Corporate social responsibility put to the test
Download
1 / 74

by Prof. Dr. Andreas Georg Scherer - PowerPoint PPT Presentation


  • 754 Views
  • Updated On :

Corporate social responsibility put to the test What are the responsibilities at local, national & global levels? Lessons learnt for international business ethics. Prof. Dr. Andreas Georg Scherer University of Zurich presentation at the Lasalle Ethik Forum 2010

Related searches for by Prof. Dr. Andreas Georg Scherer

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' by Prof. Dr. Andreas Georg Scherer' - liam


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Corporate social responsibility put to the testWhat are the responsibilities at local, national & global levels?Lessons learnt for international business ethics

Prof. Dr. Andreas Georg Scherer

University of Zurich

presentation at the

Lasalle Ethik Forum 2010

Ethics in Business and the Economy in the Face of the Crisis,

March 25-26, 2010


Abstract
Abstract

  • due to the globalization process the environment of business firms has changed dramatically

  • the traditional CSR paradigm is based on the assumption of a strong state (rule of law, democratic institutions) and clear legal and moral requirements

  • we argue that these assumptions become problematic in the current “post-national constellation” (Habermas)

  • we describe the new situation with regulatory gaps in global regulation, erosion of national governance, and loss in moral homogeneity in the corporate environment

  • we discuss the implications of these changes for the responsibilities of global busines firms


The practical dimension human rights
The Practical Dimension: Human Rights

The ILO estimates that about 246 million children worldwide work under conditions that can be defined as the worst forms of child labor — prostitution, mining and slave labor in different industries.

See ILO 2002, http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang--en/WCMS_007791/index.htm


The practical dimension social standards
The Practical Dimension: Social Standards

Photo: mutilated workers in Asia

According to an ILO report in 2004 2 million work related deaths occur annualy, most of them in Asia; the number of serious injuries is unknown

see ILO 2004, http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Feature_stories/lang--en/WCMS_075605/index.htm


The practical dimension environmental standards
The Practical Dimension: Environmental Standards

toxic e-trash dumping in Guiyu, China

See: Johnson, T.: E-waste Dump of the World

Seattle Times, April 9 2006

http://seattletimes.nwsource.com/html/nationworld/2002920133_ewaste09.html



Who is responsible
Who is Responsible?

  • The state?

  • The UNO?

  • The ILO?

  • NGOs?

  • Consumers?

  • You and me?

  • Business Firms?


The old view economic development first
The Old View: Economic Development First

  • “the way to help poor people abroad is to open our markets to them not to force them to adopt…human rights standards.”

    Krauss, M. 1997. How Nations Grow Rich. The Case for Free Trade. New York: Oxford University Press, p. 51.

  • “a lousy job is better than no job at all”

    Martinez-Mont, L. 1996. “Sweatshops are Better Than no Shops,” Wall Street Journal, June 25, 1996

  • “Still, the best and most direct way to raise wages and labor standards is […] economic development. […] therefore efforts to limit international trade or to shut down the sweatshops are counterproductive.”

    Irwin, D. A. 2002. Free Trade under Fire. Princeton, Princeton University Press, p. 214


The old view focus on profits only
The Old View: Focus on Profits Only

  • “the social responsibility of business is to increase its profits.”

    Friedman, M. 1962. Capitalism and Freedom. Chicago: University of Chicago Press, p. 133.

  • “…social welfare is maximized when all firms in an economy maximize total firm value.”

    Jensen, M. C. 2002. “Value Maximization, Stakeholder Theory, and the Corporate Objective Function.“ Business Ethics Quarterly 12: 235-256, p. 239.

  • stakeholders other than shareholders “have protection (or can seek remedies) through contracts and the legal system.”

