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Indeed sometimes it seems that the assessment of risk has moved from a primary concern with impact of actions on others, to a concern for the risk that the publicity around adverse impacts may have economic costs to the corporation itself. Where this aspect of risk becomes central, critics understandably see CSR as merely marketing or a cynical interest in brand values. Responding to perceived publicity effects and issues of brand integrity, some global corporations such as Levis or US Whole Foods have quite significantly shifted their practices most often related to their supply chain in response to codes of conduct emanating from civil regulatory organisations.

While there may be differences on the effectiveness of these norms, what is notable is that they imply a clear recognition of a direct governance function for the core-corporation over its complex networked global supply chain. The required administrative processes and evaluative mechanisms are at the very least analogous to, and in many ways directly parallel, the more often recognised institutions of global governance.

Here the focus is on the manner in which private actors are able to shape and inform the practices and structures of global governance. However, this approach seeks to understand global corporations as network actors deploying their authority built up through their market activities to shape existing institutions of global governance. Global corporations may be deploying their authority to influence existing institutions or through standard setting and other normative mechanisms seek to establish new institutions that reflect their collective interests, for instance by normalising market-based decision making.

Global governance remains something corporations seek to inform, influence and shape beyond their own networks. Conversely, as I have developed above, global governance is something global corporations are doing within their own networked relations, suggesting that they have less need to rely on external private authority and are often directly governing their own networked supply chain. The first element of this refocussing is to recognise that the relations of the global corporate supply chain are like other social networks; they are patterned by power relations.

In this sense, the networked supply chain resembles the pro-actively assembled group of partners that pattern almost all institutions of global governance: joining the network requires the explicit acceptance of institutional rules or conditions; prospective members must commit to the conditions of the network, but also to accept the governance of the lead corporation, as members of global governance institutions expressly accept the leadership of the institutional secretariat however constituted. Once a firm has joined the network, apart from the threat of expulsion for whatever reason , there is also the question of the allocation of resources, tasks and activities which are the subject of the governance function and are the result of power relations within the network adapted from Baudry and Chassagnon, However, the final sanction of removal from the network is hardly the basis of a nuanced governance regime, and thus a more complex analysis is required.

The second dimension plays out in the supply chain through the multi-faceted negotiation and surveillance activities that I have discussed above. This element is clearly strengthened by a perhaps variable ability to utilise the exit-threat in specific instances although when there have been significant sunk costs in an on-going network relation a break would not be cost-neutral for the core-corporation, and contractors are well aware of this.

The second element, institutional power seeks to capture the manner in which certain actors can further their interests and end via sets of institutionalised rules and practices Barnett and Duvall, : 16— If we regard the market as an institution, then market imperatives fit into this element, as do issues around legal regulation and perhaps codes of conduct, although that is perhaps more ambiguous.

To some extent then this aspect of their model brings in the discursive elements that Fuchs is keen to emphasise, with the ability to normalise specific relations and network positions as a crucial manner in which corporations seek to govern their supply chains. However, this discursive constitution of relations then also works for Barnett and Duvall as their fourth element of power in global governance, the productive where they explicitly include discursive elements Barnett and Duvall, : Bringing this together to think about the global corporation as an institution of global governance suggests that such a focus would not only require an analysis to take account of instrumental or compulsory power differentials in supply chain networks, but to focus more fully on the manner in which corporations seek to constitute and produce the socio-economic and spatial terrain that the supply chain encompasses.

Specifying the required ends, however, requires more than an easy presumption of profit maximisation; it is seldom if ever the case that a corporation has a single directing mind or a closely knit management team with a single and defined set of governing principles and norms. Therefore, Dallas argues:. Through corporate processes, corporate goals emerge that satisfy the parties or parties comprising the dominant coalition; these goals are distinct from the goals of any one individual or group.

Furthermore, goals result from the communication among individuals and groups concerning opportunities and dangers represented by or to the organisational structure itself. This is not to say that no corporations are driven by a singular focus on profit maximisation when governing their supply chain, but rather that other goals of governance may frequently arise from different power coalitions within global corporate networks Dallas, : 58— At the very least there are likely to be considerable differences on how to maximise profit! The approach outlined above suggests a number of aspects of a critical perspective on the governance of global supply chains.

If governance is to be seen as legitimate by those who are within the network, this approach implies that for governance practices to be effective they must be regarded as transparent and have modes of accountability to deliver the value that can be derived from these relations, over and above any basic market-based form of contractual relations. In global governance the response to such deficits has often been to empower, or seek to empower civil society, which directly parallels the moves in CSR monitoring and auditing and indeed is often used as an example in mainstream debates.

Therefore, like other global governance institutions a fall-off of perceived legitimacy may prompt exit from the network—suppliers will seek other more amenable supply chains where plausible. Where lock-in issues are evident, then other resistance activities may be deployed, and civil society organisations may be drawn in to engage with the legitimacy of specific elements of the governance function.

However, in supply chain networks the actors that might benefit from empowerment are not only civil groups labour, environmentalists, those seeking to promote human rights but also the smaller contractors themselves, whose interests and requirements may often be quite different to the usual civil society actors identified in accounts of global governance.

Thus, and interestingly, as Richard Locke points out in his discussion of the manner in which labour standards have been promoted in supply chain networks, whereas in early engagements auditing and inspecting was seen as a process for gauging the need or otherwise for sanctions for non-compliance, more recently auditors internal and contracted-external have regarded their work as developmental.

The negotiation and socialisation of network participants and at least a partial recognition of their interests may be the manner in which corporations most effectively govern these networks. Global corporations are often engaged in the management of extremely complex networks of subsidiaries, affiliates and contractors, and thus the realm over which they have influence and power is often global. As the UNGC, EITI and other moves to regulate labour standards Locke, suggest, there is a clear recognition in policy circles that corporations are governing these networks not merely managing them.

As such, the governance of production networks has become less like direct command and control, and more like models of governance that have developed in other areas of the global system. Therefore, the purpose of the argument above has not been to suggest that the recognition of the global governance function fulfilled by corporations should replace the analysis of the impact corporations have on other institutions of global governance, nor the discussion of how corporate practices may be shaped by interactions with various international organisations.

Rather, by adding a third dimension to the account of corporations in global governance the account of how the contemporary global political economy is ordered and governed is made more comprehensive. By utilising the insights from the study of global governance, we can develop a critical approach to assessing the manner in which corporate rule over their supply networks is justified and the limits to legitimacy this governance function might confront.

Finally, however, the claim that this third dimension is a useful site of further research and analysis is not a claim that all corporations are equally able to govern their networks to the same degree or level of effectiveness. Indeed, as with the constellation of institutions and organisations that represent the usual scope of global governance studies we are likely to find some corporations achieve a level of control as good as, or even beyond that which the most effective global governance regimes exhibit; equally we will find other global corporations that are effectively unable or unwilling to establish strong governance functionality in the same way that we can identify weak or partly ineffective global governance institutions.

Most importantly, we can usefully include global corporations within our analysis of global governance more generally to develop a better account of both global governance and the practices or global corporations themselves. Data sharing is not applicable to this article as no datasets were generated or analysed during the current study. Corporations as institutions of global governance. Palgrave Communications. For instance, contributions to Harland et al. While not all globally active firms are corporations, the majority are likely to be due to the needs to mobilise large amounts of share capital to operate.

Certainly there are large privately owned firms IKEA, Zara to name two that operate global supply chains, and large state owned corporations in some extractive sectors, but for the sake of simplicity I assume that while these varying ownership structures might have some impact on the political economy of the specific company, the governance issues and power relations within the supply chain networks are likely to be relatively similar.

See the case studies in Kristensen and Zeitlin This tripartite schema is drawn from Suchman Burnham used his analysis of the rise of managerialism to make a number of highly inaccurate political forecasts, but even his critics recognise he presented an early account of an important social dynamic.

For accounts of his wider work see Nichols : 31—39 and Orwell []. The drive for control as a or even the central aspect of the analysis of corporate power, as opposed to property rights or efficiency concerns, is also a central motif of Bowman Adapted from Dekker et al. See for instance the analysis of the UK supply chain for fresh vegetables discussed in Dolan and Humphrey For an extended discussion of corporate power which this paragraph quickly summarises see May : Chapter 4.

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Who’s in charge? Corporations as institutions of global governance

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Professor, Sociology of Education, University of Bristol

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Thinking Inside the Box: China and Global/Regional Governance - Rising Powers in Global Governance

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