Filling the Empty Shell

Springer 2006

Journal of Business Ethics (2007) 70:285–297 DOI 10.1007/s10551-006-9111-8

Filling the Empty Shell. The Public Debate on CSR in Austria as a Paradigmatic Example of a Political Discourse

ABSTRACT. Instead of essentializing and defining what CSR ‘‘is’’, we analyze CSR as a political discourse in which different actors struggle to fill the empty shell of Corporate Social Responsibility (CSR) with a legitimate interpretation. In this paper we take the current debate on CSR in Austria as an example to demonstrate how this debate is shaped by changes in the greater socio-economic environment. We suggest that this debate might be paradigmatic for the development of CSR in the European/ International context. We argue that the debate and the political moves concerning an implicit or an explicit

Bernhard Mark-Ungericht is a Professor of Management at the Department of International Management at the University of Graz. His research focuses on strategies and practices of companies in the context of globalization. Currently he is working on a research project which concentrates on the constructions of the concept of ‘‘CSR’’. Bernhard is interested in alternative models of enterprises that might realise societal responsibility. He is the author of Zwischen Konflikt und Kooperation. Multistakeholder-Dialog als betriebswirtschaftliche Herausforderung (Mu¨nchen/Mering, Hampp Verlag 2005). Richard Weiskopf is Associate Professor in the School of Management (Department of Organization and Learning) at the University of Innsbruck. His research focuses on the problematization of organizational and managerial practices. He is particularly interested in poststructuralist philosophies and their potential for critical analysis and rethinking of organizations and organizing. Currently he is working on a project funded by the Austrian Sience Funds (FWF) on ethical and aesthetic practices of organizing in the so called ‘‘Creative Industries’’. He is editor of Menschenregierungsku¨nste. Anwendungen poststrukturalistischer Analyse auf Management und Organisation (Wiesbaden, Westdeutscher Verlag 2003). A cowritten book (with G. Krell) on strategies of organizing passion hast just appeared: Die Anordung der Leidenschaften (Wien, Passagen Verlag 2006).

Bernhard Mark-Ungericht Richard Weiskopf

concept of CSR are rooted in a more fundamental question: the societal (re-)embedding or disembedding of companies. KEY WORDS: corporate social responsibility (implicit and explicit), political discourses, embedding, disembedding

Introduction: A new socio-political framework for the debate of CSR? The concept of corporate social responsibility (CSR) has a long and varied history (Boatright, 2003; Carroll, 1999; Mason, 1974). The debates moved through various stages of intensity, provoked by corporate scandals, unethical business practices, changes in the public opinion about specific societal aspects and changes in the overall political, economic and social frameworks. But the point of departure seems to be the same: Bowen’s (1953) argument that corporations are vital centers of power and decisionmaking and that the actions of these firms touch the lives of citizens at many points is still valid. In the age of a global economy, corporations have further expanded in size, power and reach. As a result of this increase in corporate power, we witness an intensification of the debate on CSR on two levels today. First, we see again a growing interest in the academic community (e.g. Andriof and McIntosh, 2001; Crane and Matten, 2004; Habisch et al., 2005). Second, we witness an increasing debate within political institutions on the national and the EU-levels.1 Quite a number of authors have pointed to the fact that the main topics of CSR have altered in course of time. From labour rights, to regional responsibility, envi-

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ronmental protection, and social problems (unemployment, problems in urban centers, minorities etc.), the areas of societal responsibility have shifted and expanded over the decades. These changes in the debate of CSR indicate two important aspects: first, that neither an established theoretical core for CSR nor a ‘‘natural’’ catalogue of areas of responsibility does exist. Second, that CSR discourses are always embedded in specific socio-political frameworks. From this point of view, it is more plausible to analyze the discursive constructions of CSR, to focus on the differences between them and to reveal the positions of interest that are immanent in the images, perceptions and debates on CSR. Today, (public) debates on CSR are structured around topics that are different from those discussed 10, 20 or 30 years ago; they reveal new lines of conflict and they are rooted in a different socio-political environment that constitutes the framework of the current debate. As a matter of fact, globalization2 has changed the social contract between business and society. And, therefore, a new dimension of corporate responsibility entered public awareness: responsibilities which derive from a global economic transformation and global corporate activities. Three characteristics of economic globalization are particularly significant with respect to the debate around CSR: • The profusion of regulatory gaps or regulation in a neo-liberal sense • The possibility to pass on responsibility • The dis-embedding of economic decisions from a rule-based regional, local, or national social contexts Regulatory instruments for internationally active enterprises are largely missing. In keeping with the dominant doctrine in economic policy, hardly any attempts are currently being made at a global level to create a counterweight to this expanded playing field of international corporations. On the other hand, socalled ‘‘self-regulation’’ of individual corporations and branches is increasingly called for – a self-regulation which, however, can be neither controlled nor sanctioned. This profusion of regulatory gaps allows economic (and political) actors to relinquish responsibility. Responsibility is delegated to (legally independent) suppliers/sub-contractors; it is made undetectable inside complex international procure-

