talk ain’t cheap: political csr and the challenges of ...€¦ · starbucks also asked their...

©2017 Business Ethics Quarterly 27:2 (April 2017). ISSN 1052-150XDOI: 10.1017/beq.2016.73

pp. 183–211

Talk Ain’t Cheap: Political CSR and the Challenges of Corporate Deliberation

Cameron SabadozCarleton University

Abraham SingerUniversity of Rochester

ABSTRACT: Deliberative democratic theory, commonly used to explore questions of “political” corporate social responsibility (PCSR), has become prominent in the literature. This theory has been challenged previously for being overly sanguine about firm profit imperatives, but left unexamined is whether corporate contexts are appropriate contexts for deliberative theory in the first place. We explore this question using the case of Starbucks’ “Race Together” campaign to show that sig-nificant challenges exist to corporate deliberation, even in cases featuring genuinely committed firms. We return to the underlying social theory to show that this is not an isolated case: for-profit firms are predictably hostile contexts for deliberation, and significant normative and strategic problems can be expected should delibera-tive theory be imported uncritically to corporate contexts. We close with recent advances in deliberative democratic theory that might help update the PCSR project, and accommodate the application of deliberation to the corporate context, albeit with significant alterations.

KEY WORDS: political corporate social responsibility, deliberation, deliberative democracy, legitimacy, deliberative systems, critical theory

INTRODUCTION

In early 2015, amidst a series of racially-charged incidents across the United States, the coffee retailer Starbucks launched an internal soul-searching operation,

designed to foster deliberation on race relations and Starbucks’ political role as a for-profit company operating in a racially-charged society (Starbucks, 2015a).1 In March, Starbucks then took this deliberation external with the “Race Together” campaign, where they partnered with USA Today to create interactive content designed to foster dialogue about both how to combat racism, as well as to discuss what antiracist responsibilities might lie with firms like Starbucks (Somaiya, 2015). Starbucks also asked their 140,000 American employees to promote the campaign, which they were asked to participate in themselves when possible, by discussing race relations with customers (Reuters, 2015; Starbucks, 2015b). By most accounts the campaign was a disaster. Starbucks was accused of “institutional arrogance” (Carr, 2015), and the

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comedian John Oliver suggested of charismatic CEO Howard Schultz that, “I think it’s pretty clear, no one has said ‘no’ to this guy in 25 years” (HBO, 2015). More substantively, critics had normative concerns that Starbucks’ generally white and privileged executive team was engaging in a cheap and easy values performance that would be actually cashed out by a poorly-paid2 (and diverse) front-line workforce, thus unfairly placing staff in a politicized position they had not asked for (Berkowitz, 2015; Somaiya, 2015; Tolentino, 2015). There were also considerable strategic problems: traditional media generally responded with thinly-veiled derision (e.g. Kleinberg, 2015; Parker, 2015; Walters, 2015), while social media was ferocious, with 2.5 billion (overwhelmingly negative) impressions in the first 48 hours of the campaign (Carr, 2015). The most ambitious corporate deliberative intervention of the new century was quickly abandoned (Somaiya, 2015).

We raise this example because it highlights some important and predictable chal-lenges in contemporary efforts to apply deliberative democracy theory to corporate contexts. Deliberative democracy, which holds that legitimate decision making requires the exchange of defensible reasons amidst the “public deliberation of free and equal citizens” (Bohman, 1998: 401), has emerged as a leading theory in both business ethics and mainstream management, as scholars have explored the normative and strategic benefits of having firms deliberate, not negotiate, with stakeholders (Baur & Arenas, 2012; Baur & Palazzo, 2011; Kobrin, 2009; Moon, Crane, & Matten, 2005; Oosterhuut, 2008; Palazzo & Scherer, 2006; Rasche & Esser, 2006; Santoro, 2010; Scherer & Palazzo, 2007, 2011; Scherer, Palazzo, & Baumann, 2006; Scherer, Palazzo, & Seidl, 2013). For lack of a better term, we label these scholars deliberative management theorists. This perspective has an intuitive appeal, as it offers a robust cross-cultural system of business ethics that also claims real-world applicability, and thus suggests both normative and strategic success to practitioners.

What management scholars and business ethicists have yet to fully examine, however, is whether any of the empirical work or social theory underpinning the theory of deliberative democracy is easily transferred to corporate contexts. Our research question is effectively “does deliberative democracy, as it is conceived of by deliberative management scholars, make sense as a model of business and corporate social responsibility?” With some qualification, we answer: “no, it does not.” Deliberative democracy is much more difficult to apply to management contexts than is currently described in the literature. Our core argument is that deliberative democratic theory is unreliable when applied to firms because the theory was devel-oped originally out of a conceptual distinction between norm-oriented deliberation and the consequence-oriented market; the deliberative management project is thus based on a social theory that is simply not calibrated for the corporate context it seeks to affect.

We begin by laying out the recent deliberative turn in business ethics and corpo-rate social responsibility (CSR), explaining its appeal and reviewing some of the challenges to it that have already been made. We then use the Starbucks example to show how, in our view, the theory features broader and deeper problems than cur-rently appreciated. With this established, we go back into the source of deliberative theory, particularly Habermas’ discourse ethics, to show how deliberative democracy





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fits within a larger social theory. Based on this review of Habermas, we argue that it is not obvious that deliberation so conceived can be applied to corporations based on this social theoretic background. We conclude by offering some potential ways forward: theories of deliberative democracy have recently moved beyond the sorts of conceptual underpinnings upon which the deliberative management project currently rests. Updating its conception of deliberation and its relationship to self-interest and seemingly non-deliberative institutions offers a possible way forward for the deliberative management project. As we show, however, such conceptual updating would also require a drastic rethinking of precisely what deliberative management practices would look like, as well as a far more humble understanding of the aims that such practices could realistically achieve.

Lest our intentions be unclear, we would like to state straightforwardly that we are critics, not partisans, of the deliberative management project; despite its intuitive appeal and the nuance with which it has been articulated by talented scholars, we are not particularly optimistic about the possibility of fully redeeming it. Still, we believe the project is animated by an urgent problem and a worthy aim, both of which we attempt to do justice to here. Our criticism of deliberative management is thus borne out of a deep agreement and respect for the empirical problem it identifies as well as its connection of moral aspirations with tangible institutional interventions. This empirical problem, and these moral aspirations are in urgent need of workable and practical solutions, solutions that we do not think deliberation so conceived can provide.

THE DELIBERATIVE CHALLENGE – CAN DELIBERATIVE STANDARDS BE FRUITFULLY APPLIED TO BUSINESS?

Deliberative Democracy’s Appeal

As a large and productive school in political theory, there are a number of compelling accounts of deliberative democracy to choose from (see, among others: Bohman, 1998; Dryzek, 2002; Gutmann & Thompson, 1996; Habermas, 1996). By far the most influential in business ethics and management today, mostly introduced through the work of Guido Palazzo and Andreas Scherer, is the classic Habermasian model (see Palazzo & Scherer, 2006; Scherer & Palazzo, 2007, 2011; as well as Baur & Palazzo, 2011; Mena & Palazzo, 2012; Rasche & Esser, 2006).

Habermasian deliberative democracy aims to reconcile moral philosophy with empir-ical social science. There, Habermas (1996) expands on his work on discourse ethics and communicative action to suggest that implicit in human communication rests the foundation for a just political system based on moral reasoning. Habermas looks to take elements of Kantianism, systems theory, linguistics, and legal theory to tease out an account of positive law whose moral legitimacy can ultimately trace itself back to the principle of communicative validity. Validity claims are put forth by individuals, and are criticized if they are found lacking. These communications can then build on themselves to build, modify, or critique social structures (Habermas, 1996, 2001).

