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Abstract

Corporate involvement in democratic processes typically takes the form of corporate political activity (CPA). In this paper, I develop a framework of political corruption to explain the corroding influence of CPA on democratic processes. CPA corrupts democratic processes by excluding (a) citizen representation from political decision making, (b) citizens’ voices from public deliberation, and (c) citizens’ interests from private deliberations about political preferences. By attending to the power relations within the three key democratic spheres in society—political, public, and private—I explain how corporations influence democratic processes and how these processes in turn become dependent on corporate involvement. My theorization explicates the corporate capture of democratic processes and provides a nuanced understanding of corruption in Western liberal democracies. Finally, I suggest ways to halt this process and thereby defend democracy as a system of governance from undue corporate interests.

Keywords

corporate political activities democracy political corruption political CSR politics power

There is a genuine concern that wealth supported by business interests undermines the health of Western liberal democracies (see, e.g., Lessig, 2011; Wolin, 2010). Crouch (2004) used the term “post-democracy” to describe how businesses exercise inordinate political power to shape governmental policy. Similarly, Barley (2007, p. 201) suggested that representative democracy has been replaced with a “corporate society” in which corporations influence legislation for their own benefit, without regard for a country’s citizens. The insight that business is intertwined with politics is not new; throughout history, businesses have undermined the will of the people in the pursuit of profits (Barley, 2010). Rather, the concern is that Western liberal democracies are moving increasingly in the wrong direction; corporate influence is on the rise leading to an erosion of democratic principles and a process of de-democratization in many countries around the world (Brown, 2015; Fraser, 2015).

Within organization and management studies, discussions on corporate involvement in democratic processes have primarily taken place in the literatures on corporate political activity (CPA) (Lawton, McGuire, & Rajwani, 2013) and political corporate social responsibility (PSCR) (Scherer & Palazzo, 2007). The CPA literature is concerned with the detailed practices of advancing business interests, with CPA broadly defined as “any deliberate firm action intended to influence governmental policy or process” (Getz, 1997, pp. 32–3). The aim of CPA is to influence policy decision in a manner favorable to the firm by addressing legislative uncertainties and eliminating policy threats (Hillman, Keim, & Schuler, 2004). Indeed, corporations are spending an increasing amount of money on activities aimed at influencing public policy (Alzola, 2013). With a clear emphasis on the instrumental value of CPA to firms, scholars have paid scant attention to the democratic implications of these actions (Hadani, Bonardi, & Dahan, 2017; Lawton et al., 2013).

In the PCSR literature, scholars focus on the corporation as a political actor and discuss the increasing legitimacy of corporate engagement in public deliberations, democratic consultation, and political decision-making processes (see, e.g., Scherer & Palazzo, 2011; Scherer, Rasche, Palazzo, & Spicer, 2016). Taking this increased corporate participation in democratic processes as a starting point, these scholars have argued that business has a role to play in activities typically handled by governments by, for example, dealing with environmental problems (e.g., deforestation) and providing public goods essential for a functioning democracy (e.g., education and public health) (Scherer & Palazzo, 2007; Scherer, Palazzo, & Matten, 2014). By promoting corporate engagement in deliberative processes to address democratic deficits in society (Scherer & Palazzo, 2011), PCSR scholars have downplayed the competitive character of markets (Dawkins, 2019) and overestimated corporations’ willingness or capacity to forego strategic interests (Eberlein, 2019; Hussain & Moriarty, 2018).

Clearly, CPA and PCSR scholars have acknowledged that corporations engage in democratic processes. However, both literatures are corporate-centric with attention being primarily directed towards their strategic market-creating activities, and with limited theorization of how corporate engagements influence democratic processes (Dahan, Hadani, & Schuler, 2013; Etchanchu & Djelic, 2019). Despite acknowledging that “powerful actors (such as business firms) advance their private interests . . . often at the expense of other, less powerful, actors” (Scherer, 2018, p. 390), scholars have not fully considered these power asymmetries and have neglected the democratic implications of such corporate activities (Acosta, Acquier, & Gond, 2019; Rhodes & Fleming, 2020).

To address these oversights, I problematize the growing influence of business on democracy by detailing how corporations encroach on three overlapping, but analytically separate, spheres that are pivotal for a functioning democracy: the political sphere of decision making, the public sphere of deliberation, and the private sphere of citizens’ interests. By detailing the exercise of power and influence by corporations within and between these spheres, I show how the social integration of, and eventual systemic dependence on, corporations in democratic processes leads to the exclusion (a) of citizen representation from the political sphere, (b) of citizens’ voices from the public sphere, and (c) of citizens’ interests from the private sphere. This strategic exclusion can be seen as political corruption, which I define as a form of corruption that harms democratic processes (Warren, 2006), and occurs, for example, when special interests capture the power of government to realize private gains or exclude citizens from democratic decision making. The enduring harm of political corruption to democratic processes is explained through the development of two theoretical mechanisms—the politics of influence and the politics of dependence—which reinforce corporate involvement despite a lack of democratic legitimacy. I furthermore show that while Western liberal democracies operate according to different constitutions and legal frameworks, the identified strategic activities of political corruption are generally applicable concepts that illuminate the process of de-democratization across these societies.

My aim is to contribute to theory and debate by explaining how public policymaking has been captured by private business interests. Specifically, I make three central contributions. First, I show how corporate strategies to influence public policy and engage in democratic processes weaken the functioning of Western liberal democracies. By detailing the effect of the power relations within each sphere of a democratic society (political, public, and private), I explain the corporate capture of democratic processes. The activities of political corruption influence the three spheres and create undue dependence on corporations. This, I argue, undermine democratic processes, thereby facilitating de-democratization. Second, this theorization has the potential to advance studies of corruption by providing an analytical lens to evaluate corporate activities within these three spheres. By focusing on democratic processes within and between the three spheres, I explain systemic forms of corruption that normalizes abuse of power in Western liberal democracies. Finally, I contribute to the broader debate about corporate involvement in political processes. Theorizing how corporations wield power to influence democratic processes shifts the debate towards defending democracy as a system of governance. To this end, I suggest ways to halt political corruption and offer possible strategies towards democratization.

Political Power in CPA and PCSR

Corporations have tried to influence government policy ever since the corporate form of organizing was established in the 17^th century (Barley, 2010). However, the magnitude and types of tactics witnessed over the last couple of decades are unprecedented (Dahan et al., 2013; Scherer & Palazzo, 2011). These tactics include providing campaign funding through political action committees (PACs) and partnering with think tanks to shape policy agendas (Walker & Rea, 2014); creating government affairs and public relations departments (Lawton et al., 2013), and hiring public relations, legal, and lobbying firms to develop and strengthen relationships with policymakers (Tyllström & Murray, 2019); and securing public and political posts to support corporate interests from within the governance structure (Barley, 2010). Even so, the democratic legitimacy of these kinds of tactics remains unquestioned in the CPA literature (Nyberg & Murray, 2020), which is directed towards understanding how firms can influence public policies to create competitive advantages in terms of direct corporate profits or securing a favorable change in policy (Lawton et al., 2013; Lux, Crook, & Woehr, 2011). This emphasis is justified by viewing corporations as competing with other firms, interest groups, and political parties to inform public policy in what can be seen as a “marketplace of ideas” (Hadani et al., 2017; Lawton et al., 2013). However, CPA scholars have considered neither power asymmetries within this competition for influence nor the subsequent corporate domination of policy discussions (Gilens & Page, 2014).