ment and production networks, or it is made relative with the justification of tough international competition. As noted by several authors (e.g. Altvater and Mahnkopf, 1997; Balanya et al. 2000, Beck 1997, Dicken 1998, Die Gruppe von Lissabon 1997), one of the consequences of this relinquishing and diffusion of responsibility in the global economic field is the social disembedding of economic decisions and institutions. The dominant discourse on globalization – in which the current debate of CSR is embedded – constitutes not only economic decisions and practices, but must also necessarily include a discourse, which provides the legitimization of these processes: the discourse of neo-liberalism, which is characterized by a specific set of arguments and concepts: – Freedom for economic activities is given priority. Governments should not intervene in economic decision-making and should break down barriers to international economic activity. Governmental regulations are to be reduced and industry is to be ‘‘regulated’’ by voluntary self-regulation. – Economics is constructed as the leading science; from this background ‘‘unjustified’’ and ‘‘illegitimate’’ encroachments from other areas such as politics or ethics are rejected. The ‘‘market’’ is seen as a prime organizing principle of social life. (see e.g. Bro¨ckling et al., 2000) – Competition and competitiveness are key-concepts. Everything has to be subordinated under the goal of competitiveness. Activities and decisions are justified only insofar as they can prove that they contribute to enhanced competitiveness. An ideology of the ‘‘survival of the fittest’’ in an ‘‘economic war’’ (see e.g. D‘Aveni, 1994) legitimates social inequality. (see Hayek von, 1981) Neo-liberal terms such as ‘‘economic freedom’’, ‘‘competition,’’ and ‘‘efficiency’’ penetrate all other aspects of social life. And of course concepts of corporate responsibility are also shaped and influenced by this dominant view. This is highly visible, for example, in positioning papers of the EU (Europa¨ische Kommission, 2001), where CSR is regarded as an individual and voluntary instrument to enable economic growth and of European

Filling the Empty Shell competitiveness. But interestingly, the initiative on the EU-level also reflects and mentions a quest for transparency, accountability and standards. A publication of the EU Council (Rat der Europa¨ischen Union, 2003) argues, for example, that CSR practices have to be ‘‘trustworthy’’ and have to include subcontractors and suppliers. This ambiguous designation gave rise to attempts from industry’s side as well as from civil society organizations’ side to influence public opinion and political decisionmaking processes on CSR. It was against this background, that the Austrian Federal Economic Chamber and the Federation of Austrian Industry end of the year 2002 founded (with support of the conservative Austrian Government) the ‘‘CSRAustria-Initiative’’. In the following chapter, we will portray3 the concept of CSR favoured by this Initiative and contrast it with the CSR-concept of the NGO/Labour-Organizations coalition, which 4 emerged as a direct response. We will further argue that these concepts should not be seen as the result of a specific and single national debate only. CSR as a political discourse and the debate in Austria: Worlds apart Specific concepts of CSR reflect differing positions of interest, differing views of economic behaviour and its aims, and differing positions about what constitutes a fair and just society and the role of business within it. As political discourses they attempt to shape and influence the public understanding of responsibility associated with corporations and to define the ‘‘legitimate’’ concepts of responsibility and justice; they attempt to delimit the spaces of responsibility and determine the ‘‘adequate’’ instruments to realize this specific form of responsibility. The positions on CSR from employer’s organizations on the one side and from civil society and labour organizations on the other side construct two obviously antagonistic CSR-worlds, which will be portrayed in the following paragraphs. CSR-Austria: The world of the employer organizations The foundation and official Goals of CSR – Austria The already mentioned socio-political transformations and the first attempts at the EU level to approach the

