Corporate Diplomacy at the Intersection of Public Relations and Public Diplomacy

Abstract

Since the concept of corporate diplomacy is at the core of this dissertation, this chapter will offer an extensive review of the previous literature on corporate diplomacy to derive a concise definition of corporate diplomacy, guiding this thesis. Corporate diplomacy originates to a large extent from public diplomacy. Therefore, this chapter will first introduce public diplomacy by outlining significant conceptualizations of the term and comparing public diplomacy with public relations to distinguish the two fields from each other.

Since the concept of corporate diplomacy is at the core of this dissertation, this chapter will offer an extensive review of the previous literature on corporate diplomacy to derive a concise definition of corporate diplomacy, guiding this thesis. Corporate diplomacy originates to a large extent from public diplomacy. Therefore, this chapter will first introduce public diplomacy by outlining significant conceptualizations of the term and comparing public diplomacy with public relations to distinguish the two fields from each other. Secondly, the chapter will review previous definitions and conceptions of corporate diplomacy. Lastly, this chapter will develop an integrative framework of corporate diplomacy at the intersection of public relations and public diplomacy to derive a distinctive and comprehensive definition of the construct.

3.1 Public Diplomacy and Public Relations

Public diplomacy research has emerged from traditional diplomacy approaches focusing on government-to-government relations (e.g., Deutsch, 1966) over government-to-foreign publics relations (e.g., Tuch, 1990) to international actors-to-foreign publics relations (e.g., Cull, 2009). The evolution of public diplomacy approaches can be explained by globalization, the rise in communication technology, particularly digitalization, and the related power shift from governments to international organizations (Melissen, 1999, 2011). Previously, the literature pointed to strategic goals and public diplomacy outcomes (Gilboa, 2008; Snow, 2009). These outcomes included the influence on the attitudes and behavior of foreign publics, which have been supposed to contribute to the acceptance of foreign policies (Signitzer & Coombs, 1992; Snow, 2009) and the positive image of a country (Gilboa 2008; Malone, 1985; Signitzer & Coombs, 1992). Following this strategic perspective, Signitzer and Coombs (1992) have defined public diplomacy as “the way in which both government and private individuals and groups influence directly or indirectly those public attitudes and opinions which bear directly on another government’s foreign policy decisions” (p. 138). The objectives of public diplomacy outlined by Signitzer and Coombs (1992) are similar to the concept of soft power, which can be conceived as a country’s influence to attract foreign audiences (Gilboa, 2008). Soft power results from the country’s “culture (in places where it is attractive to others), its political values (when it lives up to them at home and abroad), and its foreign policies (when they are seen as legitimate and having moral authority)” (Nye, 2008, p. 96).

With the relational turn in public diplomacy research and the rise of communication technology (see Fitzpatrick, 2007; Zaharna, 2009), scholars have increasingly emphasized the role of communication and relationship building in public diplomacy (L’Etang, 2009; Leonard, 2002; Wang, 2006). In this respect, new public diplomacy approaches have highlighted the role of an ongoing and genuine dialog that involves alternative views of different actors (Dutta, 2014; Melissen, 2011; Molleda, 2011). For including various actors in public diplomacy, relationship-building is essential as it brings together numerous actors, including civil society members across national boundaries, to create a mutual understanding among countries and citizens (Dutta, 2014; Leonard, 2002; Melissen, 2011). Given that I explore corporate diplomacy as a legitimation strategy of MNCs for which relationship-building is central, this research follows the relational approach of public diplomacy and its conception as “an international actor’s attempt to manage the international environment through engagement with a foreign public […and] as creator and facilitator of networks and relationships” (Cull, 2008, pp. 31–32). However, corporate diplomacy is not regarded as a part of public diplomacy, as some scholars have recently suggested (e.g., Fitzpatrick et al., 2020; White, 2012). Instead, corporate diplomacy is conceived at the intersection of public diplomacy and public relations (see section 3.4). Therefore, the main differences and commonalities between public diplomacy and public relations will be briefly outlined.

