You are on page 1of 14

Corporate Power in Global Governance

A neo-Gramscian perspective on Corporate Social


Delphine Rabet
PhD candidate, School of Social and Political Sciences,
Faculty of Arts, University of Sydney

Abstract: This paper looks at global corporate actors and their quest for power. It will briefly
present Multinational Corporations as global political actors and emphasize the importance of
Foreign Direct Investment (FDI) in the making of specific rules of global governance, which
protect corporate interests. Building on a Gramscian definition of hegemony, the paper will
then argue that the CSR phenomenon constitutes an attempt to complete a corporate historical
bloc, in which corporate actors consolidate their power through gaining ‘consent’ from
various other global actors and society at large. Such an approach should highlight power
mechanisms otherwise often unexplored.

Key words: Corporate Social Responsibility, MNCs, FDI, global governance, historical bloc

Corporate Power in Global Governance
A Neo-Gramscian perspective on corporate social responsibility

If nation-states have traditionally been the object of study for political scientists, large
economic entities, operating across countries, should as well be understood politically. This paper will
focus on these global corporate actors and their quest for power. In the first half, it will briefly look at
MNCs as political actors in global governance and argue that the profit-motive comes second to the
will to survive and expand for these large economic entities. The importance of Foreign Direct
Investment (FDI) in the making of specific rules of global governance will then illustrate further such
a claim. In a second part, building on Antonio Gramsci’s thesis about the elements required for the
constitution of an historical bloc, the paper will highlight the importance of the rhetoric of Corporate
Social Responsibility (CSR), defined broadly as a hegemonic system necessary for corporations to
maximize their chance of survival.

While the term “Global Governance” has become an overused motto in studies of political, economic
or social issues arising at the world level, definition is far from being agreed upon. Global governance
has tended to be primarily conceptualized through a normative lens and has often been used to signify
a range of potential organizing principles concerning global production. However, it is also possible to
look at global governance as the existing structure and forces producing a particular world order
through processes of credit, production, and distribution. Production refers here to the production of
material goods, but also to the production of monetary wealth and to the production of ideas,
encompassing the potential political, social, cultural and environmental dimensions of global
governance. It is through this definition that the existence, purpose and functioning of large productive
entities, multinational corporations (MNCs), will be conceptualized here. Such an approach should
highlight power mechanisms otherwise often unexplored.

Political dimension of MNCs in global governance

It is only recently that the conceptualization of corporations as political actors has become a
potential field of research in the discipline of political sciences. If scholarly work on the political
dimension of the corporation has been available in the past (Berle and Means 1967, Mason 1961,
Veblen 1904), the business corporation seemed to have then withdrawn again into the amorphous,
supposedly apolitical realm of the market, itself narrowly conceived as a sphere of private agreement,
rational profit seeking and economic efficiency (Zumansen 2009). Still, this retreat should not
preclude a contemporaneous critical reading of the global firm through a political lens. As Earl
Latham claimed some fifty years ago: “The great corporations are political systems in which their
market, social, and political influence go far beyond their functional efficiency in the
economy.”(Latham 1961, 218)

At the global level, markets display oligopolistic tendencies (Hymer 1976, Milward 2003). This
characteristic of modern capitalism is the result of various and distinct economic, political and legal
processes which have been taking place, within and amongst nations, throughout the last five or six
centuries, and have greatly accelerated in the late 20th century. At the same time, concerning the
growth of corporations, instead of an “organic” evolution, the mergers and acquisitions explosion of
the 1990s are shaping the fundamental features of the global business structure in this beginning of
21st century (Nolan et al. 2002, 94). This situation requires a better conceptualization than the
traditional accounts offered by mainstream economic theories.

The neo-classical concept of the market neglects social relations and structure, and underplays power
and conflict; however, it has even influenced the historical analysis of earlier market societies (Lie
1993, 275). It is also inadequate to explain the rise of MNCs. A neglect or misrepresentation of the

fundamental characteristics and values present within institutions – such as markets – result in a wrong
analysis of actors – such as corporations. The distributive process is not characterized by the maximal
efficiency of markets governed by the logics of the invisible hand, but by needs and power (Lenski
1966). It is in this light that the corporation has to be defined as a market actor in quest of power.

Across most global business activities, leading corporations increasingly compete with the identified
firms that have occupied the commanding heights in a wide range of business activities (Nolan et al.
2002, 102). Oligopolistic markets mean that certain goods, many essential to human life, are produced
and distributed by a small number of large economic entities. These organizations hold a tremendous
amount of power over the way these goods or services are produced, priced, and exchanged. Thus
MNCs appear to have a strong influence in the rule-making processes happening at the global level
(Korten 1995).

The constitution of global markets as institution, and the nationality of the few large corporations
operating on these markets, reflects a certain continuity in the distribution of power amongst state
actors at a particular time in history. Global markets have grown continuously (if irregularly) but the
way they are structured have their roots in history. In the 1990s, there occurred an unprecedented
concentration of business power in large corporations with headquarters in high-income countries
(Nolan et al. 2002, 1). This happened due to the pre-existing structures of global institutions, which
materialized in global markets dominated by the economic interests of leading states, mainly countries
from Western Europe, the United States and Japan.

If MNCs are connected to specific states, a brief mention of what is at stake at the sub-firm level is
still necessary. In term of control of the corporation, it is possible to see that the realization of profits,
transformed in dividends for shareholders, becomes a means to ensure the expansion and therefore the
survival of the firm, which is the ultimate end. Through the realization of profits, the firm actually
attempts to gain power and protect its raison d’être. Thus, in the global realm, without denying its
economic purpose, the corporation becomes primarily a power-maximizer and a political analysis of
the corporation is even more indispensable.

The corporate sector itself in the early 1970s has been advocating the adoption of a more
comprehensive conception of profit as it has been outlined in a statement by the Committee on
Economic Development, a group composed of major American corporate leaders (1971, 22 cited in
Barkenov and Rich 1972, 752 [emphasis added]):

The large corporation is developing long-term goals such as survival, growth, and increasing
respect and acceptance by the public. Current profitability, once regarded as the dominant if
not exclusive objective, is now often seen more as a vital means and powerful motivating
force for achieving broader ends, rather than as an end in itself. Thus, modern managers are
prepared to trade off short-run profits to achieve qualitative improvements in the institution
which can be expected to contribute to the long-run profitable growth of the corporation.

Such a statement tends to show that, while some shareholders may be interested in maximizing their
return on investment in the short term, corporate leaders may have a distinctive view about the role of
the firm and they emphasize the importance of survival and growth. Thus linked to survival, it is the
quest for power that motivates corporate actors. If economic entities shape institutions to remain
powerful in the long run, their role is not only economic but definitely political.

The dominant position of leading states in global governance, along with their connection to their
‘national champions’, is also relevant to confirm the power-seeking dimension of global corporate
actors. As stated earlier, historically, trade has been used to advance a country’s interests. There are
strategic reasons for a state to support large domestic corporations in their foreign endeavours in
particular industries, and these reasons do not necessarily have economic justifications. The
relationship between high-income states and MNCs is of a complex nature but their interests conflate
at times.

It can be advantageous for a state to indirectly have a strong presence in key economic sectors of
another state by supporting particular firms in order to maintain an asymmetrical power relation
(Hoogvelt 1997). In this context, the profit motive or an economic rationale is insufficient to explain
the behaviour of a given MNC operating on foreign territory. Corporations are political actors because
they carry with them the values and interests of their home base within the structure of global
governance. If they are formally granted with an independent legal personality, they also have a more
subjective identity, itself strongly related to the identity of their home base and the interests and
institutions which prevail in this state (Hirst and Thompson 1996).

MNCs, like any political entity, are firstly motivated by gaining and exerting enough power to secure
their existence and domination. Stephen Hymer (1976, 57) stated prophetically a few decades ago that
in a near future, the real interest of the MNC ‘would be to foreclose competition, to restrict the choices
offered, and to ensure the survival of their own organization’. A change in the basic assumptions
which define corporations’ existence is required from a profit to power- maximization rationale as this
would open more possibilities for political analysis.

A mature political conception of the corporation must view it as an organization or a system for the
accumulation, control and administration of power. Any MNC is a ‘body politics’ which exhibits
describable characteristics common to all body politics (Latham 1961, 220). The profit motive is
wrongly understood as paramount for the corporation; it is an essential but not an exclusive feature of
such an organization.

If the political dimension of the MNC is to be recognised in global governance, there is a need to
analyse the manifestations of its power. When corporations invest and operate in a foreign country,
which differs institutionally from the firm’s home base, a window then opens for the researcher to
understand and confirm this political activity. Foreign Direct Investment is an illustration of the quest
for power of the corporation. The next part will therefore argue that FDI is about progressively gaining
power at the global level more than increasing profits per se. It is conceived here as the ‘coercive’
aspect of the Gramscian approach to power which will be developed subsequently.