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topic of regulation and responsible corporate behaviour in the global and European realms led both employer organizations in Austria to raise the issue of CSR themselves in early 2002. In cooperation with the Ministry for Labour and Economy, the Federation of Austrian Industry and the Austrian Federal Economic Chamber instituted the initiative ‘‘CSR-Austria’’ at the end of 2002. With this initiative the following goals are officially pursued: the general goal of CSR-AUSTRIA is ‘‘to initiate a pro-active CSR policy and with that, to strengthen Austrian companies and Austria as an economic location’’ (Deuerlein et al., 2003. p. 4, translation and italics our own). This general goal is made more precise in the publications of CSR-AUSTRIA and in interviews with representatives of sponsoring organizations. The following interrelated goals are at the center: • Direct image-building to the outside world5 • Appeal to member companies to publicize their CSR activities more forcefully • Representing the competitive advantage for companies when they act in a socially responsible way • Trustbuilding as a precondition for economic success and growth Cornerstones of the CSR-Austria concept An article in one periodical that is associated closely with the employer organizations designates the cornerstones of this discourse, which will be dealt with in more detail later. This article, intended for a wider public, glorifies the Austrian companies of the past and draws a connection to contemporary Austrian enterprises. As proof for the statement ‘‘social commitment has a tradition in Austria’’, the magazine cites the example of a textile industrialist in the 19th century: ‘‘The School History in Tattendorf records: ‘Mr Nicolaus Dumba, provincial legislator, ‘‘Herrenhaus’’ member and factory owner in Tattendorf, has made a present to the community Tattendorf of the newly constructed and fully furnished schoolhouse, built at a cost of 7000 Gulden.’ In addition, according to the School History, the industrialist provided annually for a Christmas tree and presented the schoolchildren with fruit, bakery, and toys: The poorest also received clothing, textiles, and reading materials for young people. A further donation made it possible for the school classes to take a field trip and for the school and its

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library to obtain learning materials. He had an equipment house built for the volunteer fire department and donated an altar, a tabernacle and a glass window to the village church. With all that, the philanthropist went down in history as a collector and patron of art.’’ (No author 2003, p.46f, our transl.) This historical foray into the CSR concept of the 19th century is not a coincidence. Central elements of this conception of CSR re-emerge in the current CSR-Austria discourse. The business-led CSRAustria discourse constitutes and structures CSR around the following characteristics: 1 2 3 4

Voluntarism CSR as Win–Win-relation/competitive advantage Emphasis on the local Little relativity to the Core-Business and emphasis on philanthropy

Voluntarism. The most important aspect in the CSRAustria concept is the emphasis on the voluntary character of CSR. Every attempt at establishing rules is rejected out of hand. This is even true for content, minimum standards, controls and sanctions. CSRAustria stresses that no concessions can be assumed from CSR activities and that they in no way constitute a basis for further legal development. The reasons given for this are the necessary flexibility of the companies and the differences between the companies and the branches. The president of the Austrian Federal Economic Chamber states: ‘‘The discussions about CSR at this stage are still too diverse, depending on branch and the situation of the companies.... Considering the variety of enterprises, and here especially in the area of small and mediumsized companies, a universal CSR concept can and may not exist.... Neither should the process lead to a new pertinent rule of law. It is in the nature of the thing, that the voluntary (decisions) of the company is a basic principle here. Everything in the currently held discussion that leads to an enforced measure is damaging to the process as a whole.’’ (Leitl, 2003, p. 13, our transl.) In this way, the principle of voluntarism is quasinaturalized and declared as a pre-condition in the perception of social responsibility.

CSR as win/win relationship and competitive advantage. A second core element of the CSR concept of CSR-Austria is the consistent portrayal of CSR as a win/win relationship. This message is directed toward both the public and the Austrian companies. It is signalled to the public that CSR instruments contribute to competitive advantage and that this is to the best for all. Companies, on the other hand, are given the signal that publicly communicating company activities that correspond to such an understanding of CSR (very broadly defined here)6 brings competitive advantages.7 In this way, CSR is subordinated to economic reasoning. One theme that is not addressed throughout the CSR-Austria discourse is the conflict between ethical responsibility and the imperative of competitiveness, in other words an aporetic situation in which a responsible ‘‘true’’ decision in an ethical sense is required (Derrida, 1992, 2000; Jones et al., 2005, pp. 121–124; Willmott, 1998; Weiskopf, 2004). In the CSR-Austria world, there is no room for contradiction: ‘‘economic success and responsible behaviour in the society’s sense are not a contradiction. On the contrary. Where the two meet, an advantage of location springs up for Austria’s companies.’’ (CSR-Austria, 2003, p. 5, our transl.) For the potential case of conflict, economic rationality is declared as a basis for a good and responsible decision: ‘‘Economic success is the foundation that can secure both social cohesion and a liveable environment. It is the successful companies that supply the people with the necessary goods and services for a life in security, wealth, and dignity. In order for companies to be able to fulfill this function, they must be competitive and profitable.’’ (ibid, p. 6 our transl.) Emphasis on the local. It can justifiably be supposed that the CSR-Austria Initiative primarily represents a reaction to the first tentative attempts to regulate international corporate activities. However this reaction apparently emphasizes the local and blinds out the more international dimension of CSR. A majority of the ‘‘best practice’’ examples that are presented emphasize the immediate vicinity of the

