at the political Talks about CSR, sustainable development, corporatenature of business insists on this practical dimension of citizenship, or triple bottom line, of course, reflectcitizenship and the set of behaviors and activities this. However, the apparently more neutral languageassociated there with. It starts from the realization of ‘‘corporate governance reforms’’ also hides politicalsome of these citizenship practices (from individual dimensions, as illuminated by recent studies of cor-citizens) are now redirected toward corporations and porate governance patterns. Gourevitch and Shinnbusiness actors instead of being primarily directed (2005), for instance, in their illuminating book,toward governments.21 The importance of this redi- examine how patterns of corporate governance arerection of political activities by individual citizens shaped by political structures and reflect public policyand groups was stressed by Hertz in her ‘‘Better to choices. Maintaining some distance from the classicalshop than vote’’ article where she states, very nexus-of-contracts view of the firm while acceptingenthusiastically: its usefulness, they show how patterns of corporate … instead of showing up at the voting booth to reg- governance are also influenced by various elements of ister their demands and wants, people are turning to politics – interests, institutions, and political conflicts. corporations. The most effective way to be political While doing so, they give us a better idea of how today is not to cast your vote at the ballot box but to political movements, organizations, and parties, from
  • 10. 342 ´ Pierre-Yves Neronboth the right and the left, organized their discourses Putting debates about the desirability and effec-to favor changes in corporate governance structures.22 tiveness of this mutation of citizenship aside, the From that point of view, talks about the relations contestation of corporate practices appears, none-between corporations and the politically charged theless, to be increasingly important in the realm ofnotion of citizenship are understood, not as an individual citizenship. A striking feature of the post-invitation to see corporations as citizens, but as a socialist critique of capitalism is that several groupschallenge to our understandings of citizenship now devote most of their resources to orient changespractices and their preconditions. It is, thus, pretty in corporate practices and policies, instead of push-similar to other propositions such as ‘‘cosmopolitan ing for more regulation by governments or, morecitizenship,’’ ‘‘ecological citizenship,’’ ‘‘transnational radically, for the nationalization of entire indus-citizenship,’’ ‘‘postnational citizenship,’’ ‘‘diasp- tries.24 The efforts of many activists from the left andoric citizenship’’ and so on. All these propositions, critics of modern capitalism have been devotedthat Melissa Williams labels as the citizenships of trying to convince individual firms, using ‘‘namingglobalization, aim to revisit our assumptions about and shaming’’ strategies and more collaborative ones,citizens status, entitlements, and modes of partici- into accepting voluntary constraints on their prac-pation in light of new societal developments (2007, tices and activities. As Wayne Norman states it, in-p. 228). For example, ‘‘ecological citizenship’’ has stead of using the language of socialism, class warfare,become a popular way to frame debates in envi- or struggles against private property, those critics ofronmental politics, such as ‘‘cosmopolitan’’ and modern capitalism are most likely to formulate their‘‘transnational’’ citizenship have been frequently criticisms and recommendations in the language ofused as tools to think about issues of global justice. ‘‘corporate social responsibility,’’ ‘‘sustainable devel-This is why, it should be stressed, that this redirec- opment,’’ and ‘‘stakeholder capitalism’’ (Norman,tion of citizenship activities from governments to- 2004).25ward corporations is crucial for a theory of individual From this perspective then, what appears to becitizenship: its practices, institutions, preconditions, significant with this third way of looking politicallyand so on. It does not justify the use of the metaphor at business practices and institutions is that it shedsof ‘‘corporate citizenship’’ as a tool to think about some fresh light on the idea of social responsibility ofcorporations’ responsibilities, obligations, and vir- business and the various ways it is embedded intues. It is much more an argument for the idea that political spheres and movements (Colomonos,political philosophers of citizenship should think 2005). The ‘‘market for virtues,’’ in which virtuousmore seriously about the role of corporations in companies are recompensed and bad ones punishedpolitical life and discourses than it being an argument or ashamed, is a complex arena involving a pluralityfor the use of the language of citizenship to think of actors that interact within complex networks ofabout corporate responsibilities. exchanges, collaboration, deliberation, and con- Here, of course, an important issue concerns the frontation (Vogel, 2005; Colonomos, 2005). Thesenormative evaluation of this mutation in the prac- complex interactions and the shaping and reshapingtical component of citizenship.23 It is one thing to of this market for virtues could be described as whatsay that there is such a redirection of citizenship I shall call a ‘‘politics of accountability’’ in whichpractices, but it is another to evaluate it. It is not corporations negotiate and renegotiate their placeclear at all whether the most effective