Both corporate social responsibility
and corporate governance have become major international issues.
Many of the reasons for this have been discussed at this conference.
Only a few will be reviewed here. The more central interest is
in showing the intertwined nature of governance, responsibility and
the quality of social and economic choices. Arguably
corporate governance reform provides the best hope for addressing the
problems of our times and providing a synergistic relation between corporate
social responsibility and economic viability. But different reforms
provide different hopes and possibilities. These
differences are of concern here. Any analysis
has to remain relatively abstract given the complex differences arising
from industries, national laws and policies, and specific historical
exigencies. Nonetheless, some general directions
can be given that might focus the development of specific contextualized
responses.
The flow of the argument of this paper
is thus: Contemporary concerns with both
corporate governance and corporate social responsibility have arisen
from organizational failures and negative social consequences that appear
to be systematic in nature. The systemic
quality is created by corporate governance structures and processes
that enable the exaggerated representation of some values and interests
and leave others out. Organizational decisions
are inevitably interested and value-laden rather than simply economically
rational, but the various conflicting values and interests in society
have not been given an equal opportunity to influence decision making.
Significant public decisions are made in the corporate site,
creating systematic distortions in social and economic developments
and posing important moral and political questions.
Traditional governance models have counted
on some combination of managerial stewardship, governmental regulation,
and consumer choices to make operant wider social values.
For a variety of well-documented reasons these have each become
less effective in providing guidance (Kelly, 2001; Deetz, 1995a; Schmookler
Whether based on rights or need for performance, getting social
values and interests into the decisional premises, processes and routines
has become an ever more pressing problem. Stakeholder
collaboration becomes one promising alternative.
The central questions "Whose objectives should count?"
"How much should they count?"; and "How will they be
accounted for?" arise in all modern organizations.
Beyond the political aims of new form of governance, evidence
suggests that the presence of diverse values can aid creativity, constituent
commitment, workplace coordination, and product and service customization.
And, that these are especially important for the competitiveness
of post-industrial societies and in the more knowledge intensive industries
where forms of social and intellectual capital are central.
Stakeholder governance models offer
possible political and economic benefits. Still stakeholder collaboration
remains fairly underdeveloped and often ineffective.
Part of this arises from limited stakeholder inclusion, strategic
management of stakeholders and/or co-optation of stakeholder involvement
by managerial groups. Perhaps a bigger but more hidden problem has been
the lack of serious attention to models of communication in decision
making. Participation models have largely been evaluated as if they
are all alike without careful attention to the models and skills of
communication present. Clearly, communication
concepts and practices embedded in public/state democratic processes
are rarely useful for the types of collaborations that are most effective.
More productive concepts and practices can be developed from
consideration of innovative communication processes based in conflict
rather than consensus models. Good communication rests not in the finding
of common ground but in assuring requisite diversity and contestation
coupled with the ability to invent creative options that sustain mutual
commitment, difference, and mutual accomplishment of diverse goals.
Forces Behind Rethinking Governance
Issues of corporate governance have been long term. Over
the years different societies have struggled with shareholder rights
and various processes for representing other stakeholders, principally
employees. While some have followed
more radical political agendas, most of these were attempts to make
adjustments within the context of the more general "owner rights/managerial
prerogative"; model whenever specific social problems arose.
While within academic circles larger discussions regarding political
rights maybe of concern, outside of this, the interest is primarily
in making adjustments to better manage the immediate social and economic
problems. (See, for example, the 2004 Organisation for Economic Co-Operation
and Development [OECD] report on corporate governance, or the 2002 Sarbanes-Oxley
Act in the US.)
In the contemporary context both external social issues and internal
economic ones have reinvigorated this discussion.
The increased attention to governance by those traditionally defined
as "outside" the organization appears generated by four core problems.
All of these have strong social and economic implications for
the wider society but the first three are rarely expressed in corporate
social responsibility terms. From the standpoint
of general social interests, any discussible governance solution would
need to address each of these in some fashion. They are: 1) scandals
and the financial disruptions created by these scandals, 2) the dominance
of short-term decision making and subsequent lack of organizational
development and socially beneficial growth, 3) managerial self-interests
that have run counter to productivity and development, and 4) the general
decline of corporate social responsibility.