The major similarity between public relations and public diplomacy can be found in their focus on relationship management and strategic communication to achieve individual and collective goals (Signitzer & Wamser, 2006). L’Etang (2009) has stated that both public relations and public diplomacy “are responsible for official institutional communications with other organizations and relations with wider groups or publics and are responsive to public opinion and media coverage” (p. 608). Regarding the definitions of public relations and public diplomacy in the realm of relational approaches, the overlapping of both terms becomes obvious. While public relations was commonly conceived as the management or cultivation of mutually beneficial relationships (e.g., Cutlip et al., 2000), a widely accepted definition of the “new” public diplomacy refers to it as “the management function that establishes and maintains mutually beneficial relationships between organizations and the publics on whom its success or failure depends” (Melissen, 2005, p. 14). In this regard, relationship-building is at the heart of public relations and public diplomacy. When it comes to the actors involved in these relationships or targeted by organizational efforts, public relations and public diplomacy share another similarity. Recent public diplomacy research has included several actors in public diplomacy activities, including governments, private companies, NGOs, social representatives, and the wider society (Cull, 2008; Fitzpatrick, 2007). Even though public relations is often related to corporate public relations efforts, public relations can be initiated by several actors, including governments and NGOs, and is similar to public diplomacy (L’Etang, 2009). However, public diplomacy research has mostly viewed governments as the major actors or initiators of public diplomacy efforts, while other actors were regarded as additional actors besides the government (Fitzpatrick et al., 2020). Moreover, public relations can occur at a national and an international level, while public diplomacy almost exclusively deals with issues and actors globally, mostly across national borders (L’Etang, 2009).

Concerning the objectives and desired outcomes of public relations and public diplomacy, further similarities and differences can be identified. Public relations is mainly considered to be concerned with positive public perceptions and judgments, including a strong reputation, long-term legitimacy, and a favorable image at the organizational level (L’Etang, 2009). In contrast, public diplomacy scholars have mostly referred to a positive country image and reputation as the desired public diplomacy outcomes (see Fitzpatrick, 2007). As Snow (2004) outlined, what distinguishes public relations and public diplomacy is the predominant link of public relations with corporate communications and the connection of public diplomacy with national interests and foreign public affairs. The communication modes and efforts, particularly dialogic approaches and relationship building seeking mutual understanding, are prevalent in public relations and public diplomacy conceptions (Fitzpatrick, 2007; Snow, 2014). Hence, the context of the objectives of public relations and public diplomacy practices may differ, but the tools and methods public relations and public diplomacy use to achieve their goals have much in common.

In summary, it can be concluded that public relations and public diplomacy bear various similarities, which can also be found in previous conceptualizations of corporate diplomacy, as the following subsections will show in more detail. Overall, the overlaps between public relations and public diplomacy make an integrative framework for defining and contextualizing corporate diplomacy valuable (see section 3.4).

3.2 Research Approaches to Corporate Diplomacy

Previously, corporate diplomacy has been studied in different research fields, including public relations, public diplomacy, general management, and, to some extent, business ethics (Ingenhoff & Marschlich, 2019). This chapter will review previous definitions and conceptualizations of corporate diplomacy, mainly building on Ingenhoff and Marschlich’s (2019) systematic review and considering additional newer papers. In discussing the corporate diplomacy literature, this chapter will present more in-depth the actors in the host country environment, addressed by corporate diplomacy and its objectives as indicated by prior scholars.

Three major research streams on corporate diplomacy can be identified in previous research considering corporate diplomacy as a management instrument of corporations in the international arena (Amann et al., 2007; Henisz, 2014; Saner & Yiu, 2014; Steger, 2003; Westermann-Behaylo et al., 2015), the role corporations play in public diplomacy (Fitzpatrick et al., 2020; White, 2012; White & Fitzpatrick, 2018; White & Kolesnicov, 2015), and the engagement of MNCs in strategic communication and relationship-building on an international level (Ingenhoff & Marschlich, 2019; Kochhar, 2018; Kochhar & Molleda, 2015; Macnamara, 2012; Mogensen, 2017; White et al., 2011).

