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Neoliberal CSR in Historical Perspective

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Neoliberal CSR in Historical Perspective View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by SPIRE - Sciences Po Institutional REpository Journal of Business Ethics DOI 10.1007/s10551-015-2879-7 Contextualizing Corporate Political Responsibilities: Neoliberal CSR in Historical Perspective 1 1 Marie-Laure Djelic • Helen Etchanchu Abstract This article provides a historical contextual- Keywords Political CSR Á Neoliberalism Á Paternalism Á ization of Corporate Social Responsibility (CSR) and its Trusteeship Á Globalization Á Stakeholder democracy political role. CSR, we propose, is one form of business– society interactions reflecting a unique ideological framing. To make that argument, we compare contemporary CSR Introduction with two historical ideal-types. We explore in turn pater- nalism in nineteenth century Europe and managerial The debate on where the responsibility of business ends trusteeship in early twentieth century US. We outline how and that of government starts is an old one. We can at least the political responsibilities of business were constructed, trace it back to the 18th century opposition between Mer- negotiated, and practiced in both cases. This historical cantilism and Liberalism (Screpanti and Zamagni 2005). In contextualization shows that the frontier between economy its contemporary version, this debate has been shaped by and polity has always been blurry and shifting and that Milton Friedman’s provocative claim that the only firms have played a political role for a very long time. It responsibility of the corporate executive is to his employ- also allows us to show how the nature, extent, and impact ers—the shareholders (Friedman 1970). This proposition of that political role changed through history and co- suggests an axiomatic and even natural separation between evolved in particular with shifts in dominant ideologies. business and state responsibilities. Arguably, it remains to Globalization, in that context, is not the driver of the this day a structuring ‘‘null hypothesis’’—from, against or political role of the firm but a moderating phenomenon in relation to which most contemporary discussions on contributing significantly to the dynamics of this shift. The Corporate Social Responsibility (CSR) inscribe themselves comparison between paternalism, trusteeship, and con- (Kinderman 2012; Marens 2008). temporary CSR points to what can be seen as functional This ‘‘null hypothesis,’’ however, is not neutral in any equivalents—alternative patterns of business–society way but ideologically framed. Friedman’s (1970) article interactions that each correspond, historically, to unique revealed, expressed, and formalized a specific and conse- and distinct ideological frames. We conclude by drawing quential ideological frame. Ideological frames are the implications for future theorizing on (political) CSR and cognitive and value lenses that constitute our mental maps, stakeholder democracy. the background worldviews through which individual and collective actors approach, read, and act upon the world (Cheal 1979; Davies and McGoey 2012; Padelford and White 2009; Schmid 1981). With respect to the interplay & Marie-Laure Djelic between business and government, this specific ideological [email protected] frame put forward by Friedman had five main dimen- Helen Etchanchu sions—individual wealth maximization is the source of [email protected] collective welfare; corporations belong to (and should 1 ESSEC Business School, Avenue B. Hirsch, BP 90405, serve) their owners—shareholders; business and politics Cergy-Pontoise Cedex, France have different logics; that should be kept as separate as possible; and the political sphere should have only a sup- This is, precisely, the step we propose to take in this portive and minimal role. The principled separation of article. To move beyond the economic and instrumental business and state responsibilities hence cannot be appre- perspective on CSR, we contextualize CSR historically as hended without reference to the framing role of a powerful one form of business–society interactions that reflects a background worldview or ideology (Davies and McGoey unique ideological framing. The comparison of CSR with 2012; Padelford and White 2009; Van Dijk 1998). We will alternative patterns of business–society interactions in refer to that specific ideological frame, as ‘‘shareholder history and their associated background ideologies allows value maximization.’’ It is often discussed, in the literature, for a critique of the ‘‘null hypothesis’’ that is more radical, under the broader label of ‘‘neoliberalism’’ (e.g., Djelic we suggest, than that of political CSR. This historical 2006; Harvey 2005; Mirowski and Plehwe 2009). contextualization shows that the frontier between economy Within the corpus of CSR research, the ‘‘instrumental and polity has always been blurry and shifting and that CSR’’ paradigm has long been dominant (Garriga and Mele´ firms have played for a very long time a political role. It 2004; Margolis and Walsh 2003; Vogel 2005). This para- also allows us to show how the nature, extent, and impact digm clearly inscribed itself in continuity with the ideo- of that political role changed through history and co- logical frame expressed by Friedman’s ‘‘null hypothesis’’— evolved with shifts in dominant ideologies. CSR being legitimate only if it contributed to the maxi- We explore this empirically through a historical analysis mization of profits and value for shareholders (Mackey et al. of the political role of firms in two distinct periods—in the 2007; McWilliams and Siegel 2001). In contrast, the recent context of nineteenth century paternalism in Europe and in political turn in CSR research has come to question and the context of corporate/managerial trusteeship in the critique this separation and some of the ideological 1920s in the United States. We outline how the political assumptions it reveals (Matten and Crane 2005a; Scherer responsibilities of business were constructed, negotiated, and Palazzo 2007, 2011; Scherer et al. 2009). A key argu- and practiced in both cases. The comparison between ment in this stream of research is that, in the context of paternalism, trusteeship, and current notions of CSR points globalization, the boundaries between economic and polit- to what can be seen as functional equivalents—alternative ical spheres are getting increasingly blurred. Globalization patterns of business–society interactions that each corre- entails the weakening role and power of nation states and spond, historically, to unique ideological frames. While fosters in parallel a ‘‘new political role’’ for private business contemporary CSR corresponds to a ‘‘shareholder value (Scherer and Palazzo 2011). As corporations increase in maximization’’ ideology, we connect paternalism to an size and operate in multiple countries, they come to ‘‘as- ideological frame that we label ‘‘authoritarian-owner sume enlarged responsibilities in their globally expanded benevolence’’ and trusteeship to an ideology that we business environments—responsibilities once regarded as characterize as ‘‘techno-managerial efficiency.’’ The his- genuine governmental responsibilities’’ (Scherer and torical cases, furthermore, point to a number of past Palazzo 2007, p. 1109, emphasis authors). With political shortcomings, such as managerial discretion, infantilizing CSR, we share the project of moving CSR scholarship forms of control, or the privatization of politics, which help beyond the economic and instrumental perspective (Scherer us make sense, through a mirror effect, of some of the and Palazzo 2011, p. 904). We also agree that globalization limits of contemporary CSR. changes the nature of the interplay between business and The remainder of this article is organized as follows. We politics. We argue, however, that political responsibilities start with a short review of the debates around political have not always been in any absolute or natural sense CSR. We then discuss our methods—a comparison of two ‘‘genuine governmental responsibilities’’. historical ideal-types. In the following two sections, we Current theorizing on CSR in general and political CSR present in turn the two historical ideal-types that constitute in particular is largely a-historical. Most studies tracing the the empirical base for this article. In the discussion section, origins of CSR go back at most to the 1950s and the work we contextualize contemporary CSR through a systematic of Howard R. Bowen (Acquier et al. 2011; Carroll 2008, comparison with those historical cases and explore the for an exception see Marens 2012, 2013). The focus is moderating role played in recent years by neoliberal mostly on the structuration of a CSR preoccupation and globalization. Using systematic ideal-type comparison as a field in the period since the late 1970s—in parallel to the conceptualizing device (Glaser 2002), we are able to deployment of neoliberal globalization (e.g., Kaplan 2015; identify four main dimensions along which the political Kinderman 2012). This limits, we propose, our capacity to role and responsibility of firms has varied over time and in compare and contrast CSR as a particular form of busi- parallel to shifting background ideologies. A first dimen- ness–society interactions inscribed in a singular worldview sion is territory—or the range of action and responsibility. with alternatives that would be set in different ideological Second, we find a striking evolution in the nature of ‘‘ac- grounds (Matten and Moon 2008).
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