Habermasian deliberative democracy thus looks to improve the quality of com-munication in a society to determine (and improve) the legitimacy of extant decisions,






institutions, laws, rules, and practices, as their legitimacy depends on the validity of reasons given for them. Validity, however, is not determined by mere agreement—since that would open the door for parties to use manipulation, coercion, and deceit to secure arrangements favorable to their particular interests. Therefore, in classic Habermasian theory, valid agreement cannot be negotiated, but arrived at through deliberation. Negotiations feature promises and threats that lead to everyone agreeing on an outcome (even happily), but each for different reasons (e.g. you agree to pay me $4 because you would like a latte, and I agree to give you a latte because I would like $4). With classic understandings of deliberation, the good reasons for accepting a decision should be ones that everyone affected can accept (e.g. everyone could agree with the principle of free market exchange, thus legitimizing latte selling). This distinction between deliberation and negotiation preserves the idea that parties engaging in politics ought not to feel administered or pressured: dialogue based on good reasons persuades, and so the autonomy of all participants is preserved—even if they are the persuaded.

The validity of norms, rules, or ideas is thus determined by the discourse principle: “just those action norms are valid to which all possibly affected persons could agree as participants in rational discourses” (Habermas, 1996: 107). It is thus essential for governments, as well as potentially for firms that engage in political or quasi- governmental activities (Matten & Crane, 2005; Scherer & Palazzo, 2007), to engage in extensive high-quality communication in order to gather as many different perspectives as possible, so as to make the most inclusive, rational, and respectful decisions possible. Habermasian deliberative democracy thus builds on individual autonomy to develop a procedural account of justice, which generally results in robust substantive prescriptions in actual practice (Habermas, 1996). Moreover, deliberative democrats can point to the successes of many polities, with their critical independent media and robust civil societies, to show cases where this commitment to inclusive and reasonable dialogue has become an expectation. In these cases, respecting the lofty ideal can happily become strategically necessary, even to strategic agents (e.g. even partisan politicians feign to respect the truth and the norm of truth telling).

We can immediately see how such an account of deliberative democracy would appeal to business ethicists and management scholars, because just as Habermas sought to reconcile Kantian autonomy with real social structures, deliberative management seeks to reconcile Kantian autonomy with real-world management. With deliberative management, the savvy business will learn when and how to garner legitimacy through deliberation (Scherer & Palazzo, 2007; Scherer, Palazzo, & Seidl, 2013). There is also one significant additional benefit: the Habermasian project suggests that norms pertaining to human rights should ultimately be consistent with universal moral values, thus pushing back against those who argue that cross-cultural standards for business are impossible, and thus making deliberative democracy a potentially effective reply to relativists. Given a literature that is deeply perplexed over how to give ethical and managerial advice to multinational firms simultaneously working in dissimilar environments and a post-Westphalian world of weak states (see Santoro, 2010, for a review), Habermasian deliberative democracy becomes particularly attractive. It also indicates the size of the contribution that the theory promises to make.






Drawing on the above, deliberative management scholars understand corporate ethicality or CSR (often referred to as “political” CSR or “PCSR”) as the salutary outcome of communications that firms have with stakeholders and governments (Palazzo & Scherer, 2006; Scherer & Palazzo, 2007; Scherer, Palazzo, & Baumann, 2006). The next step, then, is for firms to develop better social processes to facilitate better deliberation, which will begin to create a virtuous circle in society, as better deliberations return more prosocial outcomes. As Frynas and Stephens (2015) note, these outcomes have been understood in both the macro-level of society more generally, and the meso-level of the corporation and its stakeholders more narrowly. At the macro-level, this virtuous circle can result in a satisfied, more integrated society, with civil society interactions featuring increasing levels of trust and greater senses of justice, fairness, and inclusion (Habermas, 1996). At the meso-level, it stands to also reason that this improvement in the quality and tenor of firm-society relations would also greatly benefit deliberative firms, through their garnering greater amounts of legitimacy (Suchman, 1995).

This account is genuinely compelling. It presents CSR, particularly insofar as it takes on a political cast, as perhaps best understood and managed through the lens of procedural justice. Moreover, it points straight lines regarding how shortcomings in corporate behaviour can be attended to: if deliberation is necessary to act well, in both a normative sense (everyone affected must participate for a decision to be legitimate) and a strategic one (all affected persons’ perspectives must be taken into account for us to best understand and manage firm legitimacy), then the strategic and normative prescription is to “suggest small steps of constant improvement and transformation of real democratic processes and institutions” (Fung, 2005, as cited in Scherer & Palazzo, 2007: 1107). In CSR contexts, the suggested managerial advice has to date focused on the importance of improving corporate decision-making and engagement policies, such that firms would make more comprehensively informed, and thus both more ethical as well as more strategic, decisions (Mena & Palazzo, 2012; Scherer, Palazzo & Seidl, 2013). Significant interest also exists in firms helping influence regulations and “soft law,” particularly through participation in multi-stakeholder initiatives (MSIs) (Mena & Palazzo, 2012; Scherer & Palazzo, 2007; Scherer, Palazzo, & Baumann, 2006; Scherer, Palazzo, & Seidl, 2013). Deliberative democracy, based on Habermasian theory, thus promises CSR researchers a positive theory about contemporary firm legitimacy, a fully portable and applicable normative theory, a theory about firm nonmarket strategy, and a ready set of institutional pre-scriptions all in one.

Extant Challenges to Deliberative Management

In response to the deliberative management scholars, however, the literature has seen a series of robust challenges, particularly from scholars concerned about the effects of deliberative expectations on weak stakeholders (Banerjee, 2010; Edward & Willmott, 2008; Ehrnström-Fuentes, 2016; Kuhn & Deetz, 2008; Noland & Phillips, 2010; Whelan, 2012; Willke & Willke, 2008). Broadly speaking, deliberative man-agement’s critics argue that deliberative theory, though emancipatory in its objective, actually shifts our ethical expectations in ways that often further the interests of






large firms. Specifically, shifting from an understanding of corporate responsibility as responding to stakeholder concerns to the pursuit of respectful dialogue might well advance firm interests if a public and open discussion is what the firm wants (and what the community might want to avoid). Given that most marginalized communities—as, for example, in the cases of the many indigenous communities worldwide contesting extractive and infrastructure projects—lack ready access to public relations professionals and technical staff, these are not idle concerns (Banerjee, 2010; Willke & Willke, 2008). The democratic potential of stakeholder deliberation will unavoidably be frustrated by extant inequalities and power imbal-ances that cannot help but taint stakeholder deliberation (Moog, Spicer, & Böhm, 2015). Moreover, if our lens for assessing ethicality is to assess firms’ commitment to dialogue, there is a worry that this might help inappropriately deflect society’s anger, as a commitment to dialogue may be easier to fulfill than a commitment to abandoning a contested practice (Banerjee, 2010).

To highlight the urgency and structural nature of these concerns, critics have made two large, related points. The first argument can be found in articles by Banerjee (2010), Whelan (2012), and Willke and Willke (2008). They point out that a fun-damental challenge of applying deliberative democracy to management is that it presumes that agents are able to separate themselves from their strategic interests when deliberating, which is problematic in the context of for-profit firms that are legally organized according to principles of fiduciary duty to shareholders. They thus suggest that other political theories might be more appropriate for thinking through corporate responsibility issues. Secondly, and relatedly, these critics also point out that the deliberative management scholars risk undermining state authority and state responsibility. On this count, deliberative management theorists are insufficiently attentive to the history of CSR and its role in affecting the ever-blurry line between business and political society (Djelic & Etchanchu, 2015). If deliberative democracy is applied straightforwardly to business, while we are credulous of business’ claims to earnest deliberation, we might run the risk of minimizing state responsibility and simultaneously overestimating the power of civil society to hold firms to account (Néron, 2013; Whelan, 2012). In this way, deliberative management scholars can inadvertently advance a libertarian conception of CSR where public responsibilities of society are privatized and therefore become the purview of self-regulating busi-nesses (Mäkinen & Kasanen, 2016).