Filling the Empty Shell company. No concrete obligation that transgresses national boundaries is mentioned with the exception of the general statement: ‘‘The companies acknowledge the human rights, the adherence to all local (sic!) regulations, they speak out against child labour’’. (CSR-Austria, 2003, p. 10, our transl.) No reference is made to international economic activities such as procurement, investment, sales, production and their ethical challenges and problems: Core ILO norms for labour and OECD principles are referred to, yet there are no recognizable initiatives to grant these norms a greater degree of obligation. International responsibility is replaced in the CSR mission statement with the task of ‘‘helping to improve the situation in other countries’’. (CSRAustria, 2003, p. 10, our transl.) Little relativity to the Core-Business and emphasis on philanthropy. It is conspicuous that the CSR discourse of CSR-Austria seems barely directed toward the concrete behaviour of enterprises or toward changes in that behaviour. Rather than at the companies, the CSR initiative of employer organizations is targeted at communicating and disseminating a specific image of CSR and the role of companies in our society as sketched within that picture. This CSR picture attempts to establish what can be expected of companies, but also what cannot be expected of them. Two aspects impress on this picture: first the emphasis on the principle of voluntary action as opposed to the principle of obligatory adherence to ecological and social minimum standards; second, the stronger emphasis of CSR as a general responsibility for societal challenges and problems, rather than a CSR concept that is focused on the mode of organizing core business activities. CSR is represented as that area of social involvement above and beyond the actual business activity, but at the same time, ‘‘normal’’ management activities (such as the opening of new market and customer segments, the continuing education/qualification of employees, offering places of employment) are packaged as CSR activities. The neo-liberal discourse structures the responsibility from the inside outwards. Here, the company is to be organized less according to a bureaucratic model, at whose core stands adherence to rules, rather it is to be constructed as ‘‘island of superior

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adaptability’’ (Bauman, 2001) that gains flexibility by ‘‘using disengagement and the art of escape as its major tools’’ (ibid., p. 14). Voluntariness, individualism, the absence of regulatory mechanisms, the logic of both competition and the market are the central components of conception of CSR framed in the neo-liberal discourse.

The CSR-world of labour organizations and NGOs in Austria When the employer organizations founded the CSR-Austria-Initiative with the support of the conservative government, a coalition was formed between labour organizations, the umbrella organization of Austrian development/solidarity groups (Arbeitsgemeinschaft Entwicklungszusammenarbeit – AGEZ) and environmental organizations, as well as several individual NGOs such as Amnesty International. The purpose of this coalition was to reflect critically on the CSR process of business organizations and to work out an alternative CSR position. This CSR-Position of the civil society distinguishes itself clearly from that of the employer organizations in both the starting points and the criteria attributed to CSR. A different world as point of departure The NGOs and labour organizations view the process of globalization as a shift of power in favour of internationally active corporations. The economic exploitation of these new opportunities – according to labour organizations and NGOs – often comes at the cost of groups in weaker positions. When employer organizations pick up on topics such as CSR it is viewed with scepticism and interpreted as PR responses to a far-reaching loss of society’s trust in the economy and corporations as a consequence of scandals. Beyond this, it is seen as a danger that CSR concepts of employer organizations correspond to the tendency toward self-regulation (see Bundesarbeitskammer, 2001, 2002) and especially that they are directed toward the prevention of obligatory social and ecological minimum standards for international business activities. From this completely different starting position, different and partly contrary cornerstones of their CSR conception arise.

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Cornerstones of the civil society view of CSR The CSR position of the civil society and labour organizations are founded on the following cornerstones:

mand social and ecological co-responsibility for the entire chain of economic activities. This includes that companies can be made responsible for working conditions of their sub-contractors.10

• obligatory minimum standards instead of voluntary actions, • the core business as the central area of CSR work and participation of the stakeholders, • the possibility of sanctions for breaking rules, • transparency.