FDI and corporate power

What happened in the economic sphere at the global level has consequences on the political
position of state or corporate actors in the international system. The way that corporations act and
behave on foreign grounds offers special insights about their interests, motivations and end goals.
Through FDI, foreign corporations are capable of exercising their coercive capacity over developing
states. In order to highlight the importance of FDI in institutionalizing forms of corporate authority,
this section will develop briefly the ways in which the political impact of FDI consolidates the power
of MNCs in global governance.

The large majority of FDI flows occur amongst industrialized countries (UNCTAD 2007). However,
the end of the Cold War, the needs to access the natural resources available in these countries and the
various waves of merger and acquisition have largely contributed to drastically increase inward FDI in
developing countries (UNCTAD 2007).

Considering the relatively small size of most developing countries’ economies, FDI in these states
often represents an essential share of their national economic activity. By 1991, private capital
investment exceeded official development assistance as the primary source of financial transfers from
richer to poorer countries (World Bank 2001). A decade later, private flows of capital accounted for 87
percent of the nearly US$296 billion transferred from richer to poorer countries whereas official
development assistance comprised less than 13 percent (Rondinelli 2002, 394). This means that
although developed countries are still the biggest receivers of FDI, developing countries increasingly
grew reliant on such investment. Therefore it matters greatly what rules pertain for FDI. Hence, the
rules themselves are a key battleground and the way they are established reflect, to an extent, the
dynamic of the world order.

FDI has taken various forms through history; its modern version is, at the same time, a reflection of
past practices at the global level and also displays particularities proper to the present era. For Antonio
Gramsci, every historical phenomenon had to be studied within the context of its own peculiar
characteristics rather than conflated with other forms of historical phenomena (Gramsci 1977, 330-1).
Yet, Gramsci also maintained that similar situations would almost always arise in every historical
development that might lead to the possibility of developing some general principles of political
science (Gramsci 1971, 108-109, 201).

Arguably, the Western colonial era that started in the 16th century in the Americas planted the seeds of
the mechanisms of modern FDI. Economic entities were formed to operate on these foreign territories,
often through the direct ownership by the colons of the modes of production, of the land and of the
people. These economic organizations were however subjugated to the authority of Europeans
kingdoms where precious minerals were repatriated. In the post-colonial era, similarly to flows of FDI,
trade between developed and developing countries appear minor quantitatively when compared with
trade among developed countries (UNCTAD 2007). Still, in proportion, it remains a very important
share of the economy for developing states and it is essential for these countries to get access to global
markets through establishing trade agreements. In the last 20 years, multilateral and bilateral trade
agreements, protecting mostly corporate interests, have become the norm in global governance
(Milward 2003, 21).

These multilateral or bilateral trade agreements have progressively included clauses related to foreign
direct investment, a characteristic absent from most bilateral agreements between developed states
(Van Harten 2005, 614). To get access to developed countries’ markets, developing countries came to
accept to grant certain legal powers, which go beyond their domestic law and considerably restrain
their sovereignty, to foreign firms operating on their territory. Through the spreading of trade
agreements to all corners of the planet, developed states have also sought to protect the interests of
large firms in the international system by ensuring that their investments could not be threatened in
any way (Van Harten 2005,612). In short, modern FDI has taken shape through global trade and
developed states have used their political leverage to further private economic and financial interests.

Thus, the international legal framework confirms the coercive legal capacity that MNCs have over
developing states. The dispute settlement and arbitration mechanisms, found in most investment-
related clause of trade agreements, have increased corporate authority over developing states. A firm
is entitled to take legal action against a nation-state outside of any national jurisdiction. The
widespread preference for private arbitration over adjudication in national courts (Cutler 2001, 144)
reflects the expansion of private authority as a method of regulation at the global level (Cutler et al.

International investment law generally provides a very high level of protection for international
investors along with exceptionally powerful means for investors to enforce that protection through the
previously mentioned investor-state arbitration tribunals (Van Harten 2005, 603). Although these
treaties represent reciprocal set of agreements between states, the fact that 97% of the largest MNCs in
the world originate from developed countries (UNCTAD 2007) highlights the asymmetry of the
MNCs / developing states relationship.

In addition to Trade agreements, the widespread proliferation of investment treaties during the 1990s
marks the emergence of the international system of investor protection. Since the 1990s, there has
been an explosion of bilateral investment treaties which numbered more than 2,200 in 2005 (Van
Harten 2005, 608). FDI then becomes, through such a supranational binding mechanism an
opportunity for MNCs to legally coerce states. As noted above, the national identity of these MNCs
leaves little doubt about the protection that leading states provide to their largest economic entities
through international investment law. From a power perspective, it represents a particularly successful
way for corporations to ensure their survival independently of realizing profits or performing
distributive functions. Their legal capacity grants them legitimacy outside of the economic sphere.