These are good points, and we build on elements of them below. We can see, though, that if they are considered narrowly, these concerns are fairly easy to respond to (if unsatisfyingly so). If the critics were to push the deliberative management scholars on the issue of power imbalances and how this could predictably corrode dialogue, then deliberative management scholars could presumably just pledge to take those concerns into earnest account (see Chambers, 2003, for an example of this concern and commitment in political science). If critics were to emphasize the issue of firm motivations, deliberative democrats might well reply that this is a limitation to all accounts of corporate responsiveness, and yet some firms do happen to act responsively. Finally, many of us secretly worry that all CSR theory (and all CSR practice) runs the risk that we are inadvertently letting our state regulators off






the proverbial hook (among others, see Fleming & Jones, 2013; Kinderman, 2012), meaning that this critique is not tied to the deliberative management theorists spe-cifically, but business ethics and CSR broadly. This helps explains why, in the face of vigorous (and fairly significant) critiques, the deliberative management scholars have yet to respond in any meaningful way. In effect, the debate is at something of a standstill and the interlocutors have, to a certain extent, talked past one another.

STARBUCKS AND “RACE TOGETHER”: A WELL-MEANING FAILURE

Starbucks and “Race Together,” where Starbucks sought to participate in dialogue with employees, customers, and other stakeholders on the subject of race relations—both to improve wider social conditions through education and also to inform corporate policies on subjects that could be seen as racialized—enters here. It helps illustrate that the problems with deliberative management go deeper than concerns over the predictability of firm motivations and the proper role of the state in regulating aber-rant corporate behavior. This is because in this case those conditions conspicuously do not apply. Starbucks is by many measures an ethical company,3 and virtually nobody saw “Race Together” as a manifestation of instrumentality or strategic thinking on the part of the firm (Carr, 2015). Starbucks’ executive team has indeed argued that demonstrating corporate values is good for the firm’s bottom line (Starbucks, 2015a, 2015b), but “Race Together” featured no evident tie-ins nor any effort to capitalize on the massive attention that the campaign provided them (Carr, 2015). Without evidence to the contrary, the campaign’s earnestness can reasonably be taken at face value. Also, in this case the regulatory oversight of the American state was not being undermined or avoided in any particular way.

We mentioned above that “Race Together” was not a successful campaign. In fairness, we should note that it did feature some low-key but reasonably successful early “town-hall” meetings with employees, where management reached out to the organization to express their concerns and to listen to feedback. However, when the dialogue was expanded externally to stakeholder groups and customers it ran into near-uniform negative reactions of such intensity that the initiative was quickly and quietly ended (Carr, 2015). Without wallowing in Starbucks’ trouble, the nature of this failure is illustrative in how it raises questions about deliberative management theory’s applicability as a “working theory” that can be used to generate even the broadest and most general practitioner advice.4 The fact that “Race Together” failed suggests that there are powerful norms and institutional realities that can derail delib-erative engagements, even engagements initiated by well-meaning, well-resourced, and committed firms such as Starbucks (i.e. firms that are nominally ideal for delib-erative purposes).

In “Race Together” we see genuine effort at deliberation by an uncommonly ethical and effective company. Nonetheless, it resulted in a number of serious normative and strategic failures that go far beyond the extant critiques in the literature, and which are absent from discussions of whether corporate deliberations are smart practitioner advice. Normatively speaking, there were issues of exploitation and standing: was Starbucks’ executive team effectively campaigning on the backs of their diverse front






line workforce? Should Starbucks employees of color have to talk about race relations with white customers? Should frontline employees be encouraged to adopt, and then discuss, firm policies about fraught issues such as racism? More tangibly, did Starbucks actually want these employees (including roughly fifty thousand employees of color) to speak candidly about race with each other and with customers? Or did the firm want and expect a sanitized version of that discussion? As one critic put it at the time, why would we assume that “any conversation (about race) is better than none?” (Conner, 2015). These primarily normative problems had strategic effects, as Starbucks was not seen as a thoughtful, respectful, informed partner in social dialogue, but rather the exact opposite: Starbucks was seen as an over-reaching and clumsy organization with poor social understanding and significant restraint issues (Berkowitz, 2015; Conner, 2015; HBO, 2015; Tolentino, 2015).

As a result of all of this, when the campaign was abandoned, the total effect was normatively and strategically negative. For our purposes, what is essential is that these are all normative and strategic harms that are tied to genuinely complex underlying questions about what Starbucks could and should do in regards to the problem of racism in American society. And virtually every dynamic is made significantly more complex, more ethically fraught, and harder to predict because Starbucks is a for-profit company that is employing, contracting, or serving these deliberators.

The setting of the deliberation infused the dialogue with at least two compli-cating factors. The first, not limited to the market per se but an urgent question in wider discussions of deliberation nonetheless, has to do with organizational hierarchy—how effective and how convincing can agents of hierarchical organi-zations be in deliberative contexts where their organization’s positions are already clear? (Dryzek, 2002; Pierce, Neeley, & Budziak, 2008). The interplays of firm hierarchy and everyday organizational life create dilemmas and presumed expecta-tions when politics are suddenly thrust into the conversation, even if those politics are brought in with good intentions. The Starbucks example does appear to have been initiated and propelled by generally well-meaning individuals, but we note that these problems of organizational life, hierarchy, and power are magnified in the majority of cases where firms and managers are less prosocial than they were here (Banerjee, 2010; Whelan, 2012).

Secondly, the issue of the awkwardness of the deliberation is key: accounts from the campaign were virtually unanimous in emphasizing how odd and uncomfortable the encounters between Starbucks and the outside world happened to be (Carr, 2015; Somaiya, 2015; Tolentino, 2015; Walters, 2015). The issue was less that discussing race relations is awkward and uncomfortable. The problem with “Race Together” was that there was suddenly an expectation that Americans ought to discuss race relations while working at, or frequenting, a coffee shop. Audiences clearly found this both disorienting and inappropriate. On a granular level, customers and employ-ees had trouble imagining political activity in their morning routine, and begrudged the idea of having to be relatively eloquent on a sensitive subject just to preserve politeness while grabbing or selling a coffee (Tolentino, 2015; Walters, 2015). On a higher level, however, there appeared to be disbelief that “Race Together” was a meaningful and worthwhile initiative. Outside audiences clearly had trouble






taking Starbucks’ earnestness seriously (even though it may well have been), and many simply had little interest in what a company like Starbucks would have to say anyway (Carr, 2015; Somaiya, 2015).

“Race Together” seems to have exhibited significant deficiencies of what Suchman (1995) calls “cognitive legitimacy,” support for an organization or initiative resting on largely subconscious acceptance and expected patterns or models of life. “Race Together” could point to fairly few such models. Given this fact, as well as the audience reactions mentioned above, “Race Together” was neither easily com-prehensible nor taken-for-granted in the ways that engender cognitive legitimacy (1995: 582). This, in part, explains why the early days of “Race Together” were, counterintuitively, relatively successful as Starbucks employees seemed to generally appreciate the firm’s efforts at internal dialogue on race issues (Carr, 2015). At first glance, firm town halls are actually quite problematic from a deliberative perspective, as they feature participants who are significantly constrained by power imbalances—Starbucks employees were of course publicly addressing their executive teams (Carr, 2015). However, there are extant norms, models, and expected practices structuring these sorts of engagements, as well as larger norms authorizing firm town halls as legitimate modes of an executive team showing its concern and soliciting constructive feedback. The second, external, phase of deliberation featured little of this, which is why the backlash to that expansion of the deliberation was far stronger, even though it actually made weaker demands—merely that employees and customers encourage one another to discuss race relations in a low key way.

While there might be an urge to dismiss this example as extreme or idiosyncratic, we think that would be premature. “Race Together” was indeed quite ambitious, and did suffer from insufficient strategic planning in some respects (Carr, 2015), but it was well resourced and not out of step with the general thrust of deliberative management theory. Scherer and Palazzo’s “message to managers” is to “engage in political discourse” (2007: 1113) to influence the social setting, to show reciprocal respect to stakeholders, and to help set new industry norms. That was the entire point of “Race Together:” deliberating with employees and the wider world to proactively discover the firm’s social responsibilities and then to influence social perceptions of Starbucks’ role in the world. This is exactly the sort of political work that the deliberative management scholars encourage.

