by Uwe Schneidewind

Companies don't just adapt to market, political and social conditions. Rather, they actively influence them, even if conventional management theory closes its eyes to this. More recent social science concepts help to better understand the role of companies as "structural policy actors".

Business corporations do not only adapt to market, political and societal structures. Very often they are involved in an active "co-building" of these structures. The classical business administration science does not pay attention to the phenomenon. New social science approaches help to overcome the deficit.

A look at today's management education gives the impression that Business Administration is purely a "theory of adaptation": In constantly changing markets, under new political conditions and social trends, companies seem to be challenged every day to ensure their survival. It seems as if huge waves from the market, politics and society are constantly crashing down on the surfer "company", who can only stay on his board by perfect riding technique. The development of corresponding "riding techniques" has made considerable progress in the last thirty years: while at the beginning of the 1970s there was still the optimism that suitable early warning systems would enable companies to recognise environmental developments in good time and adapt to them, by the beginning of the 1980s at the latest they had capitulated to the complexity of the corporate environment. Instead of "strategic planning", "strategic management" became the mission statement of management consultants and management schools. The aim was no longer to recognise the environment in good time, but to be prepared for future developments by making strategic decisions with a clear direction. The selection of suitable business areas or the decision in favour of certain basic strategies (Porter) were supposed to guarantee that the company would remain competitive. However, the dynamics in the markets and society remained high, so that a reorientation took place once again in the 1990s: Only adaptable organisations seemed to be able to ensure that companies could follow developments in the environment, however turbulent, and thus stay on top of the waves. Developments in information technology facilitated this reorientation. The "virtual" or "fluid" (Weber) organisation became possible, which acts independently of location and reconfigures itself almost daily.

However, anyone who assumes, in view of the differentiated adaptation instruments of management theory, that companies are limited to this form of dealing with their corporate environment must be proven wrong when looking at corporate practice:

• Influencing market structures through mergers, strategic alliances or joint ventures,
• political lobbying by companies and industry associations at national and European level,
• industry commitments on a national and global scale (e.g. the chemical industry's Responsible Care programme), which supplement or in some cases even replace existing political processes, or
• "Educational" and image campaigns for products (such as cigarettes) or technologies (such as genetic engineering or nuclear technology) to influence public opinion are examples of how companies seek to influence their market, political and social environment and not merely adapt to it. In management theory, however, this dimension of strategic action is largely ignored.

The mechanisms of structural policy

The above examples sensitise us to the fact that surfers produce their own waves, at least in part. Much of what appears to be an "external framework" has been created by companies and industry associations themselves. The trend towards this will continue to grow in the future: globalisation processes and the increasing regulatory complexity of many issues, such as environmental protection, are making it more difficult to set national frameworks. Against this backdrop, completely new regulatory patterns are emerging, particularly in the international arena, in which state authorities only play a role, and often no longer even the decisive role. The sinking of the Brent Spar oil platform has given us an impression of these new mechanisms: Here, environmental protection organisations and boycotting consumers decided on the method of disposal of a decommissioned industrial plant, rather than democratically legitimised decision-making bodies.

Companies and business organisations are also increasingly involved in these new regulatory patterns:

In the course of globalisation, the need for company-related regulation is becoming increasingly international. However, the emergence of corresponding international institutions is lagging far behind the existing need for regulation. Without co-regulation by companies, the control of many social problems (e.g. environmental protection, social disintegration, distribution issues) hardly seems possible. Many social problem areas continue to be characterised by growing complexity. Even where the state still has regional regulatory powers, it is overstretched in terms of content and expertise. Only through the involvement of companies as co-frameworkers (e.g. in the form of voluntary industry commitments) does effective and efficient control of many issues seem possible at all.

Against the background of these developments, it seems to make sense to analyse more closely how the interaction between companies and their environment works. To answer this question, it is helpful to look at enlightened social science theories that do not lightly resolve the dualism of subject and structure, of individual options for action and predetermined systemic constraints in favour of one side or the other: For a look at practice shows that neither companies can shape their own framework conditions at will, nor are they completely predetermined in their actions by external constraints and can only adapt to them.

University structures as an example

The English sociologist Anthony Giddens provides a suitable approach for this with his structuration theory. He shows that structures in social contexts are not something fixed, predetermined from outside. Rather, they are complexes of rules and resources that are (re)produced through the actions of actors. Giddens expresses this with the idea of the "duality of structure". Structures are therefore both the starting point and the result of actions. This is illustrated by the example of university "structures": Here too, there are numerous rules, e.g. in the form of examination regulations, ministerial decrees, informal codes of conduct in committee meetings and resources such as the allocation of funds by ministries, the space and technical equipment of departments or the third-party funding potential of chairs, which in their interplay influence, but do not determine, the "structures of action" of those working and studying at the university. These structures are only effective because they are (re)produced by the actions of the actors: Rules only exist for as long as they are practised, resources are available anew every year. The further development, interpretation and adaptation of the above-mentioned rules and resources is therefore also the order of the day at universities. An important aspect here is that even those who submit to and adapt to given rules are engaging in "structural policy", as they contribute to the stabilisation of existing structures. Every action taken by actors thus has a structural policy dimension.