Constitution of a corporate historical bloc
A power analysis of corporate behavior in global governance requires us to develop further
the ways in which corporate authority is exercised. This paper has argued so far that MNCs are
primarily power-seekers and that, ontologically, to consider the quest for profits as the exclusive
firm’s rationale is a misleading conception. Power in itself, necessary to dominate and expand, is what
ultimately motivates global economic entities to act. The development of an international legal
framework to protect corporate interests over states sovereignty has moved the firm into the global
political sphere and supports this claim. Still, to consolidate their power, MNCS need to develop the
ideological justification for their political existence.

The corporate social responsibility phenomenon appears actually as an almost “natural” element of the
ideological dimension of corporate discourse as the first section of this next part will develop. A neo-
Gramscian approach to hegemony will then be transposed to the manifestations of the CSR
phenomenon. Finally, the discussion will conclude that global governance represents the advent of a
corporate historical bloc, in which an aggregate of leading corporate actors frame the current world
order to maintain the present status quo. There is no benevolence in CSR but the expression of the
corporate quest for power.

Ideological dimension of the CSR discourse

Gramsci extended Marxist thinking on ideology in that he gave to it a more preeminent role in politics
and history than previously conceived. “Ideology” is one of the most persistent, omnipresent and
controversial concepts of modern political thought. This reflects the absence of any other term to link
political theory and human behavior in a more satisfactory way (Mullins 1972, 498). Hannah Arendt
beautifully defined ideology as ‘the right to retreat into our own worlds of meaning, and demand only
that each of us remain consistent within his own private terminology’ (Arendt 1963, 96).

Understanding global governance, however, requires a definition that focuses more explicitly on
global actors than on individuals’ behavior. This paper argues that CSR contributes to the construction
of an ideological system which consolidates the power of particular actors in the international realm.
Thus let us start by locating the CSR phenomenon in the context of global governance, before
highlighting its ideological dimension and qualifying it as a tool for global corporate actors to develop
their cultural and intellectual leadership in a Gramscian sense.

CSR is a multi-faceted phenomenon, but one of its essential characteristics is the advocacy of
voluntary codes of conduct, norms, conventions, standards and rules of behavior by corporations and
other actors which go beyond, or complement existing public legislations or customary business
behaviors (Clarke 2007; Moon 2002). It is based on the idea that business units, such as corporations,
voluntarily engage in activities related to issues of sustainability, environmental protection, social
change, human rights, global citizenship, and many other areas of great importance for humanity and
its ecosystem.

All global firms communicate on, and implement CSR programs (Clarke 2007). Still, a recurrent
criticism of the CSR phenomenon is that it has no reality beyond being “talked of”. However, the large
resources that MNCs dedicate to CSR activities, either discursively or materially, contradicts such a
claim (Banerjee 2007, Crane et al. 2008, Moon 2002). Moreover, Gramsci reminds us that popular
beliefs, or beliefs of the same kind as popular beliefs – such as MNCs appropriately qualified to
address specific social issues –, have the validity of material forces (2005, 158). The omnipresence of
CSR, in its various forms, (Shergolt 2009) is a sign that it is progressively becoming such a kind of
popular belief.

This normative approach to corporate action, which grants large private economic entities with a range
of responsibilities involving but going beyond their duties toward workers, customers, investors or
suppliers, is not a new phenomenon. The history of corporate social responsibility as an ideal, concept,
ideology, or illusion cannot be detached from the larger political economy of capitalist development

(Zumbansen 2008, 1). Philanthropic actions have been observed throughout corporate history, and
more specifically, originating in the United States at the turn of the 20th century, the notion of business
social responsibility dominates American social reform efforts in the 1920’ (Mitchell 1989, 140).
However, it is really in the last 15 years that it seems to have definitely become part of the global
corporate landscape (Clarke 2007; Moon 2002). The novelty of the CSR phenomenon is that is has
moved from a peripheral and controversial function of the firm (Friedmam 1970,32-3) toward a more
central and widely accepted one by businesses themselves (Holmes and Watts 2000).

The prolific literature on CSR though, is unable to empirically demonstrate any link between the
socially responsible behaviors of certain corporations and any increase in profitability (Vogel 2005).
On an anecdotal touch, it is interesting to remember that some of the most profitable industries, such
as tobacco, alcohol, pornography, armament or gambling, are based on principles diametrically
opposite to CSR. On the short-term, CSR contravenes the interests of shareholders by arbitrarily
misusing their investments and precludes the maximization of their return on investment. In the long-
term, it also potentially damages the firm, economically speaking, as if its competitors do not engage
in similar practices, the firm will have to deal with what will have become higher structural costs of

Interestingly, even despite the current economic crisis, most leading corporations have maintained
their CSR programs (Shergolt 2009). In a pure economic sense, this strategy appears nonsensical.
However, if one understands the corporation as an entity fighting for survival and expansion, and
attempting to establish the maximal conditions for this survival, then the CSR phenomenon become
intelligible. The weakness of the economic argument for CSR suggests actually its political character.

