Corporate Social Responsibility Strategy, Communication, Governance

Learning Objectives

The Corporation in Society: Shifting Perspectives

Consider the following three facts: The revenue of the largest corporation in the world, Wal-mart Stores ($482 billion in 2014), is worth more than the gross domestic product (GDP) of all but twenty-seven of the world's economies. The world's largest asset management firm, a New York-based company called Black Rock, currently manages $4.5 trillion of assets and thus invests more money than the total monetary reserves of any country in the world (China having the largest reserves with $3.9 trillion in 2015). The Bill and Melinda Gates Foundation, a private philanthropic organisation, spends about $3.9 billion annually on healthcare and development work, about the same amount as is spent by the World Health Organization (see also Rothkopf, 2012). What do these three facts suggest? They show that the relationship between public and private authority has taken an interesting turn in recent years. Globalisation together with an emerging privatisation of public goods/services has given rise to a situation where the state has withdrawn from many areas where it traditionally exercised a regulatory monopoly, such as in many Western countries. Nowadays corporations provide goods such as water, transport, education and healthcare. Private firms even run prisons, provide security and have become important actors in the conduct of war. In short, corporations are increasingly critical to a number of aspects of society, including many which are fundamental to security and welfare. As a result, they have become more powerful actors and often assume a political role, either directly or indirectly. This shift in power has important implications for how we understand and manage firms’ responsibilities towards society.

Due to their increased size and reach, corporations contribute significantly to some of the world's most vital social and environmental problems, such as overfishing of the oceans, water scarcity, violation of human rights, corruption and deforestation.