way to be into society with consumers, media, politicians,political is to target corporations and whether it governments regulators, and other ‘‘civil regulators’’should be. Clearly, Hertz (quoted above) is not only (Zadek, 2001) while ‘‘moral entrepreneurs’’ (Col-trying to describe new citizenship activities but also onomos, 2005) such as NGOs seek to wield eco-celebrating them. Authors such as Crane, Matten, nomic powers in two directions: by handing outand Moon are not always clear about this. They seek economic rewards to the virtuous and to punish, byto describe and illuminate what they perceive as new shaming them, those who fail to conform to a spe-realities in the realm of citizenship, but at some cific normative order.26point, they also seem to present these mutations in The protagonists of this politics of accountabilitythe practice of citizenship as being clearly desirable. are, of course, numerous. Shifts in languages and
  • 11. Business and the Polis 343strategies to render account or to force others to do should think of the new ‘‘incorporation of citizen-so are frequent. Moreover, my aim is not to give a ship,’’ they tend to overestimate the novelty of thedetailed account of this politics of accountability. It dynamic they are trying to shed some light upon.is to show how labeling corporate activities andpolicies as ‘‘citizenship issues’’ allows us to concep-tualize CSR and stakeholder approaches not neces- Corporations as participants in the political processsarily as a clear set of identifiable moral obligationsfor corporations not only ‘‘business-as-usual’’ strat- A fourth, and probably the most straightforward,egies, but also as way that uses a political lens to think normatively– Political discourses: discourses that aim to articulate about business practices and institutions is to regard some ‘‘contestation claims’’ and accountability corporations as actors that can influence the con- demands from a discontented citizenry about the struction of public policies, regulations, and laws. impact of some corporate practices and opera- Business organizations simply have become – tions and the designs of markets; and through their zealous lobbying, contributions to– Political strategies: strategies and tactics that aim to political action committees (PAC), public declara- advance some particular set of issues, agendas, or tions, participation in public debates, provision of interests on the public sphere by targeting mar- information, participation in public consultation ket actors instead of governments. processes, and so on – significant actors of the ‘‘advocacy politics’’ of democratic societies.27 It should also be noted that Crane et al. suggest Here, it is important to distinguish this fourthgoing a little further in our conceptualization of the understanding of corporations as political actors fromrelations between citizenship and markets actors the first one, of corporations as ‘‘distributive agents’’.such as corporations (2008a, b). According to them, In this first understanding, businesses are politicalwe should not entirely focus on the role of corpo- actors because they are important social institutionsrations in the reshaping of the practical dimension of with considerable financial and organizational re-citizenship, but also on their roles in the administra- sources that have a profound impact on who getstion of individual citizenship rights. This is an what, when, and how. In this ‘‘stakeholder’’ sense,important theme in their most recent writings. corporations are political actors because they are, byCorporations are now playing a radically new key nature, social institutions. However, here, corpora-role in governing citizenship next to governments. tions become political actors in intentionally trying to This is, of course, very important. If we think, as influence the construction of public policies, regu-Crane and al. urge that we do, that corporations lations, and laws. This is significant because it rep-now play a significant role in what they call the resents a way to take seriously the distinctionadministration of citizenship, then it could have an between the systemic effects of business on politicsimpact on both the conceptualization of corporate and the intentional influence of firms on the politicalresponsibilities and our theorizing about individual process (Bernhagen and Brauninger, 2005). As noted ¨citizenship. However, here, it should be said that, in above, firms clearly classify as political actors in thesome sense, the idea that corporations play a signif- sense that the design of markets and business orga-icant role in the administration of citizenship is nizations have significant distributive effects onnothing new. Moreover, this is close to the first view many groups. However, as (sometimes, quite active)of firms as distributive agents. This is because as participants in the political process, corporations domarket actors, corporations are a part of a complex not become political actors by simply doing their jobinstitutional matrix that provides important ‘‘citi- in competitive markets. They intentionally enter thezenship goods’’ for individuals. They provide jobs, political arena to influence the shaping and reshapingretirement plans, and financial security similarly as of their regulatory environment. This distinction ismedia provide important citizenship goods in important from a normative point of view because itproviding information for open public debate. refers to different kinds of relations between firmsTherefore, when Crane and Matten suggest that we and other social institutions, and it also suggests that
