In PCSR literature, the political role of private actors is generally conceptualised as an automatic consequence of the engagement of private actors for society. As a matter of fact, the literature on PCSR has usually focused on exploring the motivations underlying the development of a political role rather than the conditions for this development. On the other hand, increasing empirical works provide an alternative perspective on the construction of the political role of private actors within the framework of PCSR. To understand how the political role of private actors is constructed, we root our study in the literature of political action. We explore the case of emerging initiatives involving private actors to combat street harassment in France. Through this study, we uncover the determinants of political action and shed light on how private actors become political actors when they engage for society.

The growing body of research on how institutions affect Corporate Social Responsibility (CSR) reflects an increasing recognition of the complex interplay between institutional frameworks and corporate behaviour. This study aims to synthesise the literature that specifically centres on corporate social responsibility (CSR), examining how institutional factors influence the gap between declared CSR decoupling and how these institutions affect CSR decoupling across various contexts. To achieve this, the study employed a Meta-Analysis (PRISMA) framework and systematically reviewed 62 published articles, using NVivo software to map the literature. The findings highlight several factors in formal and informal institutions that influence CSR decoupling. Furthermore, this study found that there is limited research in certain regions focusing on the role of informal institutions in CSR decoupling. Conversely, the study provides future research suggestions, emphasising the need to investigate cultural, economic, and stakeholder challenges. This comprehensive review establishes a framework for understanding the role of institutions in CSR decoupling and underscores the importance of addressing both internal and external factors affecting decoupling.

Normative Perspectives on Nonmarket Strategies: A Conceptual Framework for Proactive Political Engagement to Address Grand Challenges

Introduction & Research Question

Over the past decade, scholarly interest in grand challenges (GCs) has increased in relation to the need for urgent action, particularly within the fields of management and international business (Cuhls, Bunkowski & Behlau, 2012; George, Howard-Grenville, Joshi & Tihanyi, 2016; Brammer, Branicki, Linnenluecke and Smith, 2019; Wettstein, Giuliani, Santangelo & Stahl, 2019). Addressing grand challenges - defined as “formulations of global problems that can be plausibly addressed through coordinated and collaborative effort” (George et al., 2016: 1880) - requires multistakeholder action, including the involvement of multinational enterprises (MNEs). Although extant scholarship has explored the politicization of nonmarket strategy (den Hond, Rehbein, de Bakker & Kooijmans-van Lankveld, 2014), there remains potential to advance the literature, by considering how MNEs engage in forms of proactive political engagement, from a more normative perspective, to address grand challenges. Furthermore, given the plethora of scholarship on the political activity of the firm, there remains room to delineate between political forms of nonmarket strategy, including corporate political activity (CPA), political corporate social responsibility (PCSR) and corporate diplomacy (CD).

This paper, therefore, contributes to research at the intersection of business and society, by delineating between these aforementioned political forms of nonmarket strategy and advancing conceptual development at their intersection. It does through the following research questions, namely, how can MNEs contribute to addressing GCs through political forms of nonmarket strategy? And how can political forms of nonmarket strategy (such as CPA, PCSR and CD) be delineated from one another? In doing so, it posits proactive political engagement as a potential means of action, with the aim of contributing to the growing body of literature on methods for improving cooperation and collaboration on research pertaining to GCs (Brammer et al., 2019; Cuhls et al. 2012; Keenan, Cutler, Marks, Meylan, Smith & Koivisto, 2012; Knudsen, Tranekjer & Bulathsinhala, 2019).

Conceptual Development: MNEs as Political Actors

The increasingly political role of the firm has been widely documented within management literature, as well as within scholarship from the fields of international affairs, economics and political science. Following the seismic shifts of globalization and the emergence of a global governance gap in the 20^th century (Strange, 2000), the once strict division of labour between private business and nation-state governance has dissolved under the conditions of globalization (Scherer & Palazzo, 2011: 899). In turn, a lack of regulatory oversight and enforcement by states has led the way for corporations to assume a more active role in global governance, marking a paradigm shift or ‘political turn’ (Scherer, Rasche, Palazzo & Spicer, 2016). Corporations, especially MNEs, have become proactive and political actors, by engaging in a variety of politicized activities ranging from the provision of public functions such as health services and education (Hussain & Moriarty, 2018) to CEO and corporate led activism on human rights and morality related issues (Chatterji & Toffela, 2019; Branicki, Brammer, Pullen & Rhodes, 2021).