Moreover, it is not clear that engaging Americans on race5 is a more challenging aim than, for example, deliberating with firms and cross-sector stakeholders across multiple countries with a view to establishing firm standards, let alone the prospect of deliberating with indigenous peoples who might inhabit completely different social imaginaries (Ehrnström-Fuentes, 2016). Deliberation on the big issues will always be challenging, and this example features a willing and wealthy firm on the “right” side of public opinion within a functional society. Finally, while the gen-eral topic of “race” was not essential to Starbucks’ core operations, Starbucks is a leading firm that employs large numbers of people of color in an industry known for poor working conditions due partially to structural racial injustice (Austin, 2000; Newman, 2000; Seidman, 2015). So deliberation on the topic of race relations and






the role of firms like Starbucks in that environment is both a matter of genuine import and entirely consistent with deliberative management theory. What’s inconsistent is how it worked out in practice.

A supporter of deliberative management theory might read the above and reply that we’ve missed the point: that this case actually featured surprisingly effective deliberation, it’s just that it occurred slightly off-stage. After all, society evidently considered Starbucks’ incipient plan to lead on the issue of race relations, and the public reply was clear, with reaffirmed norms about the divisions between the market and politics. In a sense, then, the system worked! However, adopting this perspec-tive requires us to place significant brackets around the core theory, as deliberative management has typically placed heavy emphasis on firms taking charge of their socio-political environments through proactive dialogue (Mena & Palazzo, 2012; Palazzo & Scherer, 2006; Scherer & Palazzo, 2007, 2011). Exhortation to reasonable dialogue is actually the fundamental point of the theory. It would thus be bizarre to see Starbucks’s normative and strategic failure at attempts to engage in dialogue as illustrative of deliberative management: as the theory stands today, normative and strategic success ought to flow (or, perhaps, ought to be at least plausible) from the discussions that Starbucks tried to initiate.

Put simply, deliberating simply did not result in the normative or strategic benefits here as suggested in the literature: Starbucks did not have the chance to learn very much, did not impress its stakeholders with its respectful demeanour, made inap-propriate demands of its employees of color, and alienated many along the way. Now, a single objecting case is hardly categorical and does not in itself invalidate the theory, but it can give us pause. The problems of “Race Together” simply aren’t anticipated or explained by deliberative management theory (or the extant critics), and this raises questions as to the explanatory and predictive power of the theory, and its ability to generate reliable practitioner advice.

These challenges are daunting, but they are not necessarily damning. After all, deliberative management scholars are surely right that corporations often suffer from a lack of legitimacy in our post-Westphalian world. And they are also correct that something akin to deliberation does seem to be happening in many cases of CSR dialogue. The problem is that deliberative management scholars have not managed to establish a theory that takes the distinctive nature of the corporate context suf-ficiently into account. Transferring the model of deliberative democracy, originally conceived of as a model of state politics, to the corporation presents a large set of challenges that require significant conceptual work to overcome. The deliberative management project, we maintain, has not done this to any sufficient degree. The end result is a correctly-identified problem, but also an implausible solution drawn from a normative theory not calibrated for the task at hand.

To get at the core of the problem, and how it might be overcome, we return to the root theory: what does the political and social theory of Habermasian deliberative democracy tell us about the idea of companies deliberating in society? It is worth noting that deliberative management theory entails a particular view of the nature of deliberative democratic theory. Essentially, the theory takes Habermas to be offering a normative claim (moral legitimacy requires deliberation, so we should encourage






democratic deliberation to render our institutions more legitimate), which can then be used to address an apparent problem for business—namely, the lack of legitimacy or social license in our multicultural, multinational, and post-Westphalian world. There are three assumptions here that appear unmotivated: 1) that the theory of deliberative democracy is primarily a normative or prescriptive theory of politics and morality; 2) that firms are a viable subject of this procedure of deliberative legitimacy; and 3) that increasing deliberation amongst the firm’s stakeholders will in fact increase a firm’s deliberative legitimacy. Here we examine and challenge the soundness of these assumptions in order to show the problems at the heart of deliberative approaches to corporate social responsibility and the “Race Matters” campaign specifically. We unpack and challenge these assumptions in turn.

THE SOCIAL THEORY UNDERLYING HABERMASIAN DELIBERATIVE DEMOCRACY6

As we’ve already noted, thinking of deliberative democracy purely as a normative theory is slightly misleading. The legitimating function of deliberation is not proposed as simply a salve for political crises, nor as a superior way of conducting politics; instead, theories of deliberation are offered as a way of extending notions and pro-cedures of democratic legitimacy that are already immanent in our social practices (Chambers, 2004a; Cooke, 2006). Though certainly not without a prescriptive ele-ment, theories of deliberative democracy are better understood as social theories, albeit social theories with a normative bent. This is all worth understanding because calls for deliberative democracy are therefore inherently tied to a more complex and thoroughgoing social theory (Stahl, 2013).

The underlying idea in classic Habermasian theory is that in modern society we cooperate in two distinct, though intertwined, ways. One way we cooperate is through assumed background consensuses on what people should do in any partic-ular instance, which Habermas opaquely refers to as the “lifeworld.” In this manner, we act in a certain way not because we expect certain things to happen as a result, but because it is either explicitly or implicitly understood as the right thing to do, either generally or in a particular instance (Habermas, 1984a: 335–337; Habermas, 1996: 21–23). Many fairly prosaic things fall into this category: our interactions with friends, family, and colleagues; spontaneous queuing to wait for a bus; and so forth. What makes modern society distinct from premodern societies is that in the latter, much more activity is governed by the shared acceptance of these norms (Habermas, 1984b). In modern society, with the development and growth of a complex division of labor, such shared consensus has become unwieldy and insufficiently robust to coordinate such large-scale organic solidarity.

This is where the second mode of cooperation comes in, the “systems” (Habermas, 1984b; Whelan, 2012; Willke and Willke, 2008). Again, there is plenty of nuance here, but for our purposes we can simply define “systems” in contradistinction from the “lifeworld”: systems are those forms of cooperation in which human action is oriented by consequences, and not by norms. In order to get greater numbers of people to cooperate in the large scale demanded by modern societies, we introduce






various forms of incentives and disincentives to get people to do what cooperation demands, without the difficult process of getting everybody to agree on the same norms. Insofar as these incentives have a particular pattern or logic to them, we can speak of a social system in which human cooperation is mediated by systemic incentives. In a manner of speaking, as societies grow, they tend to “outsource” the organization of cooperative activity to the systems.

The market and the state, in this view, are both complex subsystems: they get people to cooperate without shared background assumptions of what the terms of cooperation are. This is probably easiest to grasp with the market. Habermas (1984b: 171) refers to the latter as a “block of more or less norm-free sociality,” meaning that the market does its work of enabling the division of labor and inducing social action through more or less instrumental means. Much like Adam Smith’s “invis-ible hand,” the historical development of the market is so remarkable in this view because it allows for more people to cooperate with one another without requiring that people even know or identify with one another, let alone getting them to agree on shared norms.

The state is slightly trickier, as it functions as a medium of human cooperation in two interrelated ways (Habermas, 1996). On the one hand it works because it puts forward rules and laws that structure human activity through the incentives and disincentives they exert. We refrain from doing things because we know that noncompliance with the law will result in punishment. On the other hand, laws also function because we see them as valid in some way. Put better, the modern state, through legislative enactment and executive enforcement, is able to discharge its duties because it functions like a system, but people adhere to its dictates because it fits with the normative resources we find in the lifeworld.

The problem that deliberation is meant to solve is that the fact of law has become divorced from its validity; the modern system has undermined our ability to engender even this more limited sphere of norm-oriented behavior (Jutten, 2013). The purpose of democratic deliberation is to bring the consequence-oriented nature of modern cooperation back within the purview of shared norms, without sacrificing their ability to facilitate cooperation through instrumental means. Why should we expect deliberation to be able to do this? Why not extend or bolster traditional mechanisms of democracy, like voting? As described above, properly structured deliberation is the procedure for this purpose because it forces participants to consider their inter-ests in terms of collective and shared interests, as opposed to merely aggregating individually-considered interests (as secret ballot voting does).