    Sundaram, A. K., & Inkpen, A. C. 2004. The corporate objective revisited. Organization Science, 15: 350-363, p. 353.

    it is the task of the state to resolve issues of public interest (e.g. human rights, social and environmental standards)


The old view on nation state governance
The Old View on Nation State Governance

  • traditionally: state agencies

    • provide citizenship rights (civil rights, political participation rights, social rights),

    • produce public goods, and

    • regulate the economy in such a way that the common good is served

  • separation of nation state governance (politics) and private economy:

    • state provides the rules of the game, private business firms focus on profit making within these rules

    • no additional political responsibilities for private business firms

see Scherer & Palazzo: Globalization and CSR, in: Oxford Handbook of CSR, Oxford 2008


The new post national constellation habermas
The New Post-national Constellation (Habermas)

  • regulation capacity of nation state agencies is in decline

  • increasing heterogenity/pluralism of norms, values and life-styles

  • emergence of new modes of regulation in global governance:

    • NGOs, transnational organizations, and business firms contribute to the global governance; e.g. in peace keeping, protecting human rights, implementing social and environmental standards.

    • shift in global business regulation from state centric towards new multi-lateral non-territorial modes of regulation with private business firms as core actors

      Handbook of Research on Global Corporate Citizenship (Scherer & Palazzo (eds.) 2008)


The new post national constellation habermas1
The New Post-national Constellation (Habermas)

  • regulation capacity of nation state agencies is in decline

    • global public goods and externality problems

    • outsourcing of value chain activities to weak or failed states (no democratic control or rule of law)

    • incongruence between the territorially limited enforcement mechanisms of the nation state and the unlimited spread economic exchange processes

  • weak regulation on the supranational level

    • lack of enforcement power of transnational institutions

    • strategic bargaining in multilateral negotiations

see Habermas, J. The Post-national Constellation, Boston (Mass.) 2001


The csr approach of the 20th century carroll s pyramid of corporate responsibility
The CSR Approach of the 20th Century: Carroll’s Pyramid of Corporate Responsibility

desired

Philanthropy

expected

Moral compliance

required

Legal compliance

required

Profit


Csr in the 20th century was compliance oriented
CSR in the 20th Century was Compliance-oriented

  • Corporations have to follow the "basic rules in society“, i.e. legal rules and moral customs (Friedman, 1970: 3)

  • Corporate activities should be in line with "broader community values" (Swanson 1999: 517)

  • Responsibility is emerging from societal expectations "at a given point in time" (Carroll, 1979: 500).

  • Corporations have to act consistently “with the moral foundations of that society” (Epstein & Votaw 1978: 3)


The csr approach of the 21th century problems with carroll s pyramid of corporate responsibility
The CSR Approach of the 21th Century: Problems with Carroll’s Pyramid of Corporate Responsibility

desired

Philanthropy

expected

Moral compliance

required

Legal compliance

required

profit & legitimacy!

Profit


Profit and legitimacy
Profit and Legitimacy

  • today, business firms have to focus on both profits and legitimacy

  • legitimacy is based on societal acceptance

  • it is a necessary condition for the continuous existence of a private company

    Example:

    in 2006/2007 Siemens was financially highly successful under the leadership of v. Pierer and Kleinfeld but was losing societal acceptance due to the corruption cases throughout the company


Profit and legitimacy siemens annual report 2008
Profit and LegitimacySiemens Annual Report 2008

Our values guide us in everything we do. For us, responsibility means managing the Company on the basis of the highest ethical standards and practices. We do not tolerate behavior that violates laws or regulations. A keen sense of responsibility pervades all levels of our corporate culture:

  • The members of our Managing Board have clearly defined responsibilities.

  • Our employees contribute to the development and welfare of the societies in which they work and live.

  • Continuous and open dialogue with our investors fosters transparency in our entrepreneurial decisions.

  • The ideas and solutions of our innovators play a vital role in our success.

    By upholding our responsibilities, we’re creating lasting value for our shareholders and customers while providing answers to the toughest questions of our time.


The csr approach of the 21th century problems with carroll s pyramid of corporate responsibility1
The CSR Approach of the 21th Century: Problems with Carroll’s Pyramid of Corporate Responsibility

desired

Philanthropy

expected

Moral compliance

required

legal pluralism!

Legal compliance

required

profit & legitimacy!

Profit


Legal pluralism
Legal Pluralism

Multinational companies are operating in an environment with very divers legal requirements in terms of

  • social and environmental standards

  • corruption

  • taxes

  • etc.

    under these conditions the meaning of legal compliance becomes very ambiguos.


The csr approach of the 21th century problems with carroll s pyramid of corporate responsibility2
The CSR Approach of the 21th Century: Problems with Carroll’s Pyramid of Corporate Responsibility

desired

Philanthropy

expected

moral pluralism!