Core business and participation of those affected by business-decisions. In contrast to the CSR concept of employers, two further aspects are moved more strongly to the center of the civil society’s conception: the view of core business processes as a central field of CSR measures and the right to participate for those who are affected by management decisions. The emphasis on core business activities as a primary area for application of CSR is evident in the CSRrules called for by the NGO work group ‘‘CSR’’: The rules concerning labour relations are based primarily on the ILO conventions. For the area of environmental protection, the working paper sees the necessity of publicizing ecological goals to be met, their continual control and environmental checks through an independent agency. In the area of combatting corruption, the draft sets down the obligation of companies not to offer, demand or promise bribes, not to make illegal donations to applicants, public offices or political organizations and to make donations to public offices or political organizations public. (see NGO-Arbeitskreis ‘‘CSR’’ 2003) The position of the civil society is expressed in these rules that a company advertising CSR to the public must fulfil social and ecological minimum demands on its management practices. A second aspect of these minimum demands on CSR is allowing for the participation of those affected by corporate activities. CSR is viewed as a ‘‘participation-oriented concept’’ (Sallmutter, 2003, p. 17, our transl.) which, among other things, must secure, that interests and rights of employees, local populations and indigenous groups are taken into consideration (see NGO-Arbeitskreis ‘‘CSR’’ 2003).

Obligatory international minimum standards instead of voluntary actions. At the center of the civil, society CSR-discourse is the (re-)organization of (international) corporate activity in such a way as to minimize their negative impact on others (employees, local communities, environment). The CSR conception of these organizations assumes, therefore, that social obligations toward employees, the environment and others affected by corporate activity must be and stay regulated in a mandatory way. International standards in human rights, minimum standards for labour rights, and international environmental law are, therefore, seen as binding for internationally active corporations.8 From the viewpoint of civil society organizations, voluntary actions can only refer to the voluntary overtaking of supplemental obligations; they cannot replace these fundamental norms.9 In this respect, this position stands in a crass opposition to the position of employers, who emphasize that no obligations can be derived from CSR activities. A second disparity arises – this time to the win/win conception of CSR – in that the adherence to human rights standards, labour rights and the protection of the environment should not be left to the discretion of managers, in other words, these obligations must be kept to, regardless of the competitive position of the company. Another difference that arises is the specific conception of the space of responsibility of business activities: the CSR conception of civil society actions organizations emphasizes the international dimension of CSR much more strongly. Whereas the CSR mission statement of employers only superficially mentions, the goal ‘‘to help improve the situation in other countries’’ (CSR-Austria, 2003, p. 10), the NGOs and labour representatives de-

Sanctions. From the standpoint of civil society NGOs and labour organizations, a rule bound CSR also includes enforceability and the possibility of sanctions. The labour organizations and NGOs assume that companies will only consider societal responsibility when forced to – whether by the market/ consumers or legal authority – or when there is a promise of economic advantages in the sense of cost

Filling the Empty Shell savings. From this perspective, CSR minimum standards therefore are to become a factor in business calculations through either threat of sanctions or positive economic incentives. Without this prospect of calculation and without sanctioning for failure to meet obligations, companies would find themselves caught in a prisoner’s dilemma (see Bundesarbeitskammer, 2001, p. 4). Transparency. For the civil society organizations the credibility of CSR is dependent on the degree of transparency and conceivability that can be established with respect to the goals and criteria of social responsibility and their actual adherence (see Tumpel, 2003, p. 21). Therefore, a uniform and standardized CSR codex is called for as well as the control through an independent monitoring agency, which represents the various stakeholders. Beyond this, developing a uniform scheme for company information is demanded in order to make companies comparable.11 Without transparency in standards and the monitoring of adherence, CSR appears to them as ‘‘a mere PR campaign without substance’’ (Schachner, 2003, p. 18, our transl.). This CSR conception is also more globally oriented than the relatively locally oriented CSR conception of the employer organizations. It also concentrates more on a reorganization of the core activities of companies than on individual philanthropic projects. This picture of CSR is more directed at homogenizing and standardizing CSR in order to establish it in such a way as to make comparison, testing and sanctioning possible. The CSR concepts of employers and civil society reflect different positions of interest and rest on different views of the world and society. They are to be seen as strategies in a field of socio-political conflict that aim at a reformation or a (dynamic) preservation of the status quo.

The Austrian case as an example of a paradigmatic change in European CSR? The significance of the Austrian case in the European context Habisch et al. (2005, p. 4) describe society as a ‘‘historically grown balance of three dominant clusters

