Dorothea Baur

The Value of Unregulated Business-NGO Interaction A Deliberative Perspective

Political theories in general and deliberative democracy in particular have become quite popular in business ethics over the past few years. However, the model of deliberative democracy as generally referred to in business ethics is only appropriate for conceptualizing interaction between business and society which occurs within a context which is more or less institutionalized. The model cannot account for “unregulated” interaction between business and civil society. The authors argue that scholars need to resort to the so called “critical strand” of deliberative democracy if we want to conceptualize interaction that happens without the involvement of decision-making institutions as political action in a deliberative sense. Adopting this approach allows us to identify cases in which unregulated interaction between business and civil society is preferable over institutionalization.

CSR’s New Challenge: Corporate Political Advocacy

In summer 2011, Starbucks CEO Howard Schultz launched a highly publicized campaign against the prevailing political climate in the U.S. and the respective “lack of cooperation and irresponsibility among elected officials as they have put partisan agendas before the people’s agenda.”1 Building a coalition with other corporations, they pledged “to withhold any further campaign contributions to elected members of Congress and the President until a fair, bipartisan deal is reached that sets our nation on stronger long-term fiscal footing.”2 Furthermore, in an open letter to his “dear fellow citizens,” he called upon all citizens to send a message to their elected officials in which to remind them “that the time to put citizenship ahead of partisanship is now.”3 Schultz’s political advance raised eyebrows not only in the corporate and political communities, but also among scholars concerned with questions of business ethics and corporate responsibility. Noted business ethicists Andy Crane and Dirk Matten, for example, commented: “For a business leader like Schultz to come out and so explicitly take a stand that effectively seeks to hold his domestic politicians to ransom until they do his bidding represents a fairly unique twist on the growing involvement of business in politics.”4

Concluding Remarks: Normative Guidelines for Conceptualizing NGOs as Legitimate Partners of Corporations and Future Implications

The conclusions wrap up the discussion by outlining the central normative guidelines that can be derived from this book for judging the legitimacy of NGOs as partners of corporations. It includes points which refer to the political-theoretical level on the one hand, and points that refer to the more “pragmatic” level on the other. The latter are expressed in the form of rights and duties of legitimate partner NGOs and of corporations which interact with them. These points take the form of a plea for a political conceptualization of NGOs as legitimate partners of corporations and of NGO-business partnerships as such. The book ends with suggestions for future research on a conceptual and empirical level and with a few implications for practitioners.

NGOs, Interest Groups and Activists

This chapter marks the beginning of the fourth part of the book in which a typology is set up for distinguishing legitimate NGOs from related actors based on the normative framework in Part III. It is argued that NGOs are special stakeholders of corporations because they have their origins in civil society and because they represent public claims. Yet, NGOs continuously need to prove their legitimacy. By doing so, they can mark a distance to radical activists on the one hand and to interest groups on the other hand. NGOs share characteristics with both of these actor types. With activists, they share the content of their claims since activists typically also raise claims that have societal relevance. The boundaries between NGOs and interest groups become blurred for example if NGOs engage with corporations and start orienting themselves along economic imperatives. In line with the three dimensions of the legitimacy deficit of NGOs introduced in Part I, it is argued that the difference between NGOs, activists, and interest groups can best be assessed along substantive, structural and procedural criteria.

The Political Process

This chapter looks at how the content of public reason as specified in Chapter 7 can be put forward by NGOs as political actors in the postnational constellation vis-a-vis corporations, i.e. it asks how we should imagine the political process which underlies their actions. By emphasizing voting and elections as central elements of the political process, the liberal view has difficulties to imagine politics outside official political institutions as typically conducted by NGOs in their interaction with corporations. Deliberative democracy in contrast, in particular the so called critical strand of deliberative democracy, focuses on processes of public justification that is on non-electoral means, and does not require formal decision-making procedures such as voting or elections for action in order to be considered political. Instead, it assigns the informal public sphere in which NGOs typically raise their claims towards corporations an intrinsic democratic value and thus fully embraces even spontaneous interaction between NGOs and corporations as a political interaction.

The Postnational Constellation: A Broad Conception of Democracy

This chapter is dedicated to sketching out the postnational constellation which describes the circumstances of political action that happens beyond the nation state. By acknowledging the emergence of NGOs and multinational corporations as new political actors on a global scale, the postnational constellation provides the grounds for conceptualizing the interaction between these actors as a political interaction. NGOs assume a broad range of democratic roles and they do so in contexts with different degrees of institutionalization: in formal contexts, i.e. by collaborating with international organizations; in semi-institutionalized contexts, i.e. by participating in multi-stakeholder forums or councils; and in essentially unregulated contexts, i.e. in their spontaneous interaction with corporations. The latter type of interaction is identified as the point of reference for this book. Since this type of interaction happens without the involvement of any official political institution, i.e. exclusively in the extraconstitutional sphere, it poses particular challenges when conceptualizing it from a political-theoretical perspective.