Within the first research stream, corporate diplomacy is conceived as “the attempt to manage the business environment systematically and professionally, to ensure that business is done smoothly” (Amann et al., 2007, p. 34). Similarly, Steger (2003) referred to corporate diplomacy as a proactive management tool MNCs use strategically to achieve their license to operate. Both Amann et al. (2007) and Steger (2003) have suggested that corporate diplomacy aims to gain organizational legitimacy, which can be achieved by responding to social and political expectations while simultaneously meeting economic demands. Therefore, corporate diplomacy is particularly interested in identifying and understanding the issues that put pressure on the corporation (Amann et al., 2007). Prior management literature has not been very clear about which actors are included in corporate diplomacy activities. Instead, it has referred to stakeholders in the international arena (Henisz, 2014; Steger, 2003) or the social and political environment in a corporation’s host country (Westermann-Behaylo et al., 2015). Only Amann et al. (2007) have pointed out that corporate diplomacy is concerned with the “contextual environment [that] includes governments, media, social and environmental activist groups” (p. 38). Regarding the aim of corporate diplomacy, scholars viewing corporate diplomacy as a management instrument have often referred to organizational legitimacy as the intended outcome (Amann et al., 2007; Henisz, 2014; Steger, 2003; Westermann-Behaylo et al., 2015). However, organizational legitimacy was mainly equated with the general license to operate and understood as a strategic resource, allowing a corporation to manage external pressure (Amann et al., 2007). This view differs from how this thesis conceives and explores organizational legitimacy (see section 2.2.2).

Turning from the management perspective, the second research stream on corporate diplomacy embeds the construct within public diplomacy, conceiving corporate diplomacy on a general level as “the role of private-sector corporations as non-state actors in public diplomacy” (White, 2015, p. 306). Ordeix-Rigo and Duarte (2009) have regarded corporate diplomacy as the capability of MNCs to develop and implement corporate initiatives in the international arena. Regarding the individuals and groups that corporate diplomacy involves and its objectives, White and colleagues (White, 2012; White & Fitzpatrick, 2018) conceived corporate diplomacy as activities involving MNCs and the home and host country governments. According to these authors, corporate diplomacy activities are mostly considered to be sponsored by governmental actors.

In contrast, Ordeix-Rigo and Duarte (2009) have pointed to corporate diplomacy as MNCs’ engagement in societal and political issues implemented independently from the government. Similarly emphasizing its focus on societally relevant issues, Fitzpatrick et al. (2020) have defined corporate diplomacy as “extending beyond a company’s economic self-interest to include a more social and political role for corporations in tackling global issues such as public health, education, and protection of human rights, and working for global standards and regulations” (p. 28). Concerning the corporate diplomacy objectives, scholars have regarded diplomatic and public diplomacy goals as major purposes of corporate diplomacy (Ordeix-Rigo & Duarte, 2009; White, 2012). In particular, White and colleagues have noted that corporate diplomacy seeks to contribute to the MNC’s home country by enhancing the image and nation-branding efforts of the home country (White, 2012; White & Kolesnicov, 2015). In contrast, Ordeix-Rigo and Duarte (2009) have viewed organizational power and legitimacy as primary outcomes MNCs seek to achieve through corporate diplomacy.

Lastly, the third research stream views corporate diplomacy as the international relationship-building attempt of MNCs. In this regard, White et al. (2011) have conceived corporate diplomacy as “international public relations efforts to help create favorable conditions for business and to build relationships” (p. 282), while Mogensen (2017) has defined corporate diplomacy as MNCs’ “collaboration with the general public in a host country through negotiations directly with civic society” (p. 606). Although the objectives are conceived differently, scholars in the third research stream agree on the particular role of the interactions and engagement between MNCs and the host country environment, as highlighted by Kochhar (2018, p. 350): “Corporate diplomacy looks into effectively and strategically engaging the stakeholders.”

Furthermore, according to the literature in the third research stream, corporate diplomacy is directed toward key actors in the international environment of MNCs, particularly toward the home and the host country governments (Molleda, 2011). Kochhar (2018) has stated that corporate diplomacy addresses the nonmarket business environment of MNCs, including the public sector, social movements, and NGOs. Regarding corporate diplomacy objectives, Mogensen (2017) has outlined that corporate diplomacy is mainly interested in contributing to societal problems by offering sustainable solutions. Following this, corporate diplomacy builds on relationships and interactions with the host country environment to achieve societal goals. This perspective is in line with Weber and Larsson-Olaison’s (2017) conception of corporate diplomacy as MNCs’ responsibility toward the global community. In contrast, Molleda (2011) has pointed to the strategic role of corporate diplomacy, which seeks to influence home and host country policies. Likewise, White et al. (2011) have noted that affecting policy-making is a primary corporate diplomacy goal helping MNCs create favorable conditions for their host country’s operations.