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of institutions: government, civil society and market, represented by commercial organizations’’. We agree with Habisch and Jonker who argue that the present CSR debate across Europe indicates ‘‘a fundamental transition of the long taken-for-granted balance between those clusters of institutions is taking place (p. 4). Further, we agree that the ‘‘present CSR debate across Europe reveals that this institutional society balance is being questioned’’ (p. 3). This questioning, we suggest, should also be seen as an active and strategic attempt to (re)define corporate responsibility and this balance of institutions. Thereby the CSR-discourse of the business community is itself an important medium of this (re)definition and questioning, in particular as it represents what Jones et al. (2005, pp. 122–123) call a ‘‘strategic or marketing approach’’ in which ‘‘the goals and objectives of the organization are the central focus’’. The Austrian case is, of course, as any case a singularity. However, we suggest, that its significance goes far beyond a single national debate on CSR, emerging against a specific historical, political or cultural background (see Habisch et al., 2005). Our thesis is that the Austrian discussion is paradigmatic for the struggle and the development of CSR in a European/international context. For decades, the Austrian national business system (Whitley, 1992) was (comparable to the Scandinavian business systems) characterized by a strong tripartite approach. In particular, the experience of civil war between Social Democrats and the Conservatives in the time between the two World Wars led to the emergence of the so-called ‘‘Sozialpartnership’’ (Social Partnership). This social and political arrangement meant that a wide range of policy issues, ranging from prices and incomes policy to consumer rights and education etc., were decided on the basis of a consensus between government, business and labour representatives. Consensus was the main political instrument and participation legitimized the societal obligations in they eyes of the business community. In recent years, however, this approach was more and more questioned by the business community. Arguably, this shift not only reflects a specific national experience: When ‘‘CSRAustria’’ was founded the presidents of the Austrian employers organizations played important roles in the European employers associations: The president

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of the Austrian Federal Economic Chamber was (is) at the same time the president of the European umbrella organization and the then president of the Federation of Austrian Industry, was concurrently vice-president of UNICE, the European employers’ confederation. Furthermore, we can see the emergence and growth of business-led CSR-initiatives at the European level (see Matten and Moon, 2005, p. 343). There are many signs which indicate that the CSR-initiatives of the European business community represent a concerted strategic action, whereby the attempted political impact is far more important than the goal of taking over social and societal responsibility. The ‘‘CSR-Germany’’ initiative for example, which was launched in December 2005 by the two main German business associations (BDI – Federation of German Industries – and BDA – Federation of German Employers) follows the Austrian CSR-initiative in its argumentation and even choice of words (see http:// www.csrgermany.de).12

From implicit to explicit CSR – form embedding to disembedding This tendency and the associated concepts of CSR can be further illuminated by the distinction between ‘‘explicit’’ and ‘‘implicit’’ forms of CSR, which has been introduced by Matten and Moon (2005). According to Matten and Moon, ‘‘implicit CSR’’ is embedded in the business–society–government relations within a political system. It is characterized by strong norms, participatory consensus-seeking practices and mandatory corporate responsibilities towards society that are implicitly codified in norms, standards and legal frameworks. ‘‘Explicit CSR’’ represents a departure from this concept of CSR. Here, the focus is on the corporation and corporate policies. Explicit CSR refers to voluntary, self-interest driven policies and programmes seeking to address issues that are perceived by a company or its stakeholders as part of their responsibility. There is ample evidence that the business community in Europe strongly favours the concept of explicit CSR and that this concept is spreading all over Europe. These two concepts of CSR reflect attempts to re-embed or dis-embed corporations in society. In

his study on the economic development in the 19th century, Polanyi (1944/1990) showed how the emergence of capitalism destroyed or threatened to destroy existing feudalistic social relationships and the social and natural living space of the population. This ‘‘Great Transformation’’ expressed itself as a process in which capitalism created new, unregulated markets, including free markets for labour, land and capital, which were all treated as commodities. Whereas earlier the exchange within markets was embedded in social norms this relationship between market and society was reversed. For Polanyi, the agent of re-embedding was the nation state. This perspective – which provides a foundation for the argumentation of NGOs and labour organizations – assumes that the economy must be politically tamed in order to hinder its destructive forces or its destructive tendency to break free of bonds. The situation today of course is different to the one analyzed by Polanyi. Yet, as some authors have argued the processes of disembedding seem to be revived or even accelerated today. Both the rising power of organizations (Perrow, 1991), the processes of economization and the increase in market-oriented behaviour on a global scale seems to contribute to this process (Chomsky, 1998; Forrester 1996). The regulated nation state has been superseded by globalization. In the wake of globalization, areas of global opportunity arose for companies which are largely unregulated, or, in light of their freedom, re-regulated. Altvater and Mahnkopf (1997, 90ff) speak here of a ‘‘disembedding global’’, in which the world market rids itself of social bonds. This is the starting point of the NGOs: Obligatory rules are seen as necessary protection of the weak and as a protection for enterprises acting in a responsible way. Civil Society organizations want to achieve a re-embedding of internationally operating companies, by binding corporate activities to internationally accepted norms and standards (fundamental environmental standards, human rights and labour rights), by establishing process rules for business decisions (transparency and participation) and by insisting on the possibility of sanctioning when companies fail to adhere to these rules and standards. They follow an implicit concept of CSR. The starting point of the employer-organizations’ CSR position is a fundamentally different one.

