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Citation: Scherer, A. G., Rasche, A., Palazzo, G. and Spicer, A. (2016). Managing for
Political Corporate Social Responsibility: New Challenges and Directions for PCSR 2.0.
Journal Of Management Studies, 53(3), pp. 273-298. doi: 10.1111/joms.12203
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Managing for Political Corporate Social Responsibility –
New Challenges and Directions
Andreas Georg Scherer, University of Zurich
Andreas Rasche, Copenhagen Business School
Guido Palazzo, University of Lausanne
André Spicer, Cass Business School, City University, London
ABSTRACT
This article takes stock of the scholarly discourse on ‘political CSR’ (PCSR), reconsid-
ers some of its original assumptions, and develops new directions for future research.
We start by developing a definition of PCSR, focusing on firms’ contribution to the
provision of (global) public goods in cases where public authorities are not able or will-
ing to do so. We then discuss historical antecedents to the PCSR debate and, based on
this, outline the economic and political context that influenced early PCSR debates. The
following section explores emerging changes in the institutional context relevant to
PCSR. We draft an agenda for future research by reconsidering some of the original as-
sumptions underlying Habermas’ thesis of the postnational constellation. This high-
lights some neglected issues in work on PCSR, including the influence of new national-
ism, the role of new types of business organisations, the return of government regula-
tion, the increasing complexity of institutional contexts, the efficiency of private gov-
ernance, 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.
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 envi-
ronment, often driven by a concern for the public good that goes beyond selfish calcula-
tions 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
governance gaps on the local, regional and global level. On the other, the political turn
is associated with the changing role of state agencies and the redistribution of govern-
ance tasks between private and public actors (Bell and Hindmoor, 2009; Levi-Faur,
2005). This redistribution is considered a continuous process that predates globalization
and is influenced by ideological views on the role of the state (e.g. the neoliberal turn in
public policy, see e.g. Crouch, 2006), institutional changes in society (Djelic and Etch-
anchu, 2015; Wood and Wright, 2015), or variations in national socio-economic sys-
tems (often associated with the prevailing ‘varieties of capitalism’, see Detomasi, 2015,
Hall and Soskice, 2001).
Traditional understandings of CSR emphasize a clear separation of economic and politi-
cal domains (Sundaram and Inkpen, 2004) and focus on the business case of CSR (Car-
roll and Shabana, 2010; McWilliams et al., 2006). Recent theorizing has highlighted
how firms are increasingly involved in the provision of public goods, they shape (glob-
al) regulation in various ways, they 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 under-
standing of CSR reaches beyond the instrumental view of corporate politics expressed
in the literature on corporate political activity (CPA) (Hillman et al., 2004; Lawton et
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al., 2013). Businesses not only influence politics via lobbying, they turn into political
actors themselves – i.e. they co-create their institutional environment (Barley, 2010;
Scherer and Palazzo, 2011). Understanding CSR in this way requires us to rethink exist-
ing models of governance on the national, regional, and global level (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 extend-
ed 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 scholarly discourse
has proliferated in recent years. Authors have developed normative theory on the re-
sponsibilities 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 democ-
racy have been explored. As a result, some cholars 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
(Whelan, 2012).Others have maintained that the concept of a ‘politicized corporation’
disregards the importance of functionally differentiated societies (Willke and Willke,
2008). Frynas and Stephens (2014) have even claimed that PCSR follows a narrow re-
search agenda informed by a normative theory which has largely excluded descriptive
accounts. Some have also suggested that the PCSR research agenda needs to be further
developed and extended (for other critical reflections see Baur and Arenas, 2014; Ed-
wards and Willmott, 2008; Mäkinen and Kourula, 2012). . This article, and the follow-
ing articles in his Special Issue of Journal of Management Studies, responds to some of
these criticisms. We reconsiders some of the original assumptions of the PCSR debate
and points to new directions for future research. In particular, we suggest an extended
research agenda, which puts more emphasis on the managerial consequences of PCSR.
The articles in this special issue represent the state of the art in PCSR research. They
each begin with some of the core assumptions found in the PCSR approach, and then
apply these to a range of unique settings: pulp and paper mills in Chile (Ehrnström-
Fuentes, 2016); international agreements about coffee standards (Levy et al., 2016); the
regulation of trade in conflict minerals in the Congo (Reinecke and Ansari, 2016); the
social media strategy of a global health company (Castello et al., 2016); fracking in
Quebec (Gond et al., 2016); and the role of leaders in pushing forward PCSR strategies
(Maak et al., 2016). But more than just mechanically applying these ideas, the papers in
this special issue extend the conceptual repertoire of PCSR. By doing this they provide
new conceptual tools that can be used to think about the role which businesses play as
political actors.
This article proceeds as follows. The next section starts by clarifying our understanding
of what PCSR entails, focusing the debate on an extended concept of (global) public
goods. We then discuss historical antecedents to the PCSR debate and, based on this,
outline the economic and political context that influenced early PCSR debates. The fol-
lowing section explores emerging changes in the institutional context relevant to PCSR.
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We draft an agenda for future research by reconsidering some of the original assump-
tions underlying Habermas’ thesis of the postnational constellation and shedding light
on some underinvestigated aspects of PCSR. In the final section we describe the contri-
butions to the special issue.
THE SCHOLARLY DEBATE ON PCSR: MAPPING THE FIELD
What do we mean by ‘PCSR’?
