Introduction: The Intellectual Crisis of CSR

Abstract

Turbulent events in the world’s financial, food and energy markets, global recession, as well as the urgency of climate change, growing inequality and persistent poverty, suggest that various features of globalization and economic liberalization are fundamentally flawed. They also starkly contradict the development scenarios of those who had been touting the virtues of self-regulating markets, minimalist states and the capacity of large firms to recast their role in society through ‘corporate social responsibility’ (CSR). An offshoot of the free market ideology that took hold in the 1980s, CSR matured within the context of the ‘institutional turn’² of the 1990s, which had both an analytical and a constructivist or normative dimension. The former sought to better understand how institutions affect society and economic performance, as well as how large firms — as organizations — enjoy some autonomy from market forces to pursue their strategic interests. The constructivist dimension was concerned with filling governance gaps and fine-tuning institutions, in particular through so-called voluntary initiatives and ‘private regulation’, in an attempt to minimize certain perverse effects of economic liberalization that affected workers, communities, consumers and the environment. Such effects increasingly threatened the legitimacy of big business as well as the dominant ideology underpinning the rise of corporate power, namely neoliberalism. CSR, then, sought to address new challenges for business associated with risk, uncertainty and complexity. However, it did so in a way that was as much about sustaining core features of contemporary, corporate-led capitalism as improving corporations’ social and environmental performance.

The preparation of this chapter benefited from comments from various participants at the symposium on The Responsible Corporation in a global Economy, organized by the Warwick Business School and the Social Trends Institute, 21–2 March 2009. Special thanks go to Peter Newell and Colin Crouch for their feedback, as well as to Rebecca Buchholz and Karla Utting for comments and editorial assistance.