Moral compliance

required

legal pluralism!

Legal compliance

required

profit & legitimacy!

Profit


Moral pluralism
Moral Pluralism

Multinational companies are operating in an environment with very divers moral expectations in terms of, e.g.,

  • human rights (e.g. discrimination, gender, seniority etc.)

  • social and environmental standards (role of the individual vis-à-vis the social and natural environment)

  • corruption (what are socially accepted practices in various cultures)

  • taxes (willingness to pay or avoid taxes, tax fraud vs. tax evation)

  • etc.

    under these conditions the meaning of moral compliance becomes very ambiguos.


The csr approach of the 21th century problems with carroll s pyramid of corporate responsibility3
The CSR Approach of the 21th Century: Problems with Carroll’s Pyramid of Corporate Responsibility

desired

growing demands!

Philanthropy

expected

moral pluralism!

Moral compliance

required

legal pluralism!

Legal compliance

required

profit & legitimacy!

Profit


Growing demands
Growing Demands

There are growing demands on companies to engage in public policy and provide public goods

  • public health

  • education

  • infrastructure

  • social rights (codetermination, labor rights etc)

  • etc.

    they appear to be responsible not only for any social miseries or environmental damages

    where is the limit of corporate responsibilities?


Growing demands1
Growing Demands

What is the primary Societal Responsibility of a Corporation?

20th century:

DO GOOD!

21st century:

DO NO HARM (primum non nocere)!


Corporations are held responsible along a supply chain logic

Sphere of influence

Supply Chain

Customer

Services

Corporations are Held Responsible Along a Supply Chain Logic

Corporation


Supply chain responsibility

Supply Chain

Supply Chain Responsibility

  • 1991 Levi Strauss first company

  • introducing a Code of

  • Conduct for direct suppliers

  • 1993 First CoC of Wal Mart,

  • companies like Nike, Disney, Gap, Reebock follow

  • 1995 First independant third party

  • control (GAP)

  • 1997 First multistakeholder code

Corporation

  • Current tendencies:

  • Empowerment instead of control (e.g. Fair Labour Association)

  • Promotion of unions and workers councils (e.g. Timberland)

  • Inclusion of second tier supplier (e.g. HP)

  • Monitoring of complete chain (e.g. H & M)

  • Suppliers with their own GRI reports become strategic partners (e.g. Puma)

  • Inclusion of more industries in the discussion (electronics, cars, drugs…)


Examing harmdoing along supply chains the case of the diamond industry
Examing Harmdoing Along Supply Chains – The Case of the Diamond Industry

*Source: http://www.duke.edu/web/soc142/team7/index.html


From managing the supply chain to changing the geopolitical context
From Managing the Supply Chain to Changing the Geopolitical Context

  • « Nike... Should commit itself to working with the international human rights community to pressure local governments to release jailed labor leaders and change labor laws and practices to reflect internationally recognized labor rights. Nike should also work at the factory level to create the space for representative worker councils and for educating workers about international labor rights »

    www.globalexchange.org


From managing the supply chain to changing the geopolitical context1

Sphere of influence

Supply Chain

Customer

Services

From Managing the Supply Chain to Changing the Geopolitical Context

Corporation


The rising risk of corporate complicity being responsible for what others do

Ruggie: « Silent presence coupled with authority »

Being able in principle to know is enough

Yahoo in China

The Rising Risk of Corporate Complicity: Being Responsible for What Others do

Corporate complicity means « knowlingly providing practical assistance, encouragement or moral support that has a substantial effect on the commision of a crime » (John Ruggie, 2008)

Some scholars in international law argue that complicity is already given when

a company benefits from human rights abuses of somebody else (Clapham, 2006).


Challenges for csr and international business ethics in the 21st century
Challenges for CSR and International Business Ethics in the 21st Century

  • governance model

    • who is the main political actor and where is the locus of governance?

  • role of law

    • what is the mode of regulation and what are the dominant rules?

  • concept of responsibility

    • what is the appropriate concept of (corporate) responsibility?

  • mode of legitimacy

    • how is the legitimacy of political and economic actors maintained?

