P[04]Critical
Firm

In a media environment dominated by editorial lines concerning post-truth and post-factual politics (The New York Times, 2016), the exclusionary effects of the social media bubble (Llinares, 2016), and the rise of populism as a threat to market stability (Dalio, Bridgewater Associates, 2017), the election of Donald J. Trump as the 45th president of the United States precipitated a short trend towards the public politicisation of business organisations against his figure and particularly against his immigration ban during the early months of 2017. An extensive list of companies including Patagonia, Starbucks, Airbnb, Uber, and Lyft were involved in political commentary and activist campaigns through social media, and others such as Nike, Heineken, and Budweiser launched large-scale politically charged commercial campaigns on TV. Reporting on some of these examples, The Guardian published an opinion article titled “Sex doesn’t sell anymore, activism does” (Holder, 2017). One day before, “the ‘rise of branded activism” was praised with messianic voice in a trends foresight article at fastcodesign.com, stating that as “a reflection of the changing political tides, many brands would evolve from mission-driven to activist” and “finally stop trying to trick us” (Co.design, 2017).

“Branded activism” follows within the domain of “cultural strategy” which has long been promoted by branding guru Douglas B.Holt. In his article “Branding in the Age of Social Media” (Harvard Business Review, 2016), he encourages brands to adopt the role of amplifiers of cultural movements in order to remain relevant. Holt’s cultural strategy previously explained “How Brands Became Icons” (Holt, 2004) in the second half of the 20th century. His theory instructs brands on how to perform “identity myths” in order to become “cultural icons” that offer symbolic resolution to the tensions, contradictions, and paradoxes emerging between people’s inherited ideologies and their direct experience of the world. Those myths draw from existing stories in society and take place in idealized “populist” worlds where brands have to earn credibility through their actions and language. As Holt points out, the value of a particular myth resides not within the myth itself, but in its alignment with society’s incipient identity desires (Holt: 9).

In “The Globalization Paradox” (2011), Dany Rodrik exposes the conflicts emerging between national democracy and global market integration as one of the major global identity shapers. This argument was already developed by Nobel laureate economist Joseph E. Stiglitz in his book Globalization and Its Discontents (2003). The global power structures and institutions described in these texts define global finance and politics but remain distant for the average citizen whose political identity is still built around the nation state. The effective power of these institutions, maybe obvious for decades in countries of the periphery, was not explicitly perceived in Western societies by a generation that was raised in a period of relative growth and stability or under the protection of the welfare state. The 2008 subprime crisis, financial sector bailout, and posterior austerity measures and welfare cuts promoted by international financial institutions made those conflicts explicit. In 2013, 58% of EU citizens believed their country’s government was to a large extent or entirely controlled by a few big interest parties (Transparency International Global Barometer, 2013). As the reader can guess, the opportunistic campaign of “branded activism” does not represent the first try of the corporate world to tackle this public concern through corporate identity.

Corporate identity is “the identity attributed to an organization by its more powerful managerial group”; organizational identity represents “shared interpretive schemes” that other groups such as members, stakeholders, users, or the general public collectively construct to provide meaning to their experience (Rodrigues and Child, 2007; 887). Changes in corporate identity can be stimulated by external pressures as interpreted by corporate managers (Chreim, 2005). Divergences between the corporate identity and the desirable organizational identity as perceived by external parties such as citizens or governments lead to “identity dissonances” (Chreim, 2002). When this phenomenon arises, managerial responses search to restore consistency. The ability of top managers to construct and sustain a corporate identity discourse depends on two main factors: mobilisation and legitimacy. Mobilisation is a concept applied to “the development of collective consciousness and the energizing of action in social and political movements” (Newton, 1999). Firm mobilisation capabilities help sustain managerial identity. The counter-mobilisation capabilities of other interest groups that are opposed to a particular identity compromise it (Rodrigues and Child, 2008: 892). Legitimacy is a sociological term that denotes “a condition of positive valuation and acceptance enjoyed by persons in positions of power, and by the organizations through which that power is exercised” (Rodriguez and Child, 2008: 893). Habermas introduced the concept of ‘legitimacy crises’ to define “situations in which individuals or organizations in power are unable to meet social expectations” (1975). Corporate identity is used as a claim for legitimacy for the organization. The identity gains legitimacy when it is embedded in a discourse that relates sympathetically to the wider context. Thus “conscious and explicit attempts on behalf of the organization to justify what it is and what it stands for are aimed at securing legitimacy for the ideas behind a corporate identity and the actions associated with it” (Rodriguez and Child, 2008: 893).