The term ‘PCSR’ brings together two essentially contested concepts. CSR has been de-
fined in a number of different, and partly competing and overlapping, ways. Anyone
looking for a well-defined paradigm of CSR characterized by consensus is likely to be
disappointed (Crane et al., 2008). There is also no widely agreed upon definition of
what the term ‘political’ entails. Scholars have stressed different dimensions of politics
(e.g. power and collective decisions) to differentiate the word from its mass association
in everyday language (Etzioni, 2003). Given these definitional challenges, we suggest
treating PCSR as an umbrella concept. An umbrella concept helps to create some theo-
retical order; it connects ideas and research findings that would otherwise be treated in
isolation (Hirsch and Levin, 1999). Understanding PCSR as such an umbrella concept
implies that much past, present and future scholarly work, which may not carry the ex-
plicit label ‘PCSR’, nevertheless contributes to the on-going conversation.
Existing PCSR definitions have highlighted different aspects of the phenomenon.
Scherer and Palazzo’s (2011, p. 901) work emphasized that PCSR ‘suggests an extend-
ed model of governance with business firms contributing to global regulation and
providing public goods.’ While this definition stresses some important cornerstones of
the debate (e.g., the role of public goods), it over-emphasizes the global dimension of
business regulation. Frynas and Stephens (2015, p. 485) define PCSR ‘as activities
where CSR has an intended or unintended political impact, or where intended or unin-
tended political impacts on CSR exist (i.e. impacts related to the functioning of the state
as a sphere of activity that is distinctive from business activity).’ According to Frynas
and Stephens, this makes PCSR relevant to three domains: when there are ‘deliberate
attempts of firms to influence governments in order to gain firm-specific competitive
advantages (domain A)’, when there are ‘sometimes unintended effects of firm activities
on the development of institutions such as when acting within ‘institutional voids’ (do-
main B)’, and when thinking of the ‘reactive strategies of firms with regard to changes
in the external political environment (domain C).’ This definition is problematic for at
least three reasons (Scherer, 2015). First, there seems overlap between the three do-
mains (especially B and C). Second, the definition excludes a number of important CSR
activities with political impact, for instance when firms proactively and deliberately
shape certain public goods. Finally, and most importantly, Frynas and Stephens fail to
define the meaning of ‘political’.
Therefore, we start to define PCSR with a simple, yet important, question: What does
‘political’ mean? Some would argue that politics is essentially about studying how gov-
ernment exercises its authority (Easton, 1981). Such a narrow perspective does not fit
the PCSR approach very well, as responsible business behaviour is relevant precisely
because public authorities are unable or unwilling to provide certain public goods to cit-
izens. Others see politics as involving basic antagonism between differing ideological
positions and their attendant understandings of how society should be organised
(Mouffe, 2005). Although this approach is informative, the explicit focus on ideology
does not allow us to fully understand the consequences this has for the distribution of
public goods.
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We view the provision of public goods as a key feature underlying the PCSR approach.
The standard definition of public goods is centred on two characteristics (Samuelson,
1954): such goods are non-rival in consumption (i.e. one person can consume a good
without diminishing its availability to others) and they possess non-excludable benefits
(i.e. it is impossible to exclude someone from the benefits of the good regardless of
whether this person contributed to its production).
In some cases, PCSR is concerned with pure public goods, such as when corporations
contribute towards peace and conflict resolution (Westermann-Behalyo et al., 2015).
However, as Kaul and Mendoza (2003, p. 83) remark, ‘the properties of (non)rivalry
and (non)excludability only signal a good’s potential for being (public) private – not its
de facto provision status.’ An expanded concept of goods relevant to the public domain
needs to consider that some goods can be made public by policy design or other human
interventions. For instance, some rival goods have been made nonexclusive by policy
choice, such as when basic education and health care are provided for all citizens. Poli-
cy-induced shifts have also made some non-rival goods more non-exclusive. For in-
stance, policy makers have emphasized that the respect for human rights in all its forms
is, ideally, non-exclusive and hence something that should be available to all people,
regardless of who and where they are.
A number of public goods that are of interest to PCSR scholars have a global dimen-
sion. Kaul and co-authors (2003) define global public goods as those goods that benefit
more than one group of countries without discriminating against a specific population or
generation. Building on this research, Kaul and Mendoza (2003, p. 99–101) have sug-
gested differentiating three classes of global public goods: (1) global natural commons
such as the atmosphere, the ozone layer, and the high seas (though access to these goods
can be restricted through policy decisions), (2) global human-made commons such as
knowledge, international regimes and norms, and (3) global policy outcomes or condi-
tions such as global peace, environmental sustainability, and the universalization of es-
sentially private goods (e.g. health care and education). Based on these considerations,
we define PCSR in the following way.
PCSR entails those responsible business activities that turn corporations into pro-
viders of public goods in cases where public authorities are unable or unwilling
to fulfil this role. This includes, but is not limited to, corporate contributions to
different areas of governance, such as public health, education, public infra-
structure, the enforcement of social and environmental standards along supply
chains or the fight against corruption, discrimination or inequality. These public
goods are provided to resolve public issues with the aim of enhancing social wel-
fare.
This definition does not restrict the link between responsible business and politics to the
global level. Existing research on PCSR has been criticized for viewing relevant corpo-
rate engagement exclusively as a consequence of globalization (Whelan, 2012, p. 713).
But the political nature of CSR also relates to gaps in local or regional governance. Of-
ten, firms turn into providers of public goods because local institutions do not work suf-
ficiently, local governments fail to enforce relevant regulations, or because public au-
thorities deliberately shift governance tasks to private actors (Bell and Hindmoor, 2009;
Wood and Wright, 2015). The definition also highlights PCSR’s normative dimension
by emphasizing that relevant activities aim to enhance social welfare and thus reduce