This article provides a historical contextualization of Corporate Social Responsibility and its political role. CSR, we propose, is one form of business–society interactions reflecting a unique ideological framing. To make that argument, we compare contemporary CSR with two historical ideal-types. We explore in turn paternalism in nineteenth century Europe and managerial trusteeship in early twentieth century US. We outline how the political responsibilities of business were constructed, negotiated, and practiced in both cases. This historical contextualization shows that the frontier between (...) economy and polity has always been blurry and shifting and that firms have played a political role for a very long time. It also allows us to show how the nature, extent, and impact of that political role changed through history and co-evolved in particular with shifts in dominant ideologies. Globalization, in that context, is not the driver of the political role of the firm but a moderating phenomenon contributing significantly to the dynamics of this shift. The comparison between paternalism, trusteeship, and contemporary CSR points to what can be seen as functional equivalents—alternative patterns of business–society interactions that each correspond, historically, to unique and distinct ideological frames. We conclude by drawing implications for future theorizing on CSR and stakeholder democracy. (shrink)

This article proposes a theoretical re-conceptualization of power dynamics and their legitimation in contemporary business–society relations using the prism and metaphor of parentalism. The paper develops a typology of forms of parentalism along two structuring dimensions: care and control. Specifically, four ideal-types of parentalism are introduced with their associated practices and power-legitimation mechanisms. As we consider current private governance and authority through this analytical framework, we are able to provide a new perspective on the nature of the moral legitimation of (...) power dynamics in contemporary business–society relations. And we weave the threads between this conceptual frame and historical antecedents, suggesting that business ethicists need to revive old debates on paternalism in light of the current pervasive trend of modernized and subtler forms of parentalism. Implications for business ethics and political CSR are discussed. (shrink)

Studies on societal path dependencies tend to focus on mechanisms that anchor and stabilize national trajectories while paying less attention to transnational interactions and multilevel governance. This paper explores processes of path transformation in societies that are presumed to have the characteristics of open systems. Two pairs of case studies are presented and compared. The first illustrates institutional change through collision, when a national path meets with another. The second describes the emergence of transnational institutional paths and the impact of (...) that process on national institutions and their (potential) transformation. The results indicate that path transformation often stems from a gradual succession and combination of incremental steps and junctures – change is gradual but consequential. They also point to increasing co-evolutionary interaction between national path transformation and transnational path creation. This implies a need for analytical tools that are adapted to the analysis of multi-level, nested processes of institutionalization and de-institutionalization. The paper suggests that the concept of path generation allows for a better specification of the conditions for change in existing societal paths and for the emergence of new paths in the case of open systems than the concept of path dependency. (shrink)

The principle of limited liability is one of the defining characteristics of modern corporate capitalism. It is also, we argue in this article, a powerful structural source of moral hazard. Engaging in a double conceptual genealogy, we investigate how the concepts of moral hazard and limited liability have evolved and diffused over time. We highlight two parallel but unconnected paths of construction, diffusion, moral contestation, and eventual institutionalization. We bring to the fore clear elective affinities between both concepts and their (...) respective evolution. Going one step further, we suggest that both concepts have come to be connected through time. In the context of contemporary capitalism, limited liability has to be understood, we argue, as a powerful structural source of moral hazard. In conclusion, we propose that this structural link between limited liability and moral hazard is an important explanatory factor of the systemic instability of contemporary capitalism and, as a consequence, of a pattern of recurrent crises that are regularly disrupting our economies and societies. (shrink)