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Corporate Legitimacy as Deliberation: A Communicative Framework

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Modern society is challenged by a loss of efficiency in national governance systems values, and lifestyles. Corporate social responsibility (CSR) discourse builds upon a conception of organizational legitimacy that does not appropriately reflect these changes. The problems arise from the a-political role of the corporation in the concepts of cognitive and pragmatic legitimacy, which are based on compliance to national law and on relatively homogeneous and stable societal expectations on the one hand and widely accepted rhetoric assuming that all members of society benefit from capitalist production on the other. We therefore propose a fundamental shift to moral legitimacy, from an output and power oriented approach to an input related and discursive concept of legitimacy. This shift creates a new basis of legitimacy and involves organizations in processes of active justification vis-à-vis society rather than simply responding to the demands of powerful groups. We consider this a step towards the politicization of the corporation and attempt to re-embed the debate on corporate legitimacy into its broader context of political theory, while reflecting the recent turn from a liberal to a deliberative concept of democracy.

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Correspondence to Guido Palazzo.

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Prof. Dr. Guido Palazzo is Assistant Professor for Business Ethics at the University of Lausanne (Switzerland). He graduated in Business Administration at the University of Bamberg (Germany) and earned his PhD in Political Philosophy (1999) from the University of Marburg (Germany). His research interests are in Corporate Social Responsibility, Corporate Branding, Democratic Theory and Organizational Ethics.

Prof. Dr. Andreas Georg Scherer is director of the Institute for Organization and Administrative Science (IOU) and holds the Chair for Foundations of Business Administration and Theories of the Firm at the University of Zurich (Switzerland). He has published six books. His work has appeared in Academy of Management Review, Advances in Strategic Management, Business Ethics Quarterly, Journal of Business Ethics, M@n@gement, Management International Review, Organization, organization Studies, and in numerous volumes and German journals. Dr. Scherer is member of the editorial boards of Business Ethics Quarterly, Organization, and Organization Studies.

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Palazzo, G., Scherer, A.G. Corporate Legitimacy as Deliberation: A Communicative Framework. J Bus Ethics 66, 71–88 (2006). https://doi.org/10.1007/s10551-006-9044-2

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