What Does it Mean to See Corporations as Political Actors

Business and the Polis: What Does it Mean

to See Corporations as Political Actors? Pierre-Yves Neron

ABSTRACT. This article addresses the recent call in

business ethics literature for a better understanding of

corporations as political actors or entities. It first gives an

overview of recent attempts to examine classical issues in

business ethics through a political lens. It examines dif-

ferent ways in which theorists with an interest in the

normative analysis of business practices and institutions

could find it desirable and fruitful to use a political lens.

This article presents a distinction among four views of the

relations between corporations and politics: corporations

as distributive agents, corporations as political commu-

nities, corporate practices and policies as citizenship issues,

and corporations as active participants in the political

process. This article finishes with an examination of three

challenges that need to be overcome by the theory of the

firm as a political actor.

KEY WORDS: business and government relations, busi-

ness and politics, corporations and citizenship, organiza-

tions, political philosophy

Introduction

An interesting feature of the recent literature on

corporate roles and responsibilities is that there has

been a call for a better understanding of corporations

and the business world in general, as ‘‘political

actors’’. When saying that there has been a call for

such a conception of corporations as political actors,

I refer very broadly to a set of recent articles and

books that stress the importance of looking more

politically at firms and business institutions and

practices. The question I want to ask in this article is:

what does it mean more precisely to look at cor-

porations this way, and what are the implications?

The short answer is that it could mean a lot of things.

Moreover, depending on the interpretation that one

makes of the ‘‘politicization’’ of corporations, it

could have very different implications. Treating

corporations as political entities, actors, institutions, or

units could probably highlight some normative issues

related to business institutions and practices and

contribute to a better understanding of these issues. It

could also sometimes lead to the formulation and

defense of radical propositions. It may also simply lead

to the reaffirmation of classical theoretical statements

in business ethics. In brief, treating corporations as

political things could be theoretically useful and have

potentially quite radical implications, but in some

cases it might be also quite banal or not very fruitful

from a theoretical perspective (we should not put this

option out too quickly). This is why I try to propose

in this article some theoretical avenues to investigate

and clarify the very idea of ‘‘corporations as political

actors.’’ I first try to clarify what is at stake in this call

for a theory of the firm as a political actor. Then

I examine four political views of corporations and

business institutions and the various theoretical

insights possibly offered by these different views.

I conclude taking into consideration three challenges

that need to be overcome by theorists interested in

building a theory of the firm as a political actor.

The call for a theory of the firm as a political

actor

The study of ‘‘business and society’’ is characterized

by a certain ‘‘conceptual anarchy.’’ Academics,

NGOs, business people, corporations, and govern-

ments use many different ‘‘vocabularies’’ or ‘‘nor-

mative frameworks’’ for discussing and evaluating

the responsibilities of corporations (Schwartz and

Carrol, 2008). Philosophers like to refer to more

abstract tools and concepts from moral theory for

applying them to business systems and interactions.

Whereas some like to use the language of sustain-

ability to talk about environmental practices in

Journal of Business Ethics (2010) 94:333–352 � Springer 2009DOI 10.1007/s10551-009-0266-y

economic development, others refer to the now

omnipresent language of corporate social responsibility

which acts as a rejection of ‘‘orthodox’’ business

models, and is closely linked to the language of

stakeholder management which tries to expand, the

obligations of businesses and managers to include the

interests and opinions of a wide range of groups

affected, the stakeholders, by firm’s activities and

policies. Economists enter theses debates by framing

the issues in terms of good corporate governance, which

comes mostly from law and economics and is con-

cerned with structures of incentives and controls for

managing fiduciary responsibilities and reducing

agency problems.1

As noted in the ‘‘Introduction’’, recent studies in

the field suggest a desire to add to these various

normative frameworks a new language with strong

political connotations. Taking new realities into

account, some theorists now urge that we seek a

better and richer understanding of the political

aspects of businesses activities. Moreover, this ‘‘call’’

comes from very different perspectives and disci-

plines. It is revealing, for instance, that this move

toward a political understanding of economic orga-

nizations is explicitly suggested in the title of a recent

collaborative article, regrouping many young

scholars from different disciplines, called ‘‘Corpora-

tions as political actors,’’ in which the authors reflect

on the globalization process in which ‘‘corporations

have become political actors’’ in ‘‘postnational

constellations’’ (Rasche et al., 2008). A recent call

for articles for an upcoming special issue of the

Business Ethics Quarterly also invites scholars to con-

tribute to a better understanding of the ‘‘political

mandate of the corporation’’.

Recent developments in the theory of corporate

citizenship also open the door for a more explicit

political understanding of corporations. Corporate

citizenship theorists from the ‘‘first wave’’ have seen

the use of the language of citizenship as a way to

achieve a better understanding and to articulate a

better justification of the idea of corporate social

responsibility (CSR), broadly understood as the idea

that firms are required to benefit the societies in

which they operate in ways that go beyond the

production, in compliance with laws and regula-

tions, of goods and services as a part of the firm’s

normal profit-seeking activities. Wood and Logs-

don, for example, notice that the language of

corporate citizenship tends to replace the language of

CSR or at least, tend to be used as a synonym. They

also seem to recognize that some of their own views

about corporate citizenship are compatible with

classical definitions of CSR (2002, p. 162). According

to this view, treating corporations as ‘‘citizens’’ means

that corporations should acknowledge a broader so-

cial role and corporate obligations should be extended

to include multiple stakeholders beyond the tradi-

tional base of shareholders, such as workers, local

communities, and the environment, and the out-

comes of policies and programs directed toward those

societal relationships. The language of corporate cit-

izenship, then, should be associated with the defense,

or maybe a better defense, of the set of corporate

obligations usually associated with the concept of

CSR (Birch, 2001; Dawkins, 2002; Logsdon, 2004;

Logsdon and Wood, 2002; Post and Berman, 2001).2

Corporate citizenship theorists (and critics) from

the ‘‘second wave’’ have been more critical of this

tendency to use the vocabulary of citizenship as a

(new) comprehensive framework to think, in a very

general way, about the roles of corporations in our

society. They refuse to see corporate citizenship as an

all-encompassing framework or as a concept that

could do a better job in capturing what is actually

denoted by the concept of CSR (Crane et al., 2008a, b;

Matten and Crane, 2005; Matten et al., 2003; Moon

et al., 2005; Neron and Norman, 2008a). Instead of

seeing corporate citizenship as an extension or a

reformulation of CSR, they suggest to take seriously

the political connotations of the idea of citizenship.

Moon et al. argue, for instance, that corporate citi-

zenship should be used as a ‘‘metaphor’’ to illuminate

the roles corporations already play in the political

process of contemporary societies (2005). Crane and

Matten call for a ‘‘political view of the firm’’ in which

corporations are not seen as purely economic insti-

tutions but as actors firmly located within the polit-

ical arena (2008). Crane et al. (2008a) contend that

debates on corporate citizenship have led to a more

general debate that has just begun on the political

nature of the corporation. According to these au-

thors, the main benefit of applying the citizenship

thinking to issues in business ethics is that it exposes

the political nature of debates about CSR and stake-

holder theory. It offers ‘‘a new perspective on the

corporation’’ because ‘‘it unveils the political nature of

its involvement in society’’ and ‘‘helps to illuminate

334 Pierre-Yves Neron

certain dimensions that might otherwise go unex-

amined’’. (Crane and Matten 2008, p. 29).

In a similar vein, Neron and Norman suggest that

the use of the language of citizenship may concern

only some particular sets of corporate obligations in

some specific relations, namely with governments and

regulatory agencies (2008a).3 The idea here is that

the best way to make sense of the metaphor of cit-

izenship is to take seriously the kind of the specific

political relations and activities that citizenship is

usually associated with. In brief, the theory of cor-

porate citizenship should, first, draw our attention to

the different ways corporations interfere in the

political process and the shaping and reshaping of

their regulatory environment and, second, aim to

provide theoretical avenues that would allow us to

determine which political activities and relations

with government regulators are appropriate or

inappropriate, permissible or impermissible, obliga-

tory or forbidden for corporations.

Even a more radical critic of corporate citizenship,

for example, van Oosterhout agrees with the idea

that there is a need for a better understanding of the

political aspects of the life and activities of business

organizations. While radically rejecting the intro-

duction of the vocabulary of corporate citizenship,

van Oosterhout suggests, nonetheless, that there is

much to be gained by developing concepts and

theoretical tools that can help us to truly transcend

what he calls the ‘‘confines of economic and political

organizations’’ (2008, p. 39). Underlying van

Oosterhout’s proposition is the idea that we should

not take for granted that there is a radical division

between the sphere of politics and the sphere of

economic organizations. Or more specifically, that

we should not take for granted that organizations

with economic purposes are apolitical entities.