  • democratic politics

    • what is the appropriate model of democracy and concept of politics?


Literature
Literature

Scherer A. G. & Smid, M. (2000). The Downwards Spiral and the U.S. Model Business Principles. Why MNEs Should Take Responsibility for the Improvement of World-Wide Social and Environmental Conditions? Management International Review 40: 351-371.

Scherer, A. G., Palazzo, G., & Baumann, D. (2006), Global Rules and Private Actors – Toward a New Role of the Transnational Corporation in Global Governance. Business Ethics Quarterly 16: 505-532.

Palazzo, G. & Scherer, A. G. (2006). Corporate Legitimacy as Deliberation: A Communicative Framework. Journal of Business Ethics 66: 71-88.

Scherer, A. G. & Palazzo, G. (2007). Toward a Political Conception of Corporate Responsibility. Business and Society Seen From a Habermasian Perspective. Academy of Management Review 32: 1096-1120.

Palazzo, G. & Scherer, A. G. (2008). Corporate Social Responsibility, Democracy, and the Politicization of the Corporation. Academy of Management Review 33: 773-775.

Scherer, A. G. & Palazzo, G. (2008). Globalization and Corporate Social Responsibility. In: Oxford Handbook of Corporate Social Responsibility. Crane, A., McWilliams, A., Matten, D., Moon, J., Siegel, D. (Eds.), Oxford: Oxford Univ. Press: 413-431.

Scherer, A. G. & Palazzo, G. (Eds.) (2008). Handbook of Research on Global Corporate Citizenship, Cheltenham: Edward Elgar.


Literature1
Literature

Scherer, A. G., Palazzo, G., & Matten, D. (2009). The Changing Role of Business in Global Society. Business Ethics Quarterly 19: 327-347.

Baumann, D. & Scherer, A. G. (2010). MNEs and the UN Global Compact: An Empirical Analysis of the Implementation of Corporate Citizenship. mimeo Zurich.

Scherer, A. G. & Baumann, D. (2010). Corporate Citizenship and Corporate Governance – Compensating the Democratic Deficit of Corporate Political Activity. Fourth International Colloquium on Corporate Political Activity. Long Island University, May 20-22, 2010.

Scherer, A. G., Palazzo, G. & Seidl, D. (2010). Legitimacy Strategies in a Globalized World: Organizing for Complex & Heterogeneous Environments. mimeo Zurich.

Haack, P. & Scherer, A. G. (2010). Vertical Legitimacy Spillovers in Transnational Governance: The UN Global Compact and its Members. paper submitted for the 2010 Annual Meeting of the Academy of Management, OMT Division, Montreal, Aug. 8-10, 2010.

Scherer, A. G. & Palazzo, G. (forthcoming). The New Political Role of Business in a Globalized World – A Review of a New Approach in CSR and its Implications for the Firm, Governance, and Democracy. Journal of Management Studies.

Voegtlin, C., Patzer, M., Scherer, A. G. (2010). Responsible Leadership in Global Business: A Research Agenda. mimeo Zurich.


The changing ontology of governance on the global playing field
The Changing Ontology of Governance on the Global Playing Field

  • Global governance describes regulatory activities and regimes on a global level without the supreme authority of a government(Held & McGrew 2002, Scholte 2005)

  • Global governance involves originally non-political and non-state actors such as NGOs, intergovernmental organizations or transnational corporations(Castells 2005)

  • Global governance is increasingly following a “soft law” logic(Abbott & Snidal 2003, Ruggie 2008)

  • Soft law is bluring the « lines between the strictly voluntary and mandatory spheres for participants »(Ruggie 2007)


The new post national constellation
The New Post-national Constellation

Politics

Political Pressure

Law

Civil Society

Economy


The new post national constellation1
The New Post-national Constellation

Politics

Political Pressure

Law

Civil Society

Economy


The new post national constellation2
The New Post-national Constellation

Politics

Political Pressure

Law

Civil Society

Economy

The power of politics shrinks.

Powerlessness creates distrust and people start to look after their interests on their own.

= “globalization from below” (Giddens), “subpolitics” (Beck), “paragovernmental activities” (Dryzek)


The new post national constellation3
The New Post-national Constellation

Politics

Political Pressure

Law

Political Pressure

by Non-Governmental-

Organizations (NGOs)

Civil Society

Economy

The power of politics shrinks.