  • 12. 344 ´ Pierre-Yves Neronwe might want to apply different normative tools or realize that we must pay much more attention to thelanguages to think about these relations. responsibilities of corporations within the political At this point, it is worth noting that this fourth, and administrative processes that lead to the reformquite obvious, way to think about the political of government regulation. One has also to recognizenature of the firm has been surprisingly overlooked that firms are ‘‘political actors’’ in the sense that theyin normative debates about the desirable conduct of are key actors of the advocacy politics, who influ-business and the design of markets. As Leonard ence the construction of public policies, regulations,Weber points out, in a rare academic discussion on and laws. Therefore, if government regulations playthe ethics of corporate political activities, it seems such a fundamental role that the shape and contentthat questions about the legitimacy of corporate of such regulations are now heavily influenced bypolitical activities such as zealous lobbying and firms themselves, then one of the main aspects of thecontributions to PAC are being pushed more by definition of a responsible business organizationNGOs, and activists (shareholders and non-share- should be the determination of its political role andholders) than by academics with an interest in the the limits of this role.normative analysis of businesses practices (Weber, This could lead us far given the historical and1997, p. 72).28 In general, normative theories of ideological opposition of the business world tocorporate rights, obligations, virtues, and so on, have government regulations (Baumol, 1974). As Josephfailed to take seriously David Vogel’s suggestion that Heath puts it, ‘‘one of the more troubling features of‘‘the most critical dimension of corporate responsi- the way businesses conduct themselves in the publicbility may well be a company’s impact on public sphere is that they consistently lobby against regu-policy’’ (2005, p. 171). lations that are designed to correct market failures’’ This should be regarded as regrettable. There are (2007, p. 371). Hence, my suggestion is that onesignificant ethical concerns about the role of cor- very interesting implication of taking such a stance isporations in advocacy politics (and also the role of that it points out some of the most morally prob-money in politics in general), in contemporary lematic aspects of the conduct of corporations,democracies.29 Given the asymmetry of power be- namely, the entrenchment of market failures bytween citizens and ‘‘corporate citizens,’’ certain political oppositions to their correction by the state.questions do arise: What should be the proper role ofcorporations in the political realm? Do corporationshave the right to influence elections? How should Building the political theory of the firm:top executives think about the way their corpora- some challengestions could influence governments? Should respon-sible corporations restrain themselves in the political In the preceding section, I have made several sug-realm or even that, as the former US Secretary of gestions on the various possible ways in which to useLabor Robert Reich argues, they have a responsi- a political language to think about business practicesbility to ‘‘respect the political process by staying out and institutions. What should we think about thisof it’’ (Reich, 1998, p. 16)? Answers to these questions call for a more explicitly political conceptualizationshould be considered as crucial parts of a definition of what of normative issues that arise in the conduct ofit is to be a responsible economic organization, at home and business? How should we welcome the use ofabroad. political language to think about these issues? What In order to develop that line of argument, of does the future of a ‘‘political theory of the firm’’course, one has to recognize the fundamental role look like? In order to suggest some possible answersgovernment regulations play in the promotion and to these questions, I would like to conclude byimplementation of responsible business practices highlighting some problems with this political the-(most notably as the main institutional response to ory of the firm. While doing so, I do not want tomarket failures) (Heath and Norman, 2004; Heath, imply that building such a theory is unworthy.2006). Moreover, after focusing on how paramount I think that doing so is one of the main tasks ofstate regulation has been over the past century in academics with an interest in the normative study ofmaking corporations more responsible, we also business practices and institutions. As a consequence,
  • 13. Business and the Polis 345I want to contribute to future debates about the firm while insisting on the variety of relations andpolitical nature of business by suggesting three interactions that fall under this political umbrella.challenges that need to be overcome. In order to show that such a theory has different One striking feature of this call is that it is highly compartments is important to put aside a tendencyseductive. It appears to correspond to some of our toward uniformity that is inherent to the over-intuitions about some features of the business world. inclusion problem. Business ethicists appear to beMoreover, after examination, it seems to be a fruitful often tempted by the formulation of a moral uniformway to open new debates and illuminate certain code in which a theory of general morality (Kantian,dimensions that might otherwise go unexamined in utilitarian, Aristotelician) is applied to business‘‘classical’’ business