Scherer and Palazzo follow the same path and

refer to what they consider a new conception of

corporate responsibility in which the firm is seen as a

‘‘politicized’’ actor ‘‘democratically embedded’’

(2007, pp. 1105–1112). In another article written

with Baumann, they argue for what they call a

‘‘political responsibility of the business firm’’ (Scherer

et al., 2006, p. 515). They suggest that our theo-

retical understandings of corporate roles and respon-

sibilities have been obfuscated by a historically

developed de-politicization of the corporation in

which there is a clear separation between the

economic sphere, with its own sources of legitimacy,

and the political sphere, with its own, different,

sources of legitimacy. However, according to these

authors, this apolitical conception of the firm is both

normatively and empirically untenable, and, hence,

the need for a ‘‘politicization of the corporation’’

(Matten, 2009; Scherer and Palazzo, 2007). We

should, as Hanlon suggests, overcome the ‘‘denial of

politics’’ in the fields of business ethics and CSR

studies (Hanlon, 2008).

One particularly provocative invitation to take

seriously the political nature of the firm is to be

found in the Crane et al.’s approach in which groups

related to the firm are not seen as ‘‘stakeholders’’ but

as ‘‘citizens’’ (2004). The authors propose, in what

could be considered as a radicalization of the stake-

holder paradigm, to use the lens of citizenship theory

to look at the ways different groups interact in the

shaping and reshaping of ‘‘ethical institutional

arrangements for business,’’ leading to a reconcep-

tualization of stakeholder relations with the firm in a

fundamentally political language (2004, p. 108).

These are all examples of the recent call for a

political conception of the firm and its activities.

However, it is worthy here to take a few steps back

and recall that this ‘‘politicization’’ of corporations

was at the heart of some of the most radical critiques

of the social responsibility of business, most notably

in Friedman’s charge against the idea (Friedman,

2002). In the Friedmanian view, it is precisely

skepticism toward the idea of ‘‘firms as political

actors,’’ which leads to a reaffirmation of the neo-

classical view that firms’ main responsibility is to

maximize shareholders profits. The reference to

corporations as having ‘‘social responsibilities’’ is no

more than an ideological and subversive way to

politicize economic institutions. In order to put it

crudely, this is, from a Friedmanian point of view, a

very bad idea. Recent literature though, suggests

that theorists do not hesitate to use this language of

politics to think normatively about business.

Corporations and politics: four directions

What should we think about the call for a better

understanding of the political aspects of business life?

How should we welcome this invitation to think

about the firm as a political actor? Why should we

335Business and the Polis

think, contrary to the Friedmanian skepticism, that it

is a theoretically fruitful idea? My contention is that

it is highly seductive but it is not clear how it could

be helpful and what it means exactly for the nor-

mative analysis of business practices and institutions.

The agenda for a ‘‘political theory of the firm’’ is

appealing but remains unclear. This is why, in this

section, I try to provide some insights first by

answering these questions and then clarifying a little

bit further what it means to use a ‘‘political lens’’ to

examine issues in business ethics. I propose four

directions in which we might think politically about

corporations and examine some of the implications

of doing so.

Corporations as distributive agents

The first possible desirable way to look at business

with a political lens is to focus on the impact of the

firm on the society as a whole. Corporations are

among the most powerful social entities in our world

and are, sometimes, depicted as the key institutions

of our time. Their ‘‘pervasive presence’’ and impact

on human lives rival that of history’s most powerful

emperors, czars, and kings.4 They control vast hu-

man, organizational, and financial resources, trans-

national borders and affect every human life. They

shape flows of capital, natural resources, and labor;

they influence national governments and local

communities; and they support (directly and indi-

rectly) everything from education to the arts and

sports. Moreover, in the process of globalization,

business organizations are even taking on broader,

more complicated roles in society.

Here, firms could be viewed as being ‘‘political’’ in

the sense that they have an impact on society as whole

and often serve larger purposes than profit maximi-

zation. They have significant distributive effects because

they are able to impose a heavy imprint upon society

as a whole. This could be called the ‘‘stakeholder’’

view of the corporations as political actors. One of the

recurrent themes in stakeholder theory is the

importance of not overlooking the ‘‘public’’ nature of

the modern corporation, which should not be

understood simply as a ‘‘private’’ association but as a

social institution whose activities and policies have an

impact on a plurality of stakeholder groups and not

only on shareholders’ welfare.5

This ‘‘political’’ view of the nature of corpora-

tions is extremely important for critics of classical or

orthodox models of business. Take, for instance, the

so-called progressive corporate law movement. For

Mitchell, Green and Millon, our classical views on

corporate responsibilities are biased from the start

because they fail to realize the public nature of

corporations (Mitchell, 1995). This is why one of

the crucial moves of the progressive corporate law

theorists is to invite us to shift from a ‘‘contractarian’’

view of the firm to favour what Millon calls a

‘‘communitarian’’ view:

Communitarians tend to differ from contractarians in

emphasizing the broader social effects of corporate

activity. Contractarians focus on the corporation’s

internal relationships, applying a cost-benefit analysis to

a relatively narrow range of more or less readily mo-

netizable interest. Communitarians see corporations as

more than just agglomerations of private contract; they

are powerful institutions whose conduct has substantial

public implications. Thus, for example, assessing the

costs of the reorganization of a corporation like Time is

not just a matter of adding up possible costs in worker

layoffs and potential gains to Time shareholders. It is

also necessary to take into account the general public’s

possible interest in the various publications’ continued

editorial independence. (Millon, 1993, p. 1379)

This ‘‘communitarian’’ view is probably very

close to what a lot of theorists have in mind when

they refer to the need for a political view of the firm.

Millon’s basic point here is that firms are not merely

private associations with purely economic goals but

social or public institutions that are related to, and

have an impact on, many other important social

institutions that realize important social goals. In

brief, what progressive corporate law and stake-

holder theorists are trying to do here is to empirically

turn Friedman on his head. From this point of view,

Friedman is simply wrong at the beginning about the

nature of corporations. As a matter of fact, it is

simply not true that firms’ activities are limited to the

market. They are ‘‘political’’ from the beginning

because they are social institutions created by polit-

ical communities and serve larger purposes than

profit-seeking.

Of course, stakeholders, CSR, and progressive

corporate law theorists are right in pointing to the

‘‘public’’ nature of firms as social institutions of capitalist


societies.6 Corporations are certainly powerful

political actors in this sense. After all, if politics is

about giving an answer to the immense question of

‘‘who must do what for whom?’’, then there is no

doubt today that businesses are successful political

actors.7 Moreover, as they enter new arenas, such as

health care, education, and even military operations,

where tough choices and tradeoffs among multiple

goods are commonplace, conflicts between economic

objectives and other public worthy aims is likely to

increase. It is why it is surely right to ask ourselves, as

these theorists do: what are the responsibilities of

these ‘‘social institutions?’’ and what are their capac-

ities in certain domains of social and environmental

action?

The main problem with this first view of the firm

as a political actor is that it is hard to see how it could

bring a refreshing perspective on debates about

firms’ roles and responsibilities. CSR and stake-

holders theorists and critics of the modern business

firm are incessantly making this point. Moreover,

the problem is not that it is a false view. The

problem lies in its normative scope. Firms could

certainly be understood as ‘‘social institutions’’, in

this stakeholder theory sense, because their policies

and activities have significant distributive effects on

many groups in our societies. The problem is that it

should be, in fact, a relatively noncontroversial

starting point. Even neoclassical economists arguing

for the Friedmanian view could agree with this

starting point while insisting on the idea that the

fact that corporations are ‘‘social institutions’’ is

precisely at the basis of the best strategy to justify

the profit orientation of firms in competitive

markets.8

Corporations as political communities

It appears to be possible to look politically at the

business world in a different way, viewing firms as

being themselves ‘‘small’’ political communities. The

very basic idea here is the following: the modern

business firm is not only an organization for making

decisions in a market economy. Economics organi-

zations are, sometimes, huge communities ‘‘popu-

lated’’ by hundreds and thousands of employees with

a variety of interests, values, and different conceptions

of the good life. These ‘‘organizational citizens’’

create ties, cooperate, regulate conflicts, and coordi-

nate their efforts through different ‘‘political’’