The emphasis on deliberation is due to the nature of norm-oriented behavior and its relationship to the instrumentally-oriented systems. In the Habermasian view, we require deliberation to generate shared social norms that can then be put into effect through the modern state apparatus. The state can then also constrain market activity through the use of legislative and regulatory mechanisms to assure that the market does not create bad consequences or undermine the foundation of social solidarity. The crucial point, though, is that the market and the state are dis-tinct institutions with distinct normative orientations. The legitimating function of deliberation is based on a theory of modern society and its inherent divisions and is






meant to be applied to particular institutions in modern society, namely the state and law. Because the purpose of the market is precisely to orient behavior with minimal concerns for moral consensus, the market is not meant to be affected internally, but rather from the outside. The question then becomes whether or not the move that Habermasian-inspired deliberative management theorists make—to prescribe the procedure of deliberation to the corporation—is justified.

ARE CORPORATIONS PLAUSIBLE SUBJECTS OF DELIBERATIVE LEGITIMACY?

The difficulty arises because of the corporation’s location in the market system. Deliberation is not meant to be some procedure that is foisted onto us by speculative philosophers, but something that draws on resources that are already built into the functioning of the institution in question. With the law this makes sense, because the law’s functioning rests on the notion of it being valid; promoting deliberation in civil society is a procedure meant to re-establish the normative bases that the law necessarily requires. The question is whether the same can be said about the corporation: Are there things implicit to the corporation and the market that would make deliberation an appropriate and effective procedure for establishing a program of corporate social responsibility?

Understanding the market as an arena of “norm-free sociality” would seem to suggest that such implicit resources might not be forthcoming. Indeed, Habermas (1996: 165-166) notes that in many, in fact the majority, of social situations moral deliberation will not be available to participants: “Whenever it turns out that all the proposed regulations touch on the diverse interests in respectively different ways without any generalizable interest or clear priority of some one value being able to vindicate itself,” we should not expect the possibility of a “rationally motivated consensus” via deliberation. This would seem to capture the condition of corporate stakeholders rather elegantly. Even if we were to take the most homogenous class of stakeholders—shareholders—to be the entire “constituency” of the corporation, we see that though they perhaps share an interest in increasing profits, the common interest ends there: the various shareholders pursue this profit for a variety of rea-sons, and want such profit pursued in different ways (i.e. short-term vs. long-term) (Jensen, 2002). And this is only considering the case of shareholders: once we intro-duce employees, customers, raw-goods suppliers, members of local communities, and other stakeholder groups, the very idea of a “generalizable interest” would not appear to be forthcoming (Hansmann, 1996).

We should distinguish this critique from those of Whelen (2012), who also contends that the corporation’s location in the system is troubling to a deliberative approach to corporate social responsibility. The concern that he offers, however, is that because corporations are forced to pursue profit due to the market system, their use of things like deliberation will typically be strategic and profit oriented, robbing the procedure of its normative value. We share this concern, though as we have noted this may not always be the case; we are able to imagine corporate man-agers who might initiate deliberation for ethical reasons, as appears to be the case






with Starbucks. Our point is that even if pursued genuinely, corporations themselves are poor venues for deliberation, due to how they are situated in, and structured by, the market system. In this way, our criticism is much closer to that of Hussain and Moriarty (2016) who argue that the very nature of the corporation makes it ill suited for deliberation. However, where Hussain and Moriarty emphasize corpora-tions’ non-representative nature as disqualifying them from being participants in legitimate deliberation, we contend that their strategic imperatives make them ill suited as forums for legitimate deliberation as well. Not only is the corporation a poor deliberator, it situates those within it to deliberate poorly.

This is not to say that there isn’t communication within the corporation, some form of talking in order to reach an agreement in such situations. The fact that cor-porations exist for strategic reasons, and that people engage with them instrumen-tally, does not mean that we don’t find discoursing within it. However, the manner in which the corporation situates its various stakeholders generally puts them in a position of bargaining, not of deliberation. While admittedly ideal types, classically defined Habermasian deliberation aims to produce reasons that all accept and agree upon, whereas bargaining aims to reach compromises that all find agreeable but for their various reasons. People are not positioned to come to agreements based on recognition of the force of others’ arguments in such instances; instead, people settle on compromises based on the various material incentives and threats that others introduce in order to induce agreement. Despite deliberative management’s claim that the corporation often operates like a state in many instances, this does not mean that the stakeholders easily relate to the corporation, or each other, in the manner that citizens relate to one another or the state.

The best bet in such situations is what Habermas (1996: 167) calls “fair bargaining,” a procedure that does not try to produce rational agreement, but rather an end result that at least takes all parties’ interests equally into consideration. While “fair bar-gaining” certainly has deliberative elements (Mansbridge et al., 2010), as it features the exchange of information in a non-coercive manner, it is not obvious that it is up to the task that deliberative management theorists need it to be. Can we expect “fair bargaining” to generate the kinds of ethical claims that could underwrite actionable standards of social responsibility? It seems unlikely for a number of reasons. First, fair bargaining is not a substitute for rational deliberation but is rather something that requires a background set of deliberated-upon suppositions. That is, we are only able to know that we should adopt the bargaining procedure because we have come to the conclusion that our current positioning is not amenable to rational deliberation. Of course, the program of PCSR rests upon the presupposition that such a background consensus is impossible in our postmodern and global world. Indeed, it is such a vacuum that motivates the idea of corporate deliberation in the first place; the corporation is meant to step in and fill the democratic void left by the state’s absence.

The second concern following from this is that a procedure of “fair bargaining” requires substantial institutional engineering to produce. This procedure is meant to neutralize the differentiated bargaining power that each participant has. But enforcing this would require precisely the kind of institutions—backed with the kinds of deep






and prevailing normative claims—that PCSR presupposes not to exist. It is worth noting to this end that the prerequisites for fair bargaining are far less demanding than those required by rational deliberation, which require not merely an equal consideration of interests, but equal ability to make argumentative claims (which requires equal access to education and cultivation of political capacities), equal attention and consideration from others, equal respect, and so on. Seeing as even fair bargaining in the corporation seems hard to imagine, the idea of widespread rational deliberation within the corporation, and between the corporation and its stakeholders, seems far-fetched indeed.

But even if this weren’t the case—that is, even in the various contexts where cor-porations do exist within a background of laws, policy, and norms—it seems hard to reconcile how a corporation as it currently exists could be subject to procedures of fair bargaining. Again, let us assume that the corporate constituency was only its shareholders. Asking the corporation to take all of the shareholders’ interests into account equally would essentially be asking corporations to function like coopera-tives, with their one-member one-vote rules. Now, it may in fact be a good thing if all corporations were to function like cooperatives. But seeing as corporations have generally gained the power that deliberative management scholars are concerned with by virtue of their ability to attract investment, asking corporations to function like cooperatives would be to assume the problem away. And again, once you add different stakeholders into the equation, it seems infeasible to expect to create sit-uations in which all interests are taken into consideration equally, without hurting the corporation’s ability to attract investment.

However, even if all of the foregoing were not the case—even if fair compro-mise were achievable within the corporation—it is not a strong enough procedure to sustain the normative weight that deliberative management demands of it. Even if we could engineer the corporation such that all interests were weighted equally and could produce a compromise that rendered all parties satisfied or better off, this would still only be an agreeable aggregation of interests. This is no reason to think that the resulting arrangement reflected any sort of morally valid result. To think of such agreements as representing moral conclusions is to mistake strategical-ly-reached compromise for moral consensus, and would likely reproduce precisely the kinds of corporate malfeasance that the project of corporate social responsibility is meant to address.

