PATERNALISM AS A PARTICULAR APPROACH TO BUSINESS SOCIETY INTERACTIONS AN EVOLUTION THROUGH TIME

Transcription

1 PATERNALISM AS A PARTICULAR APPROACH TO BUSINESS SOCIETY INTERACTIONS AN EVOLUTION THROUGH TIME Helen Schneider, ESSEC Business School

2 Research question 1. How did business engage in CSR before it was called CSR? 1. Implicit vs explicit CSR (Matten and Moon 2008) paternalism 2. What has happened to paternalism in this era of CSR? 2

3 Agenda Introduction The concept and key insights Paternal business practices 1. Trace the evolution of paternalism From the social/catholic entrepreneur to the welfare state 2. Identify similar outcomes and practices today The turn to CSR Shaping structure and content of business - society relations Discussion and further research 3

4 The concept: Paternalism No common definition: narrow vs broad view (Ackers 1998) Paternalism is generally characterised by an interference with individuals' liberties justified by a claim of alleged better protection of their interests. Under paternalism people in authority make decisions for other people which are often beneficial but which prevent those people from taking responsibility for their own lives (Iankova 2008) 4

5 In search for an improved concept How can this be applied to the corporation acting for the common good? Hypothesis: Paternalism is still widely present in business-society interactions but in different forms and under different labels, like HR/CSR Principle of complete implication (1979) N. Fotion: Wholistic concept beyond its coercive aspects, integrating change Libertarian paternalism (2003) Thaler and Sunstein: Architecture of choices for the individual s and the common good (ex. Speeding) 5

6 Key insights from literature review Paternal practices are just as present in corporate capitalism as they were in family capitalism Paternal aspects of CSR practices are not identified Negative connotation Focus on State-level Paternal lens enhances understanding of business-society relations Motivation Structure Content 6

7 Traditional paternalism 18/19 th century family firms and charismatic entrepreneurs as caring fathers of their employees 7

8 Fourier s Phalanstère Bentham s Panopticon : Jean-Baptiste-André Godin creates a social palace in rural Northern France housing the entire worker community and corporationdelivering the equivalents of wealth Lallement (2009) 8

9 Léon Harmel ( ): Catholic entrepreneur, owner of textile mills, and social reformer Identifies patron s responsibility towards 4 main stakeholders: the Catholic Church, civil society, the work-family or corporation, and the family of the individual worker Coffey (2003) 9

10 Industrial paternalism - More diversified ownership structures and larger stockholder models - Discretionary paternal power - Utilitarianism - Factory towns Barse MILLER,

11 Crisis of paternalism and the rise of the Welfare State Abuses of employer s power Violent strikes and riots Trade union and social democratic movement Bismarck s social reforms in the 1880s De-responsibilization of business 11

12 The turn to CSR and what remains of paternalism Neoliberal movement: - from give-it-to-me to do-it-yourself CSR movement 12

13 Acting for the common good POWER RESPONSIBILITY 13

14 Paternalist influence on structure of business-society relations An example of assumed roles: The Swedish Trade Union Confederation Not acceptable, however, seems to be the role as welfare provider in the local community and in developing countries. ( ) Welfare services and distributive politics is a common issue and should be agreed upon in democratic order and should be financed by public funds. Corporations, rather, should pay the taxes that the legislation of different countries demands. ( ) What is also not acceptable is the idea that corporations should take up the relay where states are not pulling their weight. ( ) The contributions of corporations must be under the control of public authorities in order not to undermine the politics of elected politicians (in De Geer, Borglund et al. 2009). Result of 1 st crisis? Nationalization of social question, State s role to redistribute wealth 14

15 Paternalist influence on structure of business-society relations A diffusion story in developing countries? Shell in the Niger Delta region Shell has gone beyond what was necessary and delivered benefits to the communities precisely because of government failure. (Boele et al., 2001b) in (Ite 2004). Protests, State and local community blame MNCs Establishing a dependence culture Highlights: shared responsibility between private and public institutions and partnership logic, risk of de-responsibilization and dependency of actors 15

