THE CONCEPT OF “POLITICIZATION OF THE CORPORATION”

In their contribution “Toward a Political Conception of Corporate Responsibility: Business and Society Seen from a Habermasian Perspective,” Scherer and Palazzo (Reference Scherer and Palazzo2007) argue that established ideas about the division between political and economic factors have been eroded, which calls for a new and fresh perspective on the role of corporations in society. This new perspective leads us to no longer view the corporation merely as an economic actor, but also as a political one. They call it the “politicization of the corporation” (Scherer and Palazzo Reference Scherer and Palazzo2007, 1115; Palazzo and Scherer Reference Palazzo and Scherer2008)—a phenomenon that was already conceptualized by Blumberg in the early 1970s. He mentioned how this politicization of the corporation was already manifested at that time: angry confrontations or disruptions of shareholder meetings, picketing, sit-ins, demonstrations and boycotts, bombings, sabotage and arson, intimidation, and interference with personnel recruiters on university campuses, and demands for the election of minority groups to boards of directors (Blumberg Reference Blumberg1971, 426–27). Scherer and Palazzo are guided in their politicization concept by the philosopher and sociologist Jürgen Habermas. Renowned for his groundbreaking work in communicative rationality, social theory, and democratic thought, Habermas has crafted a sophisticated vision of how reason, language, and dialogue underpin societal structures. His contributions offer a refined framework for grasping and enhancing democratic processes. In seminal works like the two-volume Theorie des kommunikativen Handelns [The Theory of Communicative Action] (1981), Habermas explores how discourse and mutual understanding can nurture rational consensus and fortify the public sphere. The idea of politicization, according to Scherer and Palazzo, is accompanied by a political conception of corporate social responsibility (political CSR: “PCSR”), based on Habermas’s late political philosophy, which served as a normative theory and starting point for a discussion in management theory and business ethics. Business ethics is defined by Crane and Matten as “the study of business situations, activities, and decisions where issues of right and wrong are addressed” (Reference Crane and Matten2016, 5). Scherer and Palazzo use “CSR” in this debate as an umbrella term that focuses on both the definition of “corporate social responsibility” and the integration of ethical issues and effective management in a “general approach” (Scherer and Palazzo Reference Scherer and Palazzo2007, 1096).

The authors rightly argue that a positivistic framework of CSR, which uses empirical methods, leads to an inhuman instrumental interpretation of CSR. Such a framework is suitable for an economic business theory but overlooks the ethical aspect that is so important in CSR. In favor of that ethical aspect, there are various “post-positivist” interpretations of CSR, such as 1) classical business ethics, which can be distinguished into virtue ethics, deontology, and the social contract, 2) postmodernist management theory, and 3) “early” Habermasian critical theory (1097). These three approaches were all rejected in the run-up to Scherer and Palazzo’s political conception of CSR. Business ethics is too “monological,” too theoretical, and wrongly seeks universal claims from a nonexistent “view from nowhere” (1102). Postmodernist management theory focuses only on criticizing the social and (business) economic structures of the status quo. Although this is important, it still does not define a positive legitimization of business; postmodern theories are, in contrast to classical business ethics, “relativistic” (1097, 1103).Footnote ² The critical theory of early Habermas is dismissed as “idealistic” because in his view, corporations would have to become “altruistic actors” in which problem-solving would be done through the right argumentation procedures that lead to mutual understanding and agreement (1105).

In contrast to these (respectively) amoral, outdated, unfounded, and naively idealistic ideas, Scherer and Palazzo present a PCSR that is modeled on Habermas’s political theory of deliberative democracy (1106). This theory challenges the standard political model in which legitimacy is sought through democratic discourse; legitimacy is not just a matter of “input” but also of “throughput”, that is, the quality of the deliberative process between “input” (elections) and “output” (legislation). Within that throughput, “communicative action” should be aimed at mutual understanding (Habermas Reference Habermas1981, 1–112). This action forms the basis for Habermas’s deliberative model; a model in which citizens meet on equal grounds for public debate (Habermas Reference Habermas2022b, 69–87, 89–109). The most fundamental aspect of the deliberative process is that norms and institutional arrangements are only valid if they are agreed upon by all those affected by their consequences (Habermas Reference Habermas1992, 152–53). Benhabib describes the characteristics of such a process of deliberation as follows: 1) deliberative proceduralism is a rational response to persistent conflicts of values at the material level; 2) this proceduralism makes the articulation of interest conflicts possible under conditions of social cooperation that are acceptable to everyone; and 3) finally, any deliberative model is at first glance susceptible to the argument that no modern society can organize its affairs without the fiction of a mass meeting that deliberates publicly and collectively (Benhabib Reference Benhabib and Benhabib1996, 73).

It is this procedural interpretation of democratic legitimacy that forms the basis of the political conception of CSR (Scherer and Palazzo Reference Scherer and Palazzo2007, 1107). In the context of globalization and transnationality, CSR is concerned with the decentralization of authority and the emergence of political power for initially nonpolitical and nonstate organizations, such as nongovernmental organizations (NGOs), intergovernmental organizations, and transnational corporations. For this reason, according to Scherer and Palazzo, the legitimacy of corporations should not be sought in national democracies but beyond or above them. The problem with that global playing field, however, is that there are not widely shared legal or ethical standards and that the issue of a global CSR is much more complex than when approached at a national level. To keep up with the times, corporations must therefore replace the implicit adherence to social norms and expectations with explicit participation in the public process of political will formation. Scherer and Palazzo refer to this as the “politicization of the corporation” (1108).