In comparison, PCSR scholars are concerned with the legitimacy of corporate engagement in democratic processes (Frynas & Stephens, 2015). Corporate legitimacy is generally understood as “the social acceptance of corporate practices” (Baumann-Pauly, Scherer, & Palazzo, 2016, p. 31) and PCSR scholars have warned that corporations will lose their legitimacy unless they take greater responsibility by delivering public goods and fulfill their role as corporate citizens in democratic societies (Scherer & Palazzo, 2011; Scherer et al., 2016). Heavily indebted to Habermas’ (1996) idea of deliberative democracy, PCSR scholars promote corporate participation in democratic processes of deliberation alongside citizens to inform legitimate political decision making and self-government (Scherer & Palazzo, 2007, 2011).

In line with Habermas’ writings (2001), PCSR scholars generally recognize the growing public influence of corporations on democratic processes (see, e.g., Palazzo & Scherer, 2006, p. 78). However, at the same time Habermas (1984, 1989) himself suggested that businesses’ strategic engagement in deliberation is necessarily duplicitous and a form of colonization by capitalism. Within PCSR, the corrosion or colonization of democratic processes is simply accepted as a given. Thus, instead of using deliberation to protect democratic and emancipatory processes from corporate encroachment (Habermas, 1984, 1992), PCSR scholars end up further propagating the expansion of power imbalances in favor of corporations (Dawkins, 2019; Rhodes & Fleming, 2020). In fact, the naive assumption that it presupposes that corporations will prioritize public goods over strategic business goals goes against both the theoretical basis of democratic deliberation (Sabadoz & Singer, 2017; Singer & Ron, 2020) and empirical evidence regarding actual corporate engagement (Gilens & Page, 2014; Wright & Nyberg, 2017).

Despite the obviously shared interest in corporations as political actors, the literatures on CPA and PCSR have been developed largely independently (Nyberg & Murray, 2020). This is somewhat surprising, considering that the CPA literature can (at least partly) explain how businesses achieve the corporate legitimacy that attracts the attention of PCSR scholars. Effective political strategies can result in higher legitimacy for firms (Oliver & Holzinger, 2008) by direct and indirect mobilization of power and influence (Fleming & Spicer, 2014). Thus, while rarely explicitly discussing power relations, both CPA and PCSR scholars have provided insights into how corporations use forms of power to gain legitimacy and influence democratic processes. Within organization and management studies, Lukes’s (1974) three dimensions of power are well established and can be employed to detail how businesses achieve corporate legitimacy through CPA.

The most basic political strategy to increase corporate legitimacy is direct CPA in the form of financial incentives (Hillman & Hitt, 1999). This involvement in democracy is exemplified in campaign and party contributions. This type of political activity generally fits within Lukes’s (1974) first episodic dimension of power, where corporations use recognized resources to influence the preferences of political decision makers (Dahl, 1957) to construct a favorable operating environment. In such an environment, political decision makers promote the social acceptance of corporate practices in expanding areas of society (Crouch, 2004).

Another similar form of direct and episodic CPA involves providing information to political decision makers (e.g., through lobbying, testifying, and commissioning reports) to legitimate corporate agendas (Hillman & Hitt, 1999). While information can be seen as a resource that falls within the first dimension of power, lobbying is generally concerned with framing and setting the decision-making agenda (Bachrach & Baratz, 1962). Providing information can therefore be associated with Lukes’s (1974) second dimension of power. Lobbying is about establishing relationships and providing selective information to manipulate political agendas in favor of corporate interests (Oliver & Holzinger, 2008) while shielding corporate principals from identification (Tyllström & Murray, 2019).

Corporate legitimacy is further achieved through indirect CPA in the form of building constituencies in attempts “to influence public policy by gaining support of individual voters and citizens, who, in turn, express their policy preferences to political decision makers” (Hillman & Hitt, 1999, p. 834). This form of political influence can be seen as Lukes’ (1974) third systemic dimension of power in that corporations shape the interests of citizens and political decision makers through CPA (Barley, 2010). These tactics include public political marketing campaigns against proposed governmental policies (Murray, Nyberg, & Rogers, 2016) and covert “astroturfing” operations (i.e., fake grassroots movements) to make it seem as though widespread support exists for a corporate public policy position (Walker & Rea, 2014). This type of CPA ensures that corporate political involvement appears natural and inevitable (Fleming & Spicer, 2014).

These forms of political involvement are generally seen as mutually beneficial for corporations and politicians as means to subsidize participation in electoral politics by providing political assets (information, money, voter support) to decision makers (Hall & Deardorff, 2006; Lawton et al., 2013). Politicians in turn also have opportunities to join the corporate elite through established relationships with corporations (Etzion & Davis, 2008). And these revolving doors can benefit managerial elites by moving in the opposite direction. These discussions on corporate political activities and corporations as political actors are foremost focused on attempts by corporations to increase their legitimacy (PCSR) or profits (CPA). The outcomes for the political system—in this case, democracy—are less clear.

Circuits of Power and Spheres of Democratic Influence

The increasing influence of corporations on democratic processes, despite market failures and negative effects of corporate externalities (Scherer & Palazzo, 2011), suggests that corporate legitimacy alone cannot explain the enduring political power of corporations. The legitimacy of corporate political power, similar to Lukes’s (1974) third dimension of power (i.e., domination), is based on the assumption that citizens do not know what their “real” interests are. However, considering that the majority of citizens within Western liberal democracies are not likely to believe that corporate influence on democracy is (a) morally just or appropriate, or (b) benefitting them, a legitimation explanation does not account for the reproduction of political involvement in democratic decision-making processes nor for their corruption. On the contrary, PCSR scholars argue that citizens are well aware of the detrimental effects of corporations on democracy (Scherer et al., 2016), which requires an explanation of the grip corporations have over democratic processes.

By focusing on the legitimacy challenge for business and the, generally laudable, outcomes of public goods, PCSR scholars provide limited theorization of the political processes that take place in democracies. In the literature, there is less emphasis on how local instances of corporate deliberation or delivery of public goods influence democratic processes. Clegg’s (1989) “circuits of power” is a useful concept to explain how instances of actions and social relations feed into broader political processes. In the next section, I engage with this concept to develop an analytical tool for unpacking corporate influence on democratic processes (i.e., political corruption) and how this influence is sustained.