As a phenomenon, proactive political engagement can be considered as a part of the broader social processes of interaction between firms and society through activities such as CPA, CD and PCSR. Proactive political engagement by MNEs and their managers may take the form of both socially responsible behaviour (more normatively oriented) as well as socially irresponsible behaviour (which is often perceived to be more instrumentally oriented) through activities that involve proscriptive morality (‘avoiding harm’) and prescriptive morality (‘doing good’) (Stahl & Sully de Luque, 2014: 238).

Central to the concept is the assumption that firms will engage in activity beyond the scope of legal and economic requirements, however their underlying motivations may be due to instrumental drivers or moral drivers, or alternatively encompass both (Gond et al., 2017: 229). For example, MNEs and their leaders may engage in proactive political engagement to address GCs with the aim of benefitting their bottom line (in a manner that is instrumentally driven), while others may engage due to concerns for the environment and society (in line with more normative drivers) (ibid). Oftentimes, however, these drivers overlap, such as when considering the “business case” for sustainability or business and human rights (Wettstein, 2022). Proactive political engagement by leaders may also be due to moral drivers such as personal values, and may result in forms of CEO activism, which can be distinguished conceptually from PCSR and CPA (Olkkonen & Morsing, 2023; Chatterji & Toffel, 2019; Voegtlin et al., 2019). As such, CPA, CD and PCSR, as forms of proactive political engagement, all include activities related to the protection of individuals and interests, however which individuals and which interests may depend on the underlying drivers and motivation for proactive political engagement.

Given the multiplicity of means for proactive political engagement, the following section delineates between the three core aspects, namely corporate political activity (CPA), political CSR (PCSR) and corporate diplomacy (CD). Although the interlinkages between CPA and (P)CSR have been explored within extant literature (Lock & Seele, 2018; Rehbein, den Hond & Bakker, 2018; den Hond, Rehbein, de Bakker, Kooijmans-van Lankveld, 2014), corporate diplomacy, a third means of proactive political engagement, has largely been overlooked or addressed in connection only to PCSR (Westermann-Behaylo et al., 2015). Therefore, the following sub-sections aim to address this gap, given that CPA, PCSR and CD all provide unique opportunities as well as synergies for addressing grand challenges.

Corporate Political Activity

The concept of CPA emerged in the late 1990’s as scholars from management, political science, economics and sociology began to explore how corporations attempt to shape government policy in ways favourable to the firm (Hillman, Keim & Schulter, 2004: 837; Baysinger, 1984). Firms largely engage in CPA based on antecedents such as the type of firm, industry, issue or institutional factors, for the aim of achieving favourable public policy or benefits to firm performance (Hillman et al., 2004). As such, CPA may include efforts to “influence governments through campaign contributions, direct lobbying, government membership on company boards, voluntary agreements, political action committees (PACs) and, at times, even bribery” (Lawton, McGuire, Rajwani, 2013: 86).

Although CPA has largely been understood from an instrumental perspective, a growing body of scholarship has emphasized the concept’s ethical dimension, due to its positioning at the intersection of business and society (Dahan, Hadani & Schuler, 2013). At the macro level, CPA brings about questions of public governance such as governmental regulations over lobbying practices, while the micro level refers to the private governance, as enabled by a company’s governance structure, reporting systems and codes of ethical lobbying conduct (Dahan, Hadani & Schuler, 2013: 368). At a meso level, CPA may provide momentum for proactive political engagement to address both instrumental and normative interests.

For example, den Hond and colleagues mention the case of Philips, which lobbied for a European ban on incandescent lightbulbs: an action considered not only sustainable, but also beneficial to encouraging customers to purchase their LED energy saving light bulbs, following unsatisfactory sales (den Hond et al., 2014: 791). Their discussion of Philips’ strategy highlights the ways in which the alignment, misalignment and non-alignment of CSR and CPA can have a significant effect on a firm’s reputation, which is discernable from the separate reputational effects of CSR and CPA respectively (ibid). Similarly, it would logically follow that the alignment, misalignment and non-alignment of PCSR, CD and CPA, would have an impact on a firm’s reputation, particularly given underlying political engagement.

