Call for Papers
Special
Issue of the Journal of Business Ethics
Business
Groups and Corporate Responsibility for the Public Good
Guest
Editors:
Melsa
Ararat, School of Management, Sabancı
University, Istanbul, Turkey
Asli
M. Colpan, Graduate School of
Management, Kyoto University, Japan
Dirk
Matten, Schulich School of Business,
York University, Toronto, Canada
Submission
Deadline: 15 December 2016
Background of the Special Issue
Business Groups have garnered growing attention of
management scholars over the last decade (Colpan, Hikino and Lincoln, 2010).
However, the mainstream management literature appears to treat the phenomenon
of Business Groups still more rather as an epiphenomenon. A core reason for
this appear to be that Business Groups, as Williamson (1975) has argued,
conceptually straddle the sphere between markets and hierarchies. The
phenomenon of Business Groups– despite having been more extensively explored by
the literature in recent years, remains multifaceted and the literature offers
a variety of different definitions (Colpan and Hikino, 2010). Business Groups
are a set of at least two legally-independent firms whose economic activity is
often coordinated through some form of hierarchical control via equity stakes
and interlocking directorates or managerial ties. Business Groups operate in
multiple and often unrelated markets with a common management and control,
a characteristic that makes them different from multidivisional forms of
organization (Khanna and Yafeh, 2007) and similar governance arrangements
(Ararat, Black, Yurtoglu, 2015).
A particular area of interest in Business Groups
appears to be their sometimes considerable engagement in corporate (social)
responsibility, corporate sustainability, corporate citizenship etc. – labels
which we here use synonymously under the umbrella term ‘corporate social
responsibility’ (CSR; see Matten and Moon (2008)). Business Groups,
particularly in emerging economies, in various incidents offer remarkable
levels of financial, organisational and technological investments into the
wider public good of the communities, countries and regions in which they
operate. Examples are numerous: be it family governed business groups in India
or Turkey, be it some of the Korean Chaebols or Japanese vertical Keiretsu, be
it large business groups in Latin America or Europe – it appears that Business
Groups are particularly situated in addressing social needs, poverty,
governance deficits and institutional voids in welfare state provision and
public governance.
As such, the social responsibilities assumed by
Business Groups transcend the understanding of CSR in the traditional theory of
the firm perspective. The latter sees corporate responsibility for the public
good as voluntary activities which ultimately contribute to the bottom line
(McWilliams and Siegel, 2001). Looking at the engagement of Business Groups for
the public good though provides a much broader and richer picture. It includes
those standard CSR practices but often goes significantly beyond this scope: in
particular in developing/emerging contexts Business Groups, through their
foundations or through their actual core business, address institutional voids,
providing employment, products and services which essentially substitute and
emulate what would be considered welfare state provision in liberal developed
democracies. Beyond that, in many instances in some countries Business
Groups are pivotal to the functioning of markets, the setup of the economy, and
the basic building blocks of the political system, so that the question at the
heart of this call for papers - the responsibility of Business Group for the public
good - is as much an open research question as it has the potential to
refine existing debates on CSR.
This societal role, however, is far from being uncontroversial. Business
Groups – given their size and relatively high economic influence in their
respective social contexts – are often seen as being heavily involved in
political rent-seeking (Kruger 1974), investing primarily in political
connections, as opposed to productive assets. Baumol (1990) argues that large,
invasive, and corrupt governments can make political rent-seeking the highest
return on investment available to most firms, and that this can stall economic
development. This can be a stable situation in which particular rent-seeking
Business Groups do well – their investments in government connections yield
high returns in subsidies, trade protection, tax breaks, and protective
barriers to entry; as do the politicians who favor them; but the economy
suffers from a lack of genuine investment in productivity-improving assets and
thus stagnates (Morck, Wolfenzon and Yeung 2005). This is often referred to as
an “economic entrenchment trap” since this phenomenon describes predominantly
the strategic positioning of many Business Groups in emerging economies.
Other concerns regarding the social responsibilities of Business Groups
circle around their relationships with their shareholders: corporate governance
processes in Business Groups have often been discussed rather controversially.
The finance literature emphasizes pyramidal structures built by controlling
shareholders through a chain of equity ties, and the possible conflicts of
interests arising with minority shareholders (La Porta et al., 1999; Almeida
and Wolfenzon, 2006). The main concern is that these organisations - often
controlled by powerful families who through various tools control the entire
business – thus disempower other minority shareholders in the firm. The knock
on effects can have disastrous effects on the efficiency (often the mere
existence) of capital markets in those countries and their ability to attract
foreign direct investment. It furthermore encourages various forms of corruption,
as evidenced by the scandal around the Italian Business Groups Parmalat (Melis,
2005) in the early 2000s.
Purpose and Prospective Themes of the Special Issue
Despite the growing attention Business Groups have received in recent years
in scholarly debates, their impact, roles and assumption of social
responsibilities for the wider public good has only received scant and, at
best, anecdotal attention in the literature. For instance, the Oxford Handbook
of Business Groups (Colpan et al, 2010) – a comprehensive overview of the
debate around research in Business Groups – does not feature a single chapter
or index item referring to corporate (social) responsibility of Business
Groups. It is here where this Special Issue attempts at filling a significant
gap in the literature.
Research questions and themes explored by potential contributions to this
Special issue include, but are not limited to the following aspects:
- If Business Groups take voluntary action
to address the public good, in how far is that part of their explicit
policies and corporate strategy,· and how far is it just a response to
institutionalized expectations in their respective contexts?