mechanisms of collective decision making.9

This view of corporations as small political com-

munities is implicit in Christopher McMahon’s

suggestion that the task of justifying the existence of

the firm in our economic systems is analogous to the

task of justifying the existence of the state (McMa-

hon 1994, 1995, 2007). From this point of view, it is

possible to make what Joshua Cohen calls ‘‘parallel

case arguments’’ according to which it is plausible to

claim that workers stand in relation to economic

enterprises in a similar way as citizens stand in rela-

tion to the state.10 If political theorists have been

concerned with the exercise of legitimate authority

by the state, then they also must be concerned with

the way that economic organizations, especially large

corporations, are organized.11

In his study on what he calls the ‘‘political theory

of organizations’’, McMahon appears to make two

claims about the political aspects of business orga-

nizations. First, that given their size and organiza-

tional resources, some important political decisions are

left to be made by corporations; and second, that

firms are analogous in some way to political com-

munities. These claims draw our attention to two

different meanings of corporations as political actors

that I want to highlight here. The first claim is about

the external effects of corporate activities and cor-

responds broadly to what I call the view of ‘‘cor-

porations as distributive agents.’’ In this view, some

important ‘‘political’’ decisions are made by corpo-

rations in the sense that they have an impact on who

gets what, when, and how in our societies. The

second claim draws our attention to another political

aspect of firms because it is a claim about the internal

organization of corporations and leads us to the view

of corporations as political communities. It is a claim

about those who are ‘‘inside’’ the firm.

As such, ‘‘political theorists’’ of the firm appear to

have some reasons to draw our attention to issues of

authority in such relations. It is often claimed, in the

economic literature on the theory of the firm, that

the main distinction between firms and markets is

the exercise of authority within the firm (Hsieh,

2008). Contrary to competitive market relations

structured by the price mechanism, intrafirm relations

are administrated relations that are governed by the

rules that structure the bureaucratic hierarchy of the


organization (Heath, 2007, p. 359). McMahon

wants to take seriously the normative aspect of this

feature of intrafirm relations while asking the ques-

tion of the foundations of the authority exercised by

managers in such hierarchical bureaucratic structures

(1994).

Of course, the association suggested by McMahon

between the state and the firm as both being similar

political units is probably too strong, and could be

contested. Phillips and Margolis, for example, criti-

cize this analogy as being misleading (1999). As they

point out, states and firms (and associations in gen-

eral) could also be viewed as having very different

features and purposes. They insist on three major

differences between states and large corporations:

– Exit: freedom to exit from a state is quite differ-

ent than freedom to exit from a corporation.

Freedom of exit is a fundamental normative

component of what organizational membership

means, just as its impossibility is constitutive of

state membership.

– Aims and purposes: It is appropriate to expect

organizations to promote specific aims and goals,

but not for a state.

– Mutual assessment of contribution: the mutual eval-

uation of members of economic organizations is

different from the evaluation of members of a

state, which should be viewed as a community

of equals. Firms tolerate a greater level of meri-

tocracy and it should be the case.

Philips and Margolis’ message is clear. Even if we

agree with McMahon that we should care about the

way large corporations are organized, the analogy

with the state is too strong. We should not under-

estimate some important features of the state, most

notably those related to its coercive power. The

problem of protecting citizens from abuse and

exploitation by the state might differ in some ways

from the protection of worker interests in the

workplace. As Moriarty puts it, the point is that we

all know that there is a difference between Saddam

Hussein and Montgomery Burns (Moriarty, 2005).

Despite these criticisms, it seems appealing to refer

to firms, not necessarily as quasi-states, but as some

sort of political communities. After all, similar to

political communities organized through some

variety of government, corporations are sites of

power, collective action and decision making.

One could argue, as Walzer did a long time ago, that

the analogy works better with cities. Cites, similar

to firms, ‘‘are created by entrepreneurial energy,

enterprise, and risk taking; and they too, recruit and

hold their citizens, by offering them and attractive

place to live’’ (Walzer, 1984, p. 295). In drawing this

Walzerian analogy, one is led to see the differences

between firms and political communities similar to

states and cities as matter of degree (Moriarty, 2005).

For example, it is true that state membership is not

the same as organizational membership. The vol-

untariness is more important when we think about

the latter than when we think about the former,

because the possibility of exit is greater in corpora-

tions. However, at the same time, one should not

exaggerate the possibility of exit in corporations.

Exit from a corporation could be easier in some

degree than exit from a state, but it could also be

painful. It involves research costs in finding a new

job as well as transition costs in making the move

from one job to another.12 As Moriarty puts it: ‘‘It is

obvious that leaving one’s country is difficult. It is

perhaps not appreciated how difficult leaving one’s

job can be. For many workers, leaving a job means

losing seniority, retirement funds, health benefits,

job-specific skills, community ties, and friends. Most

will need to find new jobs, and these can be hard to

find.’’ (Moriarty, 2005, p. 460). If there are such

important limits to the freedom of exit from cor-

porations, then one should regard voice as a signifi-

cant alternative. Where the costs of exit are very

high, workers should be able to rely on voice, the

capacity to express dissent, and contest some of

corporate policies without exiting (Hsieh, 2005).

In recent articles, Nien-he Hsieh goes in the same

direction by drawing some attention to issues of dis-

tributive justice in the organized production of goods

and services, which he perceives as an underestimated

topic in contemporary political philosophy. He

reviews contemporary studies on the various demands

that workers can legitimately make to managers and

examines claims about meaningful work and worker

participation in firms’ governance structures. While

insisting on the requirement to go beyond parallel

case arguments, Hsieh suggests that the need for

efficient decision making in contemporary economic

organizations involves the possibility of substantial


arbitrary interference from managers in the lives of

workers. This feature, according to him, should draw

our attention to the legitimacy of power and authority

in corporate structures (Hsieh, 2005, 2006, 2008).

Here, it should be noted that my aim is not

necessarily to articulate and to defend these claims. It

is rather to show how the idea of corporations as

political communities points in some refreshing

directions. When Hsieh asks what justice requires in

economic production and evaluates the moral

importance of ‘‘voice’’ beside ‘‘exit’’ and the notion

of ‘‘meaningful work,’’ he gives us a good idea of

what it could mean to take a political look at what is

going on inside the firm. My primary concern,

hence, is to illuminate the style of analysis and

normative reasoning suggested by the view of firms

as political communities, and how the use of a

political lens can contribute to a better understand-

ing of some forms of participation in economic

enterprises and some under-theorized intrafirm

relations (such as the contestation of managerial

decisions and authority).

Take, for instance, the classical accounts of the

theory of the firm. One clear advantage of using a

political lens in viewing intrafirm relations is that it

might help to highlight some neglected aspects in

the economic theory of the firm in which corpo-

rations are seen as a nexus of contracts. In this view,

the firm is understood as a set of principal–agent

relations that necessarily create agency problems.

The main objective of the governance structures of

the firm is then to overcome these agency problems

by providing the appropriate set of incentives.

However, in some versions of the theory, it is easy to

find a quite pejorative view of the ‘‘agents’’ who are

supposed to act in the interest of the principal. While

reading the literature on ‘‘agency theory,’’ one could

have the feeling that ‘‘agents’’ similar to employees

are simply depicted as lazy opportunists who will

avoid working whenever the boss isn’t looking

(Heath, 2009).

The problem with this view is not only that it fails

to provide a proper account of agents’ moral moti-

vations but also that it fails to provide an appropriate

understanding of the rich life of complex organiza-

tions. It generally fails to explain why employees do

not only respond to external incentives but also de-

velop some moral allegiances to their business

organizations. It fails to explain why successful

management and organizational strategies to over-

come agency problems do not only always rely on

the good engineering of external incentives but also

on building a strong organizational culture that

promotes trust.13

To see firms as some sort of political communities

offers a promising way to overcome some of the

major weaknesses of agency theory, or at least to

shed some light on under examined aspects of the

rich and complex life of modern economic organi-

zations. It is so because it might help us tell better

stories about these complex organizations. To sug-

gest that firms are somehow small political com-

munities explains partly in which ways organizations

such as firms matter for their members. It allows us

to describe groups similar to the group of employees

as members of a community with an organizational

culture, some common values, and specific common

goals. The fact is that these members are not only a

part of a useful division of labor but persons with

values and a particular conception of the good life.

Moreover what a community such as a firm provides

is not only a job but also community ties and friends.