The politicization conceptualized by Blumberg could thus be referred to as passive, while Scherer and Palazzo’s concept of politicization is active. This PCSR strives for a democratic integration of corporate use of power, especially in the transnational context of incomplete legal and ethical regulation (1108). The core of CSR is no longer the business ethical argument (early Habermas) but the political argument of democratic will formation (late Habermas), which achieves “democratic control on the public use of corporate power.” The corporation is thus a political actor seeking public will (1109). An important phenomenon that demonstrates that corporations are already political actors is self-regulation, which, according to Scherer and Palazzo, takes place in a broad process of democratic will formation in combination with societal actors. This represents a movement towards the political process of policymaking through the creation and collaboration with “global institutions of political governance” (1110; cf. Urbinati Reference Urbinati and Archibugi2003, 80). Other notable manifestations include the development of “corporate codes of conduct” in collaboration with critical NGOs, exposing CSR performance of corporations to third-party monitoring, and shifting attention and funds from corporations to societal challenges that go beyond those of direct stakeholders (Scherer and Palazzo Reference Scherer and Palazzo2007, 1115; cf. Garsten and Jacobsson Reference Garsten and Jacobsson2007, 149; Jansen Reference Jansen2021; Reference Jansen2025). Seeking and finding democratic control over the public use of corporate power could also mean seeking and finding legitimacy for new forms of sovereignty competing with states. An understanding of CSR is no longer based on the separation of economy and politics (Scherer and Palazzo Reference Scherer and Palazzo2007, 1111). Economic activities should not be subject to higher norms than those of the political system itself, which is why Scherer and Palazzo place the primacy on politics in CSR (1112).

POLITICS PLAYED OUT IN THE REGISTER OF BUSINESS ETHICS

A look at history reveals that the legitimacy of a political order is not a given but rather contested. Fukuyama distinguishes three forms of legitimacy: 1) the formation of a “state” based on a monopoly of violence, 2) the “rule of law,” a form of law that is higher than positive law, and 3) “accountability” to those subject to political power (Fukuyama Reference Fukuyama2011, respectively 97 et seq., 245 et seq., 321 et seq.). PCSR specifically relates to the last two forms of legitimacy. It concerns alternatives to state regulation, that is, self-regulation and meta-regulation (Coglianese and Mendelson Reference Coglianese, Mendelson, Baldwin, Cave and Lodge2010) and raises the questions of who is ultimately accountable for the actions of corporations and to whom those corporations are accountable. The politicization of the corporation is an attempt to provide contemporary legitimacy to corporations (Bloom and Rhodes Reference Bloom and Rhodes2018, 202). This incorporates the ethical debate on the legitimacy of corporations into a broader political-philosophical context (Palazzo and Scherer Reference Palazzo and Scherer2006, 72; Freeman Reference Freeman2018, 15). This is not new—examples include Max Weber, who applies political philosophy to private enterprises and characterizes the total of shareholders in a corporation as “sovereign” (Weber Reference Weber, Owen, Strong and Livingstone1919, 49), and Ernst H. Kantorowicz’s interesting idea of the origin of the corporation (Kantorowicz Reference Kantorowicz1957, 273–313). Viewing PCSR as a form of business ethics already considers large corporations as political actors that can be moralized through discourse ethics. To anticipate my own analysis and introduce the political philosopher Chantal Mouffe—a prominent critic of Habermasian deliberative democracy—I note that the politicization of the corporation involves playing a political game in the register of business ethics (Mouffe Reference Mouffe2005, 75–76). The tension of a moralization of the political that conceals the politicization of ethics is perceptible in the background of the successive exegeses of PCSR. Therefore, I aim to provide a concise literature review of several noteworthy articles on PCSR.Footnote ³ Each contribution will elucidate how the political takes precedence over the ethical. Later in this article, it will become clear how Mouffe, following in the footsteps of the legal philosopher Carl Schmitt, distinguishes between the political and the ethical; and how politicization occurs in formerly nonpolitical registers where enmity is intensified (Schmitt Reference Schmitt1932a, 22).

Political philosophy within CSR has a tradition in business ethics. Dubbink highlighted the clash between CSR thinking and neoclassical market theories, emphasizing their incompatible views on human nature and market functioning. He proposed replacing the neoclassical idea of the market as harmonious with the view of the market as a vulnerable system (Dubbink Reference Dubbink2004, 37–41). The harmonious market doctrine neglects the real historical development of the market (cf. Taubes Reference Taubes1987, 57). Dubbink also raised concerns about the democratic nature of “corporate political discretion”, suggesting that social power can give some actors undue influence (Dubbink Reference Dubbink2005, 62–63). He, along with Smith, argued that modern liberal democratic societies need to assign greater moral responsibility to corporations (Reference Dubbink and Smith2011, 225–26). Dubbink and Van de Ven contended that while liberalism prohibits the politicization of the market, it does not forbid its moralization (Reference Dubbink and van de Ven2012, 222, 231–33). Liberalism has traditionally justified apolitical markets and clear boundaries between politics and economics (Dubbink and Van Liedekerke Reference Dubbink and van Liedekerke2014, 532–53; cf. Friedman Reference Friedman1962, 7–21). Dubbink asserts that economic systems like the market are inherently political constructs. He contends that politics is about determining associations and dissociations within society, rejecting the notion of an apolitical market, and emphasizing the political nature of economic decisions.