Scandals
and Financial Market Disruption
The various scandals at Enron, World Com, and so forth
have in many ways demonstrated fundamental weaknesses in governance
processes. Of primary concern in most discussions
has not been the loss of employee jobs and retirement accounts in the
specific scandals but the exposure of systemic weaknesses in accounting
and control processes that potentially cut across all companies and
countries. While in the US
the media and public attention may continue to focus on the personal
characteristics and failures of corporate leaders, around the world
and in Europe specifically the focus
has been on the system breakdown and the consequences for financial
markets. As the OECD leads its own report:
"The dramatic collapse of major companies over the past few years
has focused the minds of governments, regulators, companies, investors,
and the general public on the weaknesses in corporate governance systems
and the associated threat posed to the integrity of financial markets"
(2004, p.3). And, in an even more narrow
sense, the 2002 Sarbanes-Oxley Act, while heralded as a fundamental
shift in governance, focuses most directly on financial oversight and
auditing with the hope of increasing the confidence of financial investors.
Concern with Growth and Development
While scandals may have gotten everyone's attention and focused the
governance discussion, several other changes that impact on economic
health have been of more long-term concern. The
increased centrality of the quarterly report, "return on investment"
measures, and "short-termness" poses problems flowing from current governance
processes. The use of the return on investment
in the buying and selling of stock rather than company worth and growth
as measure of value has tended to favor financial manipulations and
cost containment strategies over building companies.
The growing dominance of institutional investors also has consequences.
Institutional investors, unlike traditional owners, are often more concerned
about overall return than the health of any specific company.
This invites short-term strategies (see Deal and Kennedy's 1999
discussion). And, further as resources are
held by institutional investors, individuals are less able and likely
to know much about the practices of the companies their funds are invested
in (OECD, 2004, pp. 64-66). The dominance of short-term decision making
and subsequent lack of growth is a concern to most European societies.
Few doubt the need for profits to keep companies viable,
but when management sees profit as their product rather than a by-product
of good business choices, long term consequences to the business and
society result. In an analogous way, a person
needs oxygen to live, but living for oxygen can lead to less than healthy
choices.
Managerial Self-Interests
At least since Chandler's
work we have known that "managerial capitalism" functions different
from idealized models of capitalism. Managerial self-interests and control
attempts have always had a major impact on corporate decisions.
But a number of things are new and more problematic.
The growth of executive salaries, especially in the US
has been startling to say the least. Upper-level executives have acted
less like citizens and have deployed a somewhat rawer economic logic
with less consideration of the consequences for the organization, other
employees, and host societies. Personal
agendas and "identity needs" have more greatly influenced product development
and takeover and merger strategies. And,
standard decisional routines increasingly run counter to real growth
in productivity and development.
Corporate Social Responsibility and Social Value
Representation
While all three of the above might be loosely referred to
as corporate social responsibility (CSR) issues, a much wider range
of CSR issues are present, focusing primarily on social value representation.
CSR and value representation is often discussed as a contrast
to an economic-only view of organizations. This
is, of course, misleading. Organizational
decisions are inevitably value-laden. Beliefs and values fill the gaps
between what can be known and the need to act.
Assumptions about people, fairness and business practices matter.
And organizational practices based in wider value systems endlessly
direct choices. Values are embedded within
standard accounting practices and knowledge production activities.
But we tend to talk about them as values only when they arise
from nonmanagerial groups. And then mostly only when there is some specific
harm to the larger society. CSR and value
representation concerns are not about whether values, but whose and
what values get represented in business decisions.
No one familiar with the international business situation today needs
to be told that contemporary issues of responsibility are complex and
critical. They range through important
issues such as human rights, environmental protection, equal opportunity
and pay for women and various disadvantaged minorities, and fair competition.
Such broad issues become instantiated in activities such as using
prisoners as workers, moving operations to environmentally less restrictive
communities, offering and taking bribes and payoffs, creating environmentally
unsound or wasteful products, closing of economically viable plants
in takeover and merger games, growing income disparity, declining social
safety-nets, malingering harassment, maintaining unnecessary and unhealthy
controls on employees, and advocating consumerism.
In such a context, value/moral/ethical/aesthetic considerations are
taking on additional significance. Few today
see business as either socially benign or benevolent.
Still, the growing popularity of such discussions are easily
co-opted into more or less responsible"green"; and "social"
marketing. And, the discussion often uses
traditional conceptions of policies and individual responsibility that
may be of limited value. In contrast, broader concerns draw our attention
less to reactive issues of law and ethics and more to proactive issues
of morality and social good.