Circuits of power

Clegg’s (1989) discussion of “circuits of power” advances Lukes’s (1974) three dimensions by productively relating episodic (the direct exercise of power) and systemic (enduring institutional structures) forms of power to show how power flows through different modalities and contexts. The first circuit is the enactment of power relationships in accessible and rather straightforward social interactions: agents configure episodic power relationships to secure their preferred outcomes. Similar to Lukes’s (1974) first dimension of power, these are discrete strategic acts that enable one actor to change the behaviors, attitudes, or opportunities of another actor. While not fully accounted for in Clegg’s (1989) framework, the episodic modality leads not only to influential agency, but also to the in/exclusion of actors from these relations.

The next circuit of social integration stabilizes meanings and the memberships of actors engaged in specific episodes, with the circuit of system integration facilitating the continued (dis)empowerment of agents’ capacities (Clegg, 1989). For example, through social integration, an elite is constructed where revolving doors between politics and business are fixed and meaningful relations between actors are sustained. These relations give actors greater freedom to interpret the political rules and set the rules of the game. Episodic and agential interactions can then in turn reproduce or transform how people are perceived (social processes) and their power within these relationships (system processes). Thus, the third and final circuit of system integration reproduces the rules of the game, in which corporate political influence is taken for granted and resources are distributed accordingly.

The term “circuit” suggests how the three levels of analysis—episodic, social, and system—are connected, thereby providing an understanding of how power works in transforming or reproducing relationship dynamics. For example, when citizens are excluded from the social relations between politicians and businesses, these relations reinforce the systemic integration of corporate influence as taken for granted, but without necessarily being seen as legitimate. Episodic interactions (first circuit) support social relationships (second circuit) that lock in a political system (third circuit). To understand how corporate influence over democracy can expand despite benefitting a minority of people, the circuits of power must be mapped to the different spheres of influence necessary for a functioning democracy. For each of the spheres, CPA exhibits slightly different characteristics in influencing political participation.

Democracy and spheres of influence

In the most basic sense, democracy is based on people having a say in decisions that affect them. Classically defined, democracy “derives from the people, belongs to the people, and must be used for the people” (della Porta, 2013, p. 4). In explaining democratic influence, Tilly (2007) proposed a processual approach focused on a minimum set of key processes that are central to current understandings of democracy in that they move a regime toward or away from democratization. De-democratization is subsequently the backsliding or gradual decline in the quality of democracy. Viewing (de-)democratization as processes rather than a state suggests that there is plenty of work to be done in even the most established democracies (Johnston, 2013). Democratic processes include people and give them a meaningful voice in governance and collective rulemaking. From this perspective, a “perfect” democracy does not exist, and democratization has no plausible endpoint. Rather, ongoing processes (or struggles) towards increased democratization continuously broaden the range and participation of people. However, different spheres or domains of political life exercise democratic processes differently.

To account for political and democratic deliberation, Habermas (1989) distinguished between the private and public spheres. The private sphere of the household economy, which reflects individual concerns (e.g., education, work, pension), is separate from the public sphere, which reflects societal concerns. The public sphere is also separate from the state and the economic market. To understand contemporary representative democracies, these distinctions suggest four analytically separable spheres of communication and decision making: (a) the political sphere in which public servants and politicians engage in monetary and legislative activities for the welfare of the nation; (b) the public sphere, which serves as a forum for deliberation about the boundaries of these spheres to maximize collective interests, as well as the legitimacy of laws and markets; (c) the private sphere, which regulates kinship, marriage, and household activities for private interests; and (d) the economic market, a separate sphere in which different types of organizations and individuals exchange goods and services for mutual but distinct benefits. De-democratization is then the encroachment of corporations as the key actor in the latter sphere—the market—on the political, public, and private spheres (Brown, 2015; Crouch, 2004).

Strengthening democracy, or democratization, is furthering the inclusion of participation. Overlapping with the political, public, and private spheres are three clusters of processes that are central for the democratization of a political regime:

Processes that include people in policy choices and decision making can be accomplished through representation (e.g., elected officials) (Dahl, 1971), direct participation (Barber, 1984) or democratic deliberation (Dryzek, 2012). The basic idea is that the people rule directly or indirectly through decisions made in the political sphere.

Processes that support equal inclusion in political discussions to ensure all people’s demands are considered (Dahl, 1971) form the foundation of the public sphere. When people collectively rule themselves, a public sphere or forum is required that enables people to communicate opinions and policy preferences. The public sphere is the space that links community members to each other and to their decision makers (Habermas, 1996).

Processes that enable people to develop independent preferences or interests in democratic decisions (Dahl, 1971) while protecting individual freedoms and promoting citizen rights (Balibar, 2015) form the foundation of the private sphere, a space of libertarian self-governance protected from arbitrary state or market intervention (Tilly, 2007).

These democratic processes aimed at ensuring inclusion, equality, and liberty require accounting for representation, voice, and interest. Democratization is then a series of movements toward opportunities for inclusion that lead to representation in the political sphere, equality of voice in the deliberations that take place in the public sphere, and the liberty to develop preferences and have individual rights and interests protected in the private sphere. Political corruption occurs when strategic activities harm these processes, leading to de-democratization. Importantly, political corruption as duplicitous or strategic exclusion of citizens from democratic processes occurs in different ways (Warren, 2006). For example, when politicians are not transparent in their decision making or when states erode human rights and securities. However, the focus here is on corporate assaults on democracies.

Although the spheres discussed above overlap, traditionally they have been based on slightly different relationships. This makes it possible to study how the corporation, as the market actor par excellence, employs CPA to influence the political, public, and private spheres (Baron, 1995). In each of the three spheres, different characteristics of economic activities influence democratic processes (see Table 1). Thus, the concern with political corruption is not the content of corporate messages per se, but how corporate activities come to influence democratic processes. In the next section, I explain how corporations corrode these processes by employing the circuits of power framework to show how political corruption within each sphere leads to de-democratization.

Table 1.

Taxonomy of CPA.

Sphere of influence	Tactics	Characteristics
The political sphere	• Campaign contributions• Lobbying• Commissioning research projects and reporting research results• Testifying as expert witnesses• Supplying position statements or technical reports• Contributions to politicians or political parties• Honoraria for speaking• Paid travel, wining and dining• Revolving doors	Exclude citizens from representation in political decision making
The public sphere	• Advocacy advertising• Public relations• Press conferences• Super PACs• Political coalitions of special interest groups or industry associations• Grassroots movements and astroturfing	Exclude citizens’ voices from public deliberation
The private sphere	• Circulating petitions• Political education• Private advocacy	Exclude citizens’ self-ascribed interests

Corporate Political Activities and Political Corruption

In the business literature generally, and the CPA literature more specifically, scholars define corruption as quid pro quo, whereby corporate contributions are exchanged for policy favors (see, e.g., Hillman & Hitt, 1999; Holburn & Vanden Bergh, 2008). Whereas public officials may be viewed as corrupt for acting counter to public interests, corporations are viewed as acting strategically to influence the regulatory environment. This position fails to acknowledge firms’ influence on democratic processes. Strategic quid pro quo exchanges are arguably corrupt, even when not classified as bribery, because doing so breaks the link between citizens and political decision making (Warren, 2006). Although such activities are legal, political corruption undermines citizens’ trust in democratically elected governments and corrodes democratic processes. Thus, identifying CPA as a form of political corruption requires explaining how the practices of market actors (i.e., corporations) corrupt democratic processes in each of the other three spheres (see Table 2).

