Explaining Dynamic Strategies for Defending Company Legitimacy: The Changing Outcomes of Anti-Sweatshop Campaigns in France and Switzerland

Explaining Changing Corporate Responses to Social Movement Demands

Social movements can be defined as “collective challenges, based on common purposes and social solidarities, in sustained interaction with elites, opponents, and authorities” (Tarrow, 1994, p. 4). In explicit analogy to research on social movement outcomes (Amenta & Caren, 2004; Bosi & Uba, 2009; Giugni, 2004; Giugni, McAdam, & Tilly, 1999), scholars studying movements targeting industries or corporations have analyzed what explains corporate reactions to movement demands. Studies have highlighted movement internal factors such as tactics (Ingram, Yue, & Rao, 2010; B. G. King, 2008a; Raeburn, 2004) or framing (Lounsbury, Ventresca, & Hirsch, 2003; Raeburn, 2004), characteristics of corporations (Briscoe & Safford, 2008; de Bakker & den Hond, 2008; den Hond & de Bakker, 2007; Eesley & Lenox, 2006; Holzer, 2008; Luders, 2006, 2011; Weber et al., 2009; Zald et al., 2005) and industries (B. G. King, 2008b; B. G. King & Soule, 2007; Raeburn, 2004; Schurman, 2004; Schurman & Munro, 2009; Soule, 2009; Vasi, 2009; Wahlström & Peterson, 2006), and the interplay between the two (B. G. King, 2008b).

Possible corporate reactions to movement demands vary. Beyond corporations yielding to demands or failing to do so—the question at the center of most studies—a wide range of strategic options exist (Balsiger, 2015a). Zald et al. (2005), for instance, point at different tactical options organizations have to fight back, such as taking legal action against their challengers. Oliver’s (1991) classification of organizations’ strategic responses to institutional pressure offers a rather comprehensive picture of possible reactions. Oliver distinguishes five strategic responses: acquiescence, compromise, avoidance, defiance, and manipulation. From complete conformity and compliance with pressures to fighting against them and even manipulating them, the strategies identified span the possibilities of responses to institutional pressures and can be usefully applied to responses of firms to movement challengers. Depending on their cost structures and vulnerability to legitimacy issues, firms have different dispositions to comply with demands, and will prefer different strategic responses (Aguilera, Rupp, Williams, & Ganapathi, 2007; Bies, Bartunek, Fort, & Zald, 2007; Brickson, 2007; A. King, 2007; B. G. King, 2008a; B. G. King & Soule, 2007; Schurman, 2004; Weber et al., 2009; Zald et al., 2005).

Legitimacy and Changing Outcomes Over Time

Studies with a long-term perspective and thus attentive to outcome dynamics have emphasized the importance of initial actions leading to early outcomes. New tactical forms have been shown to have more impact at the beginning of mobilization cycles and campaigns, as they provoke media reactions and may hit targets unprepared (Jasper & Poulsen, 1993; McAdam, 1983; Taylor & Van Dyke, 2004). While some studies have thus pointed at the role of novelty as a factor favoring movement outcomes, scholars have so far mostly failed to acknowledge that in the course of continued movement–target interactions, initial outcomes can get transformed and even lost over time. A theory of movement effects on their targets thus concerns “not effects alone, but also the very dynamics of social movement interactions” (Tilly, 1999, p. 270). The neglect of this dynamic aspect of outcomes is perhaps due to the fact that most studies look at legislative change (Amenta & Caren, 2004), a context where outcomes, once achieved, tend to be difficult to overturn. But when targeting corporations, it is arguably more difficult for social movements to achieve durable outcomes, unless they are (a) authoritatively implemented through the law or (b) locked into institutional arrangements with positive feedback effects, which makes exit difficult and costly (Pierson, 2000). If such is not the case, we find instances of competing solutions and strategies (Bartley, 2007) and observe, for instance, the evolution of policies of corporate social responsibility (Schrempf-Stirling & Palazzo, 2016). Outcome dynamics may switch from early concessions to other responses, including withdrawal from concessions.

Why do firms withdraw from initial concessions, and what strategies allow them to do so when facing continued public pressure from social movement campaigns? Existing explanations of why firms withdraw from complying with movement demands point at push factors, in particular the negative experiences of firms in multi-stakeholder institutions, which are perceived as costly, ineffective, and slow (Fransen, 2012a, 2012b). This negative perception is sometimes heightened by disputes between different types of civil society actors, in particular between unions and NGOs (Egels-Zandén & Wahlqvist, 2007). Concession costs, in other words, are high, and firms prefer less costly solutions. At the same time, the rise of private regulation has resulted in situations of institutional diversity with different competing voluntary programs; corporate actors may opt out of one scheme and embrace another one over time (Bartley, 2007, 2009). The development of such alternatives can serve as pull factors.

But when facing ongoing challenges, just backing away from concessions is often not a feasible option; such a move is associated with legitimacy losses, which firms cannot ignore. Therefore, even if push and pull factors drive firms to withdraw from concessions, they need to lean on alternative legitimacy strategies to do so. Analyzing programs for code monitoring in European retailing, in particular the competition between business-driven programs and multi-stakeholder initiatives, Fransen (2012a, 2012b) suggests examining the process as one of legitimation politics, thus building on and extending institutional theory’s core insight of the importance of complying with norms (Oliver, 1991). Legitimation politics rests on the quest of companies for legitimacy: conformation with social norms, values, and expectations (Palazzo & Scherer, 2006). Organizational actors are “legitimacy seeking but embedded in multiple organizational fields and, therefore, weighing different kinds of organizational pressure against each other at any given point in time” (Fransen, 2012b, p. 172). Depending on contexts and on organizational characteristics, they will deploy different strategies to establish or increase legitimacy.

This study argues that when firms retreat from concessions and/or respond with strategies that do not comply with movement demands while facing continuing public pressure, they use and combine strategies building on different sources of legitimacy. Adding to the existing literature on corporate responses to movement demands, it analyzes how different legitimacy strategies are combined over time. In the early campaign phases, campaign makers have an advantage as they may appear as the principal actors who are able to convey legitimacy to the companies they target. But as contentious interactions go on, new legitimacy strategies are developed. Legitimacy can be conveyed through different sources or means (Mena & Palazzo, 2012; Quack, 2010): For instance, efficiency, professional skills, inclusiveness, or the endorsement by a particular organization can give legitimacy. Not all sources are equally legitimate, however, and campaign makers publicly criticize and mobilize against responses that do not fully comply with campaign demands. Therefore, when firms face continuous challenges, they combine different sources of legitimacy to counter movement demands. Those strategies allow them to compensate for the legitimacy losses inflicted by the withdrawal from concessions and make up for the legitimacy deficits of alternative solutions.

To sum up, there are situations where movement pressures lead companies to different strategic responses. Figure 1 schematically presents the different steps of an analysis of outcome dynamics. Firms’ cost structures and vulnerability to legitimacy challenges provide them with distinct incentive sets to respond to social movement campaigns, leading to different responses. This responsiveness is the first step of the analysis. But those responses need not be permanent. Over time, firms can operate strategic changes and even opt out of previous commitments. An analysis of dynamic outcomes takes this possibility into account and studies the factors that lead to the development of alternative responses and the legitimacy strategies they rely on.

OPEN IN VIEWER

Figure 1.

Outcomes over time.

Case Selection and Comparison

To study outcome dynamics and the role of corporate legitimacy strategies therein, the article compares the CCC in Switzerland and France and the reactions of firms to it. The case-centered comparative strategy (Della Porta, 2008) serves to show how different contexts and interaction dynamics led to the use of different combinations of legitimacy compensation strategies. The cases of Switzerland and France were selected for two reasons. First, the cases are similar because the same campaign took place in both countries, using very similar framing strategies (Snow, 2004) and tactical action repertoires (Taylor & Van Dyke, 2004). In France and Switzerland, companies belonging to the retailing sector selling clothes were confronted with movement demands from the mid-1990s onward. The CCC in both countries demanded that retailers adopt the code of conduct developed by the campaign and have it independently monitored by a (yet to be created) multi-stakeholder institution. The French CCC was launched in 1995 with a campaign called “Libère tes fringues” (free your clothes), using a postcard petition. In the following years, various campaign rounds varied the same demands. The Swiss campaign started in the late 1990s, targeting first sneaker brands and then the main clothing retailers. In both France and Switzerland, campaigns were carried out by coalitions of NGOs, including development aid organizations, unions, and consumer associations in France, and NGOs and an advocacy group from the field of development politics in Switzerland (Balsiger, 2014).

Second, comparing campaign outcome dynamics in these two countries is heuristically beneficial because campaigns differed in important contextual conditions and with regard to the characteristics of the firms that were targeted. First, while there had been a range of “consumption campaigns” in Switzerland in the decades preceding the CCC, this was not the case for France. As a consequence, some of the targeted Swiss retailers had already previous experiences of collaboration with NGOs active in the CCC, while such ties were absent in France. Second, ethical markets exemplified by organic and fair trade labels available in big retailing outlets started to develop in Switzerland during the 1990s in parallel to the CCC activities. In France, these market segments only started to develop significantly in the mid-2000s, after the campaign (NZZ, 1992, 2000; Le Monde, 1997, 2007). And third, the characteristics of the targeted firms were different across countries. In France, after some target changes in the first campaign years, the main targets were big general and sports retailers. In Switzerland, it was a broader group of firms, including also smaller companies. In addition, the two main Swiss retailers, sharing more than 80% of the market, both have origins in the cooperative movement, which is not the case in France. There were thus differences in the size of individual firms and the composition of the group.

Data and Data Analysis

The study compares the CCC in France and Switzerland throughout its unfolding, that is, from mid-1995 to 2005 in the French case (at that time, the campaign ceased temporarily) and from early 1999 to 2008 in the Swiss case. The study is based on qualitative fieldwork conducted with the goal of reconstructing the interactions of the campaign using different kinds of firsthand and secondhand data (for a complete account of the campaigns’ origins and dynamics, see Balsiger, 2014). Regarding firsthand data, the case studies rely on interviews, archival research, the analysis of campaign documents, reports, and other documents produced by other actors, particularly corporations, and participant observation. The fieldwork originally focused on the functioning of the campaign, by conducting about 30 interviews with officials of the Swiss and French campaign from the past and present, as well as with other core actors from different initiatives in the field of ethical clothing such as representatives of other NGOs collaborating with firms or state actors. The semi-structured interviews were conducted between 2007 and 2008 in different places in Switzerland and France. They focused on the campaign dynamic and the major issues the campaign or its targets faced in its course, lasted between 1 and 3 hr with an average length of approximately 90 min, and were taped and transcribed. Together with a study of the internal archives of the French campaign, ² as well as the analysis of all the different publications (booklets, leaflets, petitions, etc.) by the campaigns in both countries, this research allowed reconstructing the dynamics and processes of the campaigns. Regarding corporate action, the fieldwork consisted of interviews with managers of Swiss firms targeted by the campaign, the analysis of corporate reports and publications, press sources, as well as the use of secondary sources such as studies focusing on corporations and the information on corporate actions one can find in the campaign publications. Indeed, campaign actors themselves very closely followed the different initiatives launched by corporations, as this following was their main preoccupation, and they reliably kept track of the different initiatives launched.

The data were analyzed building on process tracing, which consists in the reconstruction of causal processes underlying the interactions between campaigners and their corporate targets (Collier, 2011). The multiplication of sources and their triangulation (Ayoub, Wallace, & Zepeda-Millán, 2014) minimizes risks of partiality and subjectivity in the interpretation. Whenever possible, specific findings were corroborated through more than one source of evidence, relying on assessments by both key participants in the process and written accounts from different origins: publications by campaigners and by firms, press reports, internal documents when available. It is true however that given the original focus of fieldwork and given a more difficult access to direct sources in the corporate sector, the collected data were richer and more encompassing on movement actors, allowing for a fine-tuned analysis of the reflections and constraints that guide their decisions. For corporate actors, data allow for an accurate reconstruction of their reactions to the campaigns but give overall less direct insights into actor motivations and processes internal to firms, making it more speculative to explain what drives corporate decisions. In spite of this limit, it is possible to develop a reading of the outcomes of the movement that produces insights not accounted for by conventional models. ³

Finally, it is important to note that because fieldwork did not include actual measurements of working conditions in producing factories, campaign “losses” (i.e., withdrawal from concessions by corporations) do not automatically mean that the situation for workers actually worsened as a result. The discussion of outcomes refers to the interactions between the Swiss and French campaigns and their immediate targets—Swiss and French retailers and clothing brands. In this respect, building up a business-driven monitoring initiative such as the French Initiative Clause Sociale (ICS), through its auditing mechanisms, may have improved workers’ conditions more than the first tentative collaborations between one firm and the campaign makers. ⁴ Nonetheless, from the point of view of movement–target interactions and outcomes, the firm’s backtracking from associating the campaign makers to the monitoring process constitutes a step back, as outcomes now correspond less to what movements demand.

France: Phase 1—From Ignorance to Collaboration

The French campaign coalition launched three consecutive petitions in its first few years of existence. Another parallel petition was carried out by allied NGOs and later merged with the CCC coalition. While the petitions were meant to speak to all clothing retailers, their explicitly mentioned targets changed over time and gradually focused on the big national retailers and the sports industry. The first firms to show substantive reactions belonged to the sports retailing industry: Its federation issued a code of conduct, but it was nonbinding for its members. More significant was Auchan’s and Carrefour’s response, two major retailers. After initial talks with one of the campaign NGOs, ⁶ the latter started collaborating with the Fédération internationale des droits de l’homme (FIDH), an NGO that was not part of the campaign coalition. The FIDH should overview the application of Carrefour’s code of conduct. Auchan took collaboration efforts further: Numerous talks with the campaign coalition took place, as well as training sessions for buyers and a few monitoring projects in factories.

In parallel, the industry association Fédération des entreprises du commerce et de la distribution (FCD), of which all major retailers were members (including Carrefour and Auchan), became an important player. It declared that it wanted to commit itself to the improvement of working conditions and their control and created an initiative called ICS to coordinate the monitoring of codes of conduct between the firms that were part of it. The ICS was a business-driven monitoring initiative and built on social audits conducted by specialized audit firms; as such, it was clearly a reaction of the firms to the campaign’s demands. The coalition had, in a first stage, positive signals from the ICS that it could get associated to the program: As internal documents show, there were frequent exchanges and campaign makers were invited to attend meetings with the ICS. Therefore, after the third petition in 1998, which gathered more signatures than ever, the campaign organizers decided to take a break with public campaigning to push forward negotiations with companies and further develop the idea of a “social label.”

France: Phase 2—Escalation

After the pause in public campaigning, the campaign coalition came back with a tactical innovation in 2000: the so-called school grades, a ranking of firms according to their “social performance.” This ranking focused on big retailers and on sports retailers, which were from now on the only targeted firms. The goal of the tactical innovation was to increase pressure on retailers. The main difference between the ranking and previous petitions was that firms were now explicitly compared with one another; internal documents clearly stated this competition as its tactical goal. In the first ranking, only two of 14 companies were evaluated somewhat positively. In addition, imitating school grades, the rankings took on a somewhat condescending and moralistic tone. The bad grades and the tone employed by the campaigners prompted the FCD/ICS to react strongly, scheduling a press conference on the same day the third ranking was published and writing an open letter where it attacked the campaign makers and questioned their legitimacy, while defending its own approach of code monitoring. As a next step, the firms gathered in the ICS refused to respond to the questionnaire preparing the fourth ranking and gave a common answer instead. As they were all part of the joint social audit initiative, they argued, there was no difference as to their “social record.” The common answer was signed by all the firms by then part of the ICS, a total of 11 companies (among them Auchan and Carrefour). The goal was thus to prevent the campaign organizers from publishing yet another ranking. In spite of this goal, the campaign coalition did publish a fourth evaluation opposing the firms, albeit in the somewhat watered down form of a “social barometer.” Indeed, the counterstrategy of the firms provoked infights within the campaign coalition. Some coalition members pleaded for a continuation of this strategy, while others advocated a more uncompromising stance. The coalition did not find an issue to these internal strategic debates; eventually, because of a lack of funding, it ceased activity altogether by the end of 2005.

Switzerland: Phase 1—Collaboration

The Swiss CCC focused its attention on Swiss (clothing) retailers. It explicitly targeted 15 firms, chosen after conducting a study on the Swiss clothing sector. Swiss firms reacted quicker than the French ones: Except for two of them who kept ignoring claims, most already had codes of conducts (eight targeted companies reported this fact) or quickly adopted them (five targeted companies), and put forward their “social commitment” when responding to consumer letters (Mach, 2001, pp. 14-15). The actions and instruments referred to in these statements, such as a green clothing line or the support of development projects, were not directly related to the campaign claims. They took up only partial aspects thereof. In its regularly updated company evaluations, the campaign criticized them as not going far enough and encouraged consumers to react to these responses by writing letters or asking critical questions when shopping.

Three of the 15 initially targeted companies went further and approached campaign organizers to develop a joint pilot project of code monitoring: Migros (one of the two main Swiss retailers), Switcher (a specialized clothing store), and Veillon (a mail-order clothing store). This multi-stakeholder project took place between 2000 and 2002, and then continued with state funding under a new name and structure. During the pilot phase, a new organizational entity was created that conducted audits of factories and wrote (confidential) reports.

Switzerland: Phase 2—Diversity of Strategies

The pilot project led to conflicts within the campaign coalition. The two development aid organizations supported the compromises negotiated with the companies in the pilot project, while the campaigners from the advocacy group defended a more uncompromising stance. This situation led to a division of labor between the organizations, two of them remaining in the multi-stakeholder project and leaving the campaign coalition, and the third one continuing campaigning. After the split of the coalition, the campaign operated a tactical change. The new person in charge pursued a more consumerist strategy. In 2004, the campaign published a brochure in collaboration with a consumer association. In this brochure, retailers were now ranked according to their social record but, in contrast with the French case, some of them were designated as having good practices. In addition, some ethical labels were put forward in recommendations. While this tactical change was linked to a change in personnel and organizational preferences—in an interview, the new person in charge expressed a preference for rankings rather than mobilizing strategies—it also reflected the changing landscape with regard to the rise of a variety of initiatives on “ethical” clothes. On one hand, some firms had collaborated with the campaign, thus “deserving” a positive evaluation. But on the other hand, firms had also launched many ethical labels in the years preceding these evaluations. Already during the pilot project, Swiss clothing firms had started developing, sometimes together with NGOs, ethical labels, and product lines. Most importantly, the fair trade organization Max Havelaar, founded in Switzerland by the country’s main development agencies (among them the two development aid organizations involved in the CCC), started labeling fair trade cotton, and Helvetas, another development agency, promoted organic cotton, through a project financed jointly by the Swiss government, the NGO, and some clothing retailers (including Migros). Ethical labels were not necessarily initially designed by firms and NGOs as a strategic response to the campaign; they also responded to a consumer demand that was partly independent of this dynamic. But such labels were actively used by firms to publicly display their ethical commitments and became an essential part of the general campaign dynamic. The campaign itself acknowledged this circumstance when it started to specifically recommend some labels in its rankings published from 2004 on.

After those ethical clothing lines, the second notable response by Swiss retailers in this sequence was their embracing of the European-wide monitoring initiative Business Social Compliance Initiative (BSCI). Together with other European general retailers, Migros played a key role in the development of this European social auditing initiative whose functioning is very similar to the French ICS. It was thus an alternative or, depending on one’s point of view, a competitor of the multi-stakeholder initiative (MSI) that had come out of the pilot project. For a certain time, Migros was part of both institutions, but it eventually quit its participation in the MSI. In 2005 already, six Swiss retailers targeted by the campaign were part of BSCI (2006), while the campaign-initiated monitoring project was left with but one member (Switcher) when Migros opted out of it.

The Circumstances Favoring Early Gains

By putting public pressure on companies through shaming and blaming, the campaigns created disruption costs and a legitimacy deficit for the targeted corporations that did not comply with the new norm of corporate responsibility advocated by the campaign. Not all companies reacted in the same way to this reputational threat. The description of the two phases has shown that most firms at first avoided claims and buffered them by denying their responsibility. From avoidance, some of them went to compromise, adopting codes of conduct as a partial form of compliance. Some went further and accepted to participate in forms of collaboration. There were thus different degrees of willingness to comply with new norms, some firms being more inclined to submit to more constraining ways of reestablishing their legitimacy when faced with challenges. Firms’ cost structure and disposition to adopt corporate social responsibility provided them with different sets of incentives to comply with demands. Those with low incentives never complied and were avoiding or possibly compromising by adopting partial solutions. But for those with higher incentives, two specific factors made collaborations possible and also particularly attractive.

First, early outcomes were mostly favored by the newness of the demands and the ensuing lack of established routines to deal with them. As one Swiss corporate interviewee said, codes of conduct as an instrument in corporate social responsibility were completely new and unknown in this sector in Switzerland in the 1990s, and even more so forms of monitoring them. Managers in firms simply did not know how to tackle these issues. They were hit unprepared. In this situation, campaign makers became privileged partners. In the words of a member of the Swiss campaign coalition involved in the pilot project: “At one moment, the corporations respond and say, ok, what do you propose? We are ready to make a code of conduct but we would like you to help us, we don’t really know what it is” (Interview with campaign official, Lausanne, Switzerland, June 2007). Campaigners were thus approached as holders of a particular expertise that could help companies deal with this problem—a situation they had not necessarily anticipated. Early collaboration was possible in this particular conjuncture where demands were new and campaigners viewed as the most promising potential partners to deal with them. Campaign makers could provide firms with legitimacy and had an expert knowledge on the topic that other civil society actors lacked.

But the situation of newness of demand alone was not sufficient. The close analysis of the cases reveals that early collaboration between firms and campaign makers also required either internal allies (Raeburn, 2004) or at least previous experiences of collaboration between campaign makers and firms. In Switzerland, a certain proximity between campaign makers and their corporate targets already existed thanks to prior campaigns and experiences of collaboration. Examples include the Max Havelaar fair trade labels for food, which had been introduced several years before, or the first ever “social clause” that two of the organizations behind the Swiss CCC had helped establish together with Migros in the early 1980s. In France, such proximity did not exist. The CCC was the first time companies had been targeted directly by social movement actors, and there were thus no previous experiences to build on. Accounts by interviewees and other studies (Delalieu, 2008) suggest that the collaboration with Auchan was closely tied to a person from the firm’s board. The coordinator of the campaign recalls it:

They (Auchan’s managers) asked themselves, who are these people, are they going to burn our shops or are they open for dialogue . . . Their communication director at this time was a former member of cabinet from a socialist minister of industry, and he had personal views that were close to us. He had a position of director and had access to the managing board and a certain influence. (Interview with campaign official, Paris, France, April, 2008)

Proximity between the campaign and its targets thus had to be built in France (“Who are these people, are they going to burn our shops or are they open for dialogue?”), and an internal ally (Raeburn, 2004) played a crucial role in the collaboration between Auchan and the French campaign. Carrefour, which also responded to the movement demands, pursued another strategy and sought out a different source of legitimacy by collaborating with a competing social movement organization. This counterexample thus illustrates the important role internal allies played in bridging between campaign makers and their targets. It suggests that newness alone is not sufficient; it also requires social ties, proximity, and the ensuing mutual trust for collaborations to take place.

Push and Pull Factors for Withdrawal

In both the Swiss and the French case, negative socialization played a role in firms’ withdrawal from concessions. An interviewee from one of the Swiss companies participating in the pilot project pointed at the difficulties experienced due to the slow processes. Interviews with campaign makers in France and Delalieu’s (2008) study highlight that disagreements within the campaign coalition between unions and NGOs made collaboration tedious. Making matters worse, the French campaign also lost its internal ally, who left Auchan and was replaced by a person who did not have strong ties to the campaign makers. Finally, increasing polarization between campaign makers and firms in France undermined the trust that had started to build up in the previous interaction phase. The tactical innovation of the rankings played an important role in this escalation. The rankings had the opposite effect of what the campaigners had hoped for. Instead of pitting the different firms against one another and thus pushing firms to compete on these ethical issues, as the campaign makers had in mind, the companies’ reaction was to reinforce inter-firm cooperation within the ICS. Targeted retailers perceived the campaign’s tactic as aggressive “blackmailing” by “self-proclaimed censors who erect themselves as the Temple’s guard,” according to a blog post by the director of Leclerc, one big French retailer that joined the ICS (quoted in Barraud de Lagerie, 2010, pp. 254-255). Increasingly, firms perceived campaigners more as their radical opponents than potential partners.

In sum, there were push factors in both cases explaining firms’ withdrawal from concessions. But these were not the only ones at work. At the same time, firms had been working on alternative, business-driven solutions of code monitoring building on other legitimacy sources, and the development of these alternatives facilitated withdrawal and acted as a pull factor. It was when movements lost their initial quasi-monopoly on conveying legitimacy that the dynamic reversed.

Companies in both countries turned to inter-firm cooperation to create business-driven monitoring initiatives, which excluded civil society participation, in particular collaboration with campaign makers. In Switzerland, this approach took place through the development of a monitoring initiative carried out by European retailers, of which Migros was a driving force. Soon, many Swiss companies joined the BSCI, and Migros, which had been part of both the multi-stakeholder monitoring scheme and the BSCI, would eventually quit the former and thus end its strategy of compliance. Something similar happened in France with the ICS. Instead of collaborating with the campaign coalition, the French retailers ended up cooperating with each other in a business-driven monitoring initiative. The FCD, in developing a common response to the campaign by all big retailers, connected the different retailers with one another on this particular issue, and more and more companies joined the ICS over time.

Inter-firm cooperation conveys more legitimacy than solutions at the firm level and can thus to some extent make up for the lack of social movement participation. By pooling their resources and cooperating with each other, firms could show that as an industry, they took the problem seriously and were willing to cooperate to find common solutions. In addition, such arrangements made sure that all (or at least many) competing companies adopt the same counterstrategy, thus providing certainty and avoiding competition within the industry. When developing a monitoring scheme driven by firms themselves, firms took up some of the campaign demands such as adopting codes of conducts and independently controlling them. However, they also left out core demands, such as participation of third parties from civil society. Instead, firms managed the issue of labor standards through means that were entirely under their control. Business-driven initiatives were thus less encompassing than the multi-stakeholder monitoring schemes advocated by campaigners; they lacked mainly the input legitimacy of inclusiveness through civil society participation (Mena & Palazzo, 2012).

Because of their lack of input legitimacy, these business-driven initiatives remained contested; on their own, their legitimacy was threatened as long as campaigns kept attacking them. Firms used other compensating strategies to make up for this legitimacy deficit. Their concrete outlook depended on national contextual factors and on the interaction dynamics of the campaigns. The comparison points at two different pathways of this process. In both national cases, firms combined the strategy of inter-firm cooperation with another, context-dependent compensating strategy to compensate for legitimacy losses: in France, defying campaign makers by publicly attacking them, and in Switzerland, market-based counterstrategies.

France: Compensating Legitimacy Through Fighting Back

In the French case, firms engaged in public actions of defiance to undermine the credibility of their opponents to assess the legitimacy of their initiative. With increasing polarization between the campaigners and retailers, collaboration became impossible. But legitimacy was still a preoccupation for the firms, as their initiative was viewed very critically not only by campaigners who denounced it vociferously and called it a form of “window-dressing,” but also by the French press, which expressed doubts. To counter these critiques and defend its monitoring program, the FCD published an open letter in which it presented its monitoring initiative as a serious and efficient effort to deal with the issue of labor rights in production plants. The same letter also attempted to disqualify the methods and positions of the campaign coalition. It stated, in particular, that while the FCD had “largely included” the campaign coalition in the ICS, the campaign had not held up the same transparency standards when establishing the ranking. On the issue of the respect of labor standards, the letter stated, “It is easy to give lessons but more difficult to work on the field to make things progress.” It further stated the FCD’s values, notably its will not to handle ethics as a subject of competition between corporations. Implicitly, it thus accused the campaign coalition of pushing corporations to compete on the issue of their ethical records (which was indeed the goal of the coalition). The corporations, according to the way the FCD framed it, were actually more ethical because they refused such a “marketing approach” and preferred making joint efforts. The general argument was thus that the French campaign wanted to use ethics as a marketing tool, whereas the retailers that were part of the ICS treated the issue discreetly, through serious auditing and slow improvement.

Through this letter and other actions such as strategically scheduled press conferences and the refusal to respond to the questionnaires by the campaign makers, the firms thus counterattacked the campaign. The goal here is not to assess who is right or wrong in this contentious exchange but to show how the strategy of the retailers built on different sources of legitimacy and thus attempted to compensate for the fact that the monitoring initiative did not include participation of social movement actors. On one hand, the retailers stressed their own expertise and the program’s efficiency and discreet progress on the issue of labor rights, thus highlighting aspects of (output) legitimacy where they could compete with a multi-stakeholder program (Quack, 2010). On the other hand, by questioning the campaign makers’ strategy and criticizing their position as both judge and jury, the retailers attempted to challenge the legitimacy of their opponents. Legitimation politics here means framing contests with the goal of questioning one’s opponent’s standing and legitimacy. Attacking the campaign makers’ competence, methods, and motivations was a way of dismissing demands for multi-stakeholder solutions. If the campaign makers used questionable methods and were not competent in their domain, why should they participate in the monitoring of labor standards? Companies thus used the weapons that campaigners usually use, namely, publicly naming and shaming their opponents.

Switzerland: Compensating Legitimacy Through Market-Based Strategies

In Switzerland, market-based strategies compensated for the legitimacy deficit of the business-driven monitoring initiative (BSCI). BSCI was perceived as lacking in legitimacy, not only by campaign makers but also by companies. The case of Migros can illustrate this perception. According to a participant in the pilot project, Migros hoped to associate a civil society organization, if possible the CCC and its monitoring project, to the BSCI: “They hoped that another organization from the outside gives the BSCI an independent label. Their problem was always that they lacked legitimacy, because it is a business-driven initiative. What they were looking for was legitimacy” (Interview with official of pilot project, Bern, Switzerland, June 2007). But eventually, the company decided to quit the pilot project although no civil society organization was associated to BSCI. Ethical product labels helped firms compensate for this legitimacy deficit. Ethical labels often originated in collaboration with competing movement actors that were not part of the campaign, such as Max Havelaar for fair trade cotton or Helvetas for organic one; the activity of these competing movement actors thus created opportunities for firms to develop new strategic responses (Balsiger, 2015b). The attractiveness of ethical labels for companies was increased by the success of previous labels such as fair trade or organic food, which had shown that there was indeed a market for ethical products (contrary to France at that time, where retailers had not yet embraced ethical consumption). Developing ethical labels by collaborating with movement organizations allowed firms to sidestep campaign demands. Ethical labels took up certain movement demands—and could even go beyond them, as in the case of fair trade rather than “just” minimal social standards—but did so only for a few products. Labels constituted ways for companies to display their ethical commitment without explicitly responding to more encompassing demands. The competing movement actors who were at the origin of such labels could thus offer legitimacy at a lower cost, allowing firms to divert attention from contested practices to their “good deeds.” This strategy was complementary to the progressive embracement of the business-driven BSCI, which lacked social movement endorsement; the corporate response thus rested on two pillars or sources of legitimacy: BSCI and ethical labels, with the latter being able to partly compensate for the legitimacy deficit of the former. Rather than criticizing this development, the campaign’s tactical reorientation toward a consumerist repertoire explicitly recommending specific labels actually contributed to further validate this approach.

In sum, the comparative analysis shows that legitimacy-compensating strategies varied across countries and depended on the context and the interaction dynamics of the campaigns. In both cases, firms cooperated with each other to develop business-driven monitoring initiatives, and in both cases, they compensated the legitimacy deficit of these initiatives by building on alternative sources of legitimacy. In Switzerland, those were provided by competing movement actors, which developed ethical product labels that companies used. The potential of “ethical markets” had previously been demonstrated by the success of organic and fair trade food products. Ethical clothing lines could thus not only compensate legitimacy, but they could even be good for business by catering to the growing demand for “ethical” products. In France, the potential of this market had not yet been established, and the rise of ethical product lines and labels only took place at a later stage. Retailers relied on a different compensating strategy to make up for the legitimacy deficit of their monitoring initiative. On one hand, they stressed the initiative’s output legitimacy and the retailers’ competence in this domain. And on the other hand, they chose to fight back against campaign makers. They publicly counterattacked their opponents and thus attempted to delegitimize them.