For many of us who spend most of our life in that

kind of community, it is an important source of

meaning.14

Here again, my aim is not to develop an alter-

native to agency theory. It is to illustrate the style of

analysis suggested by the ‘‘firms as political things’’

perspective. My point is that in allowing us to focus

on such themes as community ties, trust-building,

loyalty, belonging, culture, and leadership in terms

of what Gary Miller calls ‘‘political leadership,’’ it

might provide some insights to better understand

how hundreds and thousands of agency problems are

solved on a daily basis by huge organizations (Miller,

1993, Chap. 11).

Of course, the use of the idea of firms as political

communities should not lead to an overestimation of

the degree of harmony and trust in firms. The life of

economic organizations is also about conflicts. Dif-

ferent groups inside the firm can have highly

divergent interests and cooperation is not easy to

enforce. However, is also this is also what the idea of

corporations as political communities is about. It

should also be understood as a way to focus on these

different conflicts, not only between shareholders

and managers, but also among many different

stakeholders.15


One of the most radical theoretical ways to follow

this path and to see corporations as political com-

munities is probably to be found in the Crane et al.’s

approach of ‘‘stakeholders as citizens’’. In a way that

could be reminiscent of some republican accounts of

the workplace, the authors suggest that we push the

stakeholder theory a little bit further in theorizing the

groups usually referred to as stakeholders as ‘‘citizens.’’16

This shift from stakeholders to citizens undoubtedly

suggests a focus on the political dimensions of eco-

nomic organizations. Corporations, in this view, are

seen as communities of ‘‘internal’’ citizens in constant

relations with ‘‘external’’ citizens such as NGOs and

consumers.

This is highly seductive. The language of citi-

zenship is a powerful and inspiring one. However,

this attempt to politicize the relations between dif-

ferent firm groups using the vocabulary of citizen-

ship could also be problematic. One could doubt

whether it really helps to clarify the nature of obli-

gations that arise within these specific relations. For

example, Crane et al. contend that ‘‘thinking about

corporations as dealing here with ‘citizens’ rather

than simply ‘consumers’ or ‘employees’, etc. brings

up several issues.’’ (2004, p. 110). Note the language.

According to this approach, we should not refer to

key groups affected by the firm’s activities as ‘‘sim-

ply’’ employees or consumers but as citizens. It

clearly suggests that our usual language is insuffi-

cient, and it posits the language of citizenship as a

‘‘richer’’ one. In some sense, it is obviously true. As I

noticed earlier, it is true that individuals who have a

job in a firm are not only employees who accom-

plish some kind of work. They have rich back-

grounds, ideas, values, and a conception of the good

life; they may also disagree with some of their firm’s

policies or decisions. However, it is also true that the

language of citizenship is very general and highly

abstract, in the sense that it does not capture very

well the variety of roles and functions of moral agents

in a complex institutional division of labor; and the

rights and obligations that derivate from those roles

and functions. It is, in fact, very useful to refer to the

group that provides labor as ‘‘simple’’ employees or

to the group that provides financial capital as ‘‘sim-

ple’’ shareholders because it helps to clarify the

nature of the relation in which they are involved.17

The introduction of a language with strong political

connotations (e.g., the language of citizenship)

should not undermine the insights provided by an

ethics of roles.

Another possible problem with this view is that it

often presupposes that seeing the firm as political

communities will lead to the justification of some

specific normative conclusions, namely those usually

defended in stakeholder theories. For instance,

Crane et al.’s (2004) account of firms’ key stake-

holders as ‘‘citizens,’’ it clearly leads to a radical

critique of the shareholder view of the firm and to

the defense of what could be associated with a

democratization of the firm. However, it is inter-

esting to note that an economist such as Hansmann

(1996), while analyzing the different structures of

ownership in his impressive book The Ownership of

Enterprise has also argued that ‘‘one theme that has

emerged with particular force is the importance of

viewing the firm as a political institution’’ (1996, p. 287

my emphasis). Of course, Hansmann’s theory is far

from the theory of corporate citizenship or the idea

of workplace republicanism and could eventually

lead to a radical critique of stakeholder theory. But it

is extremely significant that he, too, refers to the

firm as a ‘‘political institution’’ without drawing

radical propositions for change in the structures and

patterns of ownership or defending the ‘‘stakeholder

firm.’’ The firm here is labeled as a political insti-

tution by Hansmann because his account stresses the

importance of the costs of collective decision making

among different groups of ‘‘patrons’’ with different

interests. In some sense, he essentially agrees with

James March’s famous conception of the firm as a

political coalition. The composition, goals, and

ownership structures of the firm are not given; they

are negotiated, and determined through a set of

political decision-making mechanisms inside the

firm.18 This is why Hansmann is able to illuminate

the importance of the costs of collective decision

making as one of the main explanatory factors in

ownership patterns. Firms, in Hansmann’s frame-

work, are political communities that regroup dif-

ferent actors who are precisely seeking to reduce the

costs of politics.

A thoughtful examination of these debates on

ownership and the cost of collective decision making

is, of course, beyond the scope of this article.

However, this overview highlights the various pos-

sible uses of a political language to talk about eco-

nomic organizations. Moreover, it highlights also the


differences in scope and potential radicalism of the

project.

Corporate activities and policies as citizenship issues

The first two views of corporations as political things

insist on a distinction between the internal organi-

zation of the firm and external relations with soci-

eties as a whole. A third way to look at the political

nature of business is to examine some corporate

policies, structures, and practices as ‘‘citizenship is-

sues’’ while also looking at broader societal issues.

Here, by ‘‘citizenship issues,’’ I refer to corporations’

policies, structures, and practices that seem to be at

the basis of political reactions from citizens or groups

of citizens. Hence, corporations are not seen meta-

phorically as ‘‘citizens,’’ but as a growing matter of

concern for real citizens. Their operations are then

seen as ‘‘citizenship’’ issues.

It is important here to note that individual citi-

zenship refers not only to a legal status or to what

this status means for the identity of those who enjoy

it, but also to a set of attitudes or virtues.19 Citi-

zenship does not refer only to a politico-legal status

and to an aspect of personal identity, but also to a

practice. Citizens are expected to behave in certain

ways (engaging responsibly in public discourses,

respecting the rights of others, seeing the big picture,

etc.) and to engage in some types of activities (vot-

ing, participating to a certain degree in public

debates, etc.).20

This third suggested way of looking at the political

nature of business insists on this practical dimension of

citizenship and the set of behaviors and activities

associated there with. It starts from the realization

some of these citizenship practices (from individual

citizens) are now redirected toward corporations and

business actors instead of being primarily directed

toward governments.21 The importance of this redi-

rection of political activities by individual citizens

and groups was stressed by Hertz in her ‘‘Better to

shop than vote’’ article where she states, very

enthusiastically:

… instead of showing up at the voting booth to reg-

ister their demands and wants, people are turning to

corporations. The most effective way to be political

today is not to cast your vote at the ballot box but to

do so at the supermarket or at a shareholder’s meeting.

Why? Because corporations respond (Hertz, 2001,

p. 191).

Of course, it is not necessary to be as enthusiastic

as Hertz about the political effects of shopping and

shareholder activism to take this ‘‘mutation’’ in cit-

izenship’s activities and behaviors seriously. Crane

and Matten take a more modest stance and suggest

that to apply citizenship thinking to the business

world doesn’t consist simply in taking a citizenship

concept ‘‘from outhere’’ and apply it to corporations

(2008, p. 32). It obscures the fact that corporations

themselves are subtly and sophistically involved in

this reshaping of citizenship in general. They sug-

gest, rightly, that we should see some reactions to

corporate power through this citizenship, hence

political, lens. When NGOs and local communities

complain about some corporate operations, cer-

tainly, it should not be viewed only as a market

disoperation or as public relations failures by cor-

porations themselves but also as ‘‘examples of a cit-

izenry unhappy about the inequitable distribution of

power to ‘corporate citizens’ ‘‘(2008, p. 29).

As the view of corporations as political commu-

nities draws our attention to some political aspects of

what is going on inside the firm, this view of corporate

policies and practices as ‘‘citizenship issues’’ suggests

that what is going on inside the firm also matters for

larger political communities. Not only social and

environmental impact of firms, but also the political

decision-making process, organization, and structures

of firms are crucial for broader political communities.

Talks about CSR, sustainable development, corporate

citizenship, or triple bottom line, of course, reflect

this. However, the apparently more neutral language

of ‘‘corporate governance reforms’’ also hides political

dimensions, as illuminated by recent studies of cor-

porate governance patterns. Gourevitch and Shinn

(2005), for instance, in their illuminating book,

examine how patterns of corporate governance are

shaped by political structures and reflect public policy

choices. Maintaining some distance from the classical

nexus-of-contracts view of the firm while accepting

its usefulness, they show how patterns of corporate

governance are also influenced by various elements of

politics – interests, institutions, and political conflicts.