The importance of ideology for politics comes from its ‘ability to communicate cognitions,
evaluations, ideals, and purposes among members of a group’ (Mullins 1972, 508). Through this
process, ideology ensures that the meaning of political action becomes comprehensible and coherent to
oneself and others. More practically, opinion is shaped, and legitimacy is provided by ideology
(Mitchell 1989, 7). A political system is inexorably informed by a particular ideology. Drawing on
Connolly’s definition of ideology (2006, 2), CSR, broadly defined as any commitment by corporate
actors to address social and environmental issues, is becoming an integrated set of beliefs about the
global social and political environment.

CSR plays a consolidating role for corporate power through confirming the imperatives to protect the
wealth generation processes in order to allow corporations to be socially responsible. It explains which
desired goals can be promoted by deciding to tackle particular social and environmental problems. It
also informs us about which agencies and channels can most effectively be employed to forward these
goals in the given setting through, for instance, building up specific partnerships with governmental
but also non-governmental organizations (Shenkar and Reuer 2005). Finally, it even plans what the
required actions will cost various groups in the short and long run in terms of status, power, happiness,
wealth, and so on by asking individuals to modify their consumption patterns, developing countries to
grow economically through different means, or governments to modify fiscal and accounting policies
to accommodate CSR endeavors. CSR should be understood as the political and ideological voice of
corporate power.

In establishing the importance of ideology as a cultural phenomenon, Gramsci has provided us with
some insights regarding its development through explaining that it is not merely a system of beliefs
that reflects specific class interests (Jackson Lears 1985, 570) but more a sort of “spontaneous
philosophy proper to everybody” (Gramsci 1971, 323) which develops overtime. In his words:

This philosophy is contained in: 1. Language itself, which is a totality of determined notions
and concepts and not just of words grammatically devoid of content; 2. “Common sense” and
“good sense”; 3. Popular religion and, therefore, also in the entire system of beliefs,
superstitions, opinions, ways of seeing things and of acting, which are collectively bundled
together under the name of “folklore.”(Gramsci 1971, 323)

CSR presents elements of this spontaneous philosophy adopted by global corporate actors. In terms of
“language”, CSR refers extensively to concepts (re)defined in specific ways such as sustainability,
environment, corporate citizenship, development, but also the concepts of enlightened self-interest,
social capital or triple bottom line. This language shapes the way corporations represent themselves
reflectively and to society. CSR is also built on “common sense” or conventional wisdom –
understood, for instance, as the inherently positive economic and social values associated with
consumerism – and “good sense” or empirical knowledge – corporate reports and/or advertisements
use empirical evidence to communicate on the material effect of CSR. Finally, “folklore”, if one
accepts to stretch its meaning a little, would encompass the reliance of the population and of global
actors to organize global governance through global meetings between states officials, corporate
representatives, and civil society members. “Folklore” can also refer to publicized corporate actions,
such as advertising campaigns and any visible commitments focusing on CSR.

The progressive development of CSR as a potentially dominant ideology grants MNCs and the
individuals within them, with a position of cultural and intellectual leadership in global governance.
Developing states are invited to believe that their interests coincide with the interests of large private
foreign entities when the latter claim that they will follow social and environmental standards higher
than existing norms through their CSR policies without the need to enact any particular regulations.

Through their leadership, MNCs enhance their ability to persuade or to create belief (Galbraith 1984,
4). Herein resides the problem of the role of leadership and ideology, such as what CSR represents: a
system of accepted beliefs, often needed to orient political activity, tends to be organized in ways
which protect the higher level commitments of its supporters (Connolly 2006, 3). Global corporate
actors are therefore most protected through the ideological dimension of CSR.

Gramsci’s approach to hegemony

Defining CSR as the ideological tool of global corporate actors to maximize their power over other
actors in global governance, without any use of force, allows us to locate such a phenomenon in the
construction of a neo-gramscian hegemonic order.

Gramsci (1971, 12) defines hegemony as:

the ‘spontaneous’ consent given by the great masses of the population to the general direction
imposed on social life by the dominant fundamental group; this consent is ‘historically’ caused
by the prestige (and consequence confidence) which the dominant group enjoys because of its
position and function in the world of production.