Néron (Reference Néron2010) responded to calls in business ethics literature to understand economic actors as political entities. He argued that overcoming the “denial of politics” in business ethics is pragmatically useful, asserting that politics is unavoidable but “some things are more political than others” (349). Referring to Crane and Matten, Néron noted resistance in business to the idea that corporations are embedded in political relations (Crane and Matten Reference Crane and Matten2008, 30). Using a business ethical vocabulary with strong political connotations is controversial (Néron Reference Néron2010, 348; cf. Néron Reference Néron2016, 721), making competitors “wicked others” (Flahault Reference Flahault2003, 17). Néron emphasized that politics permeates all aspects of human existence and societal order, challenging the idea that domains like business ethics can exist in a completely apolitical sphere. This perspective contests attempts to separate business ethics from the inherently political significance of human existence, suggesting that political forces are at play even within seemingly nonpolitical domains.

Mäkinen and Kasanen (Reference Mäkinen and Kasanen2016) demonstrated that the politicization of business ethics is not a fixed concept. They view it as a juridification of business ethics (cf. Jansen and Jeurissen Reference Jansen and Jeurissen2022; Jansen Reference Jansen2023; Reference Jansen2025), arguing that PCSR has not sufficiently addressed the need for increased moral responsibility in global political regulation. Juridification refers to filling legal gaps by creating new laws to regulate issues (Derrida Reference Derrida1993, 231). This trend aligns with Kübler’s study on juridification as a quantitative increase in law (Reference Kübler and Teubner1987, 212–19). Mäkinen and Kasanen argued that neoclassical market theories often defend corporate moral responsibility, which leans towards a libertarian social view (Reference Mäkinen and Kasanen2016, 105–107). In the global economy, regulated markets must consider the political context and regulation of business activities. Just and moral labor division requires corporations and governments to comply with ethical standards, a matter of “global governance” (cf. Mouffe Reference Mouffe2005, 103–107). Business ethics should engage with global behavioral standards for corporations (Mäkinen and Kasanen Reference Mäkinen and Kasanen2016, 113–14). Along with Goodman, Mäkinen argued that democratizing corporations at the meso-level might undermine macro-level democratic control due to legitimacy issues and private power dominance (Goodman and Mäkinen Reference Goodman and Mäkinen2023). Politics intertwines with power and control, blurring legal regulations and political decision-making distinctions. Ethical standards in the global economy suggest that politics extends beyond national borders, intersecting with political governance and regulation.

Hussain and Moriarty (Reference Hussain and Moriarty2018) argued that transferring territorial democratic procedures to a global level poses transnational challenges. They contended that international corporations should challenge states by imposing democratization projects on unwilling governments. Scherer and Palazzo’s model, they argued, fails to address the democratic deficit in the political conception of corporations. Hussain and Moriarty suggested that corporations should be excluded from policymaking roles in PCSR, limiting participants to political NGOs and other groups (2018, 532–33). This aligns with the idea that politics involves inclusion and exclusion struggles, advocating for excluding corporations from certain political realms to address the democratic deficit.

Based on this brief literature review of significant texts on PCSR, from my perspective, the paradigm of enmity is an unavoidable issue in PCSR that is characterized by associative/dissociative dynamics (Dubbink et al.), the quest for political significance (Néron et al.), political decision-making processes (Mäkinen et al.), and inclusive/exclusive frameworks (Hussain and Moriarty). Rhodes and Fleming (Reference Rhodes and Fleming2020) took this concept of the political seriously, showing how political concepts dissolve into economic and moral categories in the PCSR discourse, pseudo neutralizing the concept of the political (cf. Schmitt Reference Schmitt1932a, 38). This is part of a larger political movement where political landscapes dissolve into transnational institutions (Kymlicka Reference Kymlicka1990, 267–68).

Habermas argues that the increasing juridification of various domains threatens the lifeworld. He points to the colonization of the lifeworld by legal systems, wherein legal interventions disrupt spontaneous communication and interactions within the lifeworld (Habermas Reference Habermas1981, 70). At the core of this process of colonization is law, which dominates the lifeworld and enforces assimilation. Habermas contends that while juridification was initially emancipatory, it has ultimately led to dilemmas and problems. He acknowledges this dilemma: juridification has had emancipatory aspects, but it has also subjected the lifeworld to external imperatives and threatens to undermine communicative power. Habermas suggests that a solution may lie in the internal democratization of the lifeworld (Habermas Reference Habermas1996, 253–64), in which the lifeworld is organized “according to the principle that the validity of every norm of political consequence be made dependent on a consensus arrived at in communication free from domination” (Habermas Reference Habermas1968, 284). However, this may be unsatisfactory due to the specter of power imbalances and the inevitability of conflicts in stakeholder relations, particularly for powerless stakeholders (Dawkins Reference Dawkins2015). In situations of such dependency, the concept of democratic participation is at best vague and at worst ideological. Like law, it imposes a foreign logic on the involved parties that does not consider their concrete needs. According to Loick, Habermas’s criticism of juridification is thus overly focused on the perspective of law itself and fails to analyze the non-legal conditions of law (Loick Reference Loick2017, 234–42). Furthermore, I concur with Gadamer that the ideal of transcending a natural determinacy into a rationally conscious motivation appears to be a dogmatic exaggeration that is inappropriate for the human condition (Gadamer Reference Gadamer and Michel1971, 312). According to Rhodes and Fleming, the deliberative basis of PCSR wrongly postulates the availability of a public space where a rational consensus can be achieved (2020, 948). In the wake of Mouffe, this democratic political model is unable to recognize the dimension of antagonism inherent to any political order (Mouffe Reference Mouffe1999, 753). I would like to add that such politics is also unable to recognize new forms of antagonism (Laclau and Mouffe Reference Laclau and Mouffe1985, 159–71). It makes me wonder whether the assertion that a power-free discussion is possible might be a ruse by the power itself.