Table 2.

Sphere-Specific Political Corruption (see also Warren, 2015).

Sphere of influence	Democratic processes	Kinds of corruption	Damage to democratic processes
Political	Responsive and representative law making	Responsiveness to money not publicly justified	Failed participation and inclusion, suppressed representation
Public	Formation of public opinion	Deception and distortion using wealth	Failed equal and public deliberation, suppressed voice
Private	Equal standing and protection of liberty	Pressures to align private interests with corporate interests	Eroded rights and protections, suppressed interests

It is through the formation of inclusive relationships that citizens are excluded, and corporations are empowered within each sphere. The sphere’s dependence on corporations further leads to integration between the three spheres, which upholds the grip of corporations on democracy. In this way, the corporate grip persists, despite increasing societal costs, recognized malfunctions of democracy, and a general lack of citizen support for corporate influence. Below, I develop two generative mechanisms based on the circuits of power—politics of influence and politics of dependence—to explain how corporations are able to perpetuate such political influence and corrupt democratic processes. In each of the three spheres (political, public, and private), the power relations between corporations and sphere-specific actors (politicians, media, and citizens) form and establish certain practices. However, the relationships and their particular meanings and practices differ within each sphere.

Political corruption and representation in the political sphere

Corporations commonly contribute to political campaigns and lobby legislators to gain favorable treatment (Funk & Hirschman, 2017; Holburn & Vanden Bergh, 2008). In the first circuit of direct power relations, corporations use money and/or information to shape the decision-making processes involved in creating, amending, or stabilizing legislation and policies. For example, Peoples’ (2010, p. 670) study of campaign contributions in the United States shows how PAC contributions “almost always lead lawmakers to vote more similarly.” The results provide evidence of a causal relationship between PAC contributions and voting in seven out of eight U.S. Houses of Representatives between 1991 and 2006. This supports Schram’s (1995, p. 62) findings based on interviews with former members of Congress in which one member explained:

You get invited to a dinner somewhere and someone gives you some money. And then you get a call a month later and he wants to see you. Are you going to say no? You’re not going to say no. So it does buy you access.

In this way, direct CPA ensures special and disproportionate responsiveness from officials and legislators not available to citizens.

Either alone or through associations such as business roundtables or chambers of commerce, corporations devote substantial resources to lobbying (Baumgartner, Berry, Hojnacki, Leech, & Kimball, 2009). In 2012, private interests spent about $12.5 million dollars per member of U.S. Congress on lobbying activities (Teachout, 2014, p. 246), with the majority of lobbying conducted by fewer than 300 firms (Kerr, Lincoln, & Mishra, 2014). In the United Kingdom, lobbying is an estimated £2 billion industry (Cave & Rowell, 2014). Political lobbyist Ian Greer infamously explained these lobbying activities to the owner of Harrods department store, Mohamad Al Fayed: “You need to rent an MP just like you rent a London taxi” (Hencke, 1994, np). By providing information and incentives to adopt a particular position, corporations expect politicians to create or sustain favorable legislative environments for them (Funk & Hirschman, 2017).

Direct CPA leads to social integration (second circuit) of power within the political sphere. Relationships are not formalized through quid pro quo contractual agreements, which generally would be illegal acts of bribery, but are based on more subtle expectations that money or information will influence decision-making processes. Due to legislative differences in different nations, reciprocal relationships between corporations and politicians can be established in a variety of ways beyond direct contributions, such as fundraising events, ticketed dinners, golf competitions, club memberships, etc. (McMenamin, 2012). The principal purpose of establishing such relationships is to ensure that corporate or industry positions are represented and considered. These relations are actively cultivated; donors do not just contribute and then sever ties but engage in “many social interactions over the years” (Peoples, 2010, p. 653). Often, such interactions lead to promises of future employment for politicians or their relatives, which can also incentivize those in power to encourage their colleagues to vote a particular way (Peoples, 2010).

Although money and information are exchanged, disproportionate inclusion and influence are what primarily corrupts democratic processes. The inclusion of money and personal incentives in these relationships facilitates disproportionate corporate representation and unequal participation in decision-making processes. At the system level (third circuit), the politics of influence are supported by the complementary effects of returns for corporations and politicians. These tit-for-tat political norms ensure synergy, with the actors lacking incentives to deviate from the agreed-upon rules of practice that benefit themselves. The inclusive relationships strengthen dependence on corporate money and representation in the political sphere. The politics of dependence are based on monetary contributions and/or political legitimacy granted by actors within the market, and reinforce the rules of CPA engagement, rendering change difficult to initiate. For example, in the United States, politicians spend between 30% and 70% of their time on fundraising activities (Lessig, 2011) aimed primarily at corporations and their interests, which leaves little time to represent citizens in decision-making processes. This reproduces the dependence on corporations in democratic processes (Figure 1).

Figure 1.

Politics of influence and dependence in the political sphere.

Despite bans in many countries on corporate donations to parties and candidates (e.g., Belgium, Canada, France, the United States) (Krishnan, 2014), corporations oftentimes still serve as a necessary element for the formation of political networks that sustain political careers. The symbiotic relationship between governments and corporations in Western liberal democracies empower the latter so that even in countries with significant state funding (e.g., Germany), politicians often become dependent on channeled corporate funding due to rising election costs (Krishnan, 2014). Thus, firms readily adapt their CPA to changes in the electoral institutions in which they are embedded (Naoi & Krauss, 2009).

This corporate empowerment strengthens relationships between politicians and corporations. For example, social integration between lobbying firms and politicians ensures that in practice, politicians become increasingly dependent on lobbyists for information and legislative proposals. Moreover, the current rule of practice in many Western liberal democracies is to integrate industry spokespeople into policy decisions by, for example, employing management consultants on a grand scale and setting up management boards that mimic corporate governance structures to inject private sector experience and expectations. One blatant example of corporate empowerment is the “buddy system” introduced by former UK Prime Minister David Cameron “whereby CEOs of major corporations were given direct access to named ministers who were expected to troubleshoot on their behalf” (Wilks, 2013, p. 79).

In summary, CPA in the form of episodic interactions includes corporate representation in political decision making and excludes citizen representation, thereby building social relations between politicians and businesses and integrating corporate influence. These relations facilitate corporate empowerment in the system of the political sphere, which further reproduces dependence on corporations in social relations and reinforces the continuation of CPA. Such political corruption excludes citizen representation in political decision making, which undermines the democratic function of the political sphere (see Figure 1).