According to Mogensen (2017), by directly engaging with the host country citizens, i.e., involving their interests, corporate diplomacy can contribute to both the society and the company as it addresses citizens’ needs and simultaneously enhances the legitimacy of the MNCs in the citizens’ eyes. Similarly, applying a political CSR perspective on corporate diplomacy, Ingenhoff and Marschlich (2019) have developed a definition that accounts for MNCs’ societal role while simultaneously pointing to legitimacy as the central goal of MNCs. Accordingly, corporate diplomacy is defined as “the corporate activities of multinational companies, which are directed at the host country’s key stakeholders and aimed at participating in decision-making processes on relevant socio-political issues and building relationships in order to gain corporate legitimacy” (Ingenhoff & Marschlich, 2019, p. 357). Table 3.1 summarizes the previous conceptions of corporate diplomacy.

Overall, as the review of previous conceptualizations of corporate diplomacy has shown, the construct’s definitions vary across research disciplines (Ingenhoff & Marschlich, 2019). However, even within the suggested research streams, differences between whom corporate diplomacy is directed toward and what purposes it seeks to achieve exist. Building on public diplomacy approaches, previous corporate diplomacy conceptualizations, and the conceptualization of neo-institutional public relations as developed in this thesis (see section 3.4), the subsequent section will present an integrative framework on corporate diplomacy and offer a precise and comprehensive definition of the term.

Table 3.1 Main assumptions and theories on corporate diplomacy

3.3 Corporate Diplomacy and CSR

Corporate diplomacy as engagement in societal issues relevant to the host country’s community (Ingenhoff & Marschlich, 2019; Mogensen, 2017) and as a response to societal expectations (Amann et al., 2007; Ordeix-Rigo & Duarte, 2009) has overlaps with the concept of CSR and related concepts, such as corporate citizenship or sustainability (for a comparison of different concepts of corporate responsibility, see, e.g., Carroll & Brown, 2018). A few scholars have linked corporate diplomacy to CSR. Westermann-Behaylo et al. (2015) and White et al. (2011) have used the concept of political CSR as a theoretical framework for understanding corporate diplomacy. In addition, Molleda (2011) has suggested that CSR, including corporate citizenship and sustainability, is part of corporate diplomacy, provided that it is considered a political task in a transnational context.¹

Classical CSR concepts often build on Carroll (1979, 1991), who has emphasized that corporations have a responsibility toward society that includes corporate responsibility on economic, legal, ethical, and social levels. This perspective is related to Davis’s (1973) conceptualization of CSR as those activities in which a company considers and responds to “issues beyond the narrow economic, technical, and legal requirements of the firm” (p. 312). Moon (2014) has distinguished between the following three approaches to corporate responsibility: companies have a responsibility to society (i.e., accountability) or for society (i.e., compensation for their negative impact and contribution to social welfare), or they need to act in a responsible manner (e.g., ethically and sustainably). However, since CSR is a phenomenon discussed across multiple disciplines, definitions of and approaches to CSR vary widely (Seele & Lock, 2015).

In the following, different CSR perspectives will be presented and compared with corporate diplomacy to identify their similarities and differences. Previous systematizations of CSR have distinguished different perspectives, including classical, instrumental, political, normative/ethical, integrative, and communicative CSR perspectives (see Carroll & Brown, 2018; Frynas & Stephen, 2015; Garriga & Mele, 2004; Seele & Lock, 2015). Subsequently, instrumental and political-normative CSR perspectives will be discussed in more detail since the distinction between these lines is dominant in previous studies and can be considered appropriate for comparing CSR with corporate diplomacy.

Instrumental CSR Perspectives

According to Schultz, Castelló et al. (2013), instrumental perspectives on CSR are based on three premises. First, companies must primarily bear an economic responsibility, i.e., companies need to maximize their profits and fulfill their shareholders’ interests. Secondly and mostly following stakeholder theory (Freeman, 1984), it is assumed that companies need to meet the expectations of their stakeholders in addition to those of their shareholders (Sundaram & Inkpen, 2004). Thirdly, the public and private spheres are considered separately, i.e., the state is responsible for the common good and for controlling corporate behavior to prevent the externalities of corporations (see Schultz, Castelló et al., 2013).

Building on that, a company’s social responsibility must always be in harmony with its economic role. Thus, social activities are only accepted if they contribute to companies’ wealth creation (Garriga & Mele, 2004). Instrumental perspectives emphasize the maximization of shareholder value (Friedman, 1970; Jensen, 2000) or the general achievement of competitive advantages (Hillman & Keim, 2001; Porter & Kramer, 2006) as the main goal of CSR. To this end, companies invest in philanthropy and social activities (McWilliams & Siegel, 2001) to meet stakeholder interests, which is supposed to positively influence the consumers’ purchase behavior (Sen & Bhattacharya, 2001) and the company’s financial performance (e.g., Orlitzky et al., 2003). However, the positive effect of CSR engagement on financial outcomes should be treated with caution as this causal relation is generally hard to measure (see Griffin, 2000).

