Misguided Governance

Misguided governance?

Introduction

Globalisation has clutched its talons into the political debate and reshaped conceptualizations of the society, or global society if you prefer, in which we live in. The term in itself is highly debated and contested by various scholars. One of the most conspicuous trends in the debate is the prevalent expansion of communication, economic flows and the politicization of corporations. Companies have seceded from the national sphere in which they now partially operate as they have been fragmented, outsourced and become webbed conglomerates, and while these multinational enterprises (MNEs) - as they in most cases are - have grown in size, thus have the expectations in magnitude. The relationship between business and society has for long been at the centre of debate, and because MNEs have expanded so vastly, they have automatically become entangled in international social relations.

The chosen text of inspiration A stitch in time (Economist, January 17th 2008) discusses how companies now use Corporate Social Responsibility (CSR) as a form of risk management. In other words, a sort of proactive method, or in some cases reactive, to prevent future bad will which can lead to big losses and extreme cases of bankruptcy. Companies have become increasingly visible on local and world markets, and due to this 'transparency' discourse they are now more fragile than ever before. This might seem as a contradictive claim when talking about big MNEs, but the fact is that they now have to respond to numerous stakeholders, and even though some aggressively tries to construct CSR initiatives, they still do not know if they are sufficient as they also have to account for their B2B relations (supply chain).

I argue that CSR policies are not sufficient as we as consumers do not know to what extent they are carried out. Governments should be the natural 'regulators' when it comes to social related policies because they represent the public, not the corporations. A global framework abolishes the insecurity surrounding this subject, as well as creating a safety for the different stakeholders. All in all, I regard governance at a global level as being misguided.

The driven factors of CSR

The Corporate Social Responsibility debate is driven by a number of factors. These include efforts by business to generate positive outcomes for the communities, in which they operate, the acknowledgement by which governments have not been able to solve persistent social problems, business trying to profit by commercializing the CSR concept, and the ongoing changes of expectations by members of society. For years governments have been the official legislative body that has taken care of social issues within their national sphere. This, however, has of course not been without the influence of businesses which naturally have occupied a big role in the surrounding society by generating jobs and economic growth. These two entities once worked within the same border in a state of dependence, but due to the globalisation and the fact that companies are expanding to far corners of the world, the balance of power has been altered, some even goes as far as saying, "Globalisation is paving the way for the ultimate dominance of corporations over all aspects of human existence" (David Korten, cited in O'Callaghan 2007 p. 98).

Branding CSR: a supplement, a key player or morally wrong?

As competition has grown on the world market, companies have now turned to a concept called branding. By branding your company the main goal is to sell more products and to increase your profits. CSR is one of the new marketing spins which, for many, conflicts with the concept of CSR. A vast number of MNEs promote themselves as being an active 'good citizen' that trades fairly and produces green. But claims like these seem, for many, contradictive and misleading because the main incentive for companies to invest in a given project is to generate revenue or at least to prevent future losses. This leads us to the notion of risk, which the article a stitch in time discusses. With globalisation people have become more aware of risk being attached to certain actions, hence manufactured risk (Giddens 1999). One of the recent topics is the environmental debate in which numerous of scholars argue whether it is relevant or the changing environment in fact poses a threat to our society. Giddens defines risk as being future-oriented, hereby meaning that it functions as insurance, however, he also notes that there are opportunities attached to it. It is with his conceptualization of risk and the two components he mentions which leads us to the issue of CSR. One could define Corporate Social Responsibility as a 'double-edged sword' which on the one hand can have favourable consequences and on other hand unfavourable. This is also called 'the ambiguity of mediated visibility'.

British Petrol (BP) is one of many companies that have 'toyed' with the double-edged sword. They had intensely tried to promote themselves as being "beyond petroleum" meaning more environmental-friendly, even though selling petrol "green" is contradictive. However, their promotion proved to be a success for a long time until they experienced a serious oil spill in the Gulf of Mexico earlier this year (2010). The crisis led to a serious loss for the company, and they were blamed by the media for being reactive when this incident occurred. Hence, they suffered a loss of brand value. Before this environmental disaster BP's brand was valued to be ranked at no. 83 last year (2009), but fell out of the top 100, leaving Shell to emerge as an industry leader (Vicky Kapur 2010). What could be an argument for CSR as the key player in pursuing a higher rate of social responsibly in companies is that it increases the incentives for them to strive towards the greater good. Not doing so could mean unfavourable consequences. However, critics contend that these policies and the promotion of them are merely a "Green wash, designed to hoodwink a gullible public" and therefore morally wrong (Terry O'Callaghan 2007, p 97).

The media plays a vital role in modern societies and is even sometimes referred to as "the fourth political body". This implies that the media acts as some sort of balance tool, serving the people's interest, or in other words consumers, depending on whether we talk about government or business. There are many theories connected to this issue, and I will address two of them (e.g. the pluralist perspective and the culture studies perspective). From a pluralist perspective, the media performs two crucial democratic