ethics. Of course, seeing corpo- problems (Heath, 2007).30 It would be tempting forrations as political actors could be a good way to take theorists of the political nature of corporations to dovery seriously the common (and often vague) sug- the same, i.e., to use a political language in such a waygestion that business organizations are not purely to think about every business relation. It is probably aeconomic ones. Investigation of the ‘‘political’’ in mistake done by Crane and Matten in using thebusiness life could then serve to clarify what we citizenship language to think about almost everymean exactly when we say that business organiza- problem in the normative evaluation of businesstions are not purely economic ones. It could also practices and institutions, from corporate governanceilluminate some aspects of these organizations in matters to consumer’s choices through CSRs,putting the spotlight on some internal relations industrial relations, and meaningful work. As notedbetween groups inside the firm (shareholders, non- above, this is well exemplified by their call for ashareholder groups, and the management). How- theory that understands workers as ‘‘citizens’’ insteadever, it could also be said that this invitation to think of viewing them as ‘‘simple’’ employees. The prob-more politically about business remains, at least lem with this claim is that it overlooks the impor-partly, very vague, especially when authors as diverse tance of a complex institutional division of labor inas Crane, Matten, Palazzo, McMahon, Hartman, which human agents play different kinds of roles.Walzer, Dahl, Hsieh, and Hansmann, with very Human beings can wear different hats depending ondifferent intellectual projects and political orienta- the kind of institutional interactions in which theytions, refer to corporations as political ‘‘entities,’’ are involved. The basic insight of what could be‘‘actors,’’ or ‘‘institutions.’’ Furthermore, it is not called an ‘‘ethics of roles’’ is that the recognition ofself-evident that it always helps to think more clearly the importance of this complex institutional divisionabout some issues and problems to systematically of labor is crucial in the way we think about thelabel these issues and problems as ‘‘political.’’ rights, responsibilities, obligations, and virtues of These remarks make clear that it would be highly moral agents. This is why the systematic use of theproblematic to simply talk about every problem or very general language of citizenship risks blurring ourintellectual project in business ethics as ‘‘political’’ sensibility to considerations of division of moral laborones. Let us call it the over-inclusion problem. This is and good institutional design. In order to put itimportant because this call for a better understanding simply, it is not morally insignificant to refer to thoseof corporations from a political point of view seems persons who do a specific job within an organizationto be especially vulnerable to this problem. As a that we call a ‘‘corporation,’’ as ‘‘employees.’’ It sit-consequence, the first challenge facing the political uates them in an institutional context, giving ustheory of the firm would be to overcome this over- important insights about their rights and responsi-inclusion problem. One way to do so is by drawing bilities, and their legitimate demands.the kind of distinctions drawn in this article, which It should be clear by now that a call for a politicalappears to be a useful way to show the variety of view of business ethics issues should not blur crucialintellectual projects behind this call. It is useful be- differences between different kinds of interactions orcause it ‘‘compartmentalizes’’ this very general idea relations and their different natures. This is why myof a ‘‘political theory of the firm.’’ It retains the basic characterization of these four views takes seriouslyintuitions behind this call for a political view of the the difference, stressed by Heath, between intrafirm
  • 14. 346 ´ Pierre-Yves Neronrelations and extrafirm relations (Heath 2006, 2007). practices that leverage that which motivates businessSome extrafirm relations, such as business and gov- in a way that results in social and environmentalernment relations, are obviously political while some value creation.’’ (Rasche et al., 2008, p. 155). An-others, such as competitive practices between firms other contributor argues that corporations have athrough market interactions, might not be especially political responsibility that ‘‘can be defined as: towell understood as political ones, both empirically respect human rights, avoid being complicit in hu-and normatively. Meanwhile, some intrafirm rela- man rights abuses, do what they can to promotetions, such as relations between employees and human rights principles.’’ (Rasche et al., 2008,managers, could be fruitfully understood as political p. 164).relations of power, authority, community, and trust These two formulations of the political responsi-building, but they remain eminently different from bility of corporations are quite similar to classicalothers types of political activities. accounts of CSR. It is in fact not self-evident that it Some other relations between economic actors helps to refer here to a political responsibility. Mostare not straightforwardly political and, thus, are not theorists of CSR believe that social responsibility ofespecially well theorized as political relations or as business is not simply about philanthropic gesturescitizenship activities. For instance, Hertz’s enthusi- and should ‘‘encompasses innovative models ofasm about shopping as the most efficient political business and practices that leverage that whichactivity in contemporary societies exudes overcon- motivates business in a way that results in social andfidence. Despite recurrent talk about the fall of environmental value creation.’’ In order to label thisnation states and a ‘‘silent takeover’’ by corporations, as a political responsibility appears to be a way to addthe state remains the key political actor, and changes some normative weight to a well-known statement.in government have deep and pervasive impacts. The same could be said about the second account ofTheorists of the political nature of corporations and corporate political responsibility. Moreover, if webusiness institutions should resist such enthusiasm in are to label these responsibilities as political responsi-their attempts to shed some light on the political bilities, then the focus on human rights alone isnature of corporate practices. surprising. In fact, this definition of political A second problem would be the formulation of a responsibility fails to capture three of the four corepolitical view of the firm that simply leads to a areas of the UN Global Compact with corporations:reaffirmation of the set of ideas usually associated labor standards, environment, and anti-corruption.with CSR and stakeholder theory. In this case, it Why should we think, for instance, that a negativewould be impossible to differentiate this political obligation not to abuse human rights is best describedapproach from classical CSR and stakeholder ap- as a political responsibility? Aren’t the collaborationproaches. Let us call this the differentiation problem. and cooperation with relevant governmental andSome recent attempts to see corporations as political civil authorities to fight corruption in developingactors appear to fail overcoming this problem, and, countries more straightforward political activities?thus, fail in meeting expectations. Despite the invi- Isn’t the lobbying of governmental agencies fortation to set up an agenda to build the new political stronger environmental regulations and standards aconception of the firm and shed some light on un- better example of an obvious, clear-cut politicalder-theorized interactions and practices, these at- responsibility? Is there any reason to describe everytempts offer something close to classical CSR ‘‘innovative model of business’’ as being political?accounts and stakeholders theories. For instance, one Obviously, this association between the politicalof the contributors to the report on the First Swiss view of business practices and the CSR agenda is notMaster Class in CSR (untitled ‘‘Corporations as a problem in itself. It is, of course, a possible result ofPolitical Actors’’) refers to a debate on ‘‘whether or our inquiries. However, it would be mistaken tonot business possesses a political responsibility be- assume from the start that using a political lens toyond its traditional role in society’’ (Rasche et al., look at normative issues in the conduct of business2008, p. 154) and suggests that a political responsi- would go hand in hand with something similar to ability moves beyond philanthropic gestures and ‘‘strong CSR agenda.’’ We should not think that it‘‘encompass innovative models of business and will necessarily be the case. On the contrary, we
  • 15. Business and the Polis 347might be open to the possibility that taking such a feature of this literature that makes clear that the callstance could lead to surprising, unexpected results. for a better understanding of the political nature of One possibility, to overcome this problem, is to businesses does not represent a way to draw someadmit that among the four views examined here, attention to a specific set of activities such as lob-some could be clearly more relevant or theoretically bying and campaign contributions. It seems to referuseful than others. For instance, one could say that to something more. According to Crane, Matten, andthe first view of firms as distributive agents is Moon, for example, the theory of the firm as aprobably the most vulnerable to this differentiation political actor calls for a radical rethinking of theproblem. The idea of firms as political actors in this classical division of labor between business andsense is well recognized in the CSR literature. It is government. It also states that corporations becomethe familiar idea that given their nature as ‘‘public’’ political actors only when they adopt new patterns ofinstitutions, corporations cannot abdicate their behaviors oriented toward the ‘‘common good’’broader social responsibilities. One might also (Crane et al., 2008a, b).plausibly argue that the view of corporations as It is then clear that authors such as Crane, Matten,political communities is more promising because it and Moon seem to have in mind something elseclearly appears to draw our attention to some under- rather than a reaffirmation of a classical account oftheorized relations within the organizational struc- CSR, especially when they insist on the possibility oftures of the firm. One might also say that, in order to rethinking (maybe radically) the division of moralovercome this differentiation problem, the fourth labor between business and government. Given this,view of corporations as active participants in the it is probably useful here to draw a distinctionpolitical process appears to be especially promising. between three different understandings of the call forIt is, of course, the most straightforward way to a theory of the business firm as a political actor. Asthink politically about corporations, which puts aside should be