While doing so, they give us a better idea of how

political movements, organizations, and parties, from


both the right and the left, organized their discourses

to favor changes in corporate governance structures.22

From that point of view, talks about the relations

between corporations and the politically charged

notion of citizenship are understood, not as an

invitation to see corporations as citizens, but as a

challenge to our understandings of citizenship

practices and their preconditions. It is, thus, pretty

similar to other propositions such as ‘‘cosmopolitan

citizenship,’’ ‘‘ecological citizenship,’’ ‘‘transnational

citizenship,’’ ‘‘postnational citizenship,’’ ‘‘diasp-

oric citizenship’’ and so on. All these propositions,

that Melissa Williams labels as the citizenships of

globalization, aim to revisit our assumptions about

citizens status, entitlements, and modes of partici-

pation in light of new societal developments (2007,

p. 228). For example, ‘‘ecological citizenship’’ has

become a popular way to frame debates in envi-

ronmental politics, such as ‘‘cosmopolitan’’ and

‘‘transnational’’ citizenship have been frequently

used as tools to think about issues of global justice.

This is why, it should be stressed, that this redirec-

tion of citizenship activities from governments to-

ward corporations is crucial for a theory of individual

citizenship: its practices, institutions, preconditions,

and so on. It does not justify the use of the metaphor

of ‘‘corporate citizenship’’ as a tool to think about

corporations’ responsibilities, obligations, and vir-

tues. It is much more an argument for the idea that

political philosophers of citizenship should think

more seriously about the role of corporations in

political life and discourses than it being an argument

for the use of the language of citizenship to think

about corporate responsibilities.

Here, of course, an important issue concerns the

normative evaluation of this mutation in the prac-

tical component of citizenship.23 It is one thing to

say that there is such a redirection of citizenship

practices, but it is another to evaluate it. It is not

clear at all whether the most effective way to be

political is to target corporations and whether it

should be. Clearly, Hertz (quoted above) is not only

trying to describe new citizenship activities but also

celebrating them. Authors such as Crane, Matten,

and Moon are not always clear about this. They seek

to describe and illuminate what they perceive as new

realities in the realm of citizenship, but at some

point, they also seem to present these mutations in

the practice of citizenship as being clearly desirable.

Putting debates about the desirability and effec-

tiveness of this mutation of citizenship aside, the

contestation of corporate practices appears, none-

theless, to be increasingly important in the realm of

individual citizenship. A striking feature of the post-

socialist critique of capitalism is that several groups

now devote most of their resources to orient changes

in corporate practices and policies, instead of push-

ing for more regulation by governments or, more

radically, for the nationalization of entire indus-

tries.24 The efforts of many activists from the left and

critics of modern capitalism have been devoted

trying to convince individual firms, using ‘‘naming

and shaming’’ strategies and more collaborative ones,

into accepting voluntary constraints on their prac-

tices and activities. As Wayne Norman states it, in-

stead of using the language of socialism, class warfare,

or struggles against private property, those critics of

modern capitalism are most likely to formulate their

criticisms and recommendations in the language of

‘‘corporate social responsibility,’’ ‘‘sustainable devel-

opment,’’ and ‘‘stakeholder capitalism’’ (Norman,

2004).25

From this perspective then, what appears to be

significant with this third way of looking politically

at business practices and institutions is that it sheds

some fresh light on the idea of social responsibility of

business and the various ways it is embedded in

political spheres and movements (Colomonos,

2005). The ‘‘market for virtues,’’ in which virtuous

companies are recompensed and bad ones punished

or ashamed, is a complex arena involving a plurality

of actors that interact within complex networks of

exchanges, collaboration, deliberation, and con-

frontation (Vogel, 2005; Colonomos, 2005). These

complex interactions and the shaping and reshaping

of this market for virtues could be described as what

I shall call a ‘‘politics of accountability’’ in which

corporations negotiate and renegotiate their place

into society with consumers, media, politicians,

governments regulators, and other ‘‘civil regulators’’

(Zadek, 2001) while ‘‘moral entrepreneurs’’ (Col-

onomos, 2005) such as NGOs seek to wield eco-

nomic powers in two directions: by handing out

economic rewards to the virtuous and to punish, by

shaming them, those who fail to conform to a spe-

cific normative order.26

The protagonists of this politics of accountability

are, of course, numerous. Shifts in languages and


strategies to render account or to force others to do

so are frequent. Moreover, my aim is not to give a

detailed account of this politics of accountability. It

is to show how labeling corporate activities and

policies as ‘‘citizenship issues’’ allows us to concep-

tualize CSR and stakeholder approaches not neces-

sarily as a clear set of identifiable moral obligations

for corporations not only ‘‘business-as-usual’’ strat-

egies, but also as

– Political discourses: discourses that aim to articulate

some ‘‘contestation claims’’ and accountability

demands from a discontented citizenry about the

impact of some corporate practices and opera-

tions and the designs of markets; and

– Political strategies: strategies and tactics that aim to

advance some particular set of issues, agendas, or

interests on the public sphere by targeting mar-

ket actors instead of governments.

It should also be noted that Crane et al. suggest

going a little further in our conceptualization of the

relations between citizenship and markets actors

such as corporations (2008a, b). According to them,

we should not entirely focus on the role of corpo-

rations in the reshaping of the practical dimension of

citizenship, but also on their roles in the administra-

tion of individual citizenship rights. This is an

important theme in their most recent writings.

Corporations are now playing a radically new key

role in governing citizenship next to governments.

This is, of course, very important. If we think, as

Crane and al. urge that we do, that corporations

now play a significant role in what they call the

administration of citizenship, then it could have an

impact on both the conceptualization of corporate

responsibilities and our theorizing about individual

citizenship. However, here, it should be said that, in

some sense, the idea that corporations play a signif-

icant role in the administration of citizenship is

nothing new. Moreover, this is close to the first view

of firms as distributive agents. This is because as

market actors, corporations are a part of a complex

institutional matrix that provides important ‘‘citi-

zenship goods’’ for individuals. They provide jobs,

retirement plans, and financial security similarly as

media provide important citizenship goods in

providing information for open public debate.

Therefore, when Crane and Matten suggest that we

should think of the new ‘‘incorporation of citizen-

ship,’’ they tend to overestimate the novelty of the

dynamic they are trying to shed some light upon.

Corporations as participants in the political process

A fourth, and probably the most straightforward,

way that uses a political lens to think normatively

about business practices and institutions is to regard

corporations as actors that can influence the con-

struction of public policies, regulations, and laws.

Business organizations simply have become –

through their zealous lobbying, contributions to

political action committees (PAC), public declara-

tions, participation in public debates, provision of

information, participation in public consultation

processes, and so on – significant actors of the

‘‘advocacy politics’’ of democratic societies.27

Here, it is important to distinguish this fourth

understanding of corporations as political actors from

the first one, of corporations as ‘‘distributive agents’’.

In this first understanding, businesses are political

actors because they are important social institutions

with considerable financial and organizational re-

sources that have a profound impact on who gets

what, when, and how. In this ‘‘stakeholder’’ sense,

corporations are political actors because they are, by

nature, social institutions. However, here, corpora-

tions become political actors in intentionally trying to

influence the construction of public policies, regu-

lations, and laws. This is significant because it rep-

resents a way to take seriously the distinction

between the systemic effects of business on politics

and the intentional influence of firms on the political

process (Bernhagen and Brauninger, 2005). As noted

above, firms clearly classify as political actors in the

sense that the design of markets and business orga-

nizations have significant distributive effects on

many groups. However, as (sometimes, quite active)

participants in the political process, corporations do

not become political actors by simply doing their job

in competitive markets. They intentionally enter the

political arena to influence the shaping and reshaping

of their regulatory environment. This distinction is

important from a normative point of view because it

refers to different kinds of relations between firms

and other social institutions, and it also suggests that


we might want to apply different normative tools or

languages to think about these relations.

At this point, it is worth noting that this fourth,

quite obvious, way to think about the political

nature of the firm has been surprisingly overlooked

in normative debates about the desirable conduct of

business and the design of markets. As Leonard

Weber points out, in a rare academic discussion on

the ethics of corporate political activities, it seems

that questions about the legitimacy of corporate

political activities such as zealous lobbying and

contributions to PAC are being pushed more by

NGOs, and activists (shareholders and non-share-

holders) than by academics with an interest in the

normative analysis of businesses practices (Weber,

1997, p. 72).28 In general, normative theories of

corporate rights, obligations, virtues, and so on, have

failed to take seriously David Vogel’s suggestion that

‘‘the most critical dimension of corporate responsi-

bility may well be a company’s impact on public

policy’’ (2005, p. 171).