Following Mouffe, the consensus that PCSR assumes to exist between corporate interests and citizen interests cannot be considered either possible or desirable. Democracy thus does not work from the central premise of a desired consensus (cf. Rescher Reference Rescher1993, 128–30) but from the central premise of “dissensus” (Rhodes and Fleming Reference Rhodes and Fleming2020, 948). Rhodes et al. (Reference Rhodes, Munro, Thanem and Pullen2020) further developed this concept of “dissensus” for business ethics. In the context of contemporary political contingencies, they turn to Mouffe’s “radical democracy” (Laclau and Mouffe Reference Laclau and Mouffe1985, 149–94; Mouffe Reference Mouffe1993, 9–22) as a form of contestation that offers hope for an inclusive and sustainable alternative to reactionary populism, authoritarian strongmen, and exploitative capitalism. I would now like to quote from Mouffe’s On the Political (Reference Mouffe2005):

In the previous literature review on the politicization of corporations in business ethics, there is an anomaly in the background that has already been pointed out by Rhodes et al. It concerns an anomaly that Carl Schmitt identified in the twentieth century and that was the major source of inspiration for the political philosophy of Chantal Mouffe. An analysis based on Schmitt’s political philosophy illuminates the implications of the politicization of corporations.

THE ENEMY: A PROBLEM STATEMENT

There is a large body of politically theoretical work that criticizes business ethics and points out its oxymoronic nature, namely, the business aspect that concerns itself with strategy and self-interest and the ethics aspect that focuses on responsibility and doing good (Cooke Reference Cooke1986; Shepard, Shepard, and Wokutch Reference Shepard, Shepard and Wokutch1991; Collins Reference Collins1994; Beltramini Reference Beltramini2003; Weidenbaum Reference Weidenbaum2005). Because of the oxymoronic potential of business ethics, there is a call for a “politicization of business ethics” (Rhodes Reference Rhodes2016, 1503): the politicization should overcome the oxymoron. This politicization should be seen as a broader dynamic in which everything is considered potentially political, following Schmitt’s approach (Schmitt Reference Schmitt1932a, 22), or even the ultimate foundation of ethics is political (e.g., Žižek and Daly Reference Žižek and Daly2004, 163). The politicization of all domains increases pressure on the state as the number of competing interests increases. Once everything becomes political, the economic domain becomes a contest of organized parties striving for victory rather than reconciliation. The politicization of corporations contributes to alienating a sizeable part of the public, which does not contribute to social peace, according to Lemieux (Reference Lemieux2021, 8). Dissensus rather than consensus is increased.

The paradigm of enmity is from my own point of view an inevitable problem of an associative/dissociative political significance seeking political decisionistic and inclusive/exclusive PCSR. For this reason, I align my argument in this article with Schmitt’s concept of the political. Through the lens of “state, corporation, and society seen from a Schmittian perspective,” I present a conceptual framework that does not primarily oppose a Habermasian liberalFootnote ⁴ viewpoint but rather engages in a form of “counter-thinking” (Habermas Reference Habermas and Nicholsen1989; Mouffe Reference Mouffe1992; cf. Plessner Reference Plessner1924, 176). In doing so, I do not posit that the liberalism of Habermas is unrealistic; rather, it becomes so to the extent that it fails to undergo critical examination through Schmitt’s political distinction. Moreover, this political division, much like the individual, remains highly contentious and can be viewed as a degeneration within the political culture of its era. Even in this latter scenario, Schmitt’s distinction still holds value as it specifically alerts us to that political degeneration. I will delve deeper into this aspect in the section “Why a “Schmittian Perspective”?”

Power and sovereignty as primary political concepts without doubt play a crucial role in PCSR. The competition (economy) for power, extending beyond mere state power (politics), has resulted in a new form of sovereignty. The result is a state that is legally obliged to give every party an equal chance to power, a weak state that is threatened with dissolution (Lefort Reference Lefort1971, 117; Hirst Reference Hirst and Mouffe1999, 10): the “demise of the state” (Veldman Reference Veldman2013, 24–28), which means the demise of the state’s sovereignty. The politicization of business ethics has emerged from liberal views, driven by a focus on corporate social responsibility and advocacy for state regulations to enforce ethical standards, reflecting concerns over societal impacts and promoting fairness and sustainability. To stay close to Schmitt’s words, liberal thinking avoids or ignores politics, and therefore the (sovereign) state (Schmitt Reference Schmitt1932a, 19), in an extraordinarily systematic way:

The stability of societal peace, a goal toward which business ethics aims to contribute, faces threats from two recurrent institutional disruptions: economic instability and political animosity. Business ethics encounters challenges on both fronts and its handling of these disturbances significantly shapes its identity and societal role. However, while business ethics manages economic disturbances reasonably well, it grapples considerably more with political turbulence. Although business ethics is studied from perspectives within law, psychology, sociology, anthropology, and other disciplines; it historically reveals itself as a typical liberal discourse situated between the two heterogeneous spheres of ethics and economy. It is not surprising that liberal philosophers such as Habermas and Rawls have been popular philosophers in business ethics for years, as De George also notes (De George Reference De George2008, 74–75; cf. Lippke Reference Lippke1995, 126). Analogous to the less mainstream philosophers Schmitt and Mouffe (Martin Reference Martin2016, 436), the ultimate consensus promoted by liberal business ethics relies on exclusionary acts. Business ethics based on popular Habermasian thinking cannot understand the political as “serious,” because liberal thinking is forced to deny the insolubility of dissensus (Mouffe Reference Mouffe2005, 11–12). Habermas’s “deliberative democracy” is an attempt to resolve dissensus, an attempt that opens the possibility of a new study of business ethics for Scherer and Palazzo, among others (Palazzo and Scherer Reference Palazzo and Scherer2006; Scherer and Palazzo Reference Scherer and Palazzo2007; Reference Scherer and Palazzo2009; Scherer Reference Scherer2018).

