A. G. Scherer and G. Palazzo
Main characteristics of the transition to the new post-Westphalian order:
- The loss of the regulatory power of state institutions due to ‘the
fragmentation of authority
- the increasing ambiguity of borders and jurisdictions
- the blurring of the lines between the public and the private sphere
The economic view of CSR :
1) There is a clear separation of business and politics
2) Corporations have to maximize their profits and managers have
fiduciary responsibilities to the shareholders
3) Societal responsibilities might only be assumed if they advance the
long term value of the firm
Thus, managers of corporations should maximize shareholder while
leaving the responsibility for externalities, social miseries, environmental
protection, and the production of public goods to the state system.
Instrumentalist view of CSR: not reject socially responsible behaviour in
principle, but they would rather assess the value-creating contribution of
CSR activities.
(1) It can emerge when the behaviour of the organization is
(unconsciously) perceived as inevitable and necessary and if acceptance
is based on some broadly shared taken-for-granted assumptions
(cognitive legitimacy).
(2) Organizational legitimacy can also be based on the calculations of self-
interested individuals who will ascribe legitimacy to the behaviour of
organizations as long as they are convinced that they themselves benefit
from the results of corporate behaviour (pragmatic legitimacy).
(3) Moral legitimacy, by contrast, is based on moral judgments and an
exchange of arguments on whether an individual, an institution, or an
action can be considered socially acceptable.
Main characteristics of the transition to the new post-Westphalian order:
- The loss of the regulatory power of state institutions due to ‘the
fragmentation of authority
- the increasing ambiguity of borders and jurisdictions
- the blurring of the lines between the public and the private sphere
The economic view of CSR :
1) There is a clear separation of business and politics
2) Corporations have to maximize their profits and managers have
fiduciary responsibilities to the shareholders
3) Societal responsibilities might only be assumed if they advance the
long term value of the firm
Thus, managers of corporations should maximize shareholder while
leaving the responsibility for externalities, social miseries, environmental
protection, and the production of public goods to the state system.
Instrumentalist view of CSR: not reject socially responsible behaviour in
principle, but they would rather assess the value-creating contribution of
CSR activities.
(1) It can emerge when the behaviour of the organization is
(unconsciously) perceived as inevitable and necessary and if acceptance
is based on some broadly shared taken-for-granted assumptions
(cognitive legitimacy).
(2) Organizational legitimacy can also be based on the calculations of self-
interested individuals who will ascribe legitimacy to the behaviour of
organizations as long as they are convinced that they themselves benefit
from the results of corporate behaviour (pragmatic legitimacy).
(3) Moral legitimacy, by contrast, is based on moral judgments and an
exchange of arguments on whether an individual, an institution, or an
action can be considered socially acceptable.