Procedural Characteristics of Legitimate Partner NGOs

This chapter argues that procedural characteristics yield the most accurate distinctions amongst the three actor types. NGOs and interest groups can be distinguished by their style of reasoning and their orientation towards consensual behavior, and by the fact that claims of the kind that “legitimate partner NGOs” advocate, refer to a generalizable interest. The preferred pattern of communication for resolving such claims is deliberation. Hence, an actor’s inclination to deliberate indicates that he or she is advocating public claims rather than particularistic interests, and thus is acting as a “legitimate partner NGO” rather than an interest group. Procedural characteristics also enable us to tell NGOs apart from activists. Legitimate NGOs are primarily oriented towards discursive behaviour. Justifications of non-deliberative behaviour essentially rely on the principle of exhaustion, that is, on the requirement that deviation from deliberation is only allowed if all deliberative means have been exhausted. But all deviations operate under the proviso of civil behaviour. Within this proviso three circumstances in which deviation from deliberation can be justified are identified: Deviating from discursive means is justified if a corporation refuses to enter into dialogue with an NGO. Confrontational but still discursive behaviour is justified if deep value conflicts inhibit consensual discourse. Non-discursive confrontational civil behavior, i.e. civil disobedience, is justified in adverse political circumstances. But regardless of whether the circumstances justify deviation from deliberative behaviour, it is important that we admit various forms of speech to deliberation in order to allow the innovative and emancipatory function of NGOs to persist.

Normative Orientation from Political Theory

The third chapter introduces the political models of liberalism and deliberative democracy as potential perspectives for assessing the legitimacy of NGOs as partners of corporations. It gives a brief overview over economic and political liberalism and over the most relevant strands of deliberative democracy, namely the liberal-constitutionalist and the discursive strand. It also argues that the political models of communitarianism and republicanism are not suitable for assessing the interaction between NGOs and corporations, since they rest on presumptions such as shared values, strong communities, etc. which are often missing in the postnational constellation.

The Public Sphere

The goal of this chapter is to find a conception of the public sphere which ascribes NGOs an important role as political actors, particularly in the postnational constellation and particularly vis-a-vis corporations. The term is again assessed from a liberal and a deliberative perspective. The liberal model defines the public sphere as the political sphere in which only questions of constitutional essentials and basic justice are discussed and decided. This relatively narrow conception excludes NGOs which promote claims that are not (yet) considered as matters of basic justice from assuming a meaningful role in the public sphere. In the postnational constellation the narrow liberal focus poses additional problems given the absence of a global constitution. The deliberative model, by contrast, conceives of the public sphere as a network of communications where rational will-formation is achieved. The public sphere is thus an emancipatory space where citizens are empowered and can create pressures for legitimization towards both, the state and the economy (i.e., corporations). Deliberative democracy can equally conceive of a public sphere on a transnational level because it defines political action not by the locus or the actors involved but by the discursive character of their interaction. As such it provides a valuable perspective for the interaction between NGOs and corporations in the postnational constellation.

NGOs as Representatives of Public Claims

The first chapter sets the stage for the rest of the book by clarifying some of the central parameters: it provides a definition of NGOs, it specifies the addressees of NGO legitimization, and it outlines the role of NGOs in the CSR debate. As to the definition, it is argued that NGOs are actors which are inextricably linked to the public sphere by claiming to promote the public good or serving the public interest. The link to the public sphere makes NGOs an interesting research subject for political theory. After all, Western political theory has dealt with definitions of what is public and what is private for centuries. Based on a synthesis of common sense reservations about the legitimacy of NGOs and normative reflections three dimensions of the legitimacy deficit of NGOs are identified: substantive (what claims are legitimate?), structural (how do we deal with the fact that NGOs are not elected?), and procedural (what behavior is legitimate?). It is argued that NGOs, understood as actors in the public sphere, have the duty to legitimize themselves before corporations as well as civil society. Moreover, since this book is about the interaction between NGOs and corporations, it makes sense to link it to the CSR debate. It is argued that the rationale for corporations to perceive NGOs as actors who promote public claims and to care about their legitimacy can be found in the so called political strand of CSR.