The Schmittian concept of enmity in its most pure form does not provide a solid foundation for a concept of business ethics unless one seeks an “ethics of evil” of course (Naso and Mills Reference Naso, Mills, Naso and Mills2016). However, it does establish a firm foundation for politics that is played out within the register of business ethics. Deliberative theory provides a framework for mutual understanding of previously disputed matters. Within this framework, efforts are made to establish institutions and political cultures where individuals with different values can peacefully coexist (Habermas Reference Habermas1996, 78). In this article, the Schmittian distinction of the political, particularly the figure of the partisan, serves as a concept. Concepts are created by philosophy to configure and understand events (Deleuze and Guattari Reference Deleuze and Guattari1991, 32–34). If successful, it reveals the danger of politicizing corporations and business ethics, alongside the positive aspects that I do not deny.

There exists a discrepancy between Scherer and Palazzo’s view of corporate politicization and a “Schmittian perspective,” which encompasses more than just Schmitt’s perspective; for example, Mouffe and Derrida are significant Schmittian thinkers in this context, and in this article. Essentially, Schmitt delineates two forms of politicization. Firstly, it is the “political becoming” of a phenomenon, associated with his conceptual understanding of politicization, directly linked to his concept of the political, divided into friend and enemy. This can encompass all social or ideological fields as long as the subject is intensified in the friend-enemy distinction. Secondly, there is his concrete approach to the politicization of the corporation, asserting that every corporation is under the political authority of the state and acts in favor of the state. This reflects his conservative Catholicism (see the next section). Therefore, a corporation never escapes the state, as it must be politicized. Scherer and Palazzo offer a much more realistic view of the corporation in the modern economy, one where the corporation does indeed escape traditional state structures. However, it is possible to classify the politicized modern corporation within a Schmittian vocabulary specifically, under the concept of a political entity that has escaped from traditional nation state, supranational, and international law. Companies are gaining more power, but at the same time, the traditional legal structure—that is, democracy—seems to be less involved in decisions that originally concern those companies. This leads to more political influence from companies but less political influence from society, which is why Höllerer et al. (Reference Höllerer, Meyer, Lounsbury, Krücken, Mazza, Meyer and Walgenbach2017) write about “a politicization of corporations at the expense of a de-politicization of society.” This is why I bring up Schmitt’s notion of the “partisan”—an increasingly influential figure within a collection of societies that are becoming increasingly less influential.

Politicization within the PCSR discourse signifies transforming an economic entity into a legitimate political-economic entity, not merely a political-economic entity (Scherer, Palazzo, and Seidl Reference Scherer, Palazzo and Seidl2013). Thus, PCSR provides a legitimate reality to a political-economic entity (Scherer and Palazzo Reference Scherer and Palazzo2008). This legitimate reality brings forth a political reality of power and sovereignty, where Schmitt becomes interesting again compared to Habermas. Deliberation also stems from political power and maintaining such governance relies on a new type of sovereignty beyond the state. I interpret this beyond-state political entity as the Schmittian partisan, which I will delve into further in the next section. The form of sovereignty envisioned by Scherer and Palazzo thus needs to incorporate Habermasian intersubjective deliberation and political decision-making to be legitimate in a world facing grand social challenges (Voegtlin et al. Reference Voegtlin, Scherer, Stahl and Haw2022, 13). Aligned with the republican tradition, this approach suggests that political opinion-forming does not solely revolve around reaching compromises but centers on public discussions aimed at rational, acceptable regulations based on shared interests and principles. The idea is to perceive politics as a process of communication among participants seeking rational decisions (Habermas Reference Habermas1996, 138–39) and conflict resolution (cf. Virovere, Kooskora, and Valler Reference Virovere, Kooskora and Valler2002; Jansen Reference Jansen2021). The discourse of collective will formation propels this process; it starts by seeing rivals as opponents willing to compromise, not enemies, and extends to include strangers in a shared political culture while preserving their distinct identities (Habermas Reference Habermas2022a, 152–54).

Mouffe, however, identifies dangers in this consensus-driven model. Taking right-wing populist parties as an example, she notes their creation of collective identities around specific values and ideas. Similarly, business ethics is not devoid of the emotional appeal found in political populism. Business ethics does not solely rely on rational decision-making despite our preference for it; it also relies on eliciting emotions and moral convictions. According to Mouffe, there always seems to be something outside or potentially outside Habermas’s intersubjective deliberation because concrete decisions must meet several abstract conditions. The intent to reach a consensus, for instance, is continuously threatened in practice by contemporary political populism, which habitually drives a wedge between “the people” and “the establishment.” In contrast to those who view politics through a consensus-oriented model, populists are keenly aware that politics invariably involves creating an “us” versus “them,” necessitating the formation of collective identities (Mouffe Reference Mouffe2005, 69–72). So far, this has remained a theoretical exercise. Following Schmitt, however, Mouffe does relate significant empirical consequences to this. If the political game is played in the register of business ethics, opponents are not qualified in ethical terms, or competitors in economic, but rather both in political terms. They are no longer bad opponents or bad competitors, but they are bad human beings: they are “enemies” (76). In the following sections, I discuss the Schmittian implications of politicizing business ethics. I do this by first succinctly explaining Schmitt’s political philosophy and then applying it to the core business of this article: the politicization of business ethics.