- Empirically, what do Business Groups
actually do when they practice CSR? Which areas do they address? What are
the drivers of those activities?·
- Comparatively, are there differences
between CSR notions or initiatives of Business Groups in different
countries? We observe different roles· in different countries: In lower
income
- countries one could argue that there
is a focus on economic development, institution building and provision of
basic social needs, while in high income countries Business Groups
contribute through productivity growth, innovation and by addressing
externalities. What accounts for those differences? Are there
commonalities?
- Do Business Groups as organizations have
a common approach to CSR? How far is their approach to CSR different from
other forms of large·
businesses?
- What is the degree, form and
organizational pattern of the relations Business Groups establish to civil
society? Are they pressured by civil· society and NGOs - or do they engage,
collaborate and partner with those actors? What are agendas of Business
Groups in this context?
- Are there differences in the approach to
CSR according to industries between different Business Groups?·
- Is family control a driver of CSR? Or is
it actually an impediment? In the CSR literature the consensus is that
most of contemporary CSR· is in
some way related to the business case as this reflects the core interest
of shareholders. Since Business Groups are in many instances controlled by
families does this make a difference? Do the values of the controlling
family impact and reflect the CSR approach of Business Groups?
- How do relations of Business Groups to
governments and the political sphere impact the public good? Do they
co-opt the political sphere?· Do they use their considerable
leverage to alter and change political processes and actors? Do they just
pursue firm specific agendas or do they use their influence for wider
societal objectives?
- How do the reputational benefits of group
wide CSR, frequently implemented through a foundation financed by
affiliated firms or founding· families, accrue on individual firms?
Would failure to respond to institutional pressures and reputational risks
by the business group management or one of the affiliated firms effect
other firms in the business group?
- What is the role of Business Groups with
regard to institutional voids? Often their monopolistic market power,
their relationships to governments· and their control of key sectors can
contribute to those voids. On the other hand, we also observe considerable
efforts by business groups to address those voids at various levels.
- What is the relationship between a
Business Group’s CSR activities and its group-wide financial performance?·
- How are the CSR activities coordinated at
the headquarters and operating companies of a Business Group? Do business
groups engage in an orchestrated· CSR at the group headquarters level,
or do they have independent CSR activities at several levels of their
operating companies?
Types of Submissions
This special issue seeks to expand our knowledge of the intersections
between Business Groups, corporate responsibility and governance for the public
good. As such it invites contributions from a broad range of sub-disciplines of
management, including (but not limited to) CSR, business ethics,
sustainability, organizational behavior/theory, international business, or
corporate governance. We also encourage theoretical approaches from a range of
social and political science disciplines, including business, law, politics,
international relations, and sociology.
The Special Issue will feature papers that pave new empirical and conceptual
ground in this field of research in intersecting phenomena. We seek both papers
that deliver in-depth empirical explorations of the topic and papers providing
theoretical conceptualization, analytical vocabularies and innovative methods
for the understanding of the intersection between Business Groups and CSR. We
particularly encourage submissions that develop our theoretical understanding
of the phenomena by showcasing relevant conceptual and analytical approaches.
Submission process and schedule
Potential authors are welcome to discuss further details about submissions
with any of the three guest editors.
Authors are strongly encouraged to refer to the Journal of Business
Ethics website and the instructions on submitting a paper (please format
the paper in the JBE style). For more details about the types of manuscripts
that will be considered for publication see http://www.springer.com/social+sciences/applied+ethics/journal/10551
Submission to the special issue – by 15
December 2016 – is required through Editorial Manager at http://www.editorialmanager.com/busi/
Upon submission, please indicate that your
submission is to this Special Issue of JBE.
The Guest Editors
Melsa Ararat (melsaararat@sabanciuniv.edu) is the Director of Corporate Governance Forum, an applied
research center, and a senior research fellow at Sabanci University School of
Management, Istanbul, Turkey. She is the coordinator of Emerging Markets
Corporate Governance Research Network supported by IFC. Her research is focused
on controlled firms and family control.
Asli M. Colpan (colpan@gsm.kyoto-u.ac.jp) is Associate Professor of Corporate Strategy at the
Graduate School of Management, Kyoto University, Japan. Her work has been
published in such journals as Industrial and Corporate Change, Journal of
Management Studies, and Corporate Governance: An International Review. She
is the co-editor of the Oxford Handbook of Business Groups, Oxford: Oxford
University Press. Her research interests include corporate strategy, corporate
governance and business history.
Dirk Matten (dmatten@schulich.yorku.ca) holds the Hewlett-Packard Chair in Corporate Social
Responsibility at the Schulich School of Business, York University, Toronto. He
has published 15 books on CSR and business ethics as well as numerous articles
in journals including Academy of Management Review, Journal of
Management Studies, and Organization Studies. He is interested in
CSR, business ethics and comparative international management.
References
Almeida, H. V. and Wolfenzon, D. (2006). A
theory of pyramidal ownership and family business groups. The Journal of
Finance, 61(6), 2637-2680.
Ararat, M. and Black, B. S. and Yurtoglu, B.
Burcin, (2015) Corporate Governance, Business Groups, and Market Value:
Time-Series Evidence from Turkey (June 11, 2014). Northwestern Law & Econ
Research Paper No. 13-19; ECGI - Finance Working Paper. Available at SSRN: http://ssrn.com/abstract=2277768
orhttp://dx.doi.org/10.2139/ssrn.2277768
Baumol, W. (1990): Entrepreneurship: Productive,
unproductive and destructive, Journal of Political Economy, 98, pp.
893-921.
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