The Limits of Business Self-Regulation

Olson Mancur , The Logic of Collective Action, (Cambridge, MA: Harvard University Press, 1965).

Ibid., p. 2.

Ibid., p. 44.

Hardin Russell , “Collective Action as an Agreeable n-Prisoner's Dilemma,” Behavioral Science, vol. 16 (1971), pp. 472–79.

Runge C. Ford , “Institutions and the Free Rider: The Assurance Problem in Collective Action,” Journal of Politics, vol. 46 (1984), pp. 154–81.

Cf. Mintzberg Henry , “The Case for Corporate Social Responsibility”, Journal of Business Strategy, vol. 14 (1983), pp. 3–15.

Stone Christopher , Where the Law Ends, (New York, NY: Harper Torchbooks, 1975), p. 112.

In the prisoner's dilemma, two prisoners are interrogated separately about an armed robbery they are charged with committing. Given the strength of the case against them, each can expect to get one year in jail for fire-arms possession, but only so long as neither confesses. The D.A. offers each of them a deal: If either turns state's evidence against the other, all charges against him will be dropped, but his partner will be convicted and will face a ten-year sentence. However, if both confess, both will be convicted and will receive reduced sentences of six years each. Plainly, what is in the narrow self-interest of each prisoner (each is better off confessing no matter what his partner does) is in conflict with what is in their collective interest (between them they serve a total of only two years if neither squeals). See Hardin Russell , op. cit., p. 2.

Wilson James Q. , Political Organizations, (New York, NY: Basic Books, 1973), chapter 8.

Ibid., p. 149.

Ibid., p. 151.

Leone Robert A. , “Competition and the Regulatory Boom,” in Tella Dorothy , ed., Government Regulation of Business: Its Growth, Impact, and Future, (Washington, D.C.: Chamber of Commerce of the United States, 1979), p. 34.

Foote Susan Bartlett , “Corporate Responsibility in a Changing Legal Environment,” California Management Review, vol. 26 (1984), pp. 217–28.

Arrow Kenneth J. , “Social Responsibility and Economic Efficiency,” Public Policy, vol. 21 (1973), p. 315.

See Thomas Schelling on “the false dichotomy of voluntarism and coercion,” in “Command and Control,” in McKie James W. , ed., Social Responsibility and the Business Predicament, (Washington, D.C.: Brookings, 1974), p. 103.

The phrase is from Hardin's Garrett “The Tragedy of the Commons,” Science, vol. 162 (1968), p. 1247.

Schelling , op. cit., p. 103.

Garvin David , “Can Industry Self-Regulation Work?” California Management Review, vol. 25 (1983), p. 42.

Porter Michael , Competitive Strategy, (New York, NY: Free Press, 1980), p. 230.

Grumbly Thomas P. , “Self-Regulation: Private Vice and Public Virtue Revisited,” in Bardach Eugene Kagan Robert , eds., Social Regulation: Strategies for Reform (San Francisco, CA: Institute for Contemporary Studies, 1982), p. 97.

Garvin , op. cit., p. 155, 156.

Conte Christopher , “Transport Agency's Dole Vows to Restrict Traffic at 6 Busy Airports if Carriers Don't,” Wall Street Journal, August 16, 1984, p. 10.

Olson Mancur , The Rise and Decline of Nations, (New Haven, CT: Yale University Press, 1982), pp. 47–48.

These objections lie at the heart of the complaint that the doctrine of corporate social responsibility provides no operational guidelines to assist managers in making responsible choices. The most sophisticated (but, I think, ultimately unsuccessful) attempt to supply an objective, external standard (located in what they call the public policy process) is Preston Lee Post James , Private Management and Public Policy, Englewood Cliffs, NJ: Prentice-Hall, 1975).

See on this point the remarks of Walter A. Haas, Jr., of Levi Strauss quoted in Silk Leonard Vogel David , Ethics and Profits (New York, NY: Simon & Schuster, 1976), pp. 25–27.

Rawls John , A Theory of Justice, (Cambridge, MA: Harvard University Press, 1971), pp. 270, 269.

Olson , Rise and Decline, op. cit., pp. 47–48.

Shonfield Andrew , Modern Capitalism, (New York and London: Oxford University Press, 1965), p. 245.

Baunthal Gerard , The Federation of German Industries in Politics, (Ithaca, NY: Cornell University Press, 1965), pp. 56–57.

Bresnick David , “The Youth Employment Policy Dance: Interest Groups in the Formulation and Implementation of Public Policy,” paper presented at the American Political Science Association meetings in Denver, September 2–5, 1982, p. 33.

Vogel Ezra , Japan as Number 1, (New York, NY: Harper Colophon, 1979), chapter 5.

Ibid.

Kelman Steven , Regulating America, Regulating Sweden: A Comparative Study of Occupational Safety and Health Policy, (Cambridge, MA: MIT Press, 1981).

Ibid., p. 6.

Ibid., p. x.

Ibid., pp. 117 and 158–61.

Ibid., pp. 154–55.

Ibid., p. 151, 233.

In Bauer, Pool and Dexter's classic study, a lopsided majority of the businessmen with opinions on the subject supported free trade, but when they contacted members of Conress it was invariably to ask for protection. Bauer Raymond A. de S. Pool Ithiel Dexter Lewis , American Business and Public Policy: The Politics of Foreign Trade, (New York: Atherton, 1963), p. 221. The doyen of the pluralist school in American political science has recently remarked that “by emphasizing aspects of the self that are enhanced by … segmented gains, organizational pluralism helps to produce in political actors a set of perceptions and beliefs, even a persistent political culture, in which the absence of a common, public or widely shared set of interests is a self-fulfilling prophecy.” Dahl Robert A. , Dilemmas of Pluralist Democracy, (New Haven: Yale University Press, 1982), p. 44.

This is, of course, the essence of the argument in Olson's Logic, op. cit. This section draws heavily on Wilson James Q. , Political Organizations, op. cit.; Salisbury Robert H. , “Why No Corporatism in America?,” in Schmitter Philippe Lehmbruch Gerhard , Trends Toward Corporatist Intermediation, (Beverly Hills: Sage, 1979); and Schmitter Philippe Brand Donald , “Organizing Capitalists in the United States: The Advantages and Disadvantages of Exceptionalism,” presented at a workshop at the International Institute of Management, Berlin, November 14–16, 1979.

Wilson , op. cit., pp. 146–47, 34, 153–56 and passim.

Ibid., p. 149.

Ibid., p. 153, 161.

Salisbury , op. cit., p. 215. See also Wilson , op. cit., p. 82.

Vogel , Japan as Number 1, op. cit., p. 112.

Salisbury , op. cit., p. 222.

Schmitter Brand , op. cit., p. 71.

Wilson , op. cit., p. 83; see generally chapter 5.