This should be regarded as regrettable. There are

significant ethical concerns about the role of cor-

porations in advocacy politics (and also the role of

money in politics in general), in contemporary

democracies.29 Given the asymmetry of power be-

tween citizens and ‘‘corporate citizens,’’ certain

questions do arise: What should be the proper role of

corporations in the political realm? Do corporations

have the right to influence elections? How should

top executives think about the way their corpora-

tions could influence governments? Should respon-

sible corporations restrain themselves in the political

realm or even that, as the former US Secretary of

Labor Robert Reich argues, they have a responsi-

bility to ‘‘respect the political process by staying out

of it’’ (Reich, 1998, p. 16)? Answers to these questions

should be considered as crucial parts of a definition of what

it is to be a responsible economic organization, at home and

abroad.

In order to develop that line of argument, of

course, one has to recognize the fundamental role

government regulations play in the promotion and

implementation of responsible business practices

(most notably as the main institutional response to

market failures) (Heath and Norman, 2004; Heath,

2006). Moreover, after focusing on how paramount

state regulation has been over the past century in

making corporations more responsible, we also

realize that we must pay much more attention to the

responsibilities of corporations within the political

and administrative processes that lead to the reform

of government regulation. One has also to recognize

that firms are ‘‘political actors’’ in the sense that they

are key actors of the advocacy politics, who influ-

ence the construction of public policies, regulations,

and laws. Therefore, if government regulations play

such a fundamental role that the shape and content

of such regulations are now heavily influenced by

firms themselves, then one of the main aspects of the

definition of a responsible business organization

should be the determination of its political role and

the limits of this role.

This could lead us far given the historical and

ideological opposition of the business world to

government regulations (Baumol, 1974). As Joseph

Heath puts it, ‘‘one of the more troubling features of

the way businesses conduct themselves in the public

sphere is that they consistently lobby against regu-

lations that are designed to correct market failures’’

(2007, p. 371). Hence, my suggestion is that one

very interesting implication of taking such a stance is

that it points out some of the most morally prob-

lematic aspects of the conduct of corporations,

namely, the entrenchment of market failures by

political oppositions to their correction by the state.

Building the political theory of the firm:

some challenges

In the preceding section, I have made several sug-

gestions on the various possible ways in which to use

a political language to think about business practices

and institutions. What should we think about this

call for a more explicitly political conceptualization

of normative issues that arise in the conduct of

business? How should we welcome the use of

political language to think about these issues? What

does the future of a ‘‘political theory of the firm’’

look like? In order to suggest some possible answers

to these questions, I would like to conclude by

highlighting some problems with this political the-

ory of the firm. While doing so, I do not want to

imply that building such a theory is unworthy.

I think that doing so is one of the main tasks of

academics with an interest in the normative study of

business practices and institutions. As a consequence,


I want to contribute to future debates about the

political nature of business by suggesting three

challenges that need to be overcome.

One striking feature of this call is that it is highly

seductive. It appears to correspond to some of our

intuitions about some features of the business world.

Moreover, after examination, it seems to be a fruitful

way to open new debates and illuminate certain

dimensions that might otherwise go unexamined in

‘‘classical’’ business ethics. Of course, seeing corpo-

rations as political actors could be a good way to take

very seriously the common (and often vague) sug-

gestion that business organizations are not purely

economic ones. Investigation of the ‘‘political’’ in

business life could then serve to clarify what we

mean exactly when we say that business organiza-

tions are not purely economic ones. It could also

illuminate some aspects of these organizations in

putting the spotlight on some internal relations

between groups inside the firm (shareholders, non-

shareholder groups, and the management). How-

ever, it could also be said that this invitation to think

more politically about business remains, at least

partly, very vague, especially when authors as diverse

as Crane, Matten, Palazzo, McMahon, Hartman,

Walzer, Dahl, Hsieh, and Hansmann, with very

different intellectual projects and political orienta-

tions, refer to corporations as political ‘‘entities,’’

‘‘actors,’’ or ‘‘institutions.’’ Furthermore, it is not

self-evident that it always helps to think more clearly

about some issues and problems to systematically

label these issues and problems as ‘‘political.’’

These remarks make clear that it would be highly

problematic to simply talk about every problem or

intellectual project in business ethics as ‘‘political’’

ones. Let us call it the over-inclusion problem. This is

important because this call for a better understanding

of corporations from a political point of view seems

to be especially vulnerable to this problem. As a

consequence, the first challenge facing the political

theory of the firm would be to overcome this over-

inclusion problem. One way to do so is by drawing

the kind of distinctions drawn in this article, which

appears to be a useful way to show the variety of

intellectual projects behind this call. It is useful be-

cause it ‘‘compartmentalizes’’ this very general idea

of a ‘‘political theory of the firm.’’ It retains the basic

intuitions behind this call for a political view of the

firm while insisting on the variety of relations and

interactions that fall under this political umbrella.

In order to show that such a theory has different

compartments is important to put aside a tendency

toward uniformity that is inherent to the over-

inclusion problem. Business ethicists appear to be

often tempted by the formulation of a moral uniform

code in which a theory of general morality (Kantian,

utilitarian, Aristotelician) is applied to business

problems (Heath, 2007).30 It would be tempting for

theorists of the political nature of corporations to do

the same, i.e., to use a political language in such a way

to think about every business relation. It is probably a

mistake done by Crane and Matten in using the

citizenship language to think about almost every

problem in the normative evaluation of business

practices and institutions, from corporate governance

matters to consumer’s choices through CSRs,

industrial relations, and meaningful work. As noted

above, this is well exemplified by their call for a

theory that understands workers as ‘‘citizens’’ instead

of viewing them as ‘‘simple’’ employees. The prob-

lem with this claim is that it overlooks the impor-

tance of a complex institutional division of labor in

which human agents play different kinds of roles.

Human beings can wear different hats depending on

the kind of institutional interactions in which they

are involved. The basic insight of what could be

called an ‘‘ethics of roles’’ is that the recognition of

the importance of this complex institutional division

of labor is crucial in the way we think about the

rights, responsibilities, obligations, and virtues of

moral agents. This is why the systematic use of the

very general language of citizenship risks blurring our

sensibility to considerations of division of moral labor

and good institutional design. In order to put it

simply, it is not morally insignificant to refer to those

persons who do a specific job within an organization

that we call a ‘‘corporation,’’ as ‘‘employees.’’ It sit-

uates them in an institutional context, giving us

important insights about their rights and responsi-

bilities, and their legitimate demands.

It should be clear by now that a call for a political

view of business ethics issues should not blur crucial

differences between different kinds of interactions or

relations and their different natures. This is why my

characterization of these four views takes seriously

the difference, stressed by Heath, between intrafirm


relations and extrafirm relations (Heath 2006, 2007).

Some extrafirm relations, such as business and gov-

ernment relations, are obviously political while some

others, such as competitive practices between firms

through market interactions, might not be especially

well understood as political ones, both empirically

and normatively. Meanwhile, some intrafirm rela-

tions, such as relations between employees and

managers, could be fruitfully understood as political

relations of power, authority, community, and trust

building, but they remain eminently different from

others types of political activities.

Some other relations between economic actors

are not straightforwardly political and, thus, are not

especially well theorized as political relations or as

citizenship activities. For instance, Hertz’s enthusi-

asm about shopping as the most efficient political

activity in contemporary societies exudes overcon-

fidence. Despite recurrent talk about the fall of

nation states and a ‘‘silent takeover’’ by corporations,

the state remains the key political actor, and changes

in government have deep and pervasive impacts.

Theorists of the political nature of corporations and

business institutions should resist such enthusiasm in

their attempts to shed some light on the political

nature of corporate practices.

A second problem would be the formulation of a

political view of the firm that simply leads to a

reaffirmation of the set of ideas usually associated

with CSR and stakeholder theory. In this case, it

would be impossible to differentiate this political

approach from classical CSR and stakeholder ap-

proaches. Let us call this the differentiation problem.