16 Paternalist influence on content of business-society relations Targeting the local community CA [Community Assistance] approach focused on what Shell felt the communities lacked (Ite 2004) CD (Community Development) approach emphasis on the empowerment of communities (Ite 2004). Highlights: paternalism is still practiced in somewhat different forms and under different labels; CSR is not all good and paternalism is not all bad 16

17 Selected literature overview Historical analysis Crisis 1 Nationalization of social question Crisis 2 Neoliberalism Conceptual analysis State-level Paternal Welfare State Ethical/performance justifications (pro-contra) Gilbert and Gilbert 1989 Beck 1995 Briggs 2006 Dworkin 1971, 1983, Fotion 1979, Arneson 1980, Feinberg 1986, Alston and Ferrie 1993, Thaler and Sunstein 2003, 2008, Rostboll 2005, Moyo 2009, Eisenach 2011, Szerletics 2011 Business-level Traditional paternalism Industrial paternalism GAP Debouzy 1988, Coffey 2003, Lallement 2009 Reid 1985, Nielsen 1994, Tone 1997, Ackers, 1998 Historic link with CSR: Iankova 2008, Matten and Moon 2008, Carroll 2009, De Geer, Borglund, et al Family firms (employee focus): Mueller and Phillipon

18 Discussion and further research Towards a new corporate paternalism Extend the concept to modern stakeholders Investigate SMEs and cultural differences Applications to stakeholder theory Internal and external stakeholder involvement State intervention for the common good Instrumentalizing paternalism Business case for CSR Paternal measures as Sales argument (explicit CSR) BOP strategies PPP 18

19 New corporate paternalism : Examples Targeting the client (1/2) 19

20 New corporate paternalism : Examples Targeting the client (2/2) 20

21 Bibliography Ackers, P. (1998). "On Paternalism: Seven Observations on the Uses and Abuses on the Concept in Industrial Relations, Past and Present." Historical Studies in Industrial Relations. Alder, P. S. and B. Borys (1996). "Two Types of Bureaucracy: Enabling and Coercive." Administrative Science Quarterly 41(1): Alston, L. J. and J. P. Ferrie (1993). "Paternalism in Agricultural Labor Contracts in the U.S. South: Implications for the Growth of the Welfare State." The American Economic Review 83(4). Anheier, Toepler, et al. (1997). "The implications of government funding for non-profit organizations: three propositions." International Journal of Public Sector Management 10(3). Arneson, R. J. (1980). "Mill versus Paternalism." Ethics 90(4): Argandona, A. and H. von Weltzien Hoivik (2009). "Corporate Social Responsibility: One Size Does Not Fit All." Journal of Business Ethics 89: Beck, H. (1995). The Origins of the Authoritarian Welfare State in Prussia, , University of Michigan Press. Bellandi, M. (2001). "Local development and embedded large firms." Entrepreneurship & Regional Development. Briggs, A. (2006). The Welfare State in Historical Perspective. Carroll, A. (2009). A History of Corporate Social Responsibility. Oxford Handbook of Corporate Social Responsibility. Crane, M. Williams, Matten, Moon and Siegel Chandler, A. (1977). The Visible Hand. Cambridge, MA, The Belknap Press. Coffey, J. (2003). Léon Harmel: Entrepreneur as Catholic Social Reformer, University of Notre Dame Press. Crossley, D. (1999). "Paternalism and Corporate Responsibility." Journal of Business Ethics 21(4): De Geer, H., T. Borglund, et al. (2009). "Reconciling CSR with the Role of the Corporation in Welfare States: The Problematic Swedish Example." Journal of Business Ethics 89: Debouzy, M. (1988). "Permanence du Paternalisme?" Le Mouvement Social(144):