CPA can provide a unique lens for addressing the grand challenges through proactive political engagement. By aligning their CPA with (political) CSR, firms may be able to “avoid harm” to stakeholders and their interests, as well as avoid the risk of reputational harm. Additionally, firms may be able to “do good” by advancing regulation or constituent pressure on governmental bodies, as seen in the aforementioned case of Philips (de Hond et al., 2013: 791), or by providing financial support to political parties or civil society organizations that are committed to addressing issues associated with grand challenges. As such, CPA can be understood to be largely instrumentally driven by firm interests yet may be coupled with moral drivers in other contexts.

Political Corporate Social Responsibility (PCSR)

Initially coined by Scherer & Palazzo to denote the growing number of firms engaged in activities once considered under the purview of states, PCSR has become increasingly studied and critiqued in recent years as firms assume responsibilities beyond the scope of their legal requirements (2011: 899). In a departure from the initial aims of CPA, PCSR was created with the goal of providing a critical alternative to purely instrumental scholarship, such as that which can be found on CSR and CPA (Scherer & Palazzo, 2016). This paradigm shift is cognizant of businesses today, which as Scherer and Palazzo note, “not only influence politics via lobbying (but) they turn into political actors themselves – i.e., they co-create their institutional environment” (2016: 274; Barley, 2010; Scherer & Palazzo, 2011).

Drawing from the extended approach to corporate citizenship (Matten & Crane, 2005), PCSR largely focuses on the role firms play in the provision of public goods and other activities traditionally associated with governmental activities (Scherer & Palazzo, 2016; Matten & Crane, 2005). Extant research from the fields of management and business ethics has explored corporate engagement in public health, education, social security and the protection of human rights (Scherer & Palazzo, 2011; Matten & Crane, 2005), efforts to address social ills (Matten & Crane, 2005; Scherer & Palazzo, 2011), and promote peace, stability and strong institutions (Fort & Schipani, 2004). Contrary to traditional instrumental conceptions of CSR, which emphasize the business case and a clear separation of the economic and political domains, PCSR aims to go beyond business as usual, giving the firm an extended role within society, and ensuing responsibilities to address global, inherently political challenges (Hsieh & Wettstein, 2015: 261).

Although initial accounts emphasized the need for deliberations and collective decisions (Scherer & Palazzo, 2016), PCSR has faced critique for its integration of corporations into processes of democratic governance (Hussain & Moriarty, 2018). Rather than holding corporations as accountable to the democratic reasoning of affected parties, Hussain and Moriarty argue that PCSR positions corporations as “supervising authorities,” that can hold others accountable (2018). Questions of global governance, therefore, remain pertinent to understanding the role of firms in PCSR, particularly in the context of grand challenges. Although firms may “do good” by providing public goods and addressing activities traditionally associated with governmental activities (Scherer & Palazzo, 2016), “avoiding harm” remains a critical counterbalance when considering such activities, which is of particular relevance to firm proactive political engagement to address grand challenges.

Corporate Diplomacy

As a practice that incorporates dimensions of both corporate political activity (CPA) and political corporate social responsibility (PCSR), the literature on corporate diplomacy can be largely categorized according to perspectives that emphasize the state, the market and society (McDonald & Westermann-Behaylo, 2024). From a state-based perspective, as largely seen in scholarship originating from the fields of management (Steger, 2003; Bolewski, 2018) and international relations (Strange, 2000), corporate diplomacy can be viewed as firm efforts to pursue “an active “foreign policy” stance and articulate a political and social agenda in relation to national and global institutions (Sun et al., 2021: 1843; Saner & Yiu, 2008). Through such an approach, corporate diplomacy aims to respond to and shape both country diplomacy and international relations through nonmarket political and social strategies (Li, Shapiro, Peng & Ufimtseva, 2022: 6-8).

Literature from the fields of management and strategy (Henisz, 2014; Amann et al., 2007) also points towards a market-oriented perspective, which encompasses a range of activities aimed at generating favorable conditions for carrying out a firm’s activities and accomplishing organizational goals (Asquer, 2012: 55). The concept is most prominently addressed in management literature from an instrumental perspective, that focuses on external engagement for the goal of shareholder benefit (Westermann-Behaylo et al., 2015). For example, Henisz defines corporate diplomacy as the “practice through which senior managers build and maintain relationships with external stakeholders in order to deliver on the greatest needs or objectives of those stakeholders in a way that delivers shareholder value” (2014). Consequentially, the literature largely focuses on strategic justifications (Henisz, 2014; Steger, 2003; Amann et al. 2007) and firm-government collaboration (Schrempf-Stirling & van Buren, 2020).