clear by now, some authors clearly refer todifficulties related with problematic or unobvious this as another way to defend CSR. Let us call it theuses of a political lens to think about business. Reaffirmation view. Some other scholars clearly referHowever, it is also a view that might draw our to such a theory as a paradigm change in the way weattention to very specific, but fundamental, practices normatively think about businesses’ roles andby corporate actors that are not especially well the- responsibilities in our societies. Let us call it the Shiftorized with the tools provided by CSR and stake- in paradigm view. Proponents of this view associateholders theories. This is probably why Scherer and the idea of the business firm as political actor as anPalazzo suggest that some corporate activities in opportunity to rethink the classical division of laborcomplex networks of (global) governance point to between business and government and to redefinethe need for a better understanding of the political corporate social and environmental roles andnature of business (2007, p. 1115). The main con- responsibilities in a more expensive way. Anothertribution of a ‘‘political theory of the firm’’ then way to understand this call for a ‘‘political’’ theory ofmight not be to a reassessment of business practices the business firm is to see it as a useful way to drawin general, but to a point in the direction of a new some attention to a specific set of corporate activitiestheory of corporate responsibilities, which focuses such as lobbying, contributions to campaigns, and soon the various ways in which firms, in their external on. Let us call it the Shift in subject view. According torelations, interfere in the political process, in the this view, recent literature on the firm as politicaldirection of a robust normative theory of corporate actor suggests, more modestly, a change in the subjectlobbying. of our thinking about corporate roles and responsi- Interestingly enough, recent literature on the to- bilities. It draws our attention to the importance ofpic does not go in this direction. It rather suggests corporate political activities and suggests the need forthat the fact that corporations use zealous lobbying more theoretical tools to think normatively aboutand political strategies to foster their economic ends and design principles for business and governmentdoes not change them into political actors (Crane relations.et al., 2008a, b). It does not imply, as such, that they This classification of the different positions shouldhave a political responsibility. It is a very significant give us a better idea of the varieties of projects and
  • 16. 348 ´ Pierre-Yves Nerontheir scope. The Reaffirmation view is of course should be viewed as a significant response to man-facing the differentiation problem and seems to agerial decisions. Second, corporations could also beimply that call for a political theory of the firm might quite uncomfortable with my remarks on thenot be especially fruitful. The Shift in paradigm view importance of taking very seriously the fourth aspectdoes not face this problem and clearly implies a more (Corporations as participants in the political process)radical project. The proponents of this view suggest examined here in our normative discussions abouta new paradigm in which corporations are under- corporate responsibilities. A conception of corporatestood as assuming new roles of governance and state- roles and responsibilities that draws our attention toalike responsibilities (Crane et al., 2008a, b). They the ways firms interfere in the political process, and,are, therefore, able to put aside the differentiation therefore, in the shaping and reshaping of theirproblem, but are probably facing what I called the regulatory environment, may have radical implica-over-inclusion problem: the risk, under a new para- tions, given the ideological opposition and skepti-digm, to label every issue of business ethics as cism of the business class toward government‘‘political’’ ones without making any real theoretical regulations. Corporations generally wish to put theimprovement. By suggesting that the fourth way to spotlight on their various direct charitable contri-think politically about corporations (Corporations as butions to the community, but have little incentiveparticipants in the political process) might be the to highlight their lobbying efforts, campaign con-most fruitful one, I am, therefore, proposing some- tributions, political connections, and so on (Neron ´thing more in the lines of the Shift in subject view. It and Norman, 2008a, p. 17, b, pp. 62–65). In orderdoes not simply reaffirm classical CSR discourses, to put it crudely, they will tend to promote theirbut does not necessarily assert the need for a para- own green innovations and practices inside theirdigm change in business ethics. It simply stresses, organizations, such as the use of recto–verso for themaybe more modestly and less enthusiastically, the production and distribution of corporate documen-need for a better normative theory of (classical) tation, but will have fewer incentives to be trans-corporate political activities. parent about how they lobbied to defeat stronger Finally, the third, probably more abstract, chal- environmental regulations inspired by the protocollenge is to realize that the choice of using a political of Kyoto. In contrast, some NGOs and critics oflens to examine issues of business ethics is itself partly capitalism might have reasons to favor this intro-political. In the preceding section, I have proposed duction of a ‘‘political’’ (in the fourth sense) view