The frame of reference of Anthony Giddens' structuration theory can be applied to companies. Markets, political processes or the formation of public opinion can also be understood as arenas of play that are characterised by certain rules and resources: For example, markets are not only determined by the exchange of money for a firmly defined product benefit, but also by the assignments of meaning that companies give to products, e.g. through advertising. Many consumer and durable goods manufacturers take advantage of this. Anyone selling watches, cars or cigarettes today is not only satisfying a given customer benefit, but is also creating new worlds of benefit and meaning. Political processes are not (only) decided by the power of the better argument, but by tangible resources such as expert knowledge, financial means or the ability to mobilise the public.

Companies have an influence on these rules and resources. They are the basis for company-related structural policy, i.e. the interest-led influence of companies on market, political and social structures.

Fields of application for active structural policy

There are important fields of application for corporate structural policy wherever companies' options for action appear to be considerably restricted by market, political and social conditions. This is the case, for example, with the implementation of many ecological corporate measures. For example, companies that want to engage in committed environmental management today face numerous structural barriers in the market, politics and the public: in markets, for example, the inflation of eco-labels makes it impossible to communicate the additional ecological benefits or the procurement of ecological primary products is only possible at great expense. In politics, there is insufficient internalisation of the external effects caused by environmentally harmful behaviour: Companies that behave in an ecologically exemplary manner are at an economic disadvantage compared to companies that pollute the environment through their production processes or products at the expense of the general public. In society, trends such as the individualisation and multi-optionalisation of consumption options sometimes prevent the implementation of more ecologically compatible lifestyles and models of prosperity.

Structural policy means not accepting these framework conditions as given, but actively participating in their transformation. Structuration theory makes it possible to identify starting points for such co-design. In the ecological context, for example, corporate co-operation is of particular importance. Such co-operations between companies, but also between companies and environmental protection organisations, make it possible to mobilise joint resources and change rules. This is illustrated by co-operations between companies and environmental protection organisations: Co-operations between companies such as Hertie or the computer keyboard manufacturer Cherry with the Bund für Umwelt- und Naturschutz (BUND) send out stronger credibility signals to customers than any eco-label. The cooperative efforts of companies and environmental protection organisations for an ecological tax reform (as happened before the federal elections) have a much higher potential for political mobilisation than if these demands are made in isolation.

New legitimisation requirements

The further expansion of entrepreneurial structural policy, which is unavoidable, also raises many questions of legitimisation: According to which rules should the co-design of framework conditions take place if we abandon the fiction that this is no longer carried out exclusively by democratically legitimised bodies such as parliaments? This poses considerable challenges for the organisation of the institutions with which we will solve social problems in the future. It is possible to define some basic rules for responsible corporate structural policy:

Outlook: Corporate structural policy

Whether companies will succeed in pursuing an enlightened structural policy in the future and assuming their (structural) political role responsibly ultimately depends on those we train today at business schools and management schools. But this is where the "structural policy deficit" is particularly large. Young managers trained at business and management schools are generally taught a "toolbox" of techniques and management concepts that are intended to enable graduates to keep companies on a profitable course in increasingly turbulent and complex environments. How the actions of the companies themselves affect the environment is generally only taught to the extent that it is directly relevant to success. It is therefore not surprising that the majority of young managers today see themselves as a kind of tech- nocratic elite who define themselves by the tools of their trade and for whom it makes little difference whether they use their skills to market dog food, luxury limousines, book clubs or in health management, as long as the activity remains within the legal framework and promises corresponding career options.

Dealing with the structural-political dimension of entrepreneurial activity must therefore become an integral part of subjects such as general management and organisational theory, marketing and institutional Business Administration and must not be limited to individual courses on business ethics. Only in this way will it be possible to sensitise students to the political and social repercussions of entrepreneurial activity.

The author

Prof Dr Uwe Schneidewind (32) has been teaching the subjects of Production Economics and Corporate Environmental Policy at the Faculty of Economics and Law since 1997. After studying Business Administration at the University of Cologne, he worked for a year in strategic environmental management consulting. He completed his doctorate and habilitation (1997) at the University of St. Gallen. His areas of research are the role of companies in politics and society as well as issues of strategic environmental management, particularly in the chemical, textile and information technology industries.