22 Bibliography Drucker, P. (1984). "The New Meaning of Corporate Social Responsibility." Dworkin, G. (1971). Paternalism Morality and the Law R. Wassertrom. Belmont, Wadsworth Publishing Co. Eisenach, E. J. (2011). "Tough choice: structured paternalism and the landscape of choice." Choice: Current Reviews for Academic Libraries 48(6): Esping-Andersen, G. (1990). The Three Worlds of Welfare Capitalism, Princeton University Press. Feinberg, J. (1971). "Legal Paternalism." Canadian Journal of Philosophy 1: Fotion, N. (1979). "Paternalism." Ethics 89(2). Freeman, Jensen, et al. (2007). Dialogue Toward a Better Stakeholder Theory. National Meeting of the Academy of Management, Philadelphia. Freeman, R. E., A. C. Wicks, et al. (2004). "Stakeholder Theory and The Corporate Objective Revisited." Organization Science 15(3): Gert, B. and C. M. Culver (1979). "The Justification of Paternalism." Ethics 89(2). Gilbert, N. and B. Gilbert (1989). The Enabling State: Modern Welfare Capitalism in America. New York, Oxford University Press. Iankova, E. A. (2008). "From Corporate Paternalism to Corporate Social Responsibility in Post-Communist Europe." Journal of Corporate Citizenship 29. Ite, U. E. (2004). "Multinationals and Corporate Social Responsaibility in Developing Countries: A Case Study of Nigeria." Joyce, P. (1980). Work, Society and Politics: The Culture of the Factory in Later Victorian England, Methuen. Kus, B. (2006). "Neoliberalism, Institutional Change and the Welfare State: The Case of Britain and France. Lallement, M. (2009). Le Travail de l'utopie: Godin et le Familistère de Guise. Paris, Les Belles Lettres. Lu, X. (1997). "Enterprise paternalism and transition to markets socialism." Mondes en Développement. Marneffe, P. d. (2006). "Avoiding Paternalism." Philosophy & Public Affairs 34(1): Mathe, O'Keeffe, et al. (2011). Valuing People to Create Value, World Scientific. 22

23 Bibliography Matten, D. and J. Moon (2008). ""Implicit" and "Explicit" CSR: A Conceptual Framework for a Comparative Understanding of Corporate Social Responsibility." Academy of Management Review 33(2): Morice, A. (2004). "Travail atypique, travail salarié et paternalisme : retour sur 25 ans de recherche." TRAVAIL, capital et société 37. Moyo, D. (2009). Dead Aid. New York, Farrar, Strauss and Giroux. Mueller and Phillipon (2011). "Family Firms and Labor Relations." American Economic Journal: Macroeconomics 3. Nielsen, N. J. (1994). "Lifelong care and control: paternalism in nineteenth-century factory communities." Ethnologia Scandinavica 24. Noiriel, G. (1988). "Du "patronage" au "paternalisme": la restructuration des formes de domination de la main-d'oeuvre ouvrière dans l'industrie métallurgique francaise." Le mouvement social 144: Puppim de Oliveira, J.A. (2006). Corporate Citizenship in Latin America- Introduction. Journal of Corporate Citizenship Quadagno, J. (1987). "Theories of the Welfare State." Annual Review of Sociology 1: Reid, D. (1985). "Industrial Paternalism: Discourse and Practice in Nineteenth-Century French Mining and Metallurgy." Comparative Studies in Society and History 27(4): Roberts, D. (1958). "Tory Paternalism and Social Reform in Early Victorian England." The American Historical Review 63(2): Scherer and Palazzo (2007). "Toward a Political Conception of Corporate Social Responsibility: usiness and Society Seen from a Habermasian Perspective." Academy of Management Review 32(4). Shuili, D., C. B. Bhattacharya, et al. (2011). "Corporate Social Responsibility and Competitive Advantage: Overcoming the Trust Barrier." Management Science 57(9): Smith, C. (1994). "The New Corporate Philanthropy." Harvard Business Review 72(3). Szerletics, A. (2011). Paternalism. The ESSEX Autonomy Project. Green Paper Technical Report Thaler, R. H. and C. R. Sunstein (2003). "Libertarian Paternalism." The American Economic Review 93(2): Tone, A. (1997). The Business of Benevolence: Industrial Paternalism in Corporate America. Ithaca, Cornell University Press. Weber, M. (1978). Economy and Society. Berkeley, University of California. 23

24 APPENDICE A changing management mentality: practices and objectives 24