WHY “A SCHMITTIAN PERSPECTIVE”?

Before delving deeper into Schmitt’s political theory, it is crucial to understand the man Carl Schmitt in relation to the ideas later discussed in this article. Schmitt is often described as the “crown jurist of the Third Reich” due to his significant role in supplying ideas to German fascism and his active engagement in the Nazi system (e.g., Koenen Reference Koenen1995; Ward Reference Ward1998, 137–39; Stirk Reference Stirk2005). Schmitt’s approach constitutes an anti-liberal defense of dictatorship, where a dictator, in the name of the “people,” can set aside the rule of law to decide autonomously (Schmitt Reference Schmitt1921). He viewed sovereignty in this context and conceived politics as an extreme distinction between friend and enemy, where every political community is a potential enemy (Schmitt Reference Schmitt1932a). According to Schmitt, the enemy is essential for any political entity, posing a potential existential danger rather than an ongoing conflict (cf. Derrida Reference Derrida2003, 123–24). Schmitt expected inhabitants of such a political community—that is, the state—to be willing to kill and die for the state. For the young pre-war Schmitt, the state held “value” within which individuals fulfilled the “significance” assigned by the state (Schmitt Reference Schmitt, Vinx and Zeitlin1914). Schmitt argued that liberal states are too weak to survive, thus advocating for the Führerprinzip, where decisions are made by one man and imposed from the top down (Schmitt Reference Schmitt1940).

Given Schmitt’s Nazi, anti-Semite, racist, and pro-total war stance, why pay attention to him in our field? Hannah Arendt addresses this in her The Origins of Totalitarianism (Reference Arendt1951): studying Nazi scholars like Schmitt can illuminate the blind spots of liberal democracy, providing a cautionary approach against totalitarianism. Schmitt’s theories are “arresting reading,” according to Arendt (Reference Arendt1951, 339), because they help comprehend liberal democracy’s vulnerabilities, which are difficult to pinpoint within the system. This approach demands that ethicists temporarily suspend moralizing the enemy in order to learn from them. Nowadays, we cannot exclude dangerous thinkers from the discourse. Events like the COVID-19 pandemic, the storming of the Capitol, and wars involving Russia and Ukraine, and Israel and Hamas, have shifted the Western self-image. With the rise of China, the resurgence of Russia, and limited success in neutralizing these developments, a notion of politics has resurfaced, haunted by past demons. Reading Carl Schmitt for government inspiration is of course dangerous but sidelining him as a warning is also problematic. Schmitt’s influence spans across left-wing and right-wing thinkers like Benjamin, Arendt, Jünger, Strauss, Derrida, Agamben, Mouffe, Mbembe, Latour, Liu Xiaofeng, and Dugin. While evil thinkers see Schmitt as a visionary, those confronting evil cannot ignore him. In business ethics, Schmitt’s articulation of enmity or critique of values should not replace strategies addressing animosity or pursuing corporate values. Schmitt contributes to political theory by exposing gaps in an unrestrained belief in liberal, that is, Habermasian, business ethics.

This article reinterprets Scherer and Palazzo’s Habermasian notion of politicizing the corporation through a “Schmittian” lens. Schmitt is recognized in literature, both in ethics and political philosophy, as a compelling counter to Habermas (Orsi Reference Orsi2012; Velasco Reference Velasco2019; Ward Reference Ward2022; Wheeler Reference Wheeler2001). The literature suggests that a Habermasian political reality of communication and deliberation might inadvertently lead to a Schmittian reality of friend-enemy distinctions. In PCSR, where political engagement should translate into ethical and social advocacy, transparency, accountability, policy compliance, sustainability, and long-term vision, this reinterpretation implies political engagement involving sovereignty, legal maneuvering, identity-driven thinking, aggression, and conflict-oriented approaches.

In the hope that I have clarified the significance of Schmitt for this contemporary era, I would like to report on the politicization of business ethics, both in conjunction with and extending beyond Schmitt.

THE POLITICIZATION OF BUSINESS ETHICS

The development in which corporations increasingly must be seen as partisan entities creates a new relationship between state, corporation, and society, and a new way of thinking about business ethics. Both the international and national political orders have become more diverse in terms of sovereignty distribution (Schmitt Reference Schmitt, Berman and Zeitlin1962, 163; cf. Spengler Reference Spengler1922, 506–507). The unity of the state as a “political association” becomes subject to erosion when corporations start taking over state functions, thus placing the state as a competing entity next to (former) “economic associations” (Schmitt Reference Schmitt1932a, 39–45; cf. Schmitt 1939–Reference Schmitt and Nunan1941, 77–78). Big corporations such as Alphabet, Amazon, Meta, Apple, and Microsoft have stepped in to play as competitive governmental associations. The increasing number of state, meta, and self-regulations regarding the internet have led to conflicting norms, authorities, and interests. It is suggested that the emphasis on alternative regulatory styles is a diversion from implementing effective state regulation, that is, “hard law” (Veldman Reference Veldman, du Plessis, Varottil and Veldman2018). Some of these regulations have extraterritorial effects that limit the sovereignty of other states to regulate internet content as they wish. This raises questions about what “sovereignty” these days means (Barkan Reference Barkan2013); for instance, what sovereignty over the internet means. Big corporations instigate new forms of sovereignty and blur the line between public and private, as part of the modern economy (Agamben Reference Agamben2007, 285). This sovereignty question is the continuous outcome of this new political development, in which the concept of the political has become both more complex and more important, with far-reaching implications on how we organize our state, corporation, and society, and manage our collective affairs (Rhodes Reference Rhodes2020, 89-112). In short, we have arrived at a political order to which Peter Sloterdijk (Reference Sloterdijk1993) formulated “hyper politics” as a response.