Powerlessness creates distrust and people start to look after their interests on their own.

= “globalization from below” (Giddens), “subpolitics” (Beck), “paragovernmental activities” (Dryzek)


Traditional paradigm of csr
Traditional Paradigm of CSR

  • isomorphistic adaption of business policies to „broader community values“ (Swanson, AMR 1999), societal expectations „at a given point in time“ (Carroll, AMR 1979), or the „basic rules of that society“ (Friedman 1970)

    • BUT: growing pluralism of norms, values, and life-styles in the global society; adaptation may lead to a mismatch with societal expectations

  • instrumental view on CSR (Jones, AMR 1995): CSR as an investment (McWilliams & Siegel, AMR 2001), search for the „business case“ of CSR

    • BUT: capacity of the state system to regulate the economy is in decline; the sole focus on profits will lead to legitimacy gaps when corporations act beyond the reach of the institutions of the rule of law state


Traditional paradigm of csr1
Traditional Paradigm of CSR

  • instrumental view on corporate politics as a means to influence the political system in favour of the firm („political strategies“, Hillman, Keim & Schuler, JOM 2003)

    • BUT: corporate lobbying strategies may widen the legitimacy gap

  • is based on a strict devision of labour between

    • the public sphere (rule generation and enforcement by state governance) and

    • the private sphere (profit seeking within these rules).

    • BUT: business firms enter the public sphere as political actors:

      • provide global public goods (human rights, social and environmental issues, corruption, peace keeping etc.)

      • intrude the political system to lobby for their economic interests (political strategies)



Toward a new paradigm of csr for the global economy scherer palazzo 2010
Toward a new paradigm of CSR for the global economy 1113)(Scherer & Palazzo 2010)

  • governance model

    • who is the main political actor and where is the locus of governance?

  • role of law

    • what is the mode of regulation and what are the dominant rules?

  • concept of responsibility

    • what is the appropriate concept of (corporate) responsibility?

  • mode of legitimacy

    • how is the legitimacy of political and economic actors maintained?

  • democratic politics

    • what is the appropriate model of democracy and concept of politics?


Toward a new paradigm of csr for the global economy scherer palazzo 20101
Toward a New Paradigm of CSR for the Global Economy 1113)(Scherer & Palazzo 2010)

  • from national governance to global governance

  • from „hard law“ to „soft law“

  • from liability to social connectedness

  • from cognitive and pragmatic legitimacy to moral (argumentative) legitimacy

  • from liberal democracy to deliberative democracy


New school vs old school of csr scherer palazzo 2010
New school vs. old school of CSR 1113)(Scherer & Palazzo 2010)


A new concept of politics
A new concept of politics 1113)

  • the old view (lobbyism & power politics):

    main focus has been on « political strategies »

    “to shape government policy in ways favorable to the firm”

    Hillman, Keim, & Schuler, Journal of Management 2004: 838

    This stream of research is based on the view that

    “managers choose to engage in political activity to enhance the value of the firm”

    (Hillman et al., 2004: 839).

  • the new view:

    By political we mean a process

    “in which people organize collectively to regulate or transform some aspects of their shared social conditions, along with the communicative activities in which they try to persuade one another to join such collective actions or decide what direction they wish to take”

    (Young, Journal of Political Philosophy 2004, p. 377).


From cognitive and pragmatic legitimacy to moral argumentative legitimacy palazzo scherer jobe 2006
From Cognitive and Pragmatic Legitimacy to Moral (Argumentative) Legitimacy (Palazzo & Scherer, JoBE 2006)

  • legitimacy is the perception that an action, policy or institution is socially acceptable

  • legitimacy can be based on three sources (Suchman AMR 1995):

    • pragmatic legitimacy (outcome is benefical)

    • cognitive legitimacy (action or institution is taken for granted)

    • moral legitimacy (action or institution is a result of explicit discourse)

  • traditional CSR emphasizes pragmatic legitimacy (defense of the capitalist system or business case of CSR) or cognitive legitimacy (adaptation to social customs)