Much of the
discussion of corporate social responsibility (CSR) has focused on the
morality or ethical principles of corporate leaders and how these become
embedded in the culture and practices of organizations (e.g., Trevino
and Weaver, 2003). Often attention is directed to the character of these
leaders and their qualities as citizens of national, regional and world
communities (MacIntyre, 1984). This orientation treats CSR problems
as arising from individual defects rather than governance and decisional
structures and the solution as policies and standards rather than better
processes of making business decisions. Much can be gained by focusing
more on the decisional processes and responsive choices internal to
organizations.
The Response to These Problems
Various mechanisms
exist to address problems with scandals and managerial choices as well
as for social value representation. Wider
social concerns primarily impact business decisions through governmental
regulation, consumer choices, and managerial good will and stewardship
(often supported through hopes of economic gain or diminished regulation).
Each has clear weaknesses and even in combination these processes are
limited in their ability to represent social values well (see Deetz,
1995a, b). In general, the EU
and US have each responded to these contemporary problems with sets
of new guidelines and regulations on one hand and increased enticements
for voluntary compliance ("comply or explain" obligations and encouraged
with the threat of further regulation) on the other (OECD, 2004, p.
40). The types of initiative as well as
relative success and failure are carefully documented in two recent
OECD documents (Corporate Responsibility, 2001, and Corporate Governance,
2004). While many initiatives can
be identified, OECD assessment across countries shows major changes
in decisional processes and voluntary compliance to be less than encouraging
(OECD, 2004, pp. 52-3). Certainly
shareholder protection through greater financial transparency and reformations
in Boards has been achieved (OECD, 2004, pp. 58-79). But little more
than this. Much the same could be said regarding the Sarbanes-Oxley
Act in the US.
The focus has been heavily on financial oversight, generating
a further layer of internal bureaucracy and initiating an entire industry
of "compliance consultants" rather than concern with the larger public
or with producing a viable external surveillance.
Rather than a governance change, those in the industry describe
it perhaps best as "no accountant left behind."
Rarely has any group benefited so much by its failure.
Perhaps more importantly, such an approach has given more financial
transparency and mechanisms to assure the following of standard accounting
practices, but the significant CSR questions focus more on the values
embedded in standard accounting practices and these remain unexplored.While
the relation of governmental interventions and corporate decisions is
not to be developed here, a brief list of problems can show why state
intervention while important can only be a part of the solution.
Even though regulation and incentives can influence system choices,
most significant choices will remain within corporations themselves.
Even if they wanted to, governments can not micro-manage companies.
Further, the effects of their enticements are uneven at best
(See special forum, Academy of Management Review, April, 2005) and "monitoring
of compliance is in general underdeveloped" (OECD, 2004, p. 11) or weak
(pp. 52-53). Governments lack both the popular legitimacy
and capacity to make or require more proactive corporate choices, governmental
policy is largely influenced by corporate leaders and lobbyists, and
rarely do public agencies have enough information soon enough to participate
actively in corporate processes to make them more publicly accountable.
Additionally, regulation inevitably leads to a costly double
bureaucracy—a public one to establish guidelines and monitor compliance
for public good, and a private one that struggles to keep up with the
paper work and find loopholes and avoid regulation.
The application of endless bureaucratic rules constantly runs
counter to good situational judgments and common sense and the costs
are matched by the energy and imagination used by corporate managers
in pursuing narrow self-interests at the expense of public health, public
information, and positive social development. Globalization provides
for an even larger set of potentially competing values.
Yet, with globalization of business, governmental powers are
weakened in the ability to support the inclusion of social values and,
further, international trade agreements often outlaw social value representation
(OECD, 2001, p. 31).The prospect of consumer choices leading
to more responsible businesses and wider value representation is not
great either. The concept is clear enough.
Multiple value systems could be integrated into business choices
through strategic consumption. If stakeholders were not happy with managerial
decisions, they could eventually vote with their feet or dollars.
Unfortunately, in this formulation social and political relations
are reduced to economic relations, democracy is reduced to capitalism,
citizens to consumers, and discussion to buying and selling.
These transformations have costs.
The translation of values into the economic code entails a constraining
of people's capacity to make decisions together and reduces potential
human choices to choices already available in the system as controlled
by others. The marketplace does not work
well as a way of representing social values. Marketing and advertising,
ability to exclude and/or externalize social and environmental costs,
the complexity and length of the chain of decisions, the difficulty
of translating some values into economic terms, and inequitable distribution
of money all weaken the ability of consumption to represent values.