Filling the Empty Shell Arguments are made in terms of imperatives of competition and competitiveness rather than in terms of grievances of a global, deregulated economy.13 Obligatory rules are seen as inadequate and restricting the necessary flexibility. CSR for them means that companies have to define for themselves – in a principally monological way – where their responsibility begins and ends. Consequently companies ideally identify themselves where they do not meet the standards set by themselves: ‘‘CSR should not be an enforced measure, rather it should be based on voluntary action. Each company (must) find. out for itself in which framework involvement is possible and meaningful.’’ (Autischer 2003, p. 19, our transl.) ‘‘... It is for an individual company or industry sector-to decide what the most useful benchmark codes are and to develop their own understanding of how business principles relate to external codes/guidelines, the framework of UN values and societal expectations. (ICC 2000, p. 3) ‘‘External verification of business processes and performance other than financial performance - in areas such as health, safety, environmental or more recently social performance - is still a relatively new practice. ... external verification should be left to the choice of individual companies. ... ‘‘The method and extend of internal monitoring of compliance with its business principles, and of external reporting of performance, also have to be a. matter for the company itself.’’ (ICC, 2000, p. 3f) The same organizations which create CSR-Initiatives at the same time make very clear that they are not interested in the development or maintainance of a mandatory legal framework in the fields of human and labour rights.14 Following neo-liberal logic and its emphasis on corporate freedom, in an ideological turn, obligatory rules/norms are constructed as, doing injustice to enterprises. In this way, ‘‘CSR’’ is turned into a management tool to block attempts to establish the mandatory international regulation of companies’ activities. This became evident when business organizations like ICC or USCIB opposed the drafted UN-Norms on Transnational corporations regarding Human Rights:

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‘‘We have a problem with the premise and the principle that the norms are based on. These norms clearly seek to move away from the realm of voluntary initiatives ...’’ Stefano Bertasi, Managing Director ICC zitiert nach CSR Europe o. J.); ‘‘Let‘s face it ... the norms are a radical innovation. They purport to make private business liable for human rights violations. This is a revolutionary step.’’ (USCIB Vicepresident Timothy Deal (Deal, 2004)) ‘‘The International Chamber of Commerce and International Organization of Employers have opposed adoption of the Norms ...’’, ‘‘... the binding and legalistic approach of the draft Norms will not meet diverse circumstances of companies and will discourage innovation and creativity in addressing human rights issues...’’ (USCIB, 2003) Their goals seem to be the preservation of a weakly regulated status quo, as the process of dis-embedding is equated with corporate freedom, efficiency and productive competition, or conversely, the costs that would arise from stronger regulation are viewed as a disadvantage to competitiveness. It is not a coincidence that the trend of companies towards explicit CSR exactly comes at a time when the public’s trust in the economy began to decrease or when an increasing number of demands were being placed on companies with international supply chains. Corporations must increasingly meet various expectations and are forced to produce legitimacy. According to Brunsson (1989), organizations handle inconsistent expectations with double standards or double talk: ‘‘To talk inconsistently is not difficult..... Nor is it particularly difficult to make inconsistent decisions, at least so long as the decisions are not implemented, as is by no means always necessary.’’ (Brunsson, 1989, p. 26) The Organization of Hypocrisy avails itself of different strategies: influencing the public opinion, symbolization of altruism and exploiting a ‘‘futures approach’’ (Brunsson, 1989), which makes promises about positive future developments and actions in order to calm and tranquilize the public. All three strategies can be identified in the CSR-discourse of the employer organizations. In this respect, they

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tend to contribute to further dis-embedding, since societal expectations remain without effect on the actual behaviour of economic actors. Effective mechanisms for sanctioning are circumvented or subverted. For this reason, the business led explicit CSR concept is to be viewed as an attempt to influence public opinion and European institutions and is a strategy for the dynamic preservation of the largely unregulated status quo at the global level.15 Conclusion In this paper we have analysed CSR as a political discourse that reflects changes and challenges in the greater socio-economic environment and in which different actors struggle to fill the empty shell of ‘‘CSR’’ with a legitimate interpretation and thereby create and delimit the space of responsibility. At the example of the Austrian CSR debate, we have shown how ‘‘CSR’’ is constructed differently by societal actors and we have argued that the respective CSR-concepts reflect Matten’s and Moon’s distinction between an explicit and an implicit CSR. Given that there are no unquestionable given foundations, from which one could derive what CSR ‘‘is’’, the analysis of CSR as a political discourse that is situated in and-reflective of a specific (globalized) socio-economic environment helps to make intelligible how a historically specific form of CSR emerges and why CSR (in an explicit sense) as predominantly Anglo-Saxon concept is increasingly applied and propagated in Europe. As an ambivalent technology, CSR can both contribute to embedding or disembedding economic activities, depending on how it is constructed and enacted.