The concepts of shareholder primacy and corporate “self-interest” feature prominently within instrumental definitions of corporate diplomacy (Henisz, 2014); (White, 2015); (Fitzpatrick, White and Bier, 2019). Scholars have suggested that corporate diplomacy can serve the purpose of safeguarding a multinational company’s reputational capital (Saner et al., 2000) as well as the pursuit of enlightened self-interest (Henisz, 2014). By influencing economic and social actors to create and exploit business opportunities, minimize political risk and attract the favor of media and opinion leaders to safeguard corporate image and reputation (Saner et al. 2000), corporations aim to seize new business opportunities and protect their existing operations. Such activities may be conducted proactively, however may also be reactive, in response to perceived risks or stakeholder demands within the external environment (Amann et al., 2007).

In recent years, however, a more normative conception of corporate diplomacy has gained traction, which takes a societal perspective, with scholars such as Westermann-Behaylo, Rehbein and Fort (2015) viewing the concept upon a continuum that ranges from non-existent to instrumental to proactive efforts to fill governance gaps. Drawing from PCSR, as well as peacemaking and peacebuilding scholarship, Westermann-Behaylo and colleagues aim to reorient the attention of practitioners from the instrumental benefits of corporate diplomacy, to consider broader normative contributions to global governance. By engaging in activities such as peacemaking and peacebuilding or promoting respect for human rights through dialogue, firms may be able to “do good” in the international arena. Firms may also “avoid harm” through efforts to mitigate risks, particularly in conflict affected areas, by engaging with governments and other relevant stakeholders.

Contribution & Results

Table 1 below contextualizes the activities involved in PCSR, CD and CPA, which can be implemented according to the continuum proposed by Westermann-Behaylo and colleagues (2015). Lastly Figure 2 displays the ways in which CPA, PCSR and CD can visualized as overlapping yet independent concepts.

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This paper aims to contribute to the literature on political forms of nonmarket strategy, by exploring how MNEs can engage in forms of proactive political engagement from a more normative perspective to address GCs. MNEs are critical to the success (Van Zanten & Van Tulder, 2018:3) of efforts to address GCs and can contribute comparative advantages within global governance initiatives (Yiu & Saner, 2017). Therefore, by exploring forms of proactive political engagement, this paper aims to highlight synergies between PCSR, CPA and CD, and provide further conceptual clarity by delineating between the concepts. By shedding light on the normative dimensions of these respective concepts, this paper aims to encourage future research at their intersections as well as empirical examples.

*Please see PDF version of the paper for Table 1 and Figure 1

As traditional institutions of political education, such as schools, unions, and community organizations, decline in influence, companies are emerging as alternative spaces for fostering civic engagement. This article introduces the concept of Corporate Political Education (CPE) and explores its potential to address societal challenges like populism, misinformation, and polarization. By leveraging their trusted position in society, companies can offer political education programs that enhance employees' understanding of critical political issues, thus empowering informed citizenship. Drawing on frameworks like Corporate Political Activity and Political Corporate Social Responsibility, we argue that CPE is an extension of corporate responsibility. Case studies of companies like Siemens and Google, which provide educational programs on sustainability and social justice, show how CPE can foster civic awareness and workforce engagement. However, CPE carries risks, including potential accusations of political bias and challenges in maintaining corporate legitimacy. To mitigate these risks, we propose a framework that emphasizes critical thinking over ideological endorsement. CPE programs should be voluntary and include external oversight to ensure transparency and ethical compliance.

This analysis investigates the impact of the European Union (EU) Corporate Sustainability Reporting Directive (CSRD) on the environmental, social and human rights behaviour of firms under the scope of this regulation. The CSRD, announced in 2021 and entering into force in fiscal year 2024, amends the previous Non-Financial Reporting Directive (NFRD) that came into effect in 2018. CSRD substantially increases both the EU sustainability reporting requirements and the number of companies falling within its scope[(European Commission, 2024). To comply with the new CSRD standards, nearly 50,000 firms must undertake organizational changes, including evaluating the materiality of environmental, social and governance (ESG) issues to the firm and its stakeholders, integrating sustainability reporting into business operations, and empowering new internal sustainability teams to manage the complex process. To accomplish these changes it will take time, thus this research asks: To what degree are firms preparing for the CSRD, and what factors will increase their level of preparation? Specifically, we explore whether industry, level of internationalization, country of origin and state-ownership impact improvements in social performance, environmental performance and human rights performance.