Other scholars have argued that CSR allows for improving the economic and social resources that contribute to the company’s competitive advantages, including relationships with employees, customers, and suppliers (Bhattacharya et al., 2009; Dhanesh, 2014; Du et al., 2007; Hillman & Keim, 2001) and a positive corporate reputation (Bhattacharya & Sen, 2004; Hooghiemstra, 2000). In this sense, social and environmental benefits or improvements are more a by-product, and CSR becomes an instrument or a strategy to improve a company’s overall performance (Bhattacharya & Sen, 2004; Porter & Kramer, 2006, 2011). In this perspective, communication becomes a “rhetorically persuasive instrument, a matter of presenting and exploiting the attractive features associated with CSR to create a positive reputation” (Schultz, Castelló et al., 2013, p. 683).

Because corporate activities are usually associated with organizational self-interest and self-serving motives, instrumental CSR campaigns are also believed to lead to mistrust and skepticism, decreasing corporate credibility on the part of the stakeholders (Bachmann & Ingenhoff, 2016; Jahdi & Acikdilli, 2009) compared to other CSR approaches, particularly deliberative ones (e.g., Seele & Lock, 2015). Scholars have discussed other challenges of CSR’s effects on financial performance and reputation, including media coverage (Brammer & Pavelin, 2006; Vogler & Eisenegger, 2020) and negative publicity (Einwiller et al., 2019). However, the positive effects of CSR on corporate performance, including reputation and stakeholder relationships, often remain unquestioned.

Political CSR Perspectives

As an alternative to the dominant instrumental perspective on CSR, a political-normative perspective on CSR² has emerged primarily based on sociological and political theories in recent years. Political CSR conceptions often build on the premise that public and private spheres can no longer be regarded as separate from one another due to globalization (Crane et al., 2008; Scherer & Palazzo, 2007, 2011). Instead, the power of nation states is dwindling, and corporations increasingly participate in democratic, global governance (Scherer & Palazzo, 2011). In this way, companies become political actors addressing societal issues and defining standards for social interaction to fill government gaps in regulation (Scherer et al., 2016; Stoll, 2014). By being involved in political decision-making processes, corporations contribute to the public good (Crane et al., 2008; Scherer & Palazzo, 2011). Hence, political CSR assumes a broadened definition of corporate responsibility, i.e., a political responsibility through which private actors help solve public issues. An often-cited definition by Scherer and Palazzo (2011) conceives political CSR as “an extended model of governance with business firms contributing to global regulation and providing public goods” (p. 901). This definition shows that political CSR overlaps with corporate citizenship (see, e.g., Matten & Crane, 2005) and that political CSR can be considered a further development of corporate citizenship (Carroll & Brown, 2018).

According to political CSR scholarship, companies participate in a (communicative) deliberative process (Hussain & Moriarty, 2016; Maak et al., 2016; Scherer & Palazzo, 2011), in which various interests, some of which are contrary to the company’s interests, are considered and included in company decisions (Scherer & Palazzo, 2011; Seele & Lock, 2015). As a result, companies can build legitimacy, especially on a moral level (Scherer & Palazzo, 2011). This view mostly builds on Habermas’s discourse theory of democracy (Habermas, 1996). Applied to political CSR, corporations can gain legitimacy by establishing a dialog with their environment (Young, 2004) and by being transparent and open to reaching a consensus (Scherer & Palazzo, 2011).

In summary, the normative notion of political CSR allows ideal corporate practices that contribute to the common good to be derived. However, deliberation builds on the premise of domination-free space, according to which everyone involved in the discourse has equal power and equal access to the discourse (Habermas, 1996). Such an ethical discourse is hard to apply in corporate reality, primarily because companies need to fulfill economic interests to survive as an organization.