Yet those who endeavor to resist such forces often find counter-cultural
movements co-opted into market capitalism (Heath & Potter, 2004).
As many have shown, free-market capitalism was never intended to represent
the public well; it was intended to describe how to make a return on
financial investment (Kelly, 2001). The
idea that market choices accomplish representation, and money measures
it, is a misleading fiction. Markets are value-laden rather than neutral
representation processes, but the values are rarely explored (see Schmookler,
1992).
Government regulation, consumer choices and corporate good will offer
very weak mechanisms for value representation and virtually no support
to communication processes that create win/win situations where multiple
stakeholders—including shareholders—can successfully pursue
their mutual interests (Deetz, 1995a). Perhaps
more importantly, they do not enable nor stimulate creative decisions
whereby corporate economic objectives and social good are synergetic
rather than competing interests. Ultimately,
the best hope rests in getting wider values into the decisional premises,
processes and routines rather than to trying to direct from the outside.
The
Non-inevitability of Contradictions Between
Social and Business Concerns
A
common public conception, promoted often by business leaders, is that
the inclusion of social concerns is costly and that a basic contradiction
exists between doing good and doing well. Available
evidence across specific firms and industries is not always clear as
to whether doing social good leads necessarily to better economic performance
or the causal direction between doing good and doing well. But plenty
of support suggests that there is no necessary contradiction (OECD,
2004, pp.77-8; de Jong & Witteloostuijn, 2004; Lawler, 1999; Clarkson,
1995; McLagan & Nel, 1995).
The differences in relationships appear to be linked to external
conditions and manner of value inclusion rather than to any essential
tension.
The value-addedness
of inclusion does not appear to come simply from goodwill or reduced
litigation and regulation. The principal
value may come from the breaking of standard managerial decision routines
that are not economically sound. This was
detailed in the outcomes of various decisional impasses in the co-management
process in the early days at Saturn before they returned to a more standard
GM model (Rubinstein, Bennett & Kochan, 1993).
Even more generally this can be seen in the failure to meet objectives
in most cost containment and layoff strategies implemented by managers
in economic downturns. Opposition and difference
is essential to assessing existing decision routines and inventing new
ones. The knowledge economy's dependence
on human capital produces additional economic pressure.
Even those often critical of various forms of participation as
a way of including wider social concerns, often see it as positive in
the more knowledge intensive industries (Kerr, 2004).
From a
business (though not necessarily managerial) standpoint, the primary
justification for wide-spread inclusion is that diverse group participation
in organizational decisions will lead to better decisions than are currently
being made. Evidence supports that people
can make good collaborative decisions if given the chance, but participation
and inclusion cannot be assessed in the abstract.
They must be linked to specific objectives and processes of inclusion.
Inclusion seems most valuable when four types of business outcomes are
important--creativity in product development and decision making, increased
employee commitmentenhanced
coordination, and greater product customization.
Several well-accepted
claims advance this position that are in no way unique to my argument:
Diversity can enable greater creativity. As
Kerr showed in his analysis of the value of diverse inputs at HP and
Southwest Airlines, participation "will contribute positively to an
organization's performance where . . . the organization's output must
be diverse and original" (2004, p. 91). Further,
the use of distributed expertise can lead to faster, higher quality
decisions. Members at the point of the business
activity are often in a better position to innovate and improve processes.
The presence of valued social and intellectual capital makes
employee retention and commitment essential. Decisional
involvement correlates positively with different dimensions of commitment.
Given the cost of control and/or surveillance, especially in knowledge
industries, coordination through shared values and personal commitments
is often more effective than supervision. And,
finally higher valued products often results from product customization
which is linked to diverse group and value inclusion.
Despite the sometimes
weak models and inadequate implementation, evidence on decisional quality,
effectiveness, and efficiency consistently favors participatory decisional
forms over traditional hierarchical alternatives (Seibold & Shea,
2001; Cheney, et al., 1998; Lawler, 1999; McLagan & Nel, 1995).
Where participation programs have been less successful, the lack
of managerial acceptance and inadequate participation processes appear
to have been largely responsible (Cotton, et al, 1988).
Bottom line: Ultimately,
new governance conceptions and practices can reduce the opportunity
for scandals, encourage growth and long-term thinking, balance managerial
self-interest, and make decisions more responsive to wider social values
while at the same time encourage greater creativity in product development
and decision making, increase employee commitment, enhance coordination,
and enable greater product customization. A
tall order on the one hand, but interestingly, when looked at holistically,
all are advanced by similar transformations.
