Can Western and non-Western models of responsible corporate behaviour co-exist?

Abstract

Western, free-trade Capitalism has become the global business paradigm, bringing with it export-focused economic models, open markets and the dominance of the ‘Global North’ and transnational corporate power. Whilst companies are expected to be asocial and profit-maximising, within the law, there are also expectations of responsible behaviour. These expectations are societal norms derived from culturally determined, higher order sources of legitimacy, but legitimacy may be contested, especially in a plural, secular society, where regulation has become an instrumentalist facilitator of the free market, unable to question its neo-liberal foundations. Non-Western and non-secular world views continue to exist, presenting alternative paradigms which have the potential to mitigate corporate irresponsibility in ways difficult within the Western model, and with more promising social, ethical and environmental outcomes. However, these world views are not in a position to operate alone, and their futures appear uncertain. This study explores the interaction between Western and non-Western models of responsible corporate behaviour by means of an analysis of three case studies of initiatives deriving from Western, non-Western and compromise perspectives: Fair Trade in Bolivia, Islamic banking and finance in Malaysia, and legal personhood for a river in New Zealand. These show that it is possible for more models of responsible business to exist than the globalised Western paradigm, but that alternative strategies need to be underpinned by coherent sources of legitimacy, to which significant communities with reasonably high status subscribe. In addition, they need to have state support and a degree of flexibility in operation.