Concepts such as “branded activism” or “mission-driven business” can be classified as subcultures of CSR or progressive steps in the path of responsibilisation as much as subcategories of cultural branding. Although the process of generation of corporate identity follows this strong and understandable logic, organisations change their identities to match the dominant ideologies in society in order to legitimise their operations; within the academic community, there are two antagonistic narratives surrounding CSR. The former implies a discourse of celebration that sees CSR as the result of bottom-up corrective forces in the market; the latter implies a discourse of rejection that sees CSR as a top-down dialectical tool for the advancement of neoliberal governmentalities.

As corporations became increasingly international and the public saw itself as inhabiting a world dominated by markets, activist and social movements that had traditionally been concerned with the public politics of governments started targeting the private politics of corporations. The same reasons led some groups to mobilise around consumption as a form of political expression, generating movements such as “conscious consumerism” or concepts such as “moral markets.” In addition to this, tactical innovations exported from “civil society” organisations added collaboration to the traditional strategies of contentious confrontation developed by social movements (de Bakker et al., 2013: 574). As a result, corporations’ strategic management considerations of the stakeholder moved from purely economic to taking into consideration a wider spectrum of societal groups, as developed in the Stakeholder Theory of Edward Freeman (CEBC, 2004: 9).

The alternative discourse on CSR presents it as a structural top-down strategy, coupling a process of economisation and a process of moralisation of markets in general, and business organisations in particular, to sustain and justify neoliberal governmentalities and visions of the society (Shamir, 2008; 1-2). This logic points out that both political institutions and corporations, by promoting the logics of “responsibilisation” and “economic sustainability,” are transfiguring domains previously perceived as public, as if embedded in a competitive environment reigned by market logics (Shamir, 2008;1). Among those sectors, Shamir counts health, education, security, and welfare. Adding to that, CSR contributes to the privatisation, deregulation, and structural corporatisation of the political by “transforming laws and norms into guidelines, relying on self-reflexive regulation, and treating normative prescriptions as commodities to be produced, distributed, and consumed” (Lobel, 2004).

This article does not aim to determine whether CSR is the result of corrective forces on the free market or the justification for it to advance. It does not aim to determine the structural result of CSR as a practice either. Both narratives are compatible and understandable through the lenses of Mobilisation, Legitimacy, and Strategic Interactions and the practices deployed by each responsible firm should be studied separately. What is relevant for this paper is to acknowledge that CSR, the intended CPI of most organisations, is failing in its claims for legitimacy among extensive sectors of the population. Reasons include:

The use of the word “populism” by mainstream media has become intentionally and intrinsically pejorative and naturalized as a synonym of demagogic. However, in political science, “populism” is simply a descriptive tag used to catalogue movements that match the narrative “people versus elite.” A broad ideological, geographical, and temporal spectrum of movements are catalogued as such. As seen in previous chapters, the cultural branding strategies used by corporations for decades present clear populist elements, too. The use of populist narratives does not necessarily carry a negative or positive connotation, neither is it attached to the deployment of a particular set of policies. It is just an archetypal narrative.

This article will not discuss the degree of veracity or demagogy of any populist narrative, the same way it did not discuss the degree of veracity of the narratives of responsibility. The key point is that populist narratives do not represent a menace to the corporate establishment because they are demagogic. They represent a menace because they have been successful in mobilising people, and they did so because they are aligned and explicitly verbalise an already existing feeling of the population: that the corporate world is at the very centre of political decision-making and that it is responsible for the politico-economic devenir of the last decades, and there is an incipient desire of rebellion against it.