If the corporation is subject to politicization, it has an impact on the moral philosophy that has the same corporation as the subject of its study: business ethics. The discourse of business ethics shares the fate of concrete corporations and is also subject to politicization (cf. Schmitt Reference Schmitt, Jacobson and Schlink1930, 301). In Habermasian terms, the political character indicates something about the quality of a particular type of content of a discourse that is conducted. In short, the political character can be used to valuate a discourse. From a Schmittian perspective, there are roughly three objections to politicization that are important for the discourse of business ethics.

1. 1. The first objection is the impossibility of a final rational consensus based on open, power-free deliberation in a politicized business ethics (Schmitt Reference Schmitt1932c, 49–50; cf. Mannheim Reference Mannheim1929, 110). This can be traced back to Schmitt’s insurmountable friend-enemy distinction. This danger also looms in Habermas’s work, but he considers it politically inopportune (Habermas Reference Habermas1973, 111).

2. 2. The second is Schmitt’s skepticism regarding values, which are so important in business ethics (e.g., Patzer, Voegtlin, and Scherer Reference Patzer, Voegtlin and Scherer2018; Schnebel Reference Schnebel2000; Schormair and Gilbert Reference Schormair and Gilbert2021). This skepticism—Schmitt even calls values “tyrannical” (Schmitt Reference Schmitt, Berman and Zeitlin1979)—is inspired by Heidegger. Since the nineteenth century, the conversation about values has sought to fill the positivistic gap prompted by the disenchantment of the world (Heidegger Reference Heidegger, Young and Haynes1943, 169). Value philosophy then presents itself as a scientific solution to a nonscientific problem (Heidegger Reference Heidegger1987). Already Nietzsche called “into question the applicability of the concept of value to the total character of life” (Löwith Reference Löwith and Wolin1983, 121). These days, contemporary values, according to Han, are seen as commodities for individual consumption. They undergo commercialization, wherein values like justice, humanity, and sustainability are exploited as sources of profit (Han Reference Han2019, 5); a rationale behind Jones, Parker, and Ten Bos referring to it as “denying ethics” (Jones et al. Reference Jones, Parker and ten Bos2005, 96 et seq.). By valuing corporate policy through value philosophy, a positivist approach replaces the ethical considerations that have been disregarded (cf. Scherer and Palazzo Reference Scherer and Palazzo2007, 1079, 1106; Schmitt Reference Schmitt1934, 65).

3. 3. Thirdly, in Schmittian terms, the political character indicates something about the intensity of any possible content (Schmitt Reference Schmitt, Jacobson and Schlink1930, 307). Those who want to play this political game in the register of business ethics make business ethics a privatized form of state ethics, where political interests rather than reflective arguments are opposed to each other.

BUSINESS ETHICS AS LIBERALISM

What Schmitt teaches us about the politicization of business ethics, in addition to the utilization of Habermas in the ethical theory formation by Scherer and Palazzo, is that ideally, companies operate entirely in favor of states. These states can be nation-states or large supranational states. This alignment with the state and compliancy assumes the primacy of politics. In this sense, the corporate sphere should be completely politicized within the framework of the state. However, what globalization brought about is that companies found ways to both adhere and deviate from states. On the one hand, there are very large companies that fall under state oversight. On the other hand, there are companies that can no longer be understood in that Schmittian way. They have grown so large and have become so detached from states that they have formed their own sovereignty: corporate sovereignty (Jansen Reference Jansen2024). These sovereignties, as an evasion of states, transformed economic entities into political entities and must be understood as “partisans” within Schmitt’s conceptual framework. In a Schmittian sense, the figure of the partisan is highly significant as it manages to elude traditional state structures.

In this article, I have articulated several objections to PCSR related to the politicization of the corporation as well as that of business ethics.

1. 1. A central concern revolves around the erosion of the unity of the state as a “political association,” wherein companies partially take on crucial state functions. This places the state alongside “economic associations,” transforming the modern state into an entity competing with other associations. At the same time, it is important to remember that corporations are not people (corporate citizenship) or states (Nyberg and Murray Reference Nyberg and Murray2020a; Reference Nyberg and Murray2020b). Thus, the notion that corporations could assume the role of a competing governmental association raises questions about the potential enrichment of “democratic processes of defining rules and tackling global political challenges,” as advocated by Scherer and Palazzo (Reference Scherer and Palazzo2007, 1110). In contrast, Rhodes and Fleming argue that this could contribute to the corporatization of the public sphere and promote dedemocratization: “corporatization of the public sphere will ultimately help de-democratize the economy and society, a trend already well underway in neoliberal countries around the globe” (Rhodes and Fleming Reference Rhodes and Fleming2020, 944).

