Corporate Legitimacy as Deliberation: A Communicative Framework

42 Pages Posted: 25 Jan 2007

See all articles by Guido Palazzo

Guido Palazzo

University of Lausanne

Andreas Georg Scherer

University of Zurich - IBW Department of Business Administration

Abstract

Modern society is challenged by a loss of efficiency in national governance systems and a growing pluralism of beliefs, values, and lifestyles. Corporate social responsibility (CSR) discourse builds upon a conception of organizational legitimacy that does not appropriately reflect these changes. The problems arise from the a-political role of the corporation in the concepts of cognitive and pragmatic legitimacy which are based on compliance to national law and on relatively homogeneous and stable societal expectations on the one hand and widely accepted rhetoric assuming that all members of society benefit from capitalist production on the other. We therefore propose a fundamental shift to moral legitimacy, from an output and power oriented approach to an input related and discursive concept of legitimacy. This shift creates a new basis of legitimacy and involves organizations in processes of active justification vis-à-vis society rather than simply responding to the demands of powerful groups. We consider this a step towards the politicization of the corporation and attempt to re-embed the debate on corporate legitimacy into its broader context of political theory, while reflecting the recent turn from a liberal to a deliberative concept of democracy.

Keywords: Business and Society, Business Ethics, Corporate Social Responsibility, Deliberative Democracy, Globalization, Organizational Legitimacy

Suggested Citation

Palazzo, Guido and Scherer, Andreas Georg, Corporate Legitimacy as Deliberation: A Communicative Framework. Journal of Business Ethics, Vol. 66, No. 1, pp. 71-88, 2006. Available at SSRN: https://ssrn.com/abstract=958771

Guido Palazzo (Contact Author)

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

Andreas Georg Scherer

University of Zurich - IBW Department of Business Administration ( email )

Plattenstrasse 14
Zurich, 8032
Switzerland
+41 44-63 45302 (Phone)
+41 44-63 45301 (Fax)

HOME PAGE: http://www.business.uzh.ch/professorships/as.html

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