Guido Palazzo

The New Political Role of Business in a Globalized World – A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy

Scholars in management and economics widely share the assumption that business firms focus on profits only, while it is the task of the state system to provide public goods. In this view business firms are conceived of as economic actors, and governments and their state agencies are considered the only political actors. We suggest that, under the conditions of globalization, the strict division of labour between private business and nation-state governance does not hold any more. Many business firms have started to assume social and political responsibilities that go beyond legal requirements and fill the regulatory vacuum in global governance. Our review of the literature shows that there are a growing number of publications from various disciplines that propose a politicized concept of corporate social responsibility. We consider the implications of this new perspective for theorizing about the business firm, governance, and democracy.

Managing Legitimacy in Complex and Heterogeneous Environments: Sustainable Development in a Globalized World

The sustainability problems of the production, distribution, and consumption of goods and services increasingly challenges the legitimacy of corporations. Corporate legitimacy, however, is vital to the survival of corporations in competitive environments. The literature distinguishes three strategies that corporations commonly employ to address legitimacy problems: adapt to external expectations, try to manipulate the perception of their stakeholders or engage in a discourse with those who question their legitimacy. This paper develops a theoretical framework for the application of different legitimacy strategies and suggests that corporations facing sustainability problems have to be able to activate all three legitimacy strategies, despite their inherent incompatibilities.

Handbook of research on global corporate citizenship

The Handbook of Research on Global Corporate Citizenship identifies and fosters key interdisciplinary research on corporate citizenship and provides a framework for further academic debate on corporate responsibility in a global society.

The Business Firm as a Political Actor A New Theory of the Firm for a Globalized World

The state governance system seems to be incapable to address sufficiently global public goods problems or to regulate global business so that the public interest is served. At the same time, international governmental organizations are unable to fill the governance gap while nongovernmental organizations (NGOs) criticize the behavior of business firms along their supply chains. Therefore, business firms are confronted with increasing social and environmental demands and are requested to take responsibility for issues of public concern. As a response, some business firms engage with corporate social responsibility (CSR) projects and directly contribute to the production of public goods. These developments challenge the received theory of the firm and its strict separation of public and private domains. Corporations become political actors. In this introductory essay, the guest editors first elaborate on the concept of politics and describe the challenges that lead to the new political role of global business firms and, second, will introduce the articles in this special issue and briefly comment on their contribution.

Upstream Corporate Social Responsibility: The Evolution From Contract Responsibility to Full Producer Responsibility

The debate about the appropriate standards for upstream corporate social responsibility (CSR) of multinational corporations (MNCs) has been on the public and academic agenda for some three decades. The debate originally focused narrowly on “contract responsibility” of MNCs for monitoring of upstream contractors for “sweatshop” working conditions violating employee rights. The authors argue that the MNC upstream responsibility debate has shifted qualitatively over time to “full producer responsibility” involving an expansion from “contract responsibility” in three distinct dimensions. First, there is an expansion of scope from working conditions to human rights and social and environmental impacts broadly defined. Second, there is expansion in depth of this broader responsibility to the whole upstream supply chain without regard to contracting status. Upstream responsibility now includes all suppliers, including direct contractors and the chain of suppliers to such contractors. Finally, the change in CSR scope and depth has led to an evolution of CSR management practice.

Neither Bad Apple Nor Bad Barrel: How the Societal Context Impacts Unethical Behavior in Organizations

Every time another corporate scandal captures media headlines, the ‘bad apple vs. bad barrel’ discussion starts anew. Yet this debate overlooks the influence of the broader societal context on organizational behavior. In this article, we argue that misbehaviors of organizations (the ‘barrels’) and their members (the ‘apples’) cannot be addressed properly without a clear understanding of their broader context (the ‘larder’). Whereas previously, a strong societal framework dampened the practical application of the Homo economicus concept (business actors as perfectly rational and egocentric utility‐maximizing agents without any moral concern), specialization, individualization and globalization led to a business world disembedded from broader societal norms. This emancipated business world promotes a literal interpretation of Homo economicus among business organizations and their members. Consequently, we argue that the first step toward ‘healthier’ apples and barrels is to sanitize the larder, that is, adapt the framework in which organizations and their members evolve.

