The New Political Role of Business in a Globalized World: A Review of the Paradigm Shift in CSR and its Implications for the Firm, Governance, and Democracy



Students of management and economics widely share the assumption that business firms focus on profits only, while it is the task of the state system to provide public goods. In particular, it is the state’s mandate to regulate the economy in such a way that business activities contribute to the common good. In this view business firms are conceived of as economic actors, and governments and their state agencies are considered the only political actors. We suggest that, under the conditions of globalization, the strict division of labor between private business and nation state governance does not hold any more. Many business firms have started to assume social and political responsibilities that go beyond legal requirements and fill the regulatory vacuum in global governance. There is, therefore, a need for a paradigm shift in research on the role of business in society. Our review of the literature shows that there is growing number of publications from various disciplines that contribute to such an alternative view. We consider the implications of the emerging paradigm of political corporate social responsibility (CSR) for theorizing about the business firm, governance, and democracy.
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Taco H. Reus