Some recent attempts to see corporations as political

actors appear to fail overcoming this problem, and,

thus, fail in meeting expectations. Despite the invi-

tation to set up an agenda to build the new political

conception of the firm and shed some light on un-

der-theorized interactions and practices, these at-

tempts offer something close to classical CSR

accounts and stakeholders theories. For instance, one

of the contributors to the report on the First Swiss

Master Class in CSR (untitled ‘‘Corporations as

Political Actors’’) refers to a debate on ‘‘whether or

not business possesses a political responsibility be-

yond its traditional role in society’’ (Rasche et al.,

2008, p. 154) and suggests that a political responsi-

bility moves beyond philanthropic gestures and

‘‘encompass innovative models of business and

practices that leverage that which motivates business

in a way that results in social and environmental

value creation.’’ (Rasche et al., 2008, p. 155). An-

other contributor argues that corporations have a

political responsibility that ‘‘can be defined as: to

respect human rights, avoid being complicit in hu-

man rights abuses, do what they can to promote

human rights principles.’’ (Rasche et al., 2008,

p. 164).

These two formulations of the political responsi-

bility of corporations are quite similar to classical

accounts of CSR. It is in fact not self-evident that it

helps to refer here to a political responsibility. Most

theorists of CSR believe that social responsibility of

business is not simply about philanthropic gestures

and should ‘‘encompasses innovative models of

business and practices that leverage that which

motivates business in a way that results in social and

environmental value creation.’’ In order to label this

as a political responsibility appears to be a way to add

some normative weight to a well-known statement.

The same could be said about the second account of

corporate political responsibility. Moreover, if we

are to label these responsibilities as political responsi-

bilities, then the focus on human rights alone is

surprising. In fact, this definition of political

responsibility fails to capture three of the four core

areas of the UN Global Compact with corporations:

labor standards, environment, and anti-corruption.

Why should we think, for instance, that a negative

obligation not to abuse human rights is best described

as a political responsibility? Aren’t the collaboration

and cooperation with relevant governmental and

civil authorities to fight corruption in developing

countries more straightforward political activities?

Isn’t the lobbying of governmental agencies for

stronger environmental regulations and standards a

better example of an obvious, clear-cut political

responsibility? Is there any reason to describe every

‘‘innovative model of business’’ as being political?

Obviously, this association between the political

view of business practices and the CSR agenda is not

a problem in itself. It is, of course, a possible result of

our inquiries. However, it would be mistaken to

assume from the start that using a political lens to

look at normative issues in the conduct of business

would go hand in hand with something similar to a

‘‘strong CSR agenda.’’ We should not think that it

will necessarily be the case. On the contrary, we


might be open to the possibility that taking such a

stance could lead to surprising, unexpected results.

One possibility, to overcome this problem, is to

admit that among the four views examined here,

some could be clearly more relevant or theoretically

useful than others. For instance, one could say that

the first view of firms as distributive agents is

probably the most vulnerable to this differentiation

problem. The idea of firms as political actors in this

sense is well recognized in the CSR literature. It is

the familiar idea that given their nature as ‘‘public’’

institutions, corporations cannot abdicate their

broader social responsibilities. One might also

plausibly argue that the view of corporations as

political communities is more promising because it

clearly appears to draw our attention to some under-

theorized relations within the organizational struc-

tures of the firm. One might also say that, in order to

overcome this differentiation problem, the fourth

view of corporations as active participants in the

political process appears to be especially promising.

It is, of course, the most straightforward way to

think politically about corporations, which puts aside

difficulties related with problematic or unobvious

uses of a political lens to think about business.

However, it is also a view that might draw our

attention to very specific, but fundamental, practices

by corporate actors that are not especially well the-

orized with the tools provided by CSR and stake-

holders theories. This is probably why Scherer and

Palazzo suggest that some corporate activities in

complex networks of (global) governance point to

the need for a better understanding of the political

nature of business (2007, p. 1115). The main con-

tribution of a ‘‘political theory of the firm’’ then

might not be to a reassessment of business practices

in general, but to a point in the direction of a new

theory of corporate responsibilities, which focuses

on the various ways in which firms, in their external

relations, interfere in the political process, in the

direction of a robust normative theory of corporate

lobbying.

Interestingly enough, recent literature on the to-

pic does not go in this direction. It rather suggests

that the fact that corporations use zealous lobbying

and political strategies to foster their economic ends

does not change them into political actors (Crane

et al., 2008a, b). It does not imply, as such, that they

have a political responsibility. It is a very significant

feature of this literature that makes clear that the call

for a better understanding of the political nature of

businesses does not represent a way to draw some

attention to a specific set of activities such as lob-

bying and campaign contributions. It seems to refer

to something more. According to Crane, Matten, and

Moon, for example, the theory of the firm as a

political actor calls for a radical rethinking of the

classical division of labor between business and

government. It also states that corporations become

political actors only when they adopt new patterns of

behaviors oriented toward the ‘‘common good’’

(Crane et al., 2008a, b).

It is then clear that authors such as Crane, Matten,

and Moon seem to have in mind something else

rather than a reaffirmation of a classical account of

CSR, especially when they insist on the possibility of

rethinking (maybe radically) the division of moral

labor between business and government. Given this,

it is probably useful here to draw a distinction

between three different understandings of the call for

a theory of the business firm as a political actor. As

should be clear by now, some authors clearly refer to

this as another way to defend CSR. Let us call it the

Reaffirmation view. Some other scholars clearly refer

to such a theory as a paradigm change in the way we

normatively think about businesses’ roles and

responsibilities in our societies. Let us call it the Shift

in paradigm view. Proponents of this view associate

the idea of the business firm as political actor as an

opportunity to rethink the classical division of labor

between business and government and to redefine

corporate social and environmental roles and

responsibilities in a more expensive way. Another

way to understand this call for a ‘‘political’’ theory of

the business firm is to see it as a useful way to draw

some attention to a specific set of corporate activities

such as lobbying, contributions to campaigns, and so

on. Let us call it the Shift in subject view. According to

this view, recent literature on the firm as political

actor suggests, more modestly, a change in the subject

of our thinking about corporate roles and responsi-

bilities. It draws our attention to the importance of

corporate political activities and suggests the need for

more theoretical tools to think normatively about

and design principles for business and government

relations.

This classification of the different positions should

give us a better idea of the varieties of projects and


their scope. The Reaffirmation view is of course

facing the differentiation problem and seems to

imply that call for a political theory of the firm might

not be especially fruitful. The Shift in paradigm view

does not face this problem and clearly implies a more

radical project. The proponents of this view suggest

a new paradigm in which corporations are under-

stood as assuming new roles of governance and state-

alike responsibilities (Crane et al., 2008a, b). They

are, therefore, able to put aside the differentiation

problem, but are probably facing what I called the

over-inclusion problem: the risk, under a new para-

digm, to label every issue of business ethics as

‘‘political’’ ones without making any real theoretical

improvement. By suggesting that the fourth way to

think politically about corporations (Corporations as

participants in the political process) might be the

most fruitful one, I am, therefore, proposing some-

thing more in the lines of the Shift in subject view. It

does not simply reaffirm classical CSR discourses,

but does not necessarily assert the need for a para-

digm change in business ethics. It simply stresses,

maybe more modestly and less enthusiastically, the

need for a better normative theory of (classical)

corporate political activities.

Finally, the third, probably more abstract, chal-

lenge is to realize that the choice of using a political

lens to examine issues of business ethics is itself partly

political. In the preceding section, I have proposed

four directions in which it could be theoretically

fruitful to think about the complex relations be-

tween the business world and the polis. It is worth

noting that these various ways to think politically

about business practices and institutions are not

really consensual. As Crane and Matten point out,

there are some resistances in business circles to the

very idea that firms be seen as embedded in some

sort of political relationships that the call for a

political theory of the firm is trying to shed light

upon (2008, p. 30). This is because the very idea of

using a language with strong political connotations

is, from the start, a controversial one. It suggests

unobvious ways to publicly talk about business ethics.

Let me just give two examples. First, CEOs and top

management executives may be especially reluctant

to address issues about the legitimacy of management

authority raised by the view of corporations as

political communities. They might, for instance, be

uncomfortable with the suggestion that ‘‘voice’’

should be viewed as a significant response to man-

agerial decisions. Second, corporations could also be

quite uncomfortable with my remarks on the

importance of taking very seriously the fourth aspect

(Corporations as participants in the political process)

examined here in our normative discussions about

corporate responsibilities. A conception of corporate

roles and responsibilities that draws our attention to

the ways firms interfere in the political process, and,

therefore, in the shaping and reshaping of their

regulatory environment, may have radical implica-

tions, given the ideological opposition and skepti-

cism of the business class toward government

regulations. Corporations generally wish to put the

spotlight on their various direct charitable contri-

butions to the community, but have little incentive

to highlight their lobbying efforts, campaign con-

tributions, political connections, and so on (Neron

and Norman, 2008a, p. 17, b, pp. 62–65). In order

to put it crudely, they will tend to promote their

own green innovations and practices inside their

organizations, such as the use of recto–verso for the

production and distribution of corporate documen-

tation, but will have fewer incentives to be trans-

parent about how they lobbied to defeat stronger

environmental regulations inspired by the protocol

of Kyoto. In contrast, some NGOs and critics of

capitalism might have reasons to favor this intro-

duction of a ‘‘political’’ (in the fourth sense) view of

the firm.