This helps bring the weaknesses of the “Race Together” campaign into sharp relief. People cannot be assumed to enter Starbucks—either as managers, employees, or customers—with any robust intention or desire to come to agreement on values; much more plausibly, they transact with Starbucks to align their interests—to make profit, to earn a wage, or to buy a latte. Now, this isn’t to say that this cooperation will be a pure process of buying and selling according to prices; there will likely be communication over the nature of this cooperation, which will bring reasons to bear and produce different terms of cooperation—developing best practices for managers, structuring workplace conditions and protocols for employees, and acquiring the sale of fair-trade products (for instance). But this should not be mistaken for deliberation; interests are aligned through reasoning here, true, but also through non-deliberative,






economic pressure, which leads to aligned interests, but not shared understandings of factors or norms based on collective criteria. Forgetting for the moment the very large structural inequalities against which a Starbucks deliberation would happen, the positioning of people within Starbucks is fundamentally at odds with the context needed for deliberation. One only need consider that the most fundamental norm of the service industry—“the customer is always right”—is diametrically opposed to the orientation of proper deliberation—which says that people should enter expecting to have their opinions altered, and try to alter others in turn. An attempt to harness deliberative democracy for the purpose of ethical management cannot ignore these types of constraints since they are inherent to the very nature of corporate capitalism.

UPDATING DELIBERATIVE MANAGEMENT THEORY

We might summarize the previous section by saying that trying to establish the moral validity of the corporation through deliberation runs into three serious problems: 1) conceptually, the corporation does not seem to be the kind of institution that is subject to deliberation due to the instrumental manner in which people associate with it; 2) even if it were such an institution, empirically we see that corporations are not actually structured to enable deliberation (or even fair compromise) to take place, nor are they likely to be made so; and 3) given these conceptual and empirical obstacles, demanding that the corporation try to establish its own legitimacy can have the perverse consequence of giving instrumental action, or benevolent dysfunc-tion, the cover of normative validity. The worry isn’t that corporations discover that deliberation is impossible and that their ambitions are for naught; the worry is that they do deliberate, that it creates perverse consequences, and that we mistake those consequences for the valid and legitimate outcomes of democratic engagements.

This may seem a rather grim appraisal of deliberative management and its moral promise. We have no intention of shying away from this conclusion. However, in the process of criticizing, we should not ignore nor forget the very real problems that the deliberative approach is meant to address, nor the underlying moral commitments motivating it. PCSR rests on a fundamentally sound and important empirical point: that corporations have taken on the roles of government in various instances of stat-utory vacuums. The problem of the political power that firms appear to wield, and PCSR’s underlying commitment to democratic legitimacy, are urgent and admirable, respectively. The problem is that in trying to address these problems, deliberative management scholars have made a category error in their application of Habermasian theory. They have drawn on a conception of democratic legitimacy that is informed by a social-theoretic distinction between strategic and normative behavior, between markets and politics; but then, bewilderingly, they apply a procedure designed for the latter to an institution that is most appropriately conceived of in terms of the former. The incoherence of “Race Together” as a CSR campaign points us toward the more general incoherence of using classical Habermasian deliberative democracy as a means of securing the social legitimacy of corporations.

If PCSR advocates wish to address the corporation’s lack of democratic legitimacy they ought to disabuse themselves of their classical Habermasian underpinnings.






Happily for them, recent advances in the theory of deliberative democracy have challenged some of the distinctions that the classical model of deliberation rested upon, generating more realistic and nuanced models of deliberation and its place in a democratic society. These theoretical advances offer possible strategies for PCSR to reconceive the relationship between the corporation and deliberative democracy in a manner that is more sensitive to the realities of firms and markets. Here we review two such advancements that are particularly relevant for deliberative management scholarship; based on these developments, we suggest two potential ways for reconceiving deliberative management that may render it more plausible conceptually and practically. This plausibility, however, comes with a cost to the general project: it requires recognizing that deliberation is not likely to render the corporation the legitimated institution as previously thought; ultimately the legiti-macy of the corporation requires a set of background agreements and contentions, if not political and social institutions, the absence of which is precisely what PCSR is meant to address.

Deliberation v. Negotiation

One of the main criticisms levied against Habermasian deliberative democracy has been that it cannot deal with the messy realities of everyday politics and therefore precludes other, less straightforwardly “rational” forms of communication (Kohn, 2002). This creates a number of problems: it is overly idealistic, setting standards for democracy—namely that everybody deliberate in a perfectly rational and dis-passionate manner—that can never be reached (Sanders, 1997); it is exclusionary, because it favors those who are better trained and better prepared for such forms of deliberation, thereby further marginalizing the already marginalized (Young, 2000); or that it is overly apolitical, because it forces would-be deliberators to check their particular interests and concerns, as well as their righteously angry or emotional forms of speech, at the doors of deliberation (Shulman 2008; Young 2001). By setting high standards for politics in the hopes that public life can be redeemed from instrumen-tality, Habermasian theory undermines its own emancipatory ambitions.

In response, many deliberative theorists have sought to lower the threshold for what counts as deliberative communication so as to better accommodate the forms of participation and communication that politics demand. Against the classical model that seemed to imply that deliberation must be a coldly rational and selfless enterprise—simultaneously rendering it morally appealing and utterly implausible—deliberative theorists have offered accounts of deliberation that include certain kinds of appeals to self-interest (Mansbridge et al., 2010), rhetorical modes of address (Chambers, 2009), and contestatory ambitions.

For deliberative management scholars, the most important shift has been in emphasizing ways in which forms of negotiation can be included in democratic deliberation (Mansbridge et al., 2010). Whereas the classical model of deliberation held that deliberative forms of communication are claims made in the first-person plural about the common good, and non-deliberative communication is made in terms of “I” about self-interest (Elster, 1986), recently theorists have contended that such distinctions missed the mark. The characteristic aspect of deliberation,






on their view, is not the kinds of arguments that participants advance, but the ways in which participants are situated vis-à-vis one another, and the manner in which their locutions influence others. The relevant distinction for deliberative procedures is not between self-interest and collective-interest, or deliberation and negotiation, but coercion and non-coercion. Appeals to self-interest and particularity are fine for deliberation; it is the use or threat of force and sanction that contaminates democratic legitimacy by forcing people to accede to that which they do not think they should, and which they otherwise would not (Mansbridge et al., 2010).

Flowing from this, the stark conceptual distinction between deliberation and negotiation becomes much blurrier. Deliberations need not be conducted solely by reference to a “we” (nor will they ever be), and deliberations need not conclude with a final “answer” that all agree to for mutually-shared reasons, if this is ever the case. Instead, deliberation will include the voicing of individual or parochial interests and concerns of those present, and will often end only provisionally on solutions that are marked less by consensus than they are by various forms of negotiated settlement: the convergence of various reasons, the overlapping of various distinct interests, win-win settlements that obviate the initial controversy, or mutual sacrifice (Mansbridge et al., 2010). The project for deliberative democracy is not to eliminate or filter out self-interested claims, but rather to try and structure deliberations such that actions and speech aimed at coercing others are kept to a minimum, if not ultimately eliminated. According to this view, deliberative theorists must become attuned to the power imbal-ances that could enable some deliberants to coerce others, and find ways to mitigate such actions or counteract them.

This shift is both boon and bane to the project of deliberative management. On the one hand, if deliberation need not be free of self-interested claims then the corporation—replete as it is with its mainly systematically consequence-oriented constituents—suddenly looks like a more plausible site for deliberation. Shareholders, customers, and suppliers, can engage in deliberative negotiations that are animated both by their specific individual concerns and the mutual interests that they all share; this could quite plausibly increase the perceived legitimacy of a corporation’s socio-political action, while also addressing the various interests that stakeholders attempt to satisfy through their engage with the corporation.

On the other hand, however, this also clarifies the nature of the initial problem for PCSR. The problem is not that corporate stakeholders are consequence oriented and strategic, but rather that economic institutions like the corporation are inher-ently coercive because the market always furnishes the threat of “exit” (Hirschman, 1970): management can threaten to fire employees, withdraw investment, or move capital and manufacturing to offshore locations; customers can boycott; workers can withholder their labor. Of course deliberative settings will always be marked by such possibilities; the problem is that the corporation distributes the capacity for such coercive power so asymmetrically. As we saw, the PCSR project was motivated by the fact that corporations wield great, governmental power over their stakehold-ers in various parts of the world. By virtue of these material and social resources, however, corporate representatives and other stakeholders are positioned to coerce other stakeholders to greater degrees. While the de-emphasis on self-interest can






partially redeem the deliberative management project, the resulting emphasis on non-coercion is a reminder of just how hostile the corporate environment is to the emancipatory aims of deliberative democracy.