Differences and Commonalities between CSR Concepts and Corporate Diplomacy

As found in the systematic literature review of political CSR and corporate diplomacy by Ingenhoff and Marschlich (2019), the concepts of corporate diplomacy and political CSR differ significantly in their contexts, scopes, and perspectives on and motives of companies (see Table 3.2). While instrumental CSR is mostly considered in an industry context and, to some extent, on a national level (see Schultz, Castelló et al., 2013), political CSR is understood in national and international contexts (Palazzo & Scherer, 2008; Shirodkar et al., 2016). Instead, corporate diplomacy is primarily conceived as corporate diplomacy on an international, host country level (Ingenhoff & Marschlich, 2019; Westermann-Behaylo et al., 2015; White & Kolesnicov, 2015). Political CSR and corporate diplomacy are mainly associated with corporations that operate in multiple countries in the case of corporate diplomacy (Amann et al., 2007; Westermann-Behaylo et al., 2015) and, in the case of political CSR, on a national and international level (Palazzo & Scherer, 2008; Shirodkar et al., 2016). Instrumental CSR concepts are less specific in this respect and also include smaller companies and those that only operate regionally or nationally (e.g., Murillo & Lozano, 2006; Nielsen & Thomson, 2009). Another difference between the concepts is the audience companies address or for which they assume responsibility. Corporate diplomacy is directed toward the host country society, including citizens, government organizations, and NGOs (Mogensen, 2017; Westermann-Behaylo et al., 2015). Instrumental and political CSR approaches are primarily considered to address a broader society without being specified in more detail.

Table 3.2 Instrumental CSR, political CSR, and corporate diplomacy in comparison (building on Ingenhoff & Marschlich, 2019; Schultz, Castelló et al., 2013)

Moreover, the assumed roles of companies differ. The corporate diplomacy literature regards companies as international private actors associated with their home country when operating in foreign countries and engaging in societal activities (White & Kolesnicov, 2015; White et al., 2011). This perspective is, to some extent, similar to most instrumental CSR conceptions that regard companies as private actors but with the sole aim to (directly or indirectly) increase their business performance (e.g., Kotler & Lee, 2005). In contrast, political CSR scholars view companies as “quasi-governmental” actors who take the place of government actors to help fill regulation gaps (Scherer & Palazzo, 2011).

Another difference can be found in the concepts’ scopes. Corporate diplomacy is often described as an instrument through which to build and manage relationships with the key actors in a company’s host country (Fitzpatrick et al., 2020; Ingenhoff & Marschlich, 2019; White & Kolesnicov, 2015), while the political and instrumental CSR literature points more to the political and, respectively, social responsibility of companies (Schultz, Castelló et al., 2013). However, political and instrumental CSR differ in their assumptions about a company’s responsibility in this respect. Instrumental CSR approaches often view the responsibility toward society as the result of a company’s (negative) impact on society and the natural environment, regarding CSR activities as compensation for this (Schultz, Castelló et al., 2013). In contrast, political CSR scholars often point to the increased political responsibility of corporations due to the decreasing power and impact of governments in providing public goods (Scherer & Palazzo, 2011).

Furthermore, similarities and differences can be found when considering the goals of the three concepts. Corporate diplomacy and political CSR concepts are similar in the purpose of acquiring legitimacy, which, according to the literature, is often associated with corporate involvement in the political decision-making process (Ordeix-Rigo & Duarte, 2009; Scherer & Palazzo, 2011; Westermann-Behaylo et al., 2015). While corporate diplomacy is assumed to be an instrumental strategy to gain power and status in the host country (e.g., Ordeix-Rigo & Duarte, 2009), political CSR literature follows mostly a normative, deliberative approach to the political involvement of companies (Scherer & Palazzo, 2011). Related to this, the access of the concepts to the involved actors or groups differs as well. While corporate diplomacy and instrumental CSR mostly have an organization-centered view (Amann et al., 2007; Ordeix-Rigo & Duarte, 2009; Schultz, Castelló et al., 2013), the political CSR literature is both organization- and society-centered (Schultz, Castelló et al., 2013). However, increasingly, scholars are exploring corporate diplomacy from a more society-centered perspective, i.e., the host country community (Mogensen, 2017; Westermann-Behaylo et al., 2015).

In summary, corporate diplomacy and CSR have commonalities and significant differences. The differences lie mainly in the international context of corporate diplomacy and the transnational publics to which corporate diplomacy activities are addressed especially host country governments. Nevertheless, the focus on the social activities of corporate diplomacy is strongly linked to the assumptions of CSR, i.e., corporations have a responsibility toward society or the local and global communities. Accordingly, as White et al. (2011) and Westermann-Behaylo et al. (2015) have highlighted, it can be assumed that corporate diplomacy activities sometimes integrate CSR or political CSR. Therefore, CSR can be considered a diplomatic activity insofar as it intentionally or unintentionally “influence[s] political decisions in host countries and affect[s] policy, media agendas, and societal change” (White et al., 2011, p. 282).