As Neron and Norman argue, this kind of resis-

tance from some groups to the introduction of

specific ways to talk about corporate responsibilities

could be partly explained by the fact that it is

sometimes hard to draw a clear line between the

analysis of the language of politics and an exercise in

the politics of language (Neron and Norman,

2008b). This is because when evaluating a normative

framework or language to think about business

practices and institutions, we have to answer two

related but different questions. First, we want to

know whether the language or normative frame-

work X is helpful for thinking in a clear, coherent

way about corporate responsibilities (and their jus-

tifications). Second, we also want to ask ourselves

whether the language or normative framework X is

an efficient way of talking about responsible business

practices in public discourses. The first question is

largely calling for a ‘‘neutral’’ analysis of the language of


politics which aims to construct better normative

theories about corporate duties and obligations; the

second question is an invitation to engage in the

politics of language, to propose guidance on how we

should or shouldn’t use different normative frame-

works to promote what we would consider to be

more desirable outcomes in the social world.31 In

order to use the title of Williams Connelly’s

important book, we engage in such a process to

modify the ‘‘terms of political discourse’’ (1983).

Given the above-mentioned sort of dynamic, it is

not very surprising that some business circles might

be uneasy with a more explicitly political language to

talk about their responsibilities, practices, and

internal organization, while some of their critics

could enthusiastically embrace this language. In that

case, the ‘‘politics of language’’ of the corporate

world would consist in resisting the introduction of a

more explicitly political language and promoting

other, maybe more pro-business, normative lan-

guages. From this point of view, the debate about

the introduction of a political language to think

about business practices and institutions is itself

political because it is a way to engage in the shaping

and reshaping of the terms and structures of public

debates and discourses about business practices and

institutions.

Conclusion

Recent literature in business ethics suggests that

there has been a call for a ‘‘political’’ understanding

of corporations, and business practices and institu-

tions in general – a call for what could be designated

as a ‘‘political theory of the firm’’ or a ‘‘theory of the

firm as a political actor.’’ This article aimed to

investigate what it means to take seriously this call.

In order to do so, it proposed four different ways,

and their potential implications, to think politically

about issues in business ethics. It also showed how

recent literature has failed to take seriously these

distinctions and, therefore, has failed to identify the

proper scope of the project.

This is the reason why this article also points to

some potential difficulties that theorists involved in

this project need to overcome. Of course, none of

these critical comments or the clarification attempts

made in this article should be viewed as a rejection

of the project. Clearly, it is a worthy one. They

should be viewed as an attempt to orient the whole

project, as an invitation to not overestimating its

scope, to put aside overconfident claims, and to be

careful about its implications. The utilization of a

political lens to look at some aspects of the business

world is clearly useful to think in an imaginative,

empirically informed way about normative issues

related to business practices and institutions. In this

sense, it might be useful to overcome what Hanlon

calls the ‘‘denial of politics’’ in business ethics.

However, it is also clearly the case that some rela-

tions are not especially well theorized as ‘‘political’’

ones. Moreover, some, e.g., shopping, are at best

problematically theorized as being political. We

should always keep in mind that while there are

some grains of truth in the slogan ‘‘Everything is

political,’’ some things are more political than others.

Notes

1 For some reflections, which I draw here, on this

plurality of languages or framework, see Neron and

Norman (2008a, pp. 4–6).2 See also Jeurissen (2004), Waddock (2004), and

Zadek (2001). See Matten and Crane (2002, 2005),

Moon et al. (2005), and Neron and Norman (2008a)

for an analysis and a critique of this association of corpo-

rate citizenship with CSR.3 See Heath for the importance of applying very dif-

ferent ‘‘normative logics’’ to different relations inside

the firm and outside the firm (Heath, 2006, 2007).4 See Lynn Sharp Paine (2002, pp. 91–96).5 See Boatright (2002) for a good discussion of this

claim.6 I use the term ‘‘institutions’’ here to talk about for-

mal organizations.7 See Bernhagen and Brauninger (2005, p. 43).8 Here, see Heath (2006, pp. 540–542). See also

Stiglitz (1996).9 This could be reminiscent of James G. March’s

famous study on the firm as a political coalition (March,

1962).10 See Cohen (1989, p. 27) for an excellent account

of parallel case arguments and the need to go beyond,

see Hsieh (2008, pp. 15–22).11 In the preface of his 1994 book Authority and

Democracy, McMahon wrote that ‘‘The authority of

governments might also be called political authority,

although for reasons that will become clear as we


proceed, I believe that in important respects managerial

authority deserves the label ‘political’ as well.’’ (1994,

p. xiii).12 See Hsieh (2005, 2008) for a good discussion of the

limits of exit.13 See Dees (1992) for a good survey of the problems

and limits of the principal–agent analysis of the firm.

See Gary Miller for an attempt to produce a more

sophisticated account of agency theory.14 See Lynn Sharp Paine (2002) for a very interesting

account of what she calls the ‘‘pervasive presence’’ of

corporations in our individual life.15 Of course, conflicts also occur among minority

shareholders and controlling shareholders.16 Here, I refer to Sandel’s (1998) account of the

workplace in his defense of a ‘‘civic’’ economy. See

Dagger (2006) and Hsieh (2006).17 This is the basic point made by Joseph Heath

(2006) in his critique of stakeholder theory.18 Here, I almost use March’s words. See March

(1962, p. 672).19 For an account of citizenship in the liberal tradi-

tion, see Kymlicka and Norman (1994).20 It should be noted that not all virtuous activities are

recognized as examples of good citizenship. When peo-

ple’s special efforts are directed toward their children,

we call them ‘‘good parents’’. If a teacher pays special

care to the welfare and education of his students we call

him/her a good teacher. If your neighbors collect your

mail while you are on vacation, then you will think of

them as good neighbors; and so on.21 David Vogel captured this shift in political activities

with the title of his 1978 book ‘‘Lobbying the Corpora-

tion.’’22 See, of course, Gourevitch and Shinn (2005), and

also Cioffi (2006).23 Here, it could be fruitful to learn from recent de-

bates in the theory of citizenship about the idea of

‘‘ecological citizenship’’ between Dobson (2003) and

some of his critics.24 For a great critical account of the rise and fall of

SOE (state-owned enterprises), see Stiglitz in his ‘‘Whi-

ther Socialism.’’25 Of course, as Norman himself notices, this is a very

incomplete characterization of the contemporary left.

There are still quite radical socialists, left-libertarian,

advocates of basic income schemes, luck egalitarians,

and so on. Moreover, there is also a leftist critique of

CSR and sustainable development. See Wayne Norman

(2004) for a longer discussion of CSR and the left.26 For some interesting remarks on what I call the

‘‘politics of accountability,’’ see Colomonos (2005) and

also Kuper (2004).

27 It should be noted that the analysis of corporate

involvement in the political process and democratic

advocacy could raise some issues about the kind of

agents that corporations are. Is a corporation simply a

collection of individuals? Or, is it possible to make

sense to view a corporation as a single agent, similar to

an individual, with a set of specific political interests?

Of course, to deal with these questions about the onto-

logical status of corporations and collective agency is

beyond the scope of this article. For a good recent

account of these issues, see Pettit (2007).28 Here, it should also be noted that there is a huge

empirical literature on corporate political activities (see

Mitnick, 1993a, b for an important contribution and

Wood and Logsdon (2008) for a good bibliography of

studies on CPA). My point is not to deny the relevance

of this literature, but to highlight the neglect of CPAs in

the conceptualization of corporate rights and obligations.29 See Dworkin (2002).30 Heath criticizes this tendency to use a uniform

framework.31 For this distinction, see Neron and Norman

(2008b). For a good methodological analysis of our

awareness (or lack of) about the importance of the

choice of languages, see William Connolly’s important

book (1983). See also David Miller’s analysis of ‘‘lin-

guistic philosophy and political theory’’ (1985).

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Pierre-Yves Neron

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Montreal (CREUM),

Montreal, QC, Canada

E-mail: [email protected]


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What Does it Mean to See Corporations as Political Actors

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