Political corruption and voice in the public sphere

Democracies depend on public spheres in which citizens can deliberate independently from state and market powers (Habermas, 1996). In a democracy, public deliberations guide, limit, and legitimate the powers of not only the state, but also businesses and other organizations (Warren, 2015). It is through public discourse that people form interests and values, and which connect them to political actions. Through CPA, corporations mobilize debates in the public sphere through which they hope to influence representatives, either directly through persuasion or indirectly by influencing the voice of the public (Murray et al., 2016). The aim of this direct action in the public sphere is to influence opinions on political matters and/or to crowd out opposing voices in public deliberation (Kollman, 1998; Nyberg & Murray, 2020).

CPA in the form of advertorials or funding vocal think tanks, for example, hinders opportunities for public deliberation in establishing policy or practices. These direct actions lead to social integration of corporate power (second circuit). For instance, ExxonMobil ran four advertorials as part of a broader public relations campaign to influence policymakers’ constituents to take a stand against environmental regulations aimed at combatting climate change (Livesey, 2002). These political tactics signal corporate positions to policymakers and influence members of the mass public to share corporate concerns (Kollman, 1998). These actions lead to the social integration and acceptance of corporations as seemingly concerned citizens in the public sphere (Nyberg, Spicer, & Wright, 2013).

Furthermore, the increasing inclusion of corporate voices excludes citizens’ voices from the public sphere. With the public sphere shifting from bourgeois coffee houses in London and Paris to mass media feeds (Habermas, 1989), resourceful corporations and industries have established an advantage over citizens in deploying wealth to influence public opinion (Teachout, 2009). Speech in the public sphere is expensive, and opposing opinions can be crowded out with money (Dawood, 2015). This direct and undue influence means that those with the greatest wealth can buy space in mass media, thereby providing a greater opportunity to influence opinions in the public sphere (Murray & Nyberg, 2020), either by making direct arguments against public policies (e.g., regulation of tobacco or fossil fuels) (Murray et al., 2016) and public concerns (e.g., climate change) (Wright & Nyberg, 2015), or by funding advertisements for political candidates (e.g., through Super PACs) (Stoll, 2015). Social integration thus secures corporate participation in the public sphere.

Episodic CPA facilitates social integration in the form of public relations and political marketing activities that establish the rules of the game of giving corporations a voice in mass media. This voice ensures the distribution of corporate opinion in deliberations through advertising and information subsidies (e.g., press releases and interviews with journalists) as well as media ownership. In this way, corporate politics of influence over the public sphere corrupt democratic processes by excluding citizens from the public sphere and its essential purpose of communicating public interests to elected representatives (see Figure 2). Even when corporate voices are employed for progressive or deliberative ideals, they crowd out citizens’ voices and facilitate corporate empowerment. This undermines the public sphere’s democratic function to hold market actors to account (Habermas, 1989).

Figure 2.

Politics of influence and dependence in the public sphere.

The power relationships between media and corporate actors are then reproduced due to increasing dependence on corporations to fund deliberation spaces. For example, media outlets are shifting their business models to provide free news content, which makes them increasingly dependent on advertising. This also influences how they report on corporate advertisers (Rinallo & Basuroy, 2009). Through advertising, corporations buy not only a platform for communicating political messages, but also increasingly favorable treatment from the media (Murray & Nyberg, 2020). Likewise, advertorials are becoming more common (Brown, Waltzer, & Waltzer, 2001) and the number of Super PACs and think tanks aimed at influencing the public sphere has surged in recent years (Briffault, 2012).

Media outlets are also becoming increasingly reliant on corporations for content. Business news content has expanded since the late 20^th century, and corporate press releases are increasingly used for news stories. Blyskal and Blyskal (1985) estimated that around 50% of business news in the Wall Street Journal originates from press releases and public relations professionals, a statistic that was confirmed in later studies (Carroll & McCombs, 2003). Exchanges around advertisements and content provision have integrated corporate affairs with the news media, thereby reproducing corporate empowerment. This politics of dependence reproduces the established social relations that in turn reproduces the corporate activities as normalized in the public sphere.

In sum, CPA in the public sphere includes corporate voices and excludes citizen voices from public deliberation. This leads to a public sphere in which corporations are integrated to disproportionally influence deliberation and empowered by increasingly business-friendly media outlets. Finally, this empowerment reproduces dependence on corporations and reinforces the continuation of CPA which corrupts the public sphere as a space for inclusive democratic deliberation (see Figure 2).

Political corruption and interest in the private sphere

The function of the private sphere in democratic processes is to ensure that all citizens are able to form independent opinions and have their personal liberties protected while doing so. The aim of CPA in the private sphere is to persuade citizens to form interests that benefit corporations. This occurs, for example, by channeling employees’ political rights and directing their voting behaviors at elections (Hillman & Hitt, 1999; Weidenbaum, 1980). Through CPA, corporations influence the private sphere by including corporate interests in private preference discussions (Deetz, 1992). Equating corporate interests to private interests excludes the possibility for citizens to develop preferences independently.

Within the direct first-level power circuit, corporations influence citizens’ interests internally through the employer–employee relationship and externally through channels that affect private deliberations. Internally, corporations engage in direct political advocacy by communicating voting preferences to shareholders, executives, personnel, and their families (Briffault, 2011). These messages can explicitly support a politician, party, or policy position or express negative sentiments about opposing positions. For example, the Swedish hamburger restaurant Max, which has 101 restaurants in Sweden, sent a letter to all employees warning them that it would be a “catastrophe” if the political opposition won the upcoming election (Karlsson, Brorström, Holmqvist, & Olsson, 2014). Externally, corporations can engage in direct political communication through, for example, education programs. In Australia, the UK, and the US, energy companies have sought to engage with schools to promote their positions on energy policies, often under the guise of energy education (Wright & Nyberg, 2015). The goal is for children to persuade their parents to align their interests with those of corporations.

In this way, corporations’ political preferences are socially integrated and the politics of influence inform discussions about citizens’ rights and liberties (second circuit). Citizens can, of course, choose to oppose or align their preferences with the corporate position, and employment might even secure fundamental democratic capacities. For example, employment can give access to health benefits or insurance and protect civil rights that enable democratic participation. However, any such deliberation activities occur in relation to corporate political preferences, no matter how democratic. This social integration facilitates corporate empowerment in the private sphere, which is reproduced though the systemic distribution of resources, with citizens’ increasing dependence on corporations encroaching on all aspects supporting democratic capacities (third circuit).