  • in the post-national constellation moral legitimacy, i.e. the explicit discoursive consideration of policies and institutions, becomes the primary source of corporate legitimacy


routine (Argumentative) Legitimacy (Palazzo & Scherer, JoBE 2006)

cognitive legitimacy

time

to

action

failure of routine

strategic manipulation

pragmatic legitimacy

isomorphic adaptation

cognitive legitimacy

moral reasoning

moral legitimacy

t1

organi-zational

practice

societalexpec-

tations

organi-zational

practice

societalexpec-

tations

organi-zational

practice

societalexpec-

tations

continuous failure

success of action

success of action

continuous failure

strategic manipulation

pragmatic legitimacy

routine

cognitive legitimacy

moral reasoning

moral legitimacy

t2

Scherer, A. G., Palazzo, G., & Seidl, D. (2008). Legitimacy Strategies as Complexity Reduction in a Post-national World:

A Systems-Theory Perspective. Paper presented at the 4th Organization Studies summer workshop 2008,

Embracing Complexity: Advancing Ecological Understanding in Organizational Studies, Pissouri (Cyprus), June 5-7, 2008


Legitimization strategies
Legitimization strategies (Argumentative) Legitimacy (Palazzo & Scherer, JoBE 2006)

Consistency of societal expectations

Strategic manipulation

high

Costs of organizational change

Moral reasoning

Isomorphic adaptation

low

high

low

Scherer, A. G., Palazzo, F., & Seidl, D. (2008). Legitimacy Strategies as Complexity Reduction in a Post-national World:

A Systems-Theory Perspective. Paper presented at the 4th Organization Studies summer workshop 2008,

Embracing Complexity: Advancing Ecological Understanding in Organizational Studies, Pissouri (Cyprus), June 5-7, 2008


Organizational implications of legitimization strategies scherer palazzo seidl 2008
Organizational implications of legitimization strategies (Argumentative) Legitimacy (Palazzo & Scherer, JoBE 2006)(Scherer, Palazzo, & Seidl 2008)


Possible contributions
Possible Contributions (Argumentative) Legitimacy (Palazzo & Scherer, JoBE 2006)

  • This project contributes to theory development in the following areas

    • business ethics/CSR of MNCs

    • theory of global governance

    • theory of the firm/corporate governance

    • theory on organizational legitimacy processes


Open questions
Open questions (Argumentative) Legitimacy (Palazzo & Scherer, JoBE 2006)

  • what is the scope of CSR? where are the limits?

  • what internal organizational structures and processes do we need? (outside view vs. inside view; incentive structures; human resource management etc.)

  • what is the role of responsible leadership? (micro-level of analysis)

  • what is the role of social entrepreneurship? (social innoviation)

  • what are the consequences for corporate communication? (triple bottom line accounting)

  • what are the consequences for „political strategies“? (legitimacy of lobbying etc.)

  • what are the consequences for corporate governance? (link between global governance and corporate governance)

  • what are the consequences for democracy? (global democracy vs corporate democracy)


From Dominance of Economic Rationality to Domestication of Economic Rationality (Scherer & Palazzo, AMR 2007)

  • in the traditional view on CSR the dominance of economic rationality is taken for granted („instrumental view“, „business case“, „political strategies“ etc.)

  • new paradigm attempts to (re-)establish a political order where economic rationality is circumscribed by democratic institutions and procedures

  • the challenge is to find new forms of democratic will formation on a global scale that not only domesticate economic pressures but go beyond nation-state governance, address global public policy issues, and integrate the new political role of private business firms


From liberal democracy to deliberative democracy scherer palazzo amr 2007
From Liberal Democracy to Deliberative Democracy Economic Rationality (Scherer & Palazzo, AMR 2007)(Scherer & Palazzo, AMR 2007)

  • as firms are already engaged in political processes the challenge is to embed the corporation in democratic processes

  • traditionally, the liberal concept of democracy is based on (1) a strict separation of private and public spheres and (2) an instrumental conception of politics: „the goal of politics is the optimal compromise between given, and irreducibly opposed, private interests“ (Elster 1986, p. 103)

  • in the post-national constellation due to the (1) fading of the boundary between private and public spheres and (2) the growing pluralism of values and life-styles we need a new concept of democratic politics that puts emphasis on the communicative processes: „rather than aggregating or filtering preferences, the political system should be set up with a view to changing them by public debate and confrontation“ (Elster 1986, p. 112)


