The Meaning of 'Sphere of Influence' in ISO 26000

Abstract:     
The relationship between a company’s influence and its social responsibilities is the subject of persistent controversy, manifested for example in the debate over the use of the concept of “sphere of influence” (SOI) to define the scope of a company’s social responsibility. Early drafts of the ISO 26000 guide on social responsibility employed SOI in this way, stating among other things that influence can give rise to responsibility and that generally, the greater the ability to influence, the greater the responsibility. The UN Special Representative on business and human rights, John Ruggie, rejected this use of SOI as ambiguous, misleading, morally flawed, and susceptible to strategic gaming. The final version of ISO 26000 was amended in an effort to accommodate these objections. This chapter examines how the concept of SOI is articulated in ISO 26000 and the extent to which it responds to critics’ concerns. First, ISO 26000 avoids the main source of conceptual ambiguity attributed to SOI, the conflation of “influence as impact” with “influence as leverage,” by defining SOI exclusively in terms of leverage. Second, it avoids the main source of operational ambiguity, the tendency to operationalize SOI in terms of “proximity,” by making it clear that SOI is a relational rather than spatial concept. Third, ISO 26000 is ambivalent on the moral question of whether leverage alone should give rise to responsibility. The chapter distinguishes four varieties of influence-based social responsibility: impact-based negative responsibility, impact-based positive responsibility, leverage-based negative responsibility and leverage-based positive responsibility, and shows that ISO 26000 reflects all four to varying degrees. Finally, ISO 26000 responds partially to the critics’ fourth complaint that the SOI concept leads to strategic gaming.

Number of Pages in PDF File: 10

Keywords: social responsibility, sphere of influence, leverage, ISO 26000, John Ruggie, business and human rights

JEL Classification: K33, K39, M14

Accepted Paper Series