The Business Firm as a Political Actor:
A New Theory of the Firm for a Globalized World
Andreas Georg Scherer
University of Zurich, Switzerland
University of Lausanne, Switzerland
York University, Canada
The debate on the relationship between business and politics mainly builds on the assumption of a reasonably coherent regulatory environment, where nation state institutions address issues of public concern and regulate business behavior. In this model, state agencies are considered the only political institutions that directly focus on the well-being of society, whereas business firms are conceived of as economic actors only. Business firms—in this thinking—might well attempt to influence the political system
by their lobbying or political strategies or might engage in corporate philanthropy as part of their strategies. These activities though do not change them into political actors that operate in the name of the public interest. Rather, it is assumed that their interaction with the political sphere fosters their economic ends.
Over the last decade, however, this neat separation between the political and the economic sphere has become blurred. In the process of globalization, the national context of governance is eroding. In many cases, the state system fails in regulating the economy, dealing with transnational social and environmental problems, providing public goods, administering citizenship rights, and serving the public interest. This is particularly true when the public institutions lack the necessary resources or enforcement
mechanisms. Under these conditions, civil society groups and private actors often step in and fill the void.
Today, many multinational business firms have started to voluntarily regulate their activities or produce global public goods. As the widespread participation in the UN Global Compact shows, these firms assume political responsibilities that once were regarded as belonging to government. They contribute to public health, education, social security, and the protection of human rights or engage in self-regulation to fill gaps in legal regulation and to promote societal peace and stability. These business firms operate as
social entrepreneurs and directly serve the public interest by their resources (money, assets, know-how, etc.) and their creativity.
Next to globalization, distinct changes in political ideology during the past decades have led to massive changes in most industrialized countries. Substantial reforms of the postwar Keynesian welfare state—often commonly referred to as “neoliberal” reforms—have led to massive privatization of formerly government provided services (e.g., health care, basic shelter, education, telecommunication, public transport, water and electricity utilities, etc.). These developments have put corporations in charge of the provision of goods whose nature in terms of quality, accessibility, and affordability have an intricately political character.
These activities go beyond the common understanding of instrumental corporate social responsibility and the economic concept of the business firm. Globalizing society erodes established ideas about the division of
labor between the political and economic spheres. It calls for a fresh view concerning the political role of business in society and its creativity and contribution to social innovations and the public good. These phenomena need to be embedded in a new concept of the business firm as an economic and political actor in market societies.
As outlined above, although there is a broad consensus on business occasionally “doing” political activities, there is as yet little appreciation of business actually “being” a political actor in itself, next to governments
and increasingly also civil society actors. The political nature of the firm is highly contested—not only because it challenges existing notions of the role of business in society but also because of substantial concerns about the implications of this shift for democracy and the public good.
The task of this Business & Society special issue is to discuss the consequences of a political mandate of the business firm and to examine the implications for the theory of the firm. We specifically invite papers which take a critical perspective on the political role of the firm. Authors should aim to develop strong theoretical and/or empirical insights that increase our understanding of the political behavior of global business firms and their contribution to society. We would like to see the contributions advance the
discussion in two main directions that address the philosophical, theoretical, and practical domains of Business & Society:
1. Theoretical concepts of a political theory of the business firm.
Papers here might address questions such as the following:
2. Implications for management theory building.
Possible topics might include (but are not restricted to) the following:
We invite both theoretical and empirical contributions that help us to better understand the political responsibility of business firms. Papers that argue across the potentially relevant disciplines (organization and management studies, business ethics and CSR, economics, legal studies, political theory, etc.) would be particularly welcome. The submitted papers are subject to the regular double-blind review process at Business & Society.
The format of the papers must follow Business & Society guidelines. Business & Society uses the American Psychological Association citation and reference system (please see any recent copy of the journal for a sample). Papers should include a 100-150 word abstract followed by 3 to 5 keywords. The paper itself should contain no indications of authorship. A title page containing full author contact information should be sent as a separate document to the coeditors.
The tentative timetable for the special issue is as follows:
March 1, 2010 Papers submitted electronically to coeditors
March, 2010–Spring 2011 Review and revision process
During 2012 (tentative) Publication of Business & Society Special Issue
Prof. Dr. Andreas Georg Scherer
IOU/University of Zurich
CH-8006 Zurich, Switzerland