Society's Constitution and Corporate Legitimacy or Why it Might be Unethical for Business Leaders to Think with Their Heart

Abstract

Is the perspective of ethics sensitive to the social complexity of the changes within the legitimating notions which determine the role and responsibility of economy and business companies within contemporary society? On the scientific dimension, taking the human being as ultimate reference or endeavouring to provide organisations with human qualities may represent sociological under-complexity. On the practice dimension, catchwords such as ’managers must learn to think with their heart’ may risk leaving corporate executives in the lurch, considering the immense and increasing social complexity constituting and surrounding organisations today.

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Instead, from a sociological perspective the new legitimating ideals empirically ex-pressed in the thematisation of ethics and concepts such as CSR and triple bottom line are reconstructed as reflection, the specific 2nd order observation mode of self-referential social systems. This reconstruction sees the changing interrelation between organisation and society in relation to the societal structure and evolutionary processes. It is based mainly on Niklas Luhmann’s theories which empty society of human beings as well as any teleology or content apart from the highly improbable ability to reproduce itself.

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At the specific stage of full functional differentiation in the latter half of the 20th century, society adjusts itself by means of new legitimating notions and legitimising practices. Problems activating these changes are identified at five interrelated structural dimensions: 1) society’s strain on its environment, leading to notions such as the triple bottom line – i.e. a balancing of economic, social and environmental considerations; 2) an increasing acknowledgement of the contingency of social institutions, leading to a pronounced conflict between decision-makers and those influenced by the decisions, and consequently to the call for responsibility, transparency and sustainability; 3) the growing independence of society’s functional spheres (economics, politics, science, education etc.) which paradoxically increases their interdependence and consequently their reciprocal sensitivity, expressed for instance in partnerships and stakeholder models; 4) the overload of conventional politics and law, leading to political initiatives which aim at internalising society as horizon for the business community’s sense of responsibility; 5) globalisation which activate previously passive conflicts between different societal forms, values and cultures.

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If we fail to see the complex social and societal contexts within which the evolution of new legitimating notions and new legitimising practices are embedded, then concepts such as business ethics and CSR may at best represent good intentions, at worse may do more harm than good by overshadowing and dwarfing the social complexity.

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