The Paradox of Corporate Globalization: Disembedding and Reembedding Governing Norms

Abstract

The discussion begins with the current purpose debate. it is then divided into five parts. The first draws a baseline of corporate globalization and traces key policy measures that created its enabling environment. The second identifies the paradox of corporate globalization: at the very height of the recent globalization boom multinationals discovered that their legal license to operate, provided by states, did not in itself translate into a social license. Firms responded by adopting enterprise-wide corporate social responsibility (CSR) as a management tool. Although quite superficial in its early iterations, in retrospect this marked the first step toward systematically engaging stakeholder, if only in the attempt to placate them. The following two sections recap the institutional strategies and cascading effects of two global initiatives intended to narrow the gap between legal and social license: the UN Global Compact, the world’s largest corporate engagement platform, and the UN Guiding Principles on Business and Human Rights, the global standard in this space. Both reflect, and contributed to, the further normative evolution through which the corporation came to be viewed – in the end by many firms themselves. The conclusion returns to the current corporate re-purposing debate and reflects on what, if any, contributions it is making to rebalancing market and society, and to people and planet challenges humanity faces today.