Chapter I: Introduction: ‘Connected Capitalism,' A New Era of Governance

Under contemporary globalization, corporations have achieved a size and scope unparalleled to any other time in history (May 24). In response to growing corporate power, there have been contestations from a variety of social actors, including unions, environmentalists, and anti-corporate movements, stressing corporate reform. One result of social pressure has been the incorporation of Corporate Social Responsibility (CSR) campaigns into corporate branding strategies (May 201; Klein 430; Foster 155). On the surface, these campaigns appear to address and integrate social concerns into regular business practices. Yet, I argue that CSR campaigns are one component of a broader strategy to improve the management of crises by incorporating criticisms into corporate managed social responsibility initiatives. Instead of addressing critiques in a substantive manner, CSR initiatives “break off the sharp points of contention” to bolster legitimacy for free market policies (Hobsbawm). Partnerships between corporations, state institutions, and nongovernmental agencies (NGOs) are transforming the way citizenship and social responsibility are being conceptualized. The purpose of this project is to understand how corporations work in concert with state institutions and NGOs to access and analyze information about a local setting and incorporate this data into micro and macro-organizational strategies. CSR campaigns appear to acknowledge social concerns, but in practice, they allow corporations to tap into new social settings and increase brand value by appropriating moral rhetoric. Foster points out, “almost every socially responsible initiative on the part of the company doubles as a marketing opportunity” (158). In order to further understand this process, I focus on the Coca-Cola Company and examine its CSR campaigns.

Since the 1990s, CSR activities have become more popular in the business world, as well as within NGOs, academic institutions and the media (May 227-228). The growing number of CSR initiatives appears to coincide with “societal discontent with corporate behavior and with neoliberalism itself” (May 7). In 2000, the United Nations (U.N.) launched the Global Compact, to align the objectives of the international community with the business world and to develop “a market economy with a human face in response to some of the problems associated with globalisation” (United Nations; Williams 755). The compact is a voluntary association in which corporate members, including the Coca-Cola Company, commit to ten principles. The principles touch on human rights, labor, the environment and corruption (United Nations). The compact stresses the importance of the private sector in managing challenges brought about by contemporary globalization. In one U.N. press release, Bunmi Akinremi, a Nigerian Bank Chief argues that CSR initiatives are, “essential to easing the tension between social justice and entrepreneurial drive, and failure to achieve that balancing act could put market capitalism at risk” (United Nations 2007). According to this logic, the private sector should be invested in social justice initiatives, not solely for altruistic reasons, but based on its own self-interest. Kofi Annan, secretary-general