Dialogue and Business Legitimacy

Abstract

This chapter presents two mental models for justification of business legitimacy. One is the public arena, and the other is the corporate public diamond. As presented in this chapter, the imagination of a public arena with an agenda for societal debates is linked to developments in the modern era, including the idea of individual freedom, the acknowledgment of reason as important for building knowledge, steam-powered printing presses, and national autonomous mass media. The model makes most sense in societies, where fundamental norms and values are shared and business practices can be tested in relation to them. Mass media reports on fraud, unsanitary, and inhumane working conditions in the meat-packing industry in the twentieth century are mentioned as an example of how the public arena best works. The corporate legitimacy diamond reflects contemporary thinking. Using the public arena as a point of departure, it adds a corporate public diplomacy level. The model takes into consideration the post-millennium quest for human dignity and localized trust. When transnational corporations invest in many parts of the world, they are faced with many different perspectives on what constitute legitimate business behavior. They need to balance local norms and values around the globe, because social media allow a transnational audience to discuss their legitimacy. Using diplomatic practices, corporations can build long-term relationships, share information, and make compromises with local civic society representatives. Human resource management and plans for constructions are mentioned as examples of topics to be negotiated between corporations and civic society.