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  • Series: Handbooks of Research on International Political Economy series x
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Christian May and Andreas Nölke

A ‘despotic’ idea of multinational corporations (MNCs) ‘ruling the world’ has been a common conception in international political economy (IPE) since the 1980s. However, once we investigate corporations more closely, we find that the view of absolute corporate power is exaggerated. Besides the problem of measuring power, some important limits to corporate power have emerged recently. These limits refer, firstly, to the significant costs of organizing transnational corporate structures. Secondly, financialization and shareholder value-oriented corporate governance heavily limits managerial autonomy. Thirdly, the rise of ‘pro-business’ economic policies and a general trend towards a more organized form of capitalism makes firms more dependent on public resources and gradually become quasi-public affairs. Such a ‘re-nationalization’ of business politics opens up new ways to think of the legitimacy and accountability of corporate power beyond the discussion of corporate social responsibility and towards a public (democratic) control of corporations. This chapter then sets the stage for the individual chapters with regard to the theme of corporate power.

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Antoine Rebérioux and Gwenaël Roudaut

This chapter provides an overview of the literature on corporate governance and corporate accountability, focusing on listed companies. It first surveys the normative debate on corporate responsibility, opposing two antagonistic models: the shareholder primacy model and the corporate social responsibility model. It then relates this (normative) diversity to the empirical diversity in corporate governance systems. The following sections narrow the scope of the analysis, to discuss in more details two crucial governance mechanisms and their effects on various firm outcomes: the distribution of stock ownership, and the composition and functioning of the board of directors.

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J.P. Sapinski and William K. Carroll

This chapter provides an introduction to the literature on interlocking directorates and corporate networks. It first traces the historical roots of the field back to the early twentieth century, when researchers on both sides of the Atlantic started expressing concern about the threat to democratic process posed by the emergent corporate form, the potential for collusion allowed by the growing practice of interlocking directorate, and the general concentration of power in the hands of large firms and banks. It then outlines the major theoretical approaches employed, that focus on the corporate network as a set of both interorganizational and interindividual relationships. Third, it summarizes the main findings on the cohesiveness of the corporate community, the hegemonic position of banks, and historical changes and longitudinal dynamics of the network. Finally, it discusses the most recent debates on globalization, the emergence of a European corporate network, and the decline and recomposition of the corporate community.

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Matthias Ebenau

This chapter discusses the issue of labour in the corporation from a global political economy perspective. It seeks to understand the corporation as a site where the political economies of capital and labour intersect, and discusses their basic principles, latent conflicts and possible complementarities. In order to analyse the way concrete capital_labour relations in the corporation are overdetermined by existing institutions, the chapter develops the heuristic of labour regimes, centred on industrial relations, shop floor representation, as well as social and employment protection. The conceptual arguments are illustrated throughout with examples from the German and Argentine automotive industries, in particular concerning recent disputes on employment flexibility and its cost.

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Sanjay Pinto

The relationship between democracy and the economy is of long-standing interest for economic, political and social theory. Discussions about democracy and the economy often focus on the part that government should play in defining the terms of this relationship. Less frequently addressed in a direct way are questions concerning the role of democracy in the economy, and in its basic building blocks, corporations. This chapter considers what the corporation looks like when it comes to be organized along democratic lines. It begins by comparing the democratic conception of the firm against other widely influential theories and showing how this view is operationalized within worker cooperatives. It then considers why worker co-ops are so rare and goes on to discuss the kinds of ‘ecosystems’ that tend to make them less rare. From here, the chapter turns to a discussion of the impact of worker co-ops and some key challenges facing the worker co-op model. It concludes by situating worker co-ops within a broader universe of ‘alternative’ forms of business organization.

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Catia Gregoratti, Adrienne Roberts and Sofie Tornhill

The aim of this chapter is to document and critically analyze some of the debates around the supposed commensurability between gender equality and corporate rule. The authors survey a range initiatives and claims that emphasize the need to integrate women into the labour force, into corporate supply chains, and/or into top management roles of a growing number of corporations. These initiatives are underpinned by the ‘business case’ for gender equality, which, as feminists have argued, is deeply problematic in many of its assumptions. The authors map out some findings of ethnographic research on corporate-led empowerment initiatives aimed at women in the Global South, suggesting that these largely substantiate many of the concerns voiced by critical feminists. However, they further note that as these projects garner resistance from those social forces that they seek to silence and/or co-opt, they become central sites of feminist activism.