Postnational constellations of innovativeness: a cosmopolitan approach

Innovativeness emerges from the contexts in which individual actors and groups of actors are embedded and which influence their behavior. We refer to that context in terms of culture. The management literature normally understands culture in the sense of Alexis de Tocquevilles ‘habits of the heart’, which is the customs, habits, norms, values, and shared views of reality, expressed in a specific behavior of individuals and groups. This paper confronts established concepts of innovativeness with recent discussions on individualized and globalized societies. According to the sociologist Ulrich Beck, we are interacting more and more in a transnational and transcultural context thereby developing shared habits of the heart beyond the established (mainly geographically bound) understanding of culture. A new culture is emerging, which he introduces as cosmopolitanism. The paper analyses the conditions of innovativeness in cosmopolitan interaction by discussing two examples, the emergence of transnational civil society activism and global cooperation of researchers in the fight against SARS.

The Business Firm as a Political Actor

The state governance system seems to be incapable to address sufficiently global public goods problems or to regulate global business so that the public interest is served. At the same time, international governmental organizations are unable to fill the governance gap while nongovernmental organizations (NGOs) criticize the behavior of business firms along their supply chains. Therefore, business firms are confronted with increasing social and environmental demands and are requested to take responsibility for issues of public concern. As a response, some business firms engage with corporate social responsibility (CSR) projects and directly contribute to the production of public goods. These developments challenge the received theory of the firm and its strict separation of public and private domains. Corporations become political actors. In this introductory essay, the guest editors first elaborate on the concept of politics and describe the challenges that lead to the new political role of global busine...

Organizational Integrity — Understanding the Dimensions of Ethical and Unethical Behavior in Corporations

Organizational integrity refers to the ethical integrity of the individual actors, the ethical quality of their interaction as well as that of the dominating norms, activities, decision making procedures and results within a given organization. This article discusses these manifold aspects of organizational integrity and outlines the main driving forces and dimensions of ethical and unethical behavior in corporations. Reflections on ethics in general start with the assumption that it has to do with human actors who do or omit something. It has to do with their motives and the product of their interrelated activities. Thus, the individual might be regarded as the main point of reference for analyzing organizational integrity. However, the ongoing formalization and institutionalization of the ethical dimension of management is based on a simple observation: Organizational integrity goes beyond managerial integrity and is more than the presence of individuals with good characters within the organization. Having “good” managers is certainly a precondition for organizational integrity, but it does not prevent organizations from obtaining bad ethical results. It is possible to take the bad apples out of the barrel but the risk of deviant organizational behavior will not be reduced to zero. The good apples might develop a bad taste and sometimes it might be a problem of the barrel itself.

Unternehmensethik als Gegenstand betriebswirtschaftlicher Forschung und Lehre–Eine Bestandsaufnahme aus internationaler Perspektive

ZusammenfassungDer vorliegende Beitrag bietet einen Überblick über den Status Quo in der unternehmensethischen Forschung und Lehre im internationalen Bereich. Nach einer kurzen Begriffsklärung werden zunächst Entwicklung und Strukturen des Faches skizziert. Alsdann analysiert der Beitrag bedeutende Forschungsrichtungen des Feldes und beschreibt den Stellenwert von Unternehmensethik in der weltweiten Managementausbildung. Darüber hinaus werden wesentliche Zukunftstrends in der inhaltlichen Entwicklung des Faches aufgezeigt. Der Beitrag schließt mit einigen vergleichenden Bemerkungen über die Bedeutung des Feldes im deutschsprachigen Raum und wagt einen abschließenden Ausblick.AbstractThis paper attempts at providing an overview over the international debate in business ethics (and related concepts). It addresses some of the labels and concepts of the field internationally before providing an overview over the development of the field and its key structural elements. It then moves on to adumbrate key areas of research and sketches out the current state-of-the-art in the teaching of business ethics. Finally, the paper ventures a foray into key ongoing developments in the field and offers some comments on the current state of affairs in business ethics in the German speaking countries. The remarks close with some comments on the future of business ethics teaching and research.