Elgar original reference
Edited by Andreas Georg Scherer and Guido Palazzo
Chapter 1: Introduction: Corporate Citizenship in a Globalized World
Andreas Georg Scherer and Guido Palazzo Corporate citizenship as a global challenge In market societies economic exchange requires the existence and enforcement of rules that the market cannot generate itself. Although the dimensions and limits of state intervention have always been a matter of debate, it is indisputable that certain rules need to be implemented for an economy to function properly and contribute to the common good. Consequently, many theories of society assume that these rules will be created and enforced by national states. In this scenario the state determines formal regulations and delineates the sphere of private freedom within which individual citizens and private businesses are entitled to conclude contracts and pursue their private interests. Formal rules as embodied in the law are complemented by the informal norms of common decency which deﬁne the regulatory framework of business behavior in modern societies. With the help of this framework, modern society makes eﬃcient use of available resources and entrepreneurial capacity. If this regulatory framework is properly deﬁned and enforced, these governance structures will establish incentives so that the egoistic motives of business people in their consequences contribute to private proﬁt as well as to the common good. Current theorizing on corporate social responsibility (CSR) builds on the assumption of a more or less intact regulatory framework, in which national legislation and the values and expectations of social communities prescribe appropriate business behavior and deﬁne the responsibilities of business ﬁrms (Carroll 1991; Frederick 1998; Whetten et...