2. 2. A second objection, inspired by Schmitt, raises the question why people form political associations alongside economic ones and what the political significance of such associations is. While Scherer and Palazzo approach politics by emphasizing a particular interpretation of democratic legitimacy, Schmitt considers politics as inherently associated with polarization and antagonism. This brings up the crucial question of whether the CSR discourse could benefit from (even) more polarization (third objection). Of course, dissensus, in the sense of recognizing and valuing differences of opinion, is essential for a healthy and functioning society, and the pursuit of consensus is often unrealistic and counterproductive (Rescher Reference Rescher1993). In the context of CSR, this means that companies must acknowledge that their interests often clash with those of society. Instead of attempting to obscure or minimize these conflicts, companies can be more transparent and honest about these tensions. By being more forthcoming about the limitations and challenges of their CSR initiatives, companies can increase public trust, at least in the long run. Furthermore, recognizing dissensus compels companies to take greater responsibility for the impact of their activities on various stakeholders. By exposing corporations to diverse, often conflicting interests, dissensus pressures them to address concerns substantively, helping them avoid reputational risks and regulatory challenges. This fundamentally differs from polarization, which inevitably accompanies hostility and division.

3. 3. Further concern focuses on the consensus politics of Habermas in deliberative democracy, with the assumption of Rhodes and Fleming that negotiations are only aimed at mutually acceptable public goods considered naive (Rhodes and Fleming Reference Rhodes and Fleming2020, 948). In private regulatory initiatives, there is, for instance, a risk of “regulatory capture,” where certain actors dominate communication (Buhmann Reference Buhmann, Mauerhofer, Rupo and Tarquinio2020, 299). Despite the theoretical necessity of balanced deliberation, the reality of global supply chains dominated by private regulatory initiatives is imbued with power influences. The overrepresentation of Western corporations in these initiatives and the power dynamics in supply chains highlight the shortcomings of CSR as an ostensibly neutral ideological universality (Poesche Reference Poesche2020). This power-dependent element persists even with maximum diversity and inclusivity.

4. 4. Finally, doubt exists about whether PCSR should seek legitimacy in the procedure of deliberative democracy. Scherer and Palazzo, as critics of the positivist framework of CSR employing empirical methods, suggest that this leads to an instrumental interpretation of CSR that neglects the ethical aspect (Scherer and Palazzo Reference Scherer and Palazzo2007, 1096–97). Scherer and Palazzo base their political conception of CSR on procedural legitimacy, which can also be categorized as positivist—specifically, as legal positivistFootnote ⁹ rather than empirical positivist but still as positivist. The procedure of empirical science is exchanged for the procedure of law, so that Scherer and Palazzo’s suggestion—that an instrumental interpretation of CSR neglects the ethical aspect—remains valid (Bosman and Jansen Reference Bosman, Jansen and Mélon2024, 193).

The danger of, on one hand, the politicization of corporations, and on the other hand, the politicization of business ethics, is that it bypasses the Habermasian ideal based on communicative reason and discourse ethics. This interchange of categories places states and corporations in a friend-enemy relationship, given that in today’s globalized world, states can be competitors and corporations can be adversaries. This trend is evident in conflicts like Ukraine and Gaza, where corporations are politically urged to align themselves with certain politically friendly or hostile nations. Perhaps, in line with Schmitt, this politicization of the corporate sphere offers a way to ease the nihilistic failure of capitalism, where every fundamental value is reduced to mere commodities, but the political game ultimately revolves around the question of who remains sovereign, who is the ruler. Ethics can at most give normative content to the ruler, but the ethical game does not ultimately revolve around the question of who remains as ruler (cf. Huizinga Reference Huizinga1938, 78, 90–91). Anyone who aspires to the will and power to make decisions, engages in politics, and thus accepts the experience of the enemy, as Schmitt states (Schmitt Reference Schmitt1921, 8).

To put it bluntly, another reason why ethicists and politicians ultimately play a different game is the following: politicians can argue convincingly that they have a monopoly on truth without actually having it, but this is not the case for ethicists. The partisanship of the political poses a big problem for business ethics. What, for example, should we do with the proposition that corporations should primarily prioritize moral values in their actions, at a time when these values have become increasingly sectarian and extremist and there is less and less agreement on ethical principles? It would be worthwhile to explore the Habermasian discourse approach in this context. Habermas’s theory of communicative action provides a framework in which moral values can be discussed and justified in a rational and inclusive manner, even in times of increasing polarization and extremism. Thus, I do not view the Schmittian approach as articulated in this article as a replacement for the Habermasian perspective, but rather as a complementary reality check. Therefore, the greatest challenge for contemporary business ethics is to not be drawn into political polarization when it comes to issues involving the business sector, such as the climate transition, digitization, espionage, identity politics, sustainability, globalization, and so on. Business ethics has the idiosyncratic property of being able to reflect on these important themes without being obliged to make a decision. This by no means implies that ethics is irrelevant to politics; on the contrary, it means that ethics should be propaedeutic to political practice (not “the political” itself).

While Habermas advocates for communicative reason and discourse ethics, Schmitt emphasizes the conflictual nature of politics. Companies, as well as business ethics, should heed Schmitt’s poignant observation. The practical implication thereof entails a certain “Realpolitik” and culminates in a more transparent stance of multinational corporations towards societies. On the one hand, this transparency pertains to the limitations and challenges posed by CSR initiatives, which can enhance stakeholder trust. On the other hand, business ethics should serve as a reflective and normative guide for corporate behavior without becoming entangled in the adversarial realm of politics. Ethics should remain a discourse that informs political practice without succumbing to the conflicts and violence inherent in political partisanship. Business ethics seeking self-politicization does itself a disservice and falls into a Schmittian trap of conflict and potential violence. Business ethics should be what Schmitt abhorred: an “endless conversation” (Schmitt Reference Schmitt1919, 1, 21, 27)—precisely what, according to Schmitt, liberalism excels at.