Notes 1

Especially, the initiatives within the European Parliament and publications of the European Commission (Europa¨ische Kommission, 2002, 2001) lift CSR out of the mere academic debate to a more public level and to the level of political decision-making. 2 This is not the place to analyze the characteristics of economic globalization in depth. Other authors have done this extensively and in detail (Beck 1997, 1998; Castells, 1996, 1997, 1998; Dicken, 1998; Hirst and

Thompson, 1996; Korten, 1995). It is enough here to point out the process of deregulation, liberalization and privatization, as well as the increasingly complex international networks of production, procurement and distribution. 3 Our analysis is based on interviews that were conducted in the years 2003 and 2004 with representatives from business-organizations, labour-organizations and NGOs. Additionally, documents and publications of these groups where analyzed. 4 All Austrian companies are members of the Austrian Federal Economic Chamber, industrial companies are additionally (voluntarily) organized within the Federation of Austrian Industry. Every employee is member of the Austrian Federal Chamber of Labour, one third of them are members of the Trade Union. 5 The president of the Federation of Austrian Industry, Mitterbauer put it: ‘‘We want to show the population what Austrian companies achieve for the society’’. (Mitterbauer, 2003, p. 14, our transl.) 6 This understanding includes among others, qualification measures for one’s own employees, ecological market niche policy, etc. 7 The CSR Mission Statement of CSR-Austria names the following competitive advantages: Creation of trust; promoting consumer loyalty; advantages in the competition for the best workers; risk-management; good image and improved market position. (CSR-Austria, 2003, p. 5) 8 The following agreements are mentioned as a basis for industry and company codes: the Core Conventions of the ILO, the UN-Declaration of Human Rights, the UN-Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights (2003), the International Covenant on economic, social and cultural rights, UNO 1966, the OECD-Guidelines for TNCs, 2000, the UNDeclaration, Rio 1992 (see AGEZ, 2003, p. 3; NGOArbeitskreis ‘‘CSR’’ 2003). 9 In the opinion of the chairman of the largest branch union, Sallmutter: ‘‘In questions of ethics and social responsibility we are dealing with concrete, legally verifiable, binding norms. Voluntary measures cannot replace regulations for the protection of workers, only supplement them at best... The discussion about CSR should be used for a true further development of existing norms in labour rights’’. (Sallmutter, 2003, p. 16, our transl.) 10 ‘‘CSR must make the working conditions in the concerned country and questions of environmental protection an important topic... They must answer for the situation in the companies who supply them or produce for them... CSR must therefore cover the entire production chain’’. (AGEZ, 2003, p. 4, our transl.)

Filling the Empty Shell Demands with respect to taxation of companies also go in this direction: Companies should pay taxes where they make their turnover or a uniform corporate tax is called for (see Schachner, 2003, p. 19). 11 The working paper of the NGOs (NGOArbeitskreis ‘‘CSR’’ 2003b, p. 1) names the following demands on CSR. – continual monitoring and reviewing of the adher-

– –

– –

–

ence to company goals in the areas of environmental protection, health and safety through a controlling agency settled in the company. complaints can be made to the controlling agency without threat of sanctions independent reviews at regular intervals incorporating stakeholders, those directly affected, and government offices uniform guidelines for publicizing to enable better comparability information for the public about the effects of the company’s activities concerning environment, health and safety publication of the results from independent controls

12

These positions can also be found in the positioning paper of the International Organization of Employers (IOE, 2005). 13 For example, see the ‘‘Roadmap’’ of CSR-Europe in which the term ‘‘competitive’’ is more often used than ‘‘responsible’’ (CSR-Europe, 2004). 14 See for example the position papers of the German business organizations BDI and BDA concerning social standards, human rights and the Greenbook of the European Commission on CSR. Interestingly, these positioning papers can be downloaded from the website (http://www.csrgermany.de) (BDI, 2003; BDI/BDA, 2001; BDI/BDA, 2004) 15 See BDI Annual Report 2004/2005, BDI 2005, CSR-Europe 2004 in which they oppose CSR norms and standards and inform about the constitution of a specific work-group to influence political decision-makers.

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Bernhard Mark-Ungericht Department International Management, University of Graz, Universitaetsstr.15, A-8010, Graz, Austria E-mail: [email protected]

297 Richard Weiskopf Department of Organization and Learning, University of Innsbruck, Universita¨tsstrasse 15, A-6020, Innsbruck, Austria E-mail: [email protected]