In this context, the ideological dimension of CSR becomes then the source of the “consent” necessary
for the establishment of a hegemonic corporate order.

Gramsci’s concept of hegemony has to be understood in contrast to the concept of “domination”; a

notion that has been developed earlier and illustrated through the mechanisms of FDI with regards to
the relational and structural power of MNCs over developing countries. However, he stresses that only
weak political actors need to rely very often on the threat or use of force – of an economic kind in this
context – implied in their domination (Adamson 1980, 170). Strong political actors rule mostly
through hegemony, understood as consent of subaltern groups. Thus hegemony can be thought of as
the additional power of a dominant group through its capacity to lead society in a direction that not
only serves the dominant group’s interests but is also perceived by subordinate groups as serving a
more general interest (Arrighi 2005, 1932).

The appropriation by MNCs of discourses on sustainability, environmental concerns, social issues as

encompassed by the CSR ideology, reflects in reality such an attempt to protect corporate interests by
defining in a particular way the meaning of these concepts. These (re)definitions mostly support the
pursuit of the corporate quest for power in order to ensure the survival of large international firms. A
strict definition of sustainable processes of production, ensuring the full replenishing of any natural

resources used, and the internalization of all externalities would require dismantling all corporate
actors. It is therefore important for MNCs to have the authority to give meaning to these concepts on
their terms. CSR achieves this goal. At the same time, CSR leads developing states and society at
large, to accept the authority of corporate actors as being in their interest as well. If MNCs, through
CSR, can present their global rules as credibly benefiting not just themselves, but other actors in
global governance, they do not need to exercise their coercive power. It is when this credibility or
legitimacy is lacking that hegemony falls back into mere domination or ‘dominance without
hegemony.’(Guha 1992, 231-2)

CSR, hegemony and historical bloc

The global financial and economic regime combined with the advent of the CSR phenomenon is
creating an unprecedented moment in world history. In other words, when a group – such as MNCs –
develops its own particular world view which possesses both cultural and economic solidarity in a
specific historical context, then, this moment constitutes an “historical bloc” (Jackson Lears 1985,
571). A broader definition would be that within an historical bloc, coercion is balanced by consensus,
structure by superstructure and materialism by idealism (Howson and Smith 2008, 9). Let us now
consider some of the key elements of such a concept, mainly the role of “organic intellectuals” which
ensure its development, and the horizontal and vertical linkages that support its constitution and
hegemonic nature.

As a new “class” develops within the world of economic production, it tends to create ‘organically,
one or more strata of intellectuals which give its homogeneity and an awareness of its own function
not only in the economic but also in the social and political fields (Gramsci 1971, 5)’. These are
Gramsci’s “organic” intellectuals and his definition is much broader than what is usually understood
when one thinks of intellectuals. Normatively, this group ought to lead society to a reflexive
understanding of its existence and to offer directions to emancipate itself. However, such a concept
may also be used in a more pragmatic sense to understand the present moment.

In global governance, these organic intellectuals are the specialists in management and industrial
organization, the Public Relations staff, the economists, the lawyers, the scientists, sometimes the
human right and environmental activists, but also anyone associated with what is sometimes called
“the culture industry”. Their function is to serve as a transmitter of ideas within civil society and
between government and civil society (Adamson 1980, 143). Their work ensures the conformity
between the economic structure and the dominant ideology.

The CSR discourse is becoming a pivotal element of the formation of these organic intellectuals and of
their participation to reproducing such a discourse. The dissemination of information about CSR
values, potentiality, measurement, reach, and implementation, occur through the production of a
specific form of knowledge by these organic intellectuals. This development of the CSR discourse
actually calls for a Foucauldian analysis of the nexus power/knowledge and its disciplinary capacity
over social groups (Foucault 1976). When organic intellectuals (re)define, through a CSR prism, social
and environmental concerns, diagnostics and remedies for particular issues, it creates particular power
ramifications which participate to the creation of an historical bloc.

In order to complete a corporate historical bloc, corporate global actors need the voluntary support of
the other actors with which their existence is connected. These alliances may vary and happen at
different levels but they are indispensable. Although both dimensions are themselves interrelated, and
their distinction mostly an analytical devise, it is possible to identify horizontal and vertical linkages in
the development of a corporate historical bloc (Adamson 1980, 177).

