Managing for Political Corporate Social Responsibility: New Challenges and Directions for PCSR 2.0

• Published date: 01 May 2016
• Date: 01 May 2016
• Author: Andreas Georg Scherer,Andreas Rasche,André Spicer,Guido Palazzo
• DOI: http://doi.org/10.1111/joms.12203

Managing for Political Corporate Social

Responsibility: New Challenges and Directions

for PCSR 2.0

Andreas Georg Scherer, Andreas Rasche, Guido Palazzo

and Andre Spicer

University of Zurich; Copenhagen Business School; University of Lausanne; City University London

ABSTRACT This article takes stock of the discourse on ‘political CSR’ (PCSR), reconsiders some

of its assumptions, and suggests new directions for what we call ‘PCSR 2.0’. We start with a

definition of PCSR, focusing on firms’ contribution to public goods. We then discuss historical

antecedents to the debate and outline the original economic and political context. The

following section explores emerging changes in the institutional context relevant to PCSR and

reconsiders some of the assumptions underlying Habermas’ thesis of the postnational

constellation. This highlights some neglected issues in previous works on PCSR, including the

influence of nationalism and fundamentalism, the role of various types of business

organisations, the return of government regulation, the complexity of institutional contexts, the

efficiency of private governance, the financialization and digitalization of the economy, and the

relevance of managerial sensemaking. Finally, we discuss the contributions to this special issue

and relate them to the newly emerging research agenda.

Keywords: business and society, corporate political activity, CSR, globalization, governance

INTRODUCTION

In the past decade, the literature on corporate social responsibility (CSR) has taken a

‘political turn’. The focus has shifted towards how firms shape their institutional environ-

ment, often driven by a concern for the public good that goes beyond selfish calculations

of economic actors (Matten, 2009; Rasche, 2015; Scherer and Palazzo, 2011). On the

one hand, this political turn of CSR is interpreted as a corporate attempt to close gover-

nance gaps on the local, regional and global level. On the other, the political turn is asso-

ciated with the changing role of state agencies and the redistribution of governance tasks

between private and public actors (Bell and Hindmoor, 2009; Levi-Faur, 2005).

Address for reprints: Andreas Rasche, Copenhagen Business School, Copenhagen, Denmark (ara.ikl@cbs.dk).

V

C2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies 53:3 May 2016

doi: 10.1111/joms.12203

Since the 1960s’ rise of shareholder capitalism, the traditional understandings of CSR

emphasize a clear separation of economic and political domains (Sundaram and Inkpen,

2004) and focus on the business case of CSR (Carroll and Shabana, 2010; McWilliams

et al., 2006). Recent theorizing has highlighted how firms are increasingly involved in

the provision of public goods. They shape (global) regulation in various ways, consider

the public interest, and often do all this in situations where governmental authorities are

unable or unwilling to do so (Mahoney et al., 2009; Matten and Crane, 2005; Scherer

and Palazzo, 2008). This political understanding of CSR reaches beyond the instrumen-

tal view of corporate politics expressed in the literature on corporate political activity

(CPA) (Hillman et al., 2004; Lawton et al., 2013). Businesses not only influence politics

via lobbying, they turn into political actors themselves – i.e., they co-create their institu-

tional environment (Barley, 2010; Scherer and Palazzo, 2011). Understanding CSR in

this way requires us to rethink existing models of governance on the national, regional,

and global level (Abbott, 2012; Aguilera et al., 2007; Rasche, 2012) and to explore the

consequences for democracy (Driver and Thompson, 2002; Scherer et al., 2013a;

Thompson, 2008).

Political CSR (PCSR) (Scherer and Palazzo, 2007, 2011) and the closely related

extended approach to corporate citizenship (Matten and Crane, 2005) developed as a

critical alternative to the purely instrumental view on CSR and CPA. Proponents of

PCSR build on a notion of politics that emphasizes deliberations, collective decisions,

and a concern for (global) public goods (Scherer et al., 2014; Young, 2004). This schol-

arly discourse has proliferated in recent years. Authors have developed normative theory

on the responsibilities of business firms based on a distinct political philosophy and

theory of deliberative democracy (Matten et al., 2005; Scherer and Palazzo, 2007). In

the course of this development the implications of the changing political role of business

firms for governance, the role of law, corporate responsibility, corporate legitimacy, and

democracy have been explored. As a result, some scholars even speak of a paradigm

shift in CSR (Scherer and Palazzo, 2011).

However, PCSR has also been criticized from various angles. Some have argued that

the PCSR research tradition over-emphasizes the consequences of globalization (Whe-

lan, 2012). Others have maintained that the concept of a ‘politicized corporation’ disre-

gards the importance of functionally differentiated societies (Willke and Willke, 2008).

Frynas and Stephens (2015) have even claimed that PCSR follows a narrow research

agenda informed by a normative theory that has largely excluded descriptive accounts.

Some have suggested that the PCSR research agenda needs to be further developed

and extended (for other critical reflections see Baur and Arenas, 2014; Edward and

Willmott, 2008; M€akinen and Kourula, 2012). Considering these criticisms, we argue

that recent changes in the social and political world have given rise to a new context in

which PCSR needs to be discussed. Following Habermas’ (2001) original thesis of the

postnational constellation, we summarize this new socio-political context as the ‘postna-

tional constellation 2.0’. We reconsider some of the original assumptions of the PCSR

debate and point to new directions for future research. In particular, we suggest an

extended research agenda, an updated version of ‘PCSR 2.0’, which puts more empha-

sis on the managerial consequences of PCSR and responds to the challenges of the

emerging postnational constellation 2.0.

274 A. G. Scherer et al.

V

C2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies