Abstract
The power of large business corporations has been increasingly discussed in the media and academia in the past few decades. A variety of phenomena have been problematized, such as the market power of big players in increasingly oligopolistic industries; or the considerable lobbying power and potential for regulatory capture of certain key industries in Western democracies. In fields closely connected to management and organization studies, recent works on ‘corporate political activity’ (e.g. den Hond, Rehbein, de Bakker & Kooijmans-van Lankveld, in press) and ‘political CSR’ (e.g. Scherer & Palazzo, 2007) have not only contributed to an instrumental understanding of the political involvement of corporations but also problematized this involvement as one that should not only be seen from a narrow ‘business case’ perspective. And yet more recent agenda-setting efforts seem to suggest that more discussion on ‘The Corporatization of Politics and the Politicization of Corporations’ (de Cock, Nyberg & Wright, 2013) is on its way within organization studies broadly construed. However, the corporation has rarely been conceptualized explicitly and chiefly as ‘a governing institution’. This is what Stephen Wilks sets out to do in this book, in which he begins by noting that ‘the business corporation is arguably the most influential and least studied institution in contemporary political life’ (p. 1).
When he writes that the business corporation has been the ‘least studied institution’, the author means that within political science there has been surprisingly little interest in the role and power of corporations in public policy and governance. The book is thus positioned foremost as a contribution to politics and political economy. That said, it can be equally considered as a significant contribution to business studies, and more particularly management and organization studies. Indeed, while management and organization scholars may not have been ‘myopic’ (p. 2) on the subject in the same sense as political scientists have (mainly because corporations are quite naturally more in focus in business-related studies), it is safe to say that the metaphor of ‘oases in an arid landscape’ (p. 2) also may be used to illustrate how few systematic studies within management and organization have investigated the political power of corporations – largely as a result of the mainstream theoretical conceptualization of corporations as apolitical despite their economic power. The book thus can serve as a valuable resource to scholars from different fields (politics, management and organization studies, as well as institutional economics à la John Kenneth Galbraith, for example).
The introductory chapter clarifies how we should understand the notion of the business corporation as a governing institution, and how it is to be studied ‘through the joint lenses of institutionalism and traditional political economy’ (p. 3). Some of the neo-institutional frameworks on which Wilks sets out to draw are surely familiar to many OS contributors and readers – such as Scott’s (2008) trinity of rules, norms and meanings and Schmidt’s (2012) recent articulation of discursive institutionalism. Besides specifying the analytical lenses used in the book, this introduction sets the empirical scene in a clear yet balanced way, successfully avoiding naïve representations of management control over corporations by explicitly reminding us that there are a variety of corporations and that the relationship between the corporation and its management is complex – notably, the corporation itself can be seen as a ‘miniature political system’ (p. 13). That said, and while different types of corporations are mentioned in the latter parts of the book, particular emphasis is put on the ideal type of ‘the large Anglo-Saxon corporation as the most familiar model’ (p. 9), characterized by limited liability, legal personality, managerial control and a focus on shareholder value. The core argument of the book is also introduced in this first chapter. Drawing on Dryzek (1996), Wilks reminds us that, historically, liberal democracies have typically gone for a settlement involving a compromise through which ‘democratic principles and processes have limited the power of economic interests but allowed the operation of a capitalist system’ (p. 16). This system has helped in securing economic growth while tolerating extensive inequality in return for basic social protection of the poorer in society. Now, Wilks argues, ‘this liberal democratic equilibrium has broken down so that the business corporation has become an even more powerful political actor [since 1990]’ (p. 16), which seriously threatens liberal democracy. Wilks also makes it clear from the outset that there is a normative dimension in his analysis of corporate power: he aims to take a clear stance whether the corporate ability to influence public policy is proper or improper, based on democratic and accountability principles – and not surprisingly, his analysis leads him to conclude, at the end of the book, that this power is highly illegitimate.
Subsequent chapters are grouped in three main parts. First, two chapters discuss the corporation as a political actor in general terms, one at the national level and the other in terms of enhanced power for multinational corporations. Second, the three following chapters are focused more specifically on the UK example which is used to epitomize what Wilks calls the ‘New Corporate State’, echoing Galbraith’s (1967) ‘New Industrial State’ – and its emphasis on the central role of the large corporation, which allows Wilks to ‘distance the discussion from a preoccupation with neoliberalism’ (p. 70). Third, four interrelated chapters then focus in turn on corporate participation in global governance, corporate accountability questions (including an interesting analysis of critiques of corporations in popular culture), corporate social responsibility and different models of corporate governance. The transition between the second and third parts, that is, between chapters 6 and 7 from UK politics to global governance works smoothly through the central notion of ‘partnership’, related to phenomena that are prominent both in the UK – mainly through public–private partnerships – and transnationally – through attempts to develop transnational regulation typically in partnerships with industries or corporations. The author makes a convincing case that the UK model of a corporate state has been particularly influential on the emerging global rules, norms and culture: ‘the success of corporations in establishing themselves as institutions of global governance is comparable to, and in part emergent from, the domestic transformations to neoliberalism’ (p. 174) as experienced in the UK since the 1980s. And this connection between the UK context and global processes is also argued to hold in relation to the ‘financial components of the corporate elite hav[ing] become particularly dominant’, leading to the preoccupation of ‘hold[ing] global finance to account’ (p. 174).