Global corporate actors attach themselves to ‘other political groups as joint-power-seeker, potential
power-shapers, and the social forces behind new cultural expressions’ (Adamson 1980, 177).
Governments of leading states in global governance constitute such a group. The redaction of the
Guidelines for Multinational Enterprises in Developing Countries by the OECD in 1976 has been a

keystone of the CSR phenomenon. OECD countries created such a document upon requests from
MNCs to favor a voluntary agreement about socially responsible corporate behavior instead of a
legally binding convention as required by developing countries at the time (Rowe 2005).

More recently, International Institutions and Non-Governmental Organizations (NGOs), engaged in

environmental and social activities, have also fostered specific partnerships which qualify as CSR-
oriented endeavors. The United Nations Global Compact is a particularly illustrative example of such
an attempt. It is a platform constituted by business actors, NGOs, Academics and States, within the
UN, which seeks to legitimize market-led, voluntary forms of CSR as the only viable alternative to
address most efficiently certain social and environmental issues (Soederberg 2007). It promotes the
view that common sense dictates states and societies to enter a compromise with MNCs.

The vertical linkage within an historical bloc relates to the social and cultural mechanisms mentioned
earlier, which ensure that subaltern groups will see in a particular political and economic order, an
organizational structure which serves their interests. In the corporate historical bloc, the widespread
and unchallenged acceptance of notions such as industrialization, urbanization and aggregate
economic growth to define development and progress, integrated implicitly in CSR, play such a role.

On a more practical level, the values promoted come, for instance, from the corporation’s advertising
strategies which disseminate consumerist values. Specific but always increased consumption enables
individuals to provide the corporation with the necessary resources “to do good” socially and
environmentally. Norms such as the scientific management of work seem also unchallengeable and
widely accepted or at least tolerated by workers. An analogy with the values and beliefs associated
with the Gross Domestic Product and international division of labor can be drawn in terms of the
acceptance by developing countries of such concepts indistinctively. Perceptions and beliefs resonate
with the dogma of economic growth and the CSR movement which both call to have “faith” in the
good-will of the foreign corporation.

This paper has considered the importance of large economic entities as subject of analysis in global
governance. A political reading of the behavior of MNCs in the international sphere is necessary in
order to grasp a better understanding of the dynamics between state and non-states actors in
establishing global rules. The development of international investment law and the ideological
strength of the CSR movement are some of the ways in which MNCs establish and maintain their
power by framing the functioning mechanisms of global governance. Granting firms with the ability to
fix social and environmental issues implies that subaltern groups such as developing countries need to
develop preferences and interests compatible with MNCs’ endeavors and goals. This emerging
hegemonic culture, nevertheless, is not merely an ideological mystification but happens to serve the
interests of ruling groups at the expense of subordinate ones.

Moreover, what is confusing about the CSR phenomenon, which ought to be a global and apparently
anti-statist project is that its primary vehicles are Northern states, and international economic
institutions dominated by Northern governments (Rowe 2005, 17). Such a global structure and
dynamic forces create favorable conditions for the institutionalization of corporate power in global
governance. No other period in human history has witnessed such a concentration of economic but
also social and political power in the hands of a limited numbers of large economic entities. In sum,
the corporate hegemonic order, through increasingly potent vertical and horizontal linkages, has the
potential to establish itself as a viable historical bloc exercising hegemonic influence in large sections
of global society.

Adamson, W.L. 1980. Hegemony and Revolution, A Study of Antonio Gramsci’s Political and
Cultural Theory. Berkeley: University of California Press

Arendt, H. 1963. Between Past and Future: Six Exercises of Political Thoughts. Cleveland: Meridian

Arrighi, G. 2005. ‘Hegemony Unravelling’. New Left Review 32:23-80

Barnekov, T. K. and D. Rich. 1972. ‘The Corporation as a Social Welfare Institution’. American
Behavioral Scientist, 15:749-764

Berle, A. A. and G. C. Means. 1967. The Modern Corporation and Private Property. New York:
Harcourt Brace

Clarke, T. 2007. International Corporate Governance: A Comparative Approach. New York:


Connolly, W. E. 2006. Political Science and Ideology. New York: Aldine Transaction

Crane, A., A. McWilliams, D. Matten, J. Moon and D. Siegel, eds. 2008. The Oxford Handbook of
CSR. Oxford: Oxford University Press

Cutler, C., V. Haufler and T. Porter, eds. 1999. Private Authority and International Affairs, Albany:
State University of New York Press

Cutler, C. 2001. ‘Critical Reflections on the Westphalian Assumptions of International Law and
Organization: a Crisis of Legitimacy’. Review of International Studies 27:133–150

Foucault, M. 1976. Power/Knowledge : Selected Interviews and Other Writings 1972-1977. Trans and
ed. by C. Gordon, New York: Pantheon books