offour directions in which it could be theoretically the firm.fruitful to think about the complex relations be- ´ As Neron and Norman argue, this kind of resis-tween the business world and the polis. It is worth tance from some groups to the introduction ofnoting that these various ways to think politically specific ways to talk about corporate responsibilitiesabout business practices and institutions are not could be partly explained by the fact that it isreally consensual. As Crane and Matten point out, sometimes hard to draw a clear line between thethere are some resistances in business circles to the analysis of the language of politics and an exercise invery idea that firms be seen as embedded in some ´ the politics of language (Neron and Norman,sort of political relationships that the call for a 2008b). This is because when evaluating a normativepolitical theory of the firm is trying to shed light framework or language to think about businessupon (2008, p. 30). This is because the very idea of practices and institutions, we have to answer twousing a language with strong political connotations related but different questions. First, we want tois, from the start, a controversial one. It suggests know whether the language or normative frame-unobvious ways to publicly talk about business ethics. work X is helpful for thinking in a clear, coherentLet me just give two examples. First, CEOs and top way about corporate responsibilities (and their jus-management executives may be especially reluctant tifications). Second, we also want to ask ourselvesto address issues about the legitimacy of management whether the language or normative framework X isauthority raised by the view of corporations as an efficient way of talking about responsible businesspolitical communities. They might, for instance, be practices in public discourses. The first question isuncomfortable with the suggestion that ‘‘voice’’ largely calling for a ‘‘neutral’’ analysis of the language of
  • 17. Business and the Polis 349politics which aims to construct better normative of the project. Clearly, it is a worthy one. Theytheories about corporate duties and obligations; the should be viewed as an attempt to orient the wholesecond question is an invitation to engage in the project, as an invitation to not overestimating itspolitics of language, to propose guidance on how we scope, to put aside overconfident claims, and to beshould or shouldn’t use different normative frame- careful about its implications. The utilization of aworks to promote what we would consider to be political lens to look at some aspects of the businessmore desirable outcomes in the social world.31 In world is clearly useful to think in an imaginative,order to use the title of Williams Connelly’s empirically informed way about normative issuesimportant book, we engage in such a process to related to business practices and institutions. In thismodify the ‘‘terms of political discourse’’ (1983). sense, it might be useful to overcome what Hanlon Given the above-mentioned sort of dynamic, it is calls the ‘‘denial of politics’’ in business ethics.not very surprising that some business circles might However, it is also clearly the case that some rela-be uneasy with a more explicitly political language to tions are not especially well theorized as ‘‘political’’talk about their responsibilities, practices, and ones. Moreover, some, e.g., shopping, are at bestinternal organization, while some of their critics problematically theorized as being political. Wecould enthusiastically embrace this language. In that should always keep in mind that while there arecase, the ‘‘politics of language’’ of the corporate some grains of truth in the slogan ‘‘Everything isworld would consist in resisting the introduction of a political,’’ some things are more political than others.more explicitly political language and promotingother, maybe more pro-business, normative lan-guages. From this point of view, the debate about Notesthe introduction of a political language to thinkabout business practices and institutions is itself 1 For some reflections, which I draw here, on thispolitical because it is a way to engage in the shaping plurality of languages or framework, see Neron and ´and reshaping of the terms and structures of public Norman (2008a, pp. 4–6). 2debates and discourses about business practices and See also Jeurissen (2004), Waddock (2004), andinstitutions. Zadek (2001). See Matten and Crane (2002, 2005), ´ Moon et al. (2005), and Neron and Norman (2008a) for an analysis and a critique of this association of corpo- rate citizenship with CSR.Conclusion 3 See Heath for the importance of applying very dif- ferent ‘‘normative logics’’ to different relations insideRecent literature in business ethics suggests that the firm and outside the firm (Heath, 2006, 2007).there has been a call for a ‘‘political’’ understanding 4 See Lynn Sharp Paine (2002, pp. 91–96).of corporations, and business practices and institu- 5 See Boatright (2002) for a good discussion of thistions in general – a call for what could be designated claim. 6as a ‘‘political theory of the firm’’ or a ‘‘theory of the I use the term ‘‘institutions’’ here to talk about for-firm as a political actor.’’ This article aimed to mal organizations. 7investigate what it means to take seriously this call. See Bernhagen and Brauninger (2005, p. 43). ¨ 8In order to do so, it proposed four different ways, Here, see Heath (2006, pp. 540–542). See alsoand their potential implications, to think politically Stiglitz (1996). 9about issues in business ethics. It also showed how This could be reminiscent of James G. March’s famous study on the firm as a political coalition (March,recent literature has failed to take seriously these 1962).distinctions and, therefore, has failed to identify the 10 See Cohen (1989, p. 27) for an excellent accountproper scope of the project. of parallel case arguments and the need to go beyond, This is the reason why this article also points to see Hsieh (2008, pp. 15–22).some potential difficulties that theorists involved in 11 In the preface of his 1994 book Authority andthis project need to overcome. Of course, none of Democracy, McMahon wrote that ‘‘The authority ofthese critical comments or the clarification attempts governments might also be called political authority,made in this article should be viewed as a rejection although for reasons that will become clear as we