Since the foundation of the private sphere is the freedom to determine and pursue individual interests, corporate attempts to influence the private sphere corrupt citizens’ standing in democratic processes. Of course, religious organizations and social movements also attempt to channel their interest through their members; however, the focus here is on the undue influence of corporations and there is arguably a power shift in democratic societies towards corporations exercising substantial influence over people as workers and consumers. Even the democratic deliberation justifying corporate involvement is impeded by corporate politics of dependence. This is evident in how public institutions that ensure democratic capacities, such as health and education, are increasingly dependent on corporate ownership and sponsorship. This ensures the inclusion and facilitation of corporate influence and the exclusion of citizens’ self-ascribed preferences and interests (Figure 3).

Figure 3.

Politics of influence and dependence in the private sphere.

Dependence on corporations in the private sphere is reproduced foremost through economic shifts in society. For example, recent flexible work policies have led to a rise in the number of unpaid interns, zero-hour (i.e., standby or on-call) workers, and temporary contract employees, which reduces their social protection and increases their dependence on corporations (Gerstel & Clawson, 2015). In addition to this employment insecurity, there has been a surge in private debt to pay for education and housing (Streeck, 2011). Economic insecurity stemming from precarious work situations and increasing private debt reinforces citizens’ dependence on corporations in the private sphere. These two aspects of economic dependence need to be understood in relation to the decline of organized labor in Western liberal democracies. Weak unions have decreased workers’ bargaining power, which has brought about a decline in laborers’ share of national income, an increase in wage inequality, and wage rates that do not keep up with inflation (Kristal, 2013; Western & Rosenfeld, 2011). As political preferences have shifted, corporate empowerment within the economic market has increased and corporate interests have become increasingly salient in private concerns (Kristal, 2013).

In sum, through CPA, corporate political preferences are included in the social interactions of private citizens, with private rights and freedoms increasingly suppressed or excluded (see Figure 3). The social integration of corporate preferences facilitates corporate empowerment and dependence on corporations for the development of democratic capacities (e.g., healthcare, education) (Sen, 1985). This systemic integration of corporate influence politically corrupts the democratic processes upholding citizens’ independence from market interventions. As poignantly pointed out by Hannah Arendt (1958), citizens must be able to leave their economic worries at home in order to participate freely in democratic processes.

Inter-sphere political dependence

Dependence on corporations in each of the three spheres perpetuates the political corruption of democratic processes. Politicians are increasingly dependent on corporate contributions to run for office, media outlets are increasingly dependent on corporations for content and advertising, and private citizens are increasingly dependent on corporations for basic services and employment. Thus, politicians favor corporate solutions when suggesting policies, media outlets favor corporate positions in policy debates, and citizens are not free to speak out against corporations without retaliation. The interdependence of the three spheres fosters further corporate encroachment of democratic processes. In this section, I outline how the three spheres’ interlocking mechanisms—labeled as political capture, re-feudalization, and colonization—support the systemic corrosion of democratic processes.

First, CPA in the political sphere influences the private sphere by shaping industrial relations and increasing corporate involvement in delivering democratic capacities. For example, an organized effort by corporations to attack unions and roll back wealth distribution regulations in the US resulted in limited options to counter CPA (Marens, 2010). This was combined with a successful lobbying effort in both the US and the European Union to shift the delivery of public services, such as education and health, to corporations (Matten & Moon, 2008). Due to the political capture of the political sphere, employees have in this way also become increasingly dependent on corporations in the private sphere.

CPA in the political sphere also diminishes the independence of the public sphere by limiting its function as a forum for forming public opinions and influencing representatives. For example, CPA in the political sphere has led to an infringement on private citizens’ rights to protest against corporate elites in public areas; corporations have convinced lawmakers to privatize public spaces and have manipulated bylaws to grant police extraordinary powers to search, arrest, and detain private citizens (della Porta, 2013). This was on display in how private corporations during the Occupy movement ensured that occupation of public space was preemptively criminalized. With direct access to politicians, corporations have successfully lobbied to bar free speech and assembly on the grounds of protecting business stability (Dauvergne & LeBaron, 2014). This capture of the political sphere subdues political expression in the public sphere and makes it easier for lobbyists to convince politicians that they are speaking for “the masses.”

Second, CPA in the public sphere decreases the independence of the private sphere by excluding citizens’ voices and injecting corporate interests into private concerns. For example, if employees speak out against corporate practices in the public sphere, they often are fired and publicly discredited (Rothschild, 2008). Corporate involvement in the public sphere influences the private sphere by reducing citizens’ security; for example, print media companies may publish private details of citizens who disagree with corporate stances and social media companies harvest private information (Zuboff, 2019). Furthermore, the dominance of few media corporations, both in print and television media (e.g., Murdoch own media in Australia, UK, and US) as well as social media (e.g., Facebook, Google, Twitter), oriented towards commercial success have privatized the public sphere, in which citizens act as consumers and vehicles for corporate interests. Habermas (1989) referred to the deterioration of the public sphere as a mediator between the state and its citizens as “re-feudalization,” with the public sphere largely functioning as a stage for the authority of particular interests. The privatization of citizen participation ensures that the public does not exist apart from the corporate ruler.

CPA in the public sphere also diminishes the integrity of the political sphere in that deliberation is based on resources rather than arguments. Corporate influence on deliberation through mass media ensures that political decision makers are responding to a “phantom public”—that is, a media-based representation of the public (Murray et al., 2016). Through media content, corporations convince politicians that they are speaking for the people. Corporations can also engage in the public sphere by attacking politicians, for example, through Super PACs, which undermine officials’ abilities to engage effectively in the political sphere. Again, but in the other direction, powerful economic interests block the communication between politicians and those they are assumed to represent. These interdependences have created a re-feudalization of the public sphere in which political rights are not protected and public deliberations does not in an unmediated way represent citizens’ interests.

Finally, CPA in the private sphere diminishes the integrity of the political sphere by persuading officials to respond to faux pressure. Corporations mobilize citizens to participate in political processes through low-cost communication technologies, where endorsement of a policy position is only a click away. By providing individual citizens with talking points or petitions to sign, corporations can dictate the content of communication between citizens and politicians (Walker, 2009). Corporations convince private citizens to put pressure on politicians, who then respond to corporate interests based on citizen activism and voices. By turning the citizen into a willing pro-corporate activist or consumer (Deetz, 1992), the colonization of the private sphere influences participation in the political sphere (Habermas, 1984). The main process at work here is that monetization of the private sphere ensures that such participation supports market mechanisms.

CPA in the private sphere also influences the public sphere by distorting deliberation. For example, corporations engage in what is called “astroturfing” by enrolling private citizens in fake grassroots social movements (Walker & Rea, 2014). Furthermore, by funding think tanks to spread false information about a topic, corporations intentionally skew the debate in the public sphere to delay legislation deemed unfavorable to the industry (Cho, Martens, Kim, & Rodrigue, 2011). This has been an effective strategy to provide political cover for opposing legislation related to issues such as second-hand smoking and climate change (Walker & Rea, 2014). This corporate mediatization of the private sphere of everyday life assumes the form of colonization, with private realms of action increasingly organized, not on the basis of public deliberation, but on the basis of the monetary power already driving political participation (Habermas, 1987).

