Business Society: Political approaches to Corporate Sustainability

Globalisation

A process of intensification of cross-border social interactions due to declining costs of connecting distant locations through communication and the transfer of capital, goods and people.

Traditional relationship between business and politics

- Limited international trade & foreign direct investment

- Clear division of labour between state & business

- State control over companies

Contemporary relationship between business and politics

- International trade & foreign direct investment

- Unclear division of labour between state & business

- State & democratic control weakened

- Multi-national corporations are not bound to a single legal system

Governance Gaps

Ruggie (2008):

Occur between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences.

Governance Gap solutions

Ruggie (2008):

Businesses may...

- Contribute to public goods

- Address social & environmental concerns

- Voluntary self-regulation & global governance

Business and Voluntary Global Governance

Rasche (2012):

Address a variety of social and environmental problems by bringing together corporations, civil society organisations, governments, labour organisations and academia.

Mechanisms

Making use of standards and principles.

Corporate Political Activity

Getz (1997):

Any deliberate firm action intended to influence governmental policy or process.

CEO Activism

Hambrik & Wowak (2019):

Refers to public and personal communicative actions that are not directly related to the core business.

CEO Silence

Chatterji & Toffel (2018):

Silence is more conspicuous and more consequential.

Revolving Door

Kannel (1888):

The movement of high-level employees from public sector jobs to private sector jobs and vice versa.

Many legislators and regulators become lobbyist for industries they once regulated.

Melting Summits

Schüssler et al. (2014):

Increased business participation in UN summits.

Instrumental Business Power

Miliband (1969):

(Direct influence)

Businesses have the ability to frame and establish a dominant public discourse that may cause governments to respond with policies in their favour.

E.g. Lobbying, campaign contributions etc.

Structural Business Power

Lindblom (1977):

(Indirect influence)

Businesses possess unique influence because government re-election depends on economic growth, which requires private investment.

Institutional Business Power

Thelen (2020):

When states delegate public functions to private businesses, contributing to an asymmetrical dependence of the State on private businesses.

Three Faces of Political Power

Lukes (2005):

1. First Face - decision making

2. Second Face - agenda setting

3. Third Face - thought control

Quiet Politics

Culpepper (2011):

Businesses are more successful in lobbying and forwarding their own political agenda in areas away from public scrutiny and media attention.