The Political Role of Multinational Corporations in Global Supply Chains – Examining the Legitimacy, Challenges and Prospects of Multi-Stakeholder Initiatives

Project Description:

This cumulative dissertation project contributes to the present debate on ‘political’ CSR and the role of business in development through the critical reflection of certain assumptions and blind spots of this ongoing debate. Scherer and Palazzo (2007: 1096) present their account of political CSR as a macro level concept to define “the new role of the business firm as a political actor in a globalizing society”. Scherer and Palazzo observe that in the wake of globalization corporations increasingly assume responsibilities that can be regarded as genuine governmental responsibilities, e.g., when firms devise regulation for social and environmental standards through their engagement in multi-stakeholder initiatives (MSIs) (Palazzo & Scherer, 2006) or provide public goods such as health care, education or security (Matten & Crane, 2005). Drawing on Habermas’ (1996) concept of deliberative democracy, Scherer and Palazzo suggest that the deliberative engagement of corporations with stakeholders from civil society in MSIs serves to legitimate corporations in their role as political actors. In a first paper, I address the implications of a political understanding of corporate social responsibility for social development in developing countries, at the example of the Bangladesh garment industry. In a second paper I critically reflect on the way Scherer and Palazzo make use of the theory of deliberative democracy in developing their concept of political CSR. Here, I draw on more recent developments in deliberative democracy theory (Dryzek, 2010; Mansbridge et al., 2012) to question whether the engagement of MNCs in MSIs is sufficient to democratically legitimate the political role of corporations as Scherer and Palazzo suggest. A third paper aims at empirically testing the proposition of Scherer and Palazzo that MSIs serve as ‘schools of democracy’ (Scherer & Palazzo, 2011: 917). Through in depth interviews with participating corporations in an MSI in the garment sector, the paper explores in how far MSIs incorporate a ‘democratic learning’ aspect and serve to ‘socialize’ corporations in their political roles.

Key References:

Dryzek, J. S. 2010. Foundations and frontiers of deliberative governance. Oxford: Oxford University Press.

Habermas, J. 1996. Between facts and norms: Contributions to a discourse theory of law and democracy. Cambridge, Mass: MIT Press.

Lenssen, J.-J., & van Wassenhove, L. N. 2012. A new era of development: the changing role and responsibility of business in developing countries. Corporate Governance, 12(4): 403–413.

Mansbridge, J., Bohman, J., Chambers, S., Christiano, T., Fung, A., Parkinson, J., Thompson, D. F., & Warren, M. E. 2012. A systemic approach to deliberative democracy. In J. Parkinson & J. Mansbridge (Eds.), Deliberative systems: 1–26. Cambridge [u.a.]: Cambridge University Press.

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(4): 1096–1120.

Publication:

Huber, Kristin & Gilbert, Dirk Ulrich (2015). Political CSR and social development: Lessons from the Bangladesh garment industry. In Jamali, Dima, Karam, Charlotte and Blowfield, Michael (Eds.), Development Oriented Corporate Social Responsibility, Volume 1, Multinational Corporations and the Global Context (pp. 228 -246). Sheffield, UK: Greanleaf.