3.4 Toward a New Conceptualization of Corporate Diplomacy

As discussed in the previous section, corporate diplomacy conceptions vary according to which disciplinary view is adopted. This research seeks to link corporate diplomacy with public relations from a neo-institutional perspective. At the same time, I do not intend to neglect the origins of corporate diplomacy, i.e., public diplomacy. Therefore, a new conceptualization of corporate diplomacy at the intersection of neo-institutional public relations and public diplomacy will be proposed subsequently.

Public Relations and Neo-Institutional Public Relations

In section 2.3.3, neo-institutional approaches, legitimacy, and public relations conceptualizations were brought together. This thesis explores corporate diplomacy and legitimacy, and organizational legitimacy is generally regarded as individuals’ and groups’ perceptions of the appropriateness of an organization and its activities (Suchman, 1995). Organizational legitimacy is created and negotiated in a process that involves the organization and multiple actors within the organizational environment (Bitekine, 2011). Therefore, the role of public relations is best described as an engagement process, allowing organizations to identify the demands of their environments and build shared interests (Taylor, 2018).

Bringing this view together with the key assumptions of the sociological neo-institutional approach (see section 2.1.2), neo-institutional public relations was conceived as an engagement process between an organization and its societal environment, seeking to identify, reflect, and (re-)formulate societal expectations to show congruence between organizational actions and societal demands, which is the foundation for organizational legitimacy. Following this, the main aspect of neo-institutional public relations is the organizational orientation toward the societal environment and its demands. Neo-institutional public relations is primarily concerned with societal actors, including the community, the media, and political actors and less with economic actors. Moreover, neo-institutional public relations follows an “outside-in” instead of an “inside-out” approach, i.e., organizations continuously consider the “outside” demands in terms of societal expectations regarding their decision and activities. Finally, a central characteristic of public relations is its performance on the local, regional, national, and international levels (L’Etang, 2009).

Public Diplomacy

Recent developments in public diplomacy have shifted the view of public diplomacy as government-led activities toward foreign audiences to the activities of multiple transnational actors, including MNCs, in the international arena (e.g., Cull, 2008; Fitzpatrick, 2007). Building on the “new,” relationship-oriented perspective on public diplomacy (Fitzpatrick, 2007; Gregory, 2008; Zaharna, 2010), this research stream regards public diplomacy as the relationship management between an organization and its foreign audiences, aiming to create mutual understanding between the involved actors (see Fitzpatrick, 2007; Gilboa, 2008; Gregory, 2008). Following this, public diplomacy involves multiple actors, including political actors, citizens, media actors, and corporations. However, public diplomacy is mainly conceived as initiated by governments. Furthermore, public diplomacy is often regarded as enhancing a country’s image (e.g., Gilboa, 2008; White & Fitzpatrick, 2018), including promoting a nation’s culture, values, and politics, summarized as a country’s soft power (Nye, 2008). In this way, a central feature of public diplomacy is that it appears on an international or mostly transnational level (L’Etang, 2009; Mogensen, 2020b).

Toward a New Conceptualization of Corporate Diplomacy

Combining the elements of neo-institutional public relations and public diplomacy, this thesis proposes the following new conceptualization and a distinct and comprehensive definition of corporate diplomacy:

Corporate diplomacy is the engagement of multinational corporations with actors in their host country environment in societal issues, through which multinational corporations identify, reflect, and (re-)formulate societal expectations to demonstrate the congruence between organizational behavior and societal expectations to build organizational legitimacy within the host country environment.

The proposed definition features elements of neo-institutional public relations and public diplomacy, summarized in Figure 3.1. The definition accounts for the origin of corporate diplomacy in public diplomacy, integrating an institutional approach to public relations. It is the engagement in societal issues relevant to the host country environment through which the developed definition highlights the interest of MNCs in following or even participating in diplomatic activities. In this regard, the definition points to the transnational setting and the societal and political issues that public diplomacy and corporate diplomacy share. Referring to “political” issues means that MNCs’ engagement in societal issues in the host country may become part of the political sphere when it affects or is affected by the political agenda and political actors (Mogensen, 2020b).

Figure 3.1

Conceptual framework of corporate diplomacy integrating neo-institutional public relations and public diplomacy