From liberal democracy to deliberative democracy scherer palazzo amr 20071
From Liberal Democracy to Deliberative Democracy Economic Rationality (Scherer & Palazzo, AMR 2007)(Scherer & Palazzo, AMR 2007)

  • in the post-national constellation we need a new concept of democratic politics

  • theory of deliberative democracy (Habermas 1996, 1998) provides such a concept that focuses on the communicative processes above and beyond the state

    • this approach does not aim at a utopian and revolutionary alternative to liberal market societies. Instead, it takes the imperatives of market competition and the price system as preconditions of coordination in modern societies, while domesticating economic pressures by means of democratic reform and control


From empirical or philosophical foundations to pragmatical reasoning scherer palazzo amr 2007
From Empirical or Philosophical Foundations to Pragmatical Reasoning (Scherer & Palazzo, AMR 2007)

  • normative conceptions of CSR or business ethics traditionally search for universal norms, rules, or principles

  • Donaldson and Dunfee (Ties that bind, 1999) suggest we need a “universal and impartial … view from nowhere”.

  • in the post-national constellation with a pluralism of norms and life-styles universal principles cannot be justified

  • instead of the foundational search for universal philosophical principles we suggest a „pragmatic concept of reasoning“ that is based on a primacy of democratic practice to philosophic purity (Habermas 1996, Rorty 1991)

  • deliberative theory does not start with abstract philosophical principles but with an analysis of the changing interplay of governments, civil society actors, and corporations

  • it is a realistic rather than a utopian concept of democratic politics


From Response to Pressure from Powerful Stakeholders to Proactive Engagement in Democratic Politics(Scherer & Palazzo, AMR 2007)

  • in traditional CSR the main concern is to respond to the concerns of the most powerful stakeholder groups and to manage the relations with these groups

  • „stakeholder management“ deals with the idea of internalizing the demands, values and interests of those stakeholders that affect or are affected by corporate decision making

  • the new political approach of CSR emphasizes the corporation‘s move into democratic global governance and the resolution of environmental and social challenges


Toward a new paradigm of csr for the global economy scherer palazzo aom 2008
Toward a New Paradigm of CSR for the Global Economy Proactive Engagement in Democratic Politics(Scherer & Palazzo AoM 2008)

  • from dominance of economic rationality to domestication of economic rationality

  • from liberal democracy to deliberative democracy

  • from cognitive and pragmatic legitimacy to moral (argumentative) legitimacy

  • from empirical or philosophical foundations to pragmatical reasoning

  • from response to pressure from powerful stakeholders to proactive engagement in democratic politics


Snis projects
SNIS Projects Proactive Engagement in Democratic Politics

  • Assessing Corporate Citizenship in Large Multinational Corporations: An Analysis of Swiss UN Global Compact Participants

    Dorothee Baumann (SNF Project)

  • Business Ethics, Small and Medium-Sized Enterprises (SMEs) and the United Nations Global Compact (UNGC)

    Christoper Wickert

  • Arguing Away the Legitimacy Deficit in Global Governance? Public Deliberation and the Politization of the Firm

    Patrick Haack


Assessing Corporate Citizenship in Large Multinational Corporations: An Analysis of Swiss UN Global Compact Participants

Dorothee Baumann (SNF Project)

  • Development of an ideal construct of CC

  • Operationalization and development of a scale to measure the implementation of CC on the company level (structural, procedural, interactive aspects of CC)

  • Analysis of the implementation of CC at Swiss MNCs participating in the UNGC (ABB, Credit Suisse, Nestle, Novartis, UBS)


Business Ethics, Small and Medium-Sized Enterprises (SMEs) and the United Nations Global Compact (UNGC)

Christoper Wickert

  • Up to now CC research and practice has focused on big corporations

  • Approx. 45% of the UNGC participants are SMEs with less than 250 employees

  • Development of an assessment tool that is taylored to SMEs (informal structures, organizational culture, ethos of firms owner, integrity vs. compliance)

  • Analysis of the CC implementation of Swiss SMEs and family owned businesses

  • Comparison with the results of big Swiss SMEs


  • Arguing Away the Legitimacy Deficit in Global Governance? and the United Nations Global Compact (UNGC)Public Deliberation and the Politization of the Firm