In sum, the interdependence of the three spheres interlocks the corporate encroachment of democratic processes. Political capture ensures the expansion of corporate capitalism into the private and public spheres (Crouch, 2004), the re-feudalization of the public sphere ensures aligning politicians and citizens with corporate interests (Nyberg & Murray, 2020), and the colonization of the private sphere monetizes citizens’ public and political participation (Deetz, 1992). The corporate interlocking of the three spheres leads to de-democratization, since the spheres’ independent democratic function to account for representation, voice and interest are undermined.

Discussion

The activities underlying the politics of influence and dependence in the three spheres—political, public, and private—explain how CPA corrupts democratic processes. Political corruption is based on excluding the representation, voices, and interests of citizens by ensuring the dependence of each sphere on money, wealth, and corporate interests. The circuits of power within each sphere account for the perpetuation of de-democratization—the weakening and erosion of democratic processes in society—despite broad popular support for moving the processes in the opposite direction—towards democratization. This theoretical framework enables a detailed explanation of how CPA, in the form of exercise of partisan influence, is integrated into the social relationships that empower corporations in the political, public, and private spheres. The intersection and cycles between these overlapping spheres in turn strengthen the representation, voices, and interests of corporations within democratic processes and at the expense of citizens. The perpetuating system of power relations that this has given rise to has implications for understanding corporations as political actors in democratic processes and the consequences of their engagement. These power relations also have implications for understanding corruption in Western liberal democracies and offer opportunities to strengthen democratic processes.

Implications for research on CPA

Despite well-developed insights into how firms influence public policy, few researchers have explained the associated consequences for democratic processes. First and foremost, I have detailed the implications of widespread CPA for democracy. This “dark side” of CPA is largely unrecognized in the literature. CPA can be seen, I have argued, as a form of political corruption that undermines processes of representative democracy. Political corruption benefits the few (i.e., those with wealth or connections) and hurts the many. Paradoxically, CPA corrupts democratic processes even when its arguments support increased deliberations, because the very inclusion of corporate activities and resources as part of such deliberation facilitates corporate empowerment and the exclusion of citizens. Thus, even when corporate voices are employed to promote progressive or deliberative ideals, they crowd out citizens’ voices and facilitate corporate empowerment. These insights contribute to current CPA discussions in that they develop a much-needed political dimension of CPA (Barley, 2010; Murray et al., 2016).

Second, and somewhat ironically, the interlocking mechanisms—political capture, re-feudalization, and colonization—explain the problem of identifying the benefit of CPA for individual corporations (Hadani & Schuler, 2013; Rajwani & Liedong, 2015). While there is still limited evidence for the effect of CPA in terms of firm profit, the move towards de-democratization benefits corporate capitalism as a whole. Corporate competition over policy can level out activities by upholding information symmetry with no individual firms as a winner. Even so, all CPA increases corporate influence and dependence, thereby ensuring market-based institutions and solutions. As competing industries lobby for different policy implications, they simultaneously construct relationships within the spheres that crowd out solutions that do not benefit business interests. And once relationships are formed, actors tend to converge around a particular understanding of the issue at hand (Funk & Hirschman, 2017). Thus, although corporate positions may be fractured on a single policy issue, policy decisions in many domains are still skewed towards business interests (Nyberg et al., 2013).

Implications for research on PCSR

PCSR scholars have warned practitioners and academics about the negative influence of corporations in promoting socially and environmentally responsible business (Scherer, 2018). The assumption is that the legitimation crisis facing corporations can be addressed through involvement in democratic deliberation (Scherer & Palazzo, 2011). This is supported by the obvious fact that some firms attempt to act responsibly. However, as critics of PCSR have pointed out (e.g., Banerjee, 2010; Sabadoz & Singer, 2017), blurring the boundaries of the market and the other three spheres risks undermining democratic functions and responsibility. Individual autonomy in the private sphere is what enables activities in the public sphere to legitimize decisions in the political sphere (Habermas, 1996). Sphere independence is therefore required in order to account for responsible and just deliberation. Thus, supporting corporate inclusion and facilitation within these spheres empowers corporate interests and undermines the democratic functions of the three spheres.

First, assumptions in the PCSR literature that corporations can serve as substitutes for welfare institutions and protect civil rights are more akin to the capture of the political sphere, re-feudalization of the public sphere, and colonization of the private sphere. Through the politics of influence, existing rules and institutions are changed to include corporate actors and facilitate their participation; through the politics of dependence, corporate participation in the three non-market spheres has been institutionalized, replacing old rules and traditional actors and voices. For example, the assumed flexibility and rationality of the market is now favored in political decision making, and corporate actors occupy key executive positions in monitoring all three spheres. By following the power relations through the different contexts, I have tried to explain corporate corrosion of democracy. Corporate influence in the three central spheres of democratic processes is arguably shifting the legitimation crisis from corporations towards democracy itself, because the politics of influence have rendered the political sphere unable to fulfill its role in holding market actors to account. Industries and corporations are not too big to fail; they are within the current system too powerful to be held accountable.

My analysis also contributes to an understanding of corporations as powerful political actors that co-create their institutional environments (Scherer & Palazzo, 2011; Scherer et al, 2016). Corporations are assumed to maintain their legitimacy by providing public goods and solutions (Palazzo & Scherer, 2006). However, corporate participation is not foremost based on legitimacy, because citizens do not approve of big money in politics and corporate bailouts that do not benefit them. The taken-for-grantedness of corporate influence should not be confused with legitimation or social acceptance. Rather, corporate dominance in the three spheres is arguably based on citizens’ recognition of their dependence on corporations, despite their critical capacity to see through the normalization of corporate influence (Boltanski, 2011).

Implications for research on corruption

My analysis of political corruption contributes to theories of corruption by complementing traditional research focused on individuals, organizations, and industries (Anand, Ashforth, & Joshi, 2004; Ashforth, Gioia, Robinson, & Treviño, 2008). First, by using corruption as a processual concept of what is being corrupted (in this case, democracy), researchers can focus on broader aspects of how a public good or value is being corrupted, rather than isolated events of misuse or abuse. Zyglidopoulos (2016, p. 3) referred to this as second-order corruption, where individuals or groups “change the existing rules or norms to unfairly benefit from them.” Through CPA, corporations have shaped democracy to unfairly benefit business interests. Seen in this way, corruption thus is not about individual or even systematic acts of wrongdoing, but rather about the consequences of those acts (i.e., the corrosion of valuable institutions or practices). Addressing corruption therefore involves not only finding individual culprits or identifying significant events but also shoring up failing or threatened processes that are deemed good or valuable.