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Judith Clifton and Daniel Díaz-Fuentes

Public corporations are created when public services are transformed into corporations via corporatization. But what are the consequences of corporatization, and does it make public service privatization more likely? This chapter presents and critically interprets the two main bodies of theoretical scholarship on corporatization which offer different perspectives on this question. It then examines the nature of corporatization, its evolution and its consequences. The authors find that, initially, corporatization proceeded rapidly during the 1980s, in the European Union (EU) telecommunications market, but then started to meet with some obstacles in other EU markets, such as energy. Corporatization was promoted around the world by international organizations, including the Organisation for Economic Co-operation and Development (OECD) and the World Bank. In the 2000s, corporatization spread to the health and education sectors. However, despite the efforts of its promoters, corporatization has spread slower than its proponents would perhaps desire, not least because the uniform recipe created is a poor fit for the economic realities of diverse countries around the world.

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Markus Pohlmann and Julian Klinkhammer

The ‘business of bribery’ has repeatedly been identified as one of the key global crime problems, although corruption is but one among many forms of white-collar and corporate crime. This chapter introduces sociological and criminological perspectives on organizational deviance and applies them to the study of corruption. To this end, the authors show how to distinguish organizational from individual deviance, and exemplify the institutional approach. Case studies highlight the ambivalent role of the private sector in the fight against different types of organizational deviance. Implications for anti-corruption strategies and effective corporate compliance are discussed against the backdrop of a recent surge in law enforcement. A wave of corporate compliance rushes private companies to vertically integrate anti-corruption. Thus, in the current situation, the costs for hiding illegal practices and the risk of exposure are increasing in many countries. The authors contrast the dominant rational choice account with alternative institutional explanations and argue that the old institutionalism is particularly apt to explain the puzzling persistence of structural corruption in international business.

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Sandra Eckert

This chapter revisits the state of the art in political economy research on the role of the company in Western business systems and varieties of advanced capitalism. Given its influence, the chapter discusses the contribution of the varieties of capitalism (VoC) framework at quite some length. It presents the key elements of the VoC framework, and lays out common features but also differences compared with other approaches to comparative capitalism, such as the literature on national business systems, governance approaches and contributions from critical political economy. Special attention is paid to the ways in which comparative capitalism scholars have explained the economic and financial crisis in the eurozone. The discussion of the VoC framework brings to the fore its limitations relating to the role of the company, institutional complementarities and institutional change. The post-VoC research program has addressed several of the framework’s weaknesses, notably by integrating the role of the state and politics. The chapter shows that comparative analysis conducted over the last two decades has come a long way to provide empirical evidence for typological distinctions, and to trace the pathways of institutional change in contemporary capitalism. It further highlights how alternative approaches contribute to the debate about capitalist diversity. The literature on governance and social systems of production draws our attention to diversity within capitalism at the sectoral, regional and local level. And contributions in critical political economy open up new avenues of thought transgressing the neo-institutionalist and post-Keynesian reasoning that dominate the post-VoC debate.

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Vera Šćepanović and Dorothee Bohle

This chapter explores the consequences of dependence on transnational capital for the institutional structures of four East Central European countries: the Czech Republic, Hungary, Slovakia and Poland. These countries have been very successful in attracting foreign capital, and have geared their institutional systems to attract and embed foreign corporations. The chapter argues that a combination of state efforts, activities of foreign corporations themselves and the European Union has led to the emergence of a transnationalized institutional sphere that supports the operations of outside firms. These transnational institutional solutions have emerged and exist independently of institutions geared towards the domestic sector, creating a segmented institutional environment. This segmentation has allowed only some fractions of domestic capital to survive in the shadow of the dominant model of dependent capitalism. However, with the recent ideological shift in the region, the domestic institutional segments may also become springboards for the politicians or domestic businessmen to attempt the construction of more ‘national’ forms of capitalism.