Friedman, M. 1970. ‘The Social Responsibility of Business is to increase profits’. The New York
Times magazine, 13 September 1970

Galbraith, J.K. 1984. The Anatomy of Power: An Overview. London:Hamish hamilton

Gramsci, A. 1971. Selections from the Prison Notebooks of Antonio Gramsci. Trans. and ed. Q. Hoare
and G. Nowell Smith. New York: International Publishers

Gramsci, A. [1957]1972. The Modern Prince and Other Writings. Reprint. New York: International

Gramsci, A. [1910-20] 1977. Selections from Political Writings, 1910-1920. Trans. and ed. Q. Hoare.
New York: International Publishers

Guha, R. 1992. ‘Dominance Without Hegemony and its Historiography’. In R. Guha, ed. Subaltern
Studies vi. New Delhi

Hirst, P. Q. and G. Thomson 1996. Globalization in question: The International Economy and the
Possibility of Governance. Cambridge: Polity Press

Homes, R. and P. Watts 2000. Corporate Social Responsibility: Making Good Business Sense.
Geneva: World Business Council for Sustainable Development.

Hoogvelt, A. 1997. Globalisation and the Postcolonial World, the new political economy of
Development. Houndmills, Basingstoke: Macmillan Press Ltd

Howson, R. and K. Smith, eds. 2008. Hegemony, Studies in Consensus and Coercion. New York and
London: Routledge

Hymer, S. H. 1976. The International Operations of National Firms, A Study of Foreign Direct
Investment. Cambridge: MIT Press

Jackson Lears, T. J. 1985. The Concept of Cultural hegemony: Problems and Possibilities. The
American Historical Review 90:567-593

Korten, D. C. 1995. When Corporations Rule the World. Bloomfield: Kumarian Press

Latham, E. 1961. ‘The Body Politic of the Corporation’. In The Corporation in Modern Society. ed E.
S. Mason. Cambridge:Harvard University Press

Lenski, G. 1966. Power and Privilege: A Theory of Social stratification. New York: MacGraw Hill

Lie, J. 1993. ‘Visualizing the Invisible Hand: The Social Origins of “Market Society” in England,
1550-1750’. Politics and Society 21:275-305

Mason , E. S. ed. 1961. The Corporation in Modern Society. Cambridge: Harvard University Press

Milward, B. 2003. Globalization? Internationalization and Monopoly Capitalism, Historical

Processes and Capitalist Dynamics. Cheltenham: Edward Edgar

Mitchell, N. J. 1989. The Generous Corporation: A Political Analysis of Economic Power. New
Haven and London: Yale University Press

Moon, J. 2002. ‘Confronting the Critics: The Governance of Corporate Social Responsibility’. New
Academy Review, 1:23-32

Mullins, W. 1972. ‘On the Concept of Ideology in Political science’. The American Political Science
Review 6:498-510

Nolan, P., D. Sutherland and J. Zhang. 2002. ‘The Challenge of the Global Business revolution’.
Contributions to Political Economy 21:91-110

OECD 2000. Guidelines for Multinational Enterprises. Paris: OECD

Rondinelli, D. A. 2002. ‘Transnational Corporations: International Citizens or New Sovereigns?’.

Business and Society Review 107:391–413

Rowe, J. K. 2005. ‘CSR as Business Strategy’. In R. D. Lipschutz. Globalization, Governmentality

and Global Politics, Regulation for the Rest of Us. London: Routledge

Shenkar, O. and J. J. Reuer, eds. 2005. Handbook of Strategic Alliances, Thousand Oaks: Sage
Shergolt, P. 2009. ‘Global Financial Crisis and Economic Downturn: Implications for Corporate
Social Responsibility’. The Center for Social Impact. Issue Paper 1

Soederberg, S. 2007. ‘Taming Corporations or Buttressing Market-Led Development? A Critical

Assessment of the Global Compact’. Globalizations 4:500-513

UNCTAD 2007 World Investment Report. Geneva: UNCTAD

Van Harten, G. 2005. ‘Private Authority and Global Governance: The Contours of the International
System of Investor Protection’. Review of International Political Economy 12:600-623

Veblen, T. [1904] 2005. The Theory of the Business Enterprise. reprint New York: Cosimo

Vogel, D. 2005. The Market for Virtue, The Potential and Limits of Corporate Social Responsibility.
Washington DC: Brookings Institution Press

World Bank. 2001. Global Development Finance 2000. Washington, DC: World Bank

Zumbansen, P. 2009. ‘The Evolution of the Corporation, Organization, Finance, Knowledge and
Corporate Social Responsibility’. Comparative Research in Law and political Economy 5:1-40