The Changing Role of Business in Global Society: Implications for Governance, Democracy, and the Theory of the Firm

During the past decades business firms have started to engage in activities that have traditionally been regarded as actual governmental activities (Margolis & Walsh, 2003; Matten & Crane, 2005; Scherer & Palazzo, 2008a). This is especially true for multinational corporations (MNCs). They engage in public health, education, social security, and protection of human rights while often operating in countries with failed state agencies (Matten & Crane, 2005); address social ills such as AIDS, malnutrition, homelessness, and illiteracy (Margolis & Walsh, 2003; Rosen et al., 2003); define ethics codes (Cragg, 2005); protect the natural environment (Hart, 2005; Marcus & Fremeth, 2009); engage in self-regulation to fill global gaps in legal regulation and moral orientation (Scherer & Smid, 2000); and promote societal peace and stability (Fort & Schipani, 2004).