Second, tracing corruption from episodic interactions to systemic integration can explain the normalization of corruption. Focusing on what corruption achieves shifts the focus from individual characteristics (Zyglidopoulos, 2016) to meso-level explanations of power relations; from individual agency and events to system integration (Clegg, 1989). Accounting for power in describing “how and why” corruption evolves (Ashforth et al., 2008, p. 679) shifts the focus of studies to how powerful interests can manipulate processes to benefit a few and harm the many (Warren, 2015). Thus, corruption is foremost political, not economic. Even bribery based on assumed self-interest feeds into a political game of influence. The concept of political corruption thus as I have developed it here focuses on the wider implications of actions and events.

Implications for democratization

In this article, I have painted a rather bleak picture of the democratic processes underlying Western liberal democracies. Given extensive political corruption, what are some possible strategies for supporting processes towards democratization? The most common responses to this question involve legislation, such as limiting free speech to people rather than corporations (and perhaps other types of organizations), legislating shareholder approval for political spending (similar to how employees can opt out of unions using their funds for political spending), and disclosing all CPA spending. All of these policies are worthy of further discussion. However, they do not address the expanding and interlocking circuits of corporate power leading towards de-democratization.

Breaking the dependence on corporations in each of the spheres would address political corruption and strengthen democratic processes. First, representing citizens in the political sphere would suggest moving deliberation away from private “back room” meetings to public forums that enable larger and more diverse groups to participate in more direct democratic processes. In the wake of democracy’s legitimation crisis, there has been renewed interest in citizens’ panels and assemblies to increase public participation in political decision making (della Porta, 2013; Warren, 2013). Such forums can inform political decision making regarding anything from designing an electoral system (Lang, 2007) to shaping council budgets (Wright, 2010) and energy policies (Angel, 2017). While these kinds of fora are not always fully inclusive and are fraught with dangers of manipulation and ill-informed citizens, these can, in line with Habermas’ (1996) ideas of deliberation, strengthen the legitimacy of democratic processes. The organization of these types of democratic practices is undertheorized within organization and management scholarship, which (perhaps logically) tends to focus on corporations using deliberation as a strategy serving their own ends (Lee & Romano, 2013).

Second, including citizens’ voices in this deliberation requires establishing platforms other than corporate-owned media where citizens can feel safe to express and advocate for their interests. Digital platforms to increase democratic processes are increasingly controlled and surveilled (Zuboff, 2019), which suggests the importance of developing alternative digital platforms to mobilize participation as part of public deliberations. Organization scholars are studying many of these social movements which are amplifying citizens’ voices with regard to issues such as economic (Reinecke, 2018) and gender equality (Vachhani, 2020) or action on climate change (Ferns & Amaeshi, 2019). While Crouch (2004) warned of populist and racist public forums, however, as spheres develop, the democratic foundations of inclusion, equality, and liberty can differentiate democratic from non-democratic voices and movements.

Third, breaking citizens’ dependence on corporations in the private sphere would require further systemic changes that protect citizens from interference and enable the exercise of their own democratic agency and will in areas such as education and healthcare. Within the field of organization and management studies, there is renewed interest in the democratically organized delivery of basic human needs built on a self-governing commons (Parker, Cheney, Fournier, & Land, 2014). At a minimum, safeguarding this sphere requires an “economy in which property rights, enforcing agreements, settling disputes, and the exercise of official power are matters of law rather than sheer power” (Johnston, 2013, pp. 1244–5).

The above suggestions to increase democratization demand in line with my theorization a power-based intervention to break the dependence on corporations and level the economic playing field. This arguably requires mass mobilization towards such ends and a breaking up of the hold of elites within the political and corporate domains. For example, the Occupy movement managed to undermine much of the legitimacy of corporate elites, with considerable citizen support (Roberts, 2012). However, the movement lacked legitimacy in the political sphere and did not have enough material resources to interrupt processes solidified by political ties. The problem with addressing political corruption is in many ways the imbalance between time and rewards. Doing something incurs real costs and takes a long time. A citizen undertaking action receives limited benefits from fighting political corruption, but the costs might be very large—just ask any protester or whistle-blower. Thus, mobilizing a large number of people towards democratization arguably hinges on the ability to split the elite, so that either business elites or influential political parties support the movement.

Limitations

In this article, I have focused on Western liberal democratic countries and excluded many countries that lack basic democratic processes. However, satisfaction in existing democracies has fallen (della Porta, 2013), arguably because powerful interests are able to influence politics to benefit the few and harm the many (Lessig, 2011). This goes hand in hand with the second limitation of focusing on corporations and business interests, thereby excluding interest groups such as unions and religious coalitions that also influence democratic processes. Nevertheless, the economic power and social legitimacy of businesses make them uniquely positioned to influence public policy. Furthermore, I did not address the systemic corruption that politicians intentionally create to take advantage of the market. Politicians, like corporations, engage in political activities to gain or remain in power through powerful coalitions. A broader discussion of democracy naturally needs to take into account other groups in society that influence democratic processes.

Conclusion

After the US government failed to implement financial reforms and spent billions bailing out and protecting banks, the Citizens United decision crystallized the idea that corporate money dominates American politics (Alzola, 2013). However, nothing is inevitable with the rise of corporate political power. Perrow (2002) convincingly showed how contingent historical events triggered the privatization of large corporations that amassed resources in the market sphere to obtain unfair advantages in the other spheres. Concentrated corporate wealth, which can be unfairly deployed for political purposes with no or limited support from citizens, makes corporations a formidable force to confront. This wealth gives corporations access, preference, and voice, not because they have powerful ideas, but because they have deep pockets. Comparatively weak political parties, media organizations, and citizens are susceptible to CPA because they are motivated to retain status, market share, or employment. The problem arises when corporations use CPA to realize profit gains by subverting democratic processes. Political corruption withers democracy.

Footnotes

Conflict of Interest

Daniel Nyberg declares that he has no conflict of interest.

Funding

The author received no financial support for the research, authorship, and/or publication of this article.

Author biography

Daniel Nyberg is a professor of management at the University of Newcastle, Australia. His research explores the political activities of corporations, with a particular focus on how corporations engage both internally and externally with the climate catastrophe. He has published widely on this in journals, including Academy of Management Journal, Business & Society and Human Relations, and (with Christopher Wright) is the author of Climate Change, Capitalism and Corporations: Processes of Creative Self-Destruction (Cambridge University Press).

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Corporations,Politics,and Democracy: Corporate political activities as political corruption

Abstract

Keywords

Political Power in CPA and PCSR

Circuits of Power and Spheres of Democratic Influence

Circuits of power

Democracy and spheres of influence

Corporate Political Activities and Political Corruption

Political corruption and representation in the political sphere

Political corruption and voice in the public sphere

Political corruption and interest in the private sphere

Inter-sphere political dependence

Discussion

Implications for research on CPA

Implications for research on PCSR

Implications for research on corruption

Implications for democratization

Limitations

Conclusion

Footnotes

Conflict of Interest

Funding

Author biography

References