Different Contexts, Different Standards

In light of this, another shift in deliberative theory has been toward a concern with the contexts in which deliberation takes place. Bächtiger, Niemeyer, Neblo, Steenbergen, and Steiner (2010) have argued that the classical model of delib-eration and this newer approach (which they designate “type I” and “type II” deliberation respectively) each have strong and weak spots. As we have seen, the classical Habermasian model offers the promise of bringing greater reason and consensus to bear on political and social institutions, but it does so by prescribing an overly rigid procedure that excludes and marginalizes participants and forms of participation. Type II deliberation, on the other hand, is characterized by a much more accommodating approach to forms of communication. The emphasis here is not on how deliberants communicate, but on the end of greater understanding and integrative agreements. The danger, however, is that such theoretical moves may stretch the concept of deliberation beyond any meaning; by understandably moving away from the ideal of cold rational discourse to more quotidian or excit-able forms of speech, such theorists open the way for deliberation to be overrun by precisely the pathologies it was meant to address.

To make up for these blind spots, some theorists (Bächtiger et al., 2010; Goodin, 2005) have contended that we integrate both models of deliberation by doing them in sequences: sometimes the more open type II forms of deliberation will be the only type of deliberation available to us and we use it as a way of informing a future type I deliberation. The key here is that the context of the deliberation must be consid-ered in order to know the sort of deliberation that ought to be prescribed. Theorists of various ideological stripes have warned about the “pathologies of deliberation” (Mansbridge et al., 2012) or “discourse failure” (Pincione & Teson, 2006), both of which refer to the perverse and counterproductive results of applying deliberation to a context inappropriate for such a procedure. When the context is marked by great power imbalances and antagonistically positioned participants, for example, we must be less rigid, demanding, or expectant with regards to how participants ought to communicate and deliberate. To prescribe type I deliberation in such context will very often given coercive actions the cover of deliberative intention.

This sort of insight has led to a general reformulation of deliberation’s relationship with democratic legitimacy. Instead of thinking of deliberation as a one-to-one process where a group deliberates upon the workings of an institution to which they are subject, we can think of deliberation as occurring through multi-layered and differentiated set of institutions and venues. A host of leading scholars in deliberative democratic theory have articulated this in terms of a “deliberative system.” In this view,

the entire burden of decision making and legitimacy does not fall on one forum or institution but is distributed among different components in different cases….Because political judgments involve so many factual contingencies and competing normative






requirements, and because politics involves the alignments of will, both in concert and in opposition, among large numbers of citizens, it is virtually impossible to conceive of a political system that does not divide the labours of judgment and then recombine them in various ways. The concept of a system highlights these necessities (Mansbridge et al., 2013: 5).

The systemic approach sees different parts of a society as serving different purposes in contributing to deliberation when taken in the aggregate. So, while partisan media outlets, protest movements, or expert driven forums are generally not particularly deliberative in the classical sense (since they do not seek to be moved by others’ arguments, they approach opponents in an adversarial manner, or run counter to aim of having all participants deliberate equally), they might still contribute to large-scale deliberation by generating ideas or claims that are deliberated upon in another setting (parliaments, newspaper op-eds, academic journals, social media, etc.).

Put more succinctly: the fact that a particular institution is not internally deliberative does not mean that it is not contributing to a more general process of deliberation in some way. Similarly, an institution that is internally quite delib-erative might be problematic if it causes disequilibrium in the rest of the system by, for instance, displacing another crucial component of the deliberative system. This maps onto recent work in business ethics and political theory that tries to understand the relationship between democracy as an organizational/procedural principle and democracy as a principle of legitimacy. A democratic society might opt to establish non-democratically organized, decentralized institutions for the purpose of achieving various forms of social cooperation that are democratically legitimate (Knight & Johnson, 2011). As Hielscher, Beckmann, and Pies (2014) note, increasing participation in such institutions through democratic organization can undermine democratic legitimacy by violating the autonomy or integrity of institutions necessary for securing the bases of democratic consent.

Institutions should therefore not be assessed as if they were standalone sets of practices, but in situ so we might better appreciate their role or potential contributions to democratic legitimacy. This requires understanding two things: first, the role of the institution within a particular deliberative system; and second, the scale of the deliberative system with which we are concerned with legitimating. We may find that depending on the scale of the deliberative system, the particular institutions of interest and their roles will vary.

DELIBERATIVE MANAGEMENT AND DELIBERATIVE SYSTEMS: TWO APPROACHES

We suggest that if the deliberative management project is to have any sort of coherence or plausibility, its best bet is to follow the lead of deliberative political theorists. Deliberation should be understood as a diffused and disaggregated process, informed by a messy array of intentions and taking place in different ways through different institutions. Deliberative management scholars and PCSR theorists are right: corporations require, but currently lack, moral validity and social legitimacy.






However, deliberative management scholars must recognize that the deliberative procedures they prescribe are often inconclusive and come through a complex net-work of quasi-deliberative interactions. As a result, the corporation can only have a limited and particular role in such processes.

To understand this role, we suggest that deliberative management scholars follow the systems approach to deliberative democracy, and reconceive the idea of PCSR along these lines. To do this, one can think of the corporation in terms of at least two different scales of systems. We might think of corporations as sorts of deliberative systems themselves, with the smaller administrative units within them playing particular roles therein. Or we can think of them as but one (particularly economic) class of institution within a larger deliberative system. These paths are not panaceas. They both produce far less radical or determinate pictures of deliberation than previously supposed, and also raise further questions that might not have terribly clear answers.

The Corporation as a Deliberative System

Following these developments in deliberative theory, one may respond to our criticism in this way: although corporations as a whole may not be terribly good sites for deliberation to take place, this does not mean that they are homogenous in their deliberative potential (or the lack thereof). If we take corporations as deliberative systems themselves then we can recognize that some parts of the corporation will be more suitable for deliberation than others. An empirical analysis that highlights when and where such sub-institutions seem responsive to reasoned deliberation could give reason for trying to establish democratic deliberation in those instances.

Taken from this perspective, one aspect of the deliberative management approach (e.g. Scherer, Baumann-Pauly, & Schneider, 2012) may very well prove to withstand our criticism. As Öberg (2003) has argued, boards of directors sometimes exhibit reasoned deliberation, and reach conclusions that are brought about by reflection and agreement, as well as bargaining and compromise. While the same people may not be terribly deliberative in other aspects of their corporate lives, it seems that the proverbial boardroom tends to encourage members to reason with one another in non-trivial ways. This is not entirely haphazard: boards are intentionally structured to promote certain amounts of constructive disagreement, and feature norms of con-fidentiality to promote candid discussion (Forbes & Milliken, 1999). To the extent this holds, there is perhaps good reason to think that corporate decision making may be improved by making this deliberation more democratic.

One way of doing this would be to create more diverse boards of directors, with established chairs representing particular stakeholder groups or perspectives (e.g. Driver & Thompson, 2002). This could prove to get around some of the problems enumerated above. While admitting that the rest of the corporation will not be terribly deliberative, the corporation might still cultivate greater democratic validity by structuring governance institutions such that ideas and claims—registered in self-interested, “non-deliberative” fashions—filtered up into the boardroom where they can be more effectively deliberated.






This avenue of defending deliberative management, however, faces at least two obstacles. First, while we may find deliberation within the boardroom, generally the ends to which they are deliberating upon are still decidedly strategic and instru-mental in nature. That is, one ought not to mistake deliberation in the service of profit seeking for democratic deliberation, since the latter would require that the norm of profit seeking itself be subject to deliberation. Insofar as challenging this norm will be subject to coercive responses—threats of divestment, relocation, or shutdown—there is reason to think that the range of deliberated-upon topics will be narrowed in a rather undemocratic fashion.