  • 18. 350 ´ Pierre-Yves Neron 27proceed, I believe that in important respects managerial It should be noted that the analysis of corporateauthority deserves the label ‘political’ as well.’’ (1994, involvement in the political process and democraticp. xiii). advocacy could raise some issues about the kind of12 See Hsieh (2005, 2008) for a good discussion of the agents that corporations are. Is a corporation simply alimits of exit. collection of individuals? Or, is it possible to make13 See Dees (1992) for a good survey of the problems sense to view a corporation as a single agent, similar toand limits of the principal–agent analysis of the firm. an individual, with a set of specific political interests?See Gary Miller for an attempt to produce a more Of course, to deal with these questions about the onto-sophisticated account of agency theory. logical status of corporations and collective agency is14 See Lynn Sharp Paine (2002) for a very interesting beyond the scope of this article. For a good recentaccount of what she calls the ‘‘pervasive presence’’ of account of these issues, see Pettit (2007). 28corporations in our individual life. Here, it should also be noted that there is a huge15 Of course, conflicts also occur among minority empirical literature on corporate political activities (seeshareholders and controlling shareholders. Mitnick, 1993a, b for an important contribution and16 Here, I refer to Sandel’s (1998) account of the Wood and Logsdon (2008) for a good bibliography ofworkplace in his defense of a ‘‘civic’’ economy. See studies on CPA). My point is not to deny the relevanceDagger (2006) and Hsieh (2006). of this literature, but to highlight the neglect of CPAs in17 This is the basic point made by Joseph Heath the conceptualization of corporate rights and obligations. 29(2006) in his critique of stakeholder theory. See Dworkin (2002).18 30 Here, I almost use March’s words. See March Heath criticizes this tendency to use a uniform(1962, p. 672). framework.19 31 For an account of citizenship in the liberal tradi- ´ For this distinction, see Neron and Normantion, see Kymlicka and Norman (1994). (2008b). For a good methodological analysis of our20 It should be noted that not all virtuous activities are awareness (or lack of) about the importance of therecognized as examples of good citizenship. When peo- choice of languages, see William Connolly’s importantple’s special efforts are directed toward their children, book (1983). See also David Miller’s analysis of ‘‘lin-we call them ‘‘good parents’’. If a teacher pays special guistic philosophy and political theory’’ (1985).care to the welfare and education of his students we callhim/her a good teacher. If your neighbors collect yourmail while you are on vacation, then you will think ofthem as good neighbors; and so on. References21 David Vogel captured this shift in political activitieswith the title of his 1978 book ‘‘Lobbying the Corpora- Baumol, W.: 1974, ‘Business Responsibility andtion.’’ Economic Behavior’, in M. Anshen (ed.), Managing22 See, of course, Gourevitch and Shinn (2005), and the Socially Responsible Corporation (Macmillan,also Cioffi (2006). New York).23 Here, it could be fruitful to learn from recent de- Bernhagen, P. and T. Brauninger: 2005, ‘Structural ¨bates in the theory of citizenship about the idea of Power and Public Policy: A Signaling Model of‘‘ecological citizenship’’ between Dobson (2003) and Business Lobbying in Democratic Capitalism’, Politicalsome of his critics. Studies 53(1), 43–64.24 For a great critical account of the rise and fall of Birch, D.: 2001, ‘Corporate Citizenship: RethinkingSOE (state-owned enterprises), see Stiglitz in his ‘‘Whi- Business Beyond Corporate Social Responsibility’, inther Socialism.’’ J. Andriof and M. Mcintosh (eds.), Perspectives on25 Of course, as Norman himself notices, this is a very Corporate Citizenship (Greenleaf Publishing, Sheffield).incomplete characterization of the contemporary left. Boatright, J.: 2002, ‘Corporate Governance: Justifying theThere are still quite radical socialists, left-libertarian, Role of Shareholders’, in N. Bowie (ed.), Blackwelladvocates of basic income schemes, luck egalitarians, Guide to Business Ethics (Blackwell, Oxford).and so on. Moreover, there is also a leftist critique of Cioffi, J.: 2006, ‘Building Finance Capitalism: TheCSR and sustainable development. See Wayne Norman Regulatory Politics of Corporate Governance Reform(2004) for a longer discussion of CSR and the left. in the United States and Germany’, in J. D. Levy (ed.),26 For some interesting remarks on what I call the The State of After Statism: New State Activities in the Age‘‘politics of accountability,’’ see Colomonos (2005) and of Liberalization (Harvard University Press, Cambridge,also Kuper (2004). MA).
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