A corporate identity aiming to seduce those markets and present an alternative to CSR should utilise those drivers. In order to legitimise their position as activists, activist corporations would need to perform an “identity myth” that offers a symbolic resolution to the ongoing societal tensions and legitimises them among skeptics. The first wave of branded activism failed because firms struggled to reallocate the frustrations of individuals in “populist worlds.” This conflict can only be solved where citizens think it belongs, in the corporate world. Today, in opposition to popular belief, the purposeful generation and management of conflict can be used as a strategy to generate trust and legitimacy among citizens, and ultimately a position of leadership for businesses who unapologetically embrace their political nature.

While companies have traditionally and intentionally chosen to exercise political activity opaquely, activists and other interest groups do not recognise the legitimacy of business as a political constituent. While competing for technological disruption and efficiency in its business models, the corporate community has traditionally refused the task of cultural and political criticism, relegating it to the other actors. On the other hand, the weight of Marxist tradition and Critical Theory in the world of activism has helped to draw a monochromatic neoliberal representation of business organisations (Rushkoff, 2005). As a consequence, while there are strong links and fluid collaboration among activism, academia, and arts, the corporate world is commonly perceived as the enemy. This monolithic conception of business is the already existing ideology that serves as a foundational myth for most contemporary populist narratives and the global anxiety the critical should address. On the other hand, the factual existence of “business unity,” understood as an impediment to the effective democratic functioning of society, is a long-time discussed academic topic with both supporters and detractors. In The Structure of Corporate Political Action (1992), Mark Mizruchi brought an interesting perspective by pointing out that firms do not always act according to their belief or direct interest but as a result of structural conditions such as “market constraints,” “common stakeholders,” and particularly “direct and indirect interlocks” with bigger corporate or financial institutions. In this conceptual framework, the question is not whether the world of business is united, but under which conditions it happens to act unitarily. The results of his research conclude that firms that are interdependent through “market constraints,” “common stakeholders,” or “direct or indirect interlocks” tend to develop similar corporate political behaviours. However, the influence of “indirect interlocks” in companies’ direction boards is by far the most important structural factor. This reveals that the network of corporate interlocks is centralised and hierarchical in a way that a central firm interlocked with a number of peripheral firms influences the behaviours of these in its favor. The higher in the hierarchy, the more central the firm, and the more similar the behaviour of firms in the same structural position. Financial institutions occupy the top of the network. Firms indirectly interlocked through a financial institution tend to have a higher ratio of similar CPA (Mizruchi,1993: 235-255).

This map is the result of taking the Environmental Dynamics Model of CPA (Attarça, 2017) and adding some modifications according to the lecture of Research in Corporate Political Action: Integration and Assessment (Getz, 1997), The Structure of Corporate Political Action (Mizruchi,1992) and The Network of Global Corporate Control (Vitali, Glattfelder & Battiston, 2011).

Social movements and activists have limited legal and economic resources to influence politics. However, particularly in times of social instability such as what is being seen in today’s climate, they have high symbolic capabilities to mobilise the public. These capabilities should be used as a legitimising tool in favour of the partnered “critical firms” that, in exchange, would provide access or collaborative use of their political resources (lobbying, lawyers, PAC Donations, network, media links…). Applying this strategy to the corporate world by defining a clear hegemonic undesired political practice, social movements and critical firms should define clear corporate antagonists. This serves to present the partnered “critical firm” as a legitimate “anti-corporate” actor that fosters a counter-hegemonic political practice. This kind of strategic collaboration is imported from what CSR practice has done before. However, the explicitly political treatment of the issue and the clear strategy of conflict should generate a different outcome.

This environmental scenario is an evolution of the “social controversy” scenario presented by Attrarça. In this scenario, the impact of a particular policy is widespread and affects a variety of interest groups and society as a whole. The industry tends to act as a whole through trade and employers unions. In order to reach a counter-hegemonic political environment, the “critical firm” can then intentionally act against the hegemonic industry practice and its immediate perceived interest, so as to strengthen its ties with alternative stakeholder and interest groups that legitimate the firm among the public opinion. This favours the competitive advantage of the firm, in detriment of its competitors. If the success of the “critical/counter-hegemonic” firm is widespread, others might progressively follow in its positioning. Tactic movements by activists and critical firms should be addressed towards the consecution of this scenario.