Second, and more importantly, are empirical analyses that suggest that the relative power of corporate boards is not fixed, and is subject to change based on its relative efficiency. The German system of co-determination is a case in point. This system, which requires workers to have a certain number of seats in the board of directors, was designed to make the corporation more democratic by giving labor a formal voice in decision making. However, as Roe (2000) and Hansmann and Kraakman (2001) have argued, the result has not been a more democratic corporation brought about by a more representative board. Instead, because of the costly decision-making processes such a system has created, many corporations have simply found ways to work around their boards. Shareholder committee meetings become much more influential in most German companies, rendering the board of directors to be much more of a rubber-stamp body.

This is all to say that potential democratic reforms of the board of directors—or any other aspect of the corporation for that matter—are generally bounded by efficiency concerns. The various subparts of the corporation are not fixed in their influence, but are also subject to the strategic and instrumental imperatives that corporations necessarily face. One might try to democratically reform an influential part of the corporation, only to end up robbing that part of its influence. Therefore, if delib-erative management theorists want to make use of the deliberative potential latent in the board of directors, they must do so in a way that recognizes these strategic, systematic imperatives, and offer explanations of how their democratic reforms won’t endanger the influence the corporate board wields.

The Corporation within a Deliberative System

Alternatively, we might conceive of the corporation as but one part of a larger deliberative system. The worry we have registered with regard to deliberative management is made clearer when the corporation is understood in this way. The concern is that corporations, meant to serve a particular purpose and empower particular classes of people, will make it harder for other, better-suited institutions to do the work of cultivating moral legitimation. Trying to instigate a discussion about racial injustice in the context of a transaction may very well harm the prospects of a more general and productive deliberation about race if it turned out to be overtaken by a corporation where such discussions would be limited and skewed. Instead of seeking greater deliberation within the corporation, a more nuanced approach is to try and conceptualize what role corporations ought to play in contributing to a deliberative society.






Indeed, one might read the Starbucks case as pointing us in precisely this direction. As we noted earlier, although the “Race Together” campaign did not engender the result it intended, it did stimulate a broader discussion in social media about the kinds of things a corporation should and shouldn’t do with regards to racial injustice. This deliberation, ultimately, was what led to Starbucks abandoning the campaign. If Starbucks and its stakeholders, discussing race relations, are taken as an enclosed deliberative system, the “Race Together” campaign seems a failure: Starbucks lost a certain amount of public standing and race relations were not meaningfully advanced. However, if we look at “Race Together” as an idea that was put out into the broader public sphere, where it was part of a second-order deliberation (Chambers, 2004a), it seems much more interesting. While we cannot know with certainty whether or not Starbucks abandoned the campaign for strategic reasons, or because it really took the arguments against the campaign to heart, it seems we can say that the broader social deliberation was fairly effective in bringing the campaign to a halt. This gives some credence to the idea that Starbucks need not be effectively deliberative within its engagements with stakeholders, in order to contribute to broader social deliber-ation and the democratic results such deliberation can bring.

Of course making this point is in some ways just to push the problem back a step. Because the background assumption of the deliberative management agenda is that corporations are filling a vacuum left by the state, there will often be no deliberative system in which the corporation might play a part. While this might be true in some very extreme examples, this will generally not be the case. Even in places where the state-building project is at a very nascent stage, there will often be domestic institutions like schools, churches, and international civil society organizations, that all might have important roles in a deliberative system, even one that is not fully formed.7 Instead of making itself the locus of deliberation, and seeing stakeholders as contributing to their legitimacy, corporations might look at those institutions as potential complements helping to produce norms that would justify a system of social cooperation of which corporations are a part.

This will all necessarily be contextual. As a result, instead of trying to offer a “grand theoretic” procedural account of corporate ethics, corporate managers might consider what particular part of a deliberative process they are particularly well suited to contribute toward (Mutz, 2008). This might not mean actually creating conversations amongst stakeholders, but creating environments that cultivate trust, respect, or awareness of diversity. It may involve being more inclusive in some instances—like figuring out how corporate activities can avoid diminishing the capacity of other institutions—but it might also involve being less inclusive for decisions that require secrecy or expertise (Chambers, 2004b).

CONCLUSION

In this article we have used Starbucks’s failed “Race Together” campaign as a point of departure to consider the difficulties of deliberative approaches to corporate social responsibility. While other critics have pointed out difficulties with these approaches, we have focused on the social theoretic foundations of deliberative






democracy to explain why these tensions and problems exist. More specifically, we contended that given the corporation’s market context and the nature of why people interact with it, the corporation makes for a poor venue for democratic deliberation. Indeed, it may be that trying to introduce deliberation therein will produce perverse and counterproductive results, as people mistake success-oriented bargaining for morally legitimate consensus.

We have argued that if deliberative management theorists want to maintain their approach, they must recognize that deliberation will not be the straightforward proce-dure they imagine it to be, and that corporations should not be conceived of as a unitary locus of deliberation. Instead corporations can be conceived of as being constituted by, and a constituent of, a complex process of deliberation. This is a more realistic model of deliberation that is more appropriate for the corporate institution; but it also requires a drastic rethinking of the deliberative management project and its aims. We confess that even with such moves we are not particularly optimistic about the possibility of fully redeeming the deliberative management project. It is possible that, absent a background of democratic institutions and procedures, an economic institution like the corporation can simply never be rendered legitimate. That is to say: the problem that PCSR scholars have identified is far more daunting than they realize because the statutory vacuum that corporations occupy, by virtue of being a vacuum, cannot be brought under democratic control. In that case, the socially responsible manager might simply need to accept that and act accordingly: uneasily, with less self-assurance, and less chutzpah. To try and assuage this feeling with promises of legitimacy-generating deliberation, in this view, would be decidedly irresponsible.

However, we believe the noble aims and accurate observations of deliberative management scholars are worthy enough to warrant reconceiving their conceptual premises and normative prescriptions. And we believe the possibilities for recon-ceptualization that we raise are plausible enough to warrant further exploration.

ACKNOWLEDGEMENTS

We would like to thank and acknowledge PY Néron for his insights at the early stages of this article. Our thanks as well to Dirk Matten and Andrew Crane for their insights and comments on past versions of this project. We would also like to acknowledge the very helpful comments we received from participants at the Normative Business Ethics Workshop Series at Wharton’s Zicklin Center for Business Ethics Research. Finally, we would like to thank the anonymous reviewers for a very productive review process that greatly improved the quality of this article.

NOTES

1. A note regarding authorship: this article was a partnership where both contributed equally. Author order was determined by a coin toss.

2. We note with admiration that Starbucks pays their front-line staff well above the industry average. They nonetheless remain, in an absolute sense, poorly paid and precarious workers.

3. See Starbucks’ many prosocial investments and policies in Starbucks (2015a).4. This question has been asked and answered of deliberative democratic theory more generally,

which bills itself as a “working theory,” and which yields both empirical insights as well as institutional prescriptions (Bächtiger et al., 2010; Mansbridge et al., 2012).






5. It is important to note the limits of Starbucks’ ambitions in “Race Together.” Deliberative management scholars typically have ambitions for deliberations to result in actual decisions or the generation of new norms (Palazzo & Scherer, 2006; Scherer & Palazzo, 2007). Starbucks merely sought a public discussion from which it could educate and learn; no mutually agreed upon decision was sought.

6. The discussion of deliberative democratic theory here centers on the variant developed by Habermas and those in his tradition. While “deliberative democracy” is a big tent, we feel that this focus is justified for at least two reasons, aside from space considerations: 1) the initial canonical articulation of political corporate social responsibility was based on Habermasian theory (Palazzo & Scherer, 2006; Scherer & Palazzo, 2007, 2011), and the Habermasian approach remains the predominate form of deliberative PCSR (Frynas & Stephens, 2015); and 2) Habermas remains the most comprehensive philosophic and sociologi-cal account of deliberative democratic theory.

7. This again dovetails with the criticism of Hussain and Moriarty (2016) who put emphasis on such non-corporate, non-governmental institutions as more appropriate participants in the deliberation.

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