Thus, the more detailed focus on the UK public policy context, about which Wilks has accumulated a wealth of knowledge through both his scholarly works and his involvement in domestic competition policy for many years, is by no means a weakness for a book that purports to problematize the political power of the business corporation in more global terms. The link that is made between the UK context and transnational processes is in fact one of the strengths of the book, well illuminated by the neo-institutional perspective and the explicit links made to traditional political economy. The combination of these two lenses (new institutionalism and political economy) delivers a valuable contribution to discussions of corporate power. And this contribution is delivered in a way that is highly ‘readable’ for organization scholars, thanks to the familiar neo-institutional approach and the focus on the (especially large Anglo-Saxon) business corporation. The book is directly connected with ongoing concerns in society and prominent contemporary research agendas (political CSR, questions of governance and accountability, corporate governance, corporate political activity, corporatization of politics, etc.) but discusses these issues in a novel way, more informed by political economy than are works typically positioned within organization studies.
What also makes the book particularly valuable is how it connects the various relevant agendas in a way that to my knowledge has not been done before. Chapters 7 to 10 – dealing respectively with global governance, accountability, CSR and corporate governance – are written in different ways, which enhances their complementarity. Global governance is addressed largely from a political science/economy perspective as might be expected; the question of accountability is discussed with extensive reference to critiques from popular culture and thus draws on film and literary criticism (largely Wilks’s own, very interesting brief analyses of novels and films such as Oryx and Crake and The Constant Gardener); the critical review of CSR is well informed and the author shows an excellent grasp of the main problems with CSR, in line with the critical literature from management and organization studies; and the chapter on corporate governance critically compares different national systems of corporate governance, in a way that relates back to the previous chapters largely through an emphasis on the importance of stakeholder involvement (notably expressed through praise for the German model). The variety of approaches to tackle these highly interrelated topics delivers a fresh and stimulating reading experience – even for scholars who have extensively engaged with these issues in their own work.
The concluding chapter also provides new insights into the political power of large business corporations by explicitly debunking seven ‘fairy tales’ and establishing seven (relatively overlooked) ‘facts’. While none of these fairy tales and facts will exactly be news to critical scholars interested in corporate power, the way they are put together makes for a compelling read which reminds us that, for example, TINA (‘There Is No Alternative’) is largely an Anglo-American myth that can be debunked not only by referring to other corporate governance systems than the UK or the US, but also by calling for ‘draw[ing] the large [publicly licensed] business corporation into the realm of democratic accountability’ (p. 253). The latter message is claimed to be ‘the single most important’ (p. 253) of the book. Thus, the book does deliver on its promise of a normative conclusion – ‘with a polemical edge’ (p. 251): Wilks writes about how ‘the illegitimacy of corporate colonisation of government merges with the sheer scale of damage that ever-larger corporations can wreak to pose a threat to contemporary society’ (p. 253). His discussion of ‘futures’ is focused on the need for change, with three main avenues: a reinvention of the corporation through incremental change; a systemic change inspired by successful alternatives to the problematic Anglo-American model; and a revolutionary change drawing on socialist imaginations. All three options are discussed in a balanced way and the final chapter is concluded by an emphasis on institutional reform not revolution in the anti-capitalist sense.
The book is not really presented as a textbook (it does not really include ‘student-friendly’ tables, figures and summaries) but it could definitely work as one, as it is written very clearly, with a logical structure that makes connections between different relevant fields of study. One of the issues worth noting from this perspective is that there seems to be no option for inspection copies of the book, which is a pity. Another limitation may be related to the normative conclusions of the book, which may prove a hindrance – especially in a business school context – to keeping all students in the discussion. Other than these limitations as a textbook, the most surprising aspect from my perspective is the relatively understated role of the third sector or civil society in discussions of partnerships and governance (both in the UK and globally). When NGOs are mentioned, it is mostly in passing, as supervisors or endorsers of, for example, CSR initiatives. In an age when transnational multi-stakeholder governance initiatives involving businesses and NGOs are booming, the discussion of ‘stakeholder regulation’ (pp. 155–157) in the context of global governance looks a bit too brief to me. These few limitations notwithstanding, and as a conclusion to this review, I consider this book to be an outstanding contribution to the study of the power of large business corporations; it takes a fresh perspective by making fruitful connections between (1) new institutionalism and political economy, (2) the domestic and transnational levels of corporate power and governance, and (3) different key corporate political agendas like CSR and corporate governance.