    Patrick Haack

  • Analysis of the legitimacy gap of private/corporate engagement in global governance

  • Legitimacy as a relational and socially constructed concept (pragmatic, cognitive, moral legitimacy)

  • Focus on the communicative mechanisms that constitute legitimacy of corporate participation in world politics

  • Multi-level analysis (global level, company level, individual level)

    • Analysis of the factors and processes that constitute legitimacy

    • Analysis of the mutual relationship between societal and company level

    • Micro-level analysis of framing processes


Cc as an organizational learning process
CC as an Organizational Learning Process and the United Nations Global Compact (UNGC)

Stages of Development (Zadek 2005):

corresponds with

CC

Civil

Strategic

Managerial

Compliance

Defensive



Dimensions and indicators of cc
Dimensions and Indicators of CC 127)

  • Commitment Dimension

    • Strategic Integration & Leadership Support

    • CC Coordination

  • Structural and Procedural Dimension

    • Policies & Procedures

    • Incentive Systems

    • Training

    • Complaints Channels

    • Evaluation

    • Reporting

  • Interactive Dimension

    • Quality of Stakeholder Relationships

    • Participation in Collaborative CC Initiatives


Developing an assessment tool baumann forthcoming baumann scherer 2009
Developing an Assessment Tool 127)(Baumann, forthcoming; Baumann & Scherer 2009)

Stages of Development

Dimensions and Indicators


Developing an assessment tool baumann forthcoming baumann scherer 20091
Developing an Assessment Tool 127)(Baumann, forthcoming; Baumann & Scherer 2009)


Assessment tool and interview questions baumann forthcoming baumann scherer 2009
Assessment Tool and Interview Questions 127)(Baumann, forthcoming; Baumann & Scherer 2009)

Training

Interview questions (examples):

  • How do employees learn about the company‘s participation in the UNGC?

  • Information on UNGC vs. training on implications for individual jobs?

  • Do all employees receive training?

  • Are high-risk groups targeted for special follow-up courses?

  • Training class schedules and training manuals – can they be reviewed? How did they get developed? Are they shared?



Research results commitment dimension1
Research Results: Commitment Dimension 127)

  • All companies adopted a Code of Conduct or a similar document reflecting most of the values embedded in the UNGC

  • Mission statements are partly aligned

  • The corporate CC-strategy is defined by a CC-committee at the level of the executive board

  • CC-implementation is managed by individuals in the PR/Sustainability departments. They do not have authority to issue directives and they are not well-linked to other departments

  • Top-management supports CC in general but is not involved in the implementation process



Research results structural procedural1
Research Results: Structural & Procedural 127)

  • The alignment of procedural elements is a work-in-progress at all companies

  • The least developed element is the evaluation of the CC implementation

  • The alignment of incentive structures and the provision of confidential complaints channels focuses on compliance with legal provisions and is not explicitly extended to CC-issues (exception: Novartis)

  • The two elements that companies are planning to improve in the future are reporting and training on CC. Most advanced on these aspects is Novartis.



Research results interactive dimension1
Research Results: Interactive Dimension 127)

  • On a corporate level, companies do not engage regularly with stakeholders (informal and local relationships exist at ABB, CS, Nestle, Novartis)

  • Stakeholders are selected strategically, based on their potential to harm or benefit the corporation

  • Corporations participate in CC-initiatives and meet formal requirements but they do not actively contribute to their development (exceptions: ABB: e.g. stakeholder involvement in Sudan; Novartis: e.g. living wage.


What is globalization
What is Globalization? 127)

  • globalization is the process of growing transnational interdependence of economic and social activities (Beck 2000; Giddens 1990; Scherer & Palazzo 2008).

  • causes of globalization

    • political decisions and disruptions (GATT/WTO, collapse of the iron curtain, pro-market policy in PR China)

    • technological developments (e.g., communication, transport)

    • socio-cultural developments (individuialization of life styles, migration, global medias – global markets)

    • economic developments (FDI and cross boarder trade; intrafirm-trade; global sourcing, global markets)

    • emergence of transnational risks (global diseases, environmental risks and social problems, terrorism)


ad