Blending in the Iron Cage: The Integration of Social and Economic Discourse in U.S. Firms, 1960-2010
We examine this issue by drawing on an analysis of depictions of social and economic spheres in corporate annual reports. We constructed a unique dataset consisting of 300 firm-level annual reports spanning the period 1960-2010 from 80 large U.S. companies sampled from the S&P 500. We extracted information related to emphases on finance, production, and corporate responsibility (CR) – from labor-rights and poverty to environmental issues to philanthropic efforts. CR efforts are often buffered from a firm’s technical core as in, for example, corporate sponsorship of activates unrelated to the production process or in the segregation of CR to a stand-alone section of an annual report. Importantly, here we focus on CR efforts that are blended into elemental profit-making activities of production and to financial reporting.
Our study makes three important contributions to the literature. First, it illuminates changes in the relationship between two fundamental arenas of the modern world, society and economy (Krippner and Alvarez 2007, Hirschman 1982). The rise of discourse advocating an economic motive for engaging in social activities marks an unprecedented shift in the history of corporate America (Meyer and Bromley 2013, Vogel 2005). Second, the paper calls attention to the role of cultural, institutional pressures in constructing and re-constructing theories of causality, in this case in terms of how economic activities in firms promote the public good and how doing good contributes to profits (Bromley and Powell 2012). Third, our paper adds to existing organization theory by providing evidence that cultural rationalization facilitates the integration of previously distinct domains (cf. Batillana and Lee 2014, Thornton et al. 2012, Pache and Santos 2010). We capitalize on the way firms use rationalized evaluations to justify their actions, which is a novel operationalization of the emerging sociology of (e)valuation for organizational theory (Lamont 2012, Karpik 2010).