Workplaces could
be positive social institutions providing forums for the articulation
and creative resolution of important social conflicts regarding the
use of natural resources, the production of desirable goods and services,
the development of personal qualities, distribution of income and the
future direction of society.
In some ways, the
workplace could be a better site for public decision making than the
traditional political process given the close connection between decisions
made there and their public consequences, and the speed of adjustment.
Steering from the inside may be more effective than the carrot
and stick given the engines of today. In
a wide number of circumstances companies have been more progressive
and less ideologically directed than their elected counter parts.
In many cases, companies, unlike governments and their agencies,
simply cannot afford to be disconnected from external realities (or
to build fantasies about them) nor to allow irrational responses to
diversity in their ranks.
But, by focusing
primarily on measuring narrow contrived economic outcomes, like return
on investment, the broader issues of corporate health and/or social
and economic effects of business decisions have not been carefully assessed
nor evaluated. Systems of diverse interest representation have only
occasionally been developed. And, we have been less likely to develop
more creative (and profitable) work processes.
If we are to steer from the inside, a wider range of values and
people need to be inside.
Meeting social and
economic goals requires a transformation of organizational governance
and decision making processes to include more decisional voices representing
social and economic values and generating explicit value contestation
as part of the business decision process. Such
representation and contestation can enhance creativity, productivity,
economic performance and greater fulfillment of social good. Accomplishing
this requires new models of corporate governance focusing on stakeholders
rather than shareholders and new models of communication enabling more
productive discussions and decision processes.
The
Stakeholder Governance Model
New concepts of governance and processes of decision-making are necessary
to realize this potential. Given the difficulties of existing hopes
and interventions, stakeholder models have come to the fore as offering
a new set of directions. Clearly, not all
stakeholder conceptions are alike. They
range from discussion of how to strategically manage stakeholder groups,
to voluntary process of consultation in employment and environmental
issues, to much more expansive conceptions of reforming concepts of
ownership and governance (Reed, 1999; Jones 1995; Donaldson & Preston,
1995). Stakeholder governance conceptions
nearly always involve both social and business concerns.
Most agree that concern with stakeholders varies to the extent
that "capital (human and physical) and other rights are tied to a given
enterprise and therefore subject to possible losses from the action
of, inter alia, management" OECD, 2004, p. 70). OECD standards represent
this well, reflecting both social wellbeing issues and benefits to business
but, like most, reflects mostly on issues of tradeoff and balance rather
than the creativity that can come with conflict among stakeholders.
And, perhaps as importantly, they reflect only on the presence
or absence of inclusion with no attention to communication and decision
processes once stakeholders are present.
Certainly many over the years have recognized
the existence of multiple stakeholders with legitimate claims (e.g.,
Donaldson & Preston, 1995; Freeman & Gilbert,
1988; Carroll, 1989). The development of
labor unions, supplier cartels, and consumer groups are ways that some
stakeholders have attempted to acquire the size and clout necessary
to be represented in corporate decisions. But,
as we know from other collaborative decision making contexts, creativity
and mutual satisfaction are based on commitment to a codeterminative
process rather than just having a place to argue out self-interests
(e.g., Gray, 1989). In most discussions
of stakeholder models, management has been left as oppositional to other
stakeholders rather than a group that could and should have a commitment
to mutual accomplishment.
In a fully developed stakeholder model, management's
function would need to become the coordination of the conflicting interests
of stakeholders rather than the managing or controlling of them.
The logic is not one of containing stakeholder interests, but
trying to accomplish them through corporate activity.
In a fully developed model, management would be hired by all
stakeholders and work to optimally coordinate the meeting of all interests
as if they were interests of the corporation, thus seeking the most
creative co-determination for the benefit of all stakeholders.
Thus far the stronger versions of this model have mostly
been developed in quasi-public enterprises and in environmental collaborations.
While some of these have become venting and/or buy-in mechanisms
and others ploys for green marketing, others have offered creative and
beneficial solutions. For example, Lange
(2003), building on insights from bona fide group theory (Putnam &
Stohl, 1990), has detailed the functioning of "ecosystem management"
following the Clinton Forest Plan beginning in 1994.
But, for-profit companies have not overlooked stakeholder inclusion
opportunities. While partly restricted to works councils, de
Jong & van Witteloostuijn (2004) showed how the Dutch Breman Group's
structures and processes of participation helped to "develop and sustain
organizational adaptation and learning...;" (p. 54).
Employee participation of various forms is common today in most
successful companies. The resistance and
finally embracing of employee involvement may be instructive in looking
to the potential of including other stakeholders.
Philosophically, the concept of stakeholder is taking hold.
Johnson and Johnson, as well as other major companies, have as a part
of their credo the belief that, if management attends to stakeholder
interests, profits will result, rather than the other way around.
Some of this has clearly translated into positive corporate choices.
Stakeholder inclusion is not for the balancing of power
and advancing self interests, but is essential for the processes of
creativity that can advance both social and economic interests rather
than trade them off against each other. Such
a juxtaposition of goals is a critical feature of any attempt to move
to creativity and innovation. Such a model
begins with a determination of who has legitimate stakeholder interests,
some determination of what those interests are, and a determination
of how interest diversity advances responsiveness and creativity.
Many questions remain to be answered in the development of advanced
stakeholder governance. Basic ones are little
different from ones for participation more generally:
Which stakeholders should be involved? Where
and how should they be involved? Who should
speak on behalf of a stakeholder group? Will
stakeholders when involved understand and effectively articulate their
own interests? How to keep potential cost
of participation down?
These issues continue to be productively worked out in other contexts.
But an additional, relatively hidden, issue remains that significantly
hinders the acceptance and practice of stakeholder governance. This
issue may derail even the most positive move to stakeholder governance.
What is to be the nature of the stakeholder interaction in the
decision making process? This issue is most
often overlooked, even in fairly complete reviews of participation processes.
The biggest task may not be overcoming the autocratic tendencies
of many managers and the communication structures, principles and practices
fostered by this, but in providing new ways to think about and do communication
in places where participation is genuinely favored.
Models
of Stakeholder Communication
The--what might appear
to be benign--communication conceptions and practices have tremendous
impact on the success and viability of stakeholder governance programs.
The form and practices of participation, not just its existence, matter.
Communication is an integral part of any form of participation.
Having a right and place to say something and having a process
to positively impact decisions are often very different.
This will be developed below in looking at alternative understandings
of communication, democracy, conflict, and dialogue.
The issues of communication
are not simple and best not simply left to trainers and practitioners.
The so called "linguistic turn" in management studies and extensive
work on "organizational discourse" has focused attention on human interaction
but has remained relatively abstract and concerned with rather large
cultural formations rather than considering the critical issues of how
collaboration in decision making is accomplished.
Concerns with the
representation of social values and economic success are rarely necessarily
contradictory and are most often mutually supportive especially in the
long term. A careful look at communication
practices, however, is critical to positive outcomes. Even in countries
with strong co-determination models and structures like Germany,
Sweden and Denmark,
the communication model and practices may be fairly traditional and
greatly reduce the impact and benefits of participation.
Native communication
concepts and practices have been largely treated as unproblematic, thus
leading to a focus on developing participation forums and higher levels
of involvement with uneven consequences for decision processes.
Much of this results from dominant "enlightenment" conceptions
of communication that overlook critical aspects of interaction processes
whereby meanings and interests are produced. The
production of personal meanings in communication is over looked with
attention to the expression of them. Managerially- driven forms of participation
based in these older conceptions are often strategic attempts to increase
loyalty and commitment or decrease resistance rather than seeking genuine
decisional input. The lack of voice even
with appropriate forums results from constrained decisional contexts,
inadequate or distorted information, socialization and colonization
activities, and the solicitation of "consent" where stakeholders "choose"
to suppress their own needs and internal value conflicts (see Deetz,
1998). Even team-based decision making is
often filled with self-generated limits to open participation (Barker,
1999). Overcoming these problems requires a collaborative constitutive
view of communication based in conflict rather than consensus models.
Most managers' approach
to communication grows out of specific concepts of hierarchy and control.
Business schools more often require public speaking, presentation,
and message design skills rather than listening and negotiation skills.
"Leadership" training is still primarily conceived in the form
of directing or taking charge of others (Chrislip & Larson, 1995;
Calás & Smircich, 1991). Theories of control,
persuasion, and motivation are treated more centrally than cooperation,
facilitation, and group creativit.
Even the renewed interest in ethics in business schools directs
attention to the individual's character and compliance rather than normative
ideals in communication. Corporate communication
is often simply another word for strategic communication.
Directives and compliance-gaining characterizes the communication
relation to internal groups; advertising and public relations to external
ones. Clearly such conceptions and skills of communication cripple rather
than aid participation.
Thus not only are
managers hesitant to include even employees, let along other stakeholders,
in crucial decisions by disclosing information, sharing power or granting
autonomy, they lack the concepts and skills necessary to do so even
if they liked. Clearly managers lack the critical skills of democratic
communication necessary for coordinating divergent interests, let alone
the ability to facilitate interaction that can lead to creative mutually
satisfying outcomes. This certainly impacts
on their perceptions of cost of participation, how those costs compare
to control costs, the likelihood of economic viability, and so forth.
But what
models would they need? Several models exist
arising with the increased use and talk about team decisions, dialogue
and forms of participation generally. Often,
however, these alternatives have not been theoretically or empirically
investigated and have been presented in a vague unproblematic way as
simply "democratic" communication or "dialogue" (see, Isaacs, 1993).
And, frequently these communication practices have been seen
as requiring little training or development. If
we build a trusting team, members will communicate well; if we develop
participatory attitudes, appropriate skills will spontaneously arise.
But all democracies
and dialogues are not alike and native intuitions and skills can be
less than positive (Deetz & Simpson, 2004).
Anyone hanging around most corporations will hear a lot more
complaint about the endlessness and frustrations of meetings than the
lack of opportunity to participate. This
results from the inability to participate well not just from the limited
nature of participation tasks. Often the
problem of meetings, and communication more generally, results from
the borrowing of liberal democratic communication models from state
processes with the concurrent humanist commitments to representation
and consensus rather than more participatory communication models committed
to diversity, conflict and creativity.
Corporate
organizations are not like state democracies. As
Kerr (2004) argued, they lack "accountability of the governed, right
of participation, free exchange of information, and right of representation"
(p. 81). But even if these could be assured,
common views of democracy and communication used for state processes
were never designed to accomplish the type of participation that can
deliver on the promises laid out above. Common
native understandings are largely based in an enlightenment conception
of "liberal democracy" as institutionalized and advanced by Western
State institutions.
Barber (1984) provided one of the more complete analysis of the
consequences for state practices and decisions given this view in contrast
to more participatory forms of democracy (see also, Bachrach & Botwinick,
1992). While he focused more
on issues of structure and representation than forms of communication,
his initial distinction between liberal and participatory democracies
is instructive to understanding the limits of productive participation
in the workplace even when it is desired.
Liberal democracy
is core to the justification of contemporary forms and institutions
of communication (for development, see Deetz, 1992; Deetz & Brown,
2004). The weakness of its communication
conceptions may partly account for the poor regard people have of political
processes and the general cynicism in many societies.
Unsurprisingly, an 18th century model of democracy
and communication--based in different conception of human experience,
forms of power and contexts of decision making--does not work well in
a 21st century world. No other social science, nor the practices
they engender, could survive their 18th century models.
Critical theories of communication originating primarily from Habermas
(1979, 1984, 1992) have revived discussion of communication in public
decision making. The description of an ideal
speech situation provides a heuristic for determining the minimal conditions
for stakeholder involvement in decision making discussions.
Most of these are familiar. At the
minimum we might expect reciprocity of opportunity for expression; some
equality in expression skills; the setting aside of authority relations,
organizational positions and other external sources of power; the open
investigations of stakeholder positions and "wants" to more freely ascertain
their interests; open sharing of information and transparency of decision
processes; and the opening of fact and knowledge claims to redeterminization
based on contestation of claims and advantaged modes of knowledge creation
(e.g., accounting processes, etc.; see Deetz, 1992, for development).
Such concepts have also been developed by Forester (1989, 1999)
for public planning processes. Much of this
work is directly applicable to stakeholder decision making.
And much work has shown how organizational talk can be analyzed
to discover the retention and protection of hidden values and ideology
(e.g., Fairclough, 1992) and the presence of various forms of discursive
closure (see Deetz 1992, for development; Thackaberry, 2004).
Pearce and Littlejohn (1999), from a somewhat different perspective,
show how to develop communication processes for engaging even moral
conflicts where deep cultural differences produce what would appear
to be intractable conflict. Barge and Little (2002) have shown how a
Bakhinian conception of dialogic communication can help develop contingent
and situated practices that enhances responsiveness to conflicting stakeholder
values.
Social responsibility and increased economic health is found in fostering
particular communicative micro-practices in everyday work contexts.
Communication difficulties arise from communication practices which
preclude value debate and conflict, which substitute images and imaginary
relations for self presentation and truth claims, which arbitrarily
limit access to communication channels and forums, and which then lead
to decisions based on arbitrary authority relations. Critical theories
have been useful because they identified the key problem as the nature
of the discussion itself rather than the profiles of the participants.
But Habermasian concepts
of communication, like theories of dialogue advanced by Senge, Issacs
and others, are based more on finding common ground and a deeper prior
consensus than in producing a future beyond current cultural constraints
(Isaacs, 1993; Deetz & Simpson, 2004).
And, further, most of these theories are aimed at participants
understanding each other rather than the need to make decisions together.
(See this developed in Benhibib's [1992] critique of Habermas'
ideal speech situation.) Critical theory
alone does not offer a theory or practice of dialogue embracing difference
and facilitating decision making on the part of stakeholders (Wolin,
1996; Young, 1996).
Appropriate concepts
and practices of communication are required to move beyond mere mutual
understanding to making quality decisions together.
Our own research here across sites (MacDonald, 2004; Heath, 2005)
and that summarized by Lange (2003) regarding environmental collaborations
suggest a few basic insights.
First, programs that
focus on stakeholders jointly making decisions are of much greater value
than those that simply give stakeholders a "say." Second, membership
based on the diversity of interests of those at the table and discussion
process that encourage emergent solutions are of greater value than
those whose members represent external groups and are committed to maintaining
positions held by those not at the table. Third,
as shown for years by people working with conflict, focusing on outcomes
and interests in the interaction is of greater value than focusing on
problems and wants and bargaining over preferred solutions.
This is especially the case when problems are defined by stakeholders
as the absence of their preferred solutions. And, finally, maintaining
conflicts and differences as a positive energy toward creativity is
of greater value than seeking common ground and value consensus.
Development
of these concepts and practices requires an enriched theory of communication.
Such a theory focuses on understanding the cultural politics
of experience and processes of domination in interaction, has a strong
conception of "other" and "otherness," and is grounded in conflict theories.
Such a theory helps turn these insights in positive practices.
Such a theory shows how difference or "distantiation" enables
exploring of alternatives and producing creative decisions.
Such a theory works against native views focused on similarity,
consensus and finding common ground in showing how requisite diversity
and contestation coupled with the ability to invent creative options
can sustain mutual commitment and mutual accomplishment of interests,
thus including diverse social values.
Stakeholder
governance, with appropriate collaborative communication practices,
can generate more creativity impacting on new product
development, greater efficiency and effectiveness in personal and organizational
goal accomplishment, higher levels of mutual commitment, and greater
product and service customization. Interaction
modeled on collaboration grounded on the embracing of difference has
great potential.
Clearly,
a reformed "stakeholder" conception of workplaces can be enhanced by
the application of a conflict-based communication theory to the workplace
for the sake of greater responsibility and more effective production.
Such a conception can: (1) provide a communication-based understanding
the complex processes of organizational life; (2) direct the evaluation
of existing organizational forms and activities; and (3) provide guidance
for the education of members and redesign of organizational structures
and practices. Corporate social responsibility can be made possible
by the inclusion of multiple social values into the decisional premises,
processes and routines and the development of communication processes
that use the situations of conflict and difference to generate creative
win-win responses.
Stanley
A. Deetz (Ph.D., 1973, Ohio University) is Professor of Communication
at the University of Colorado
at Boulder.
His research primarily focuses on relations of power in work sites and
the way these relations are produced and reproduced in everyday interaction.
Normatively this work attempts to produce governance structures,
decision processes and communicative micro-practices that lead to more
satisfying work experiences and more inclusive, collaborative, and creative
decisions. His books include Leading Organizations through Transitions
(Sage 2000) and Doing Critical Management Research (Sage 2000), Transforming
Communication, Transforming Business (Hampton, 1995) and Democracy in
an Age of Corporate Colonization (SUNY,
1992). He has published around 100 essays
in scholarly journals and books regarding stakeholder representation,
decision-making, culture, and communication in corporate organizations
and has lectured widely in the U.S.
and Europe. He
is a Fellow of the International Communication Association serving as
its President, 1996-97, a National Communication Association Distinguished
Scholar, and has held many other elected professional positions.
He is also an active consultant for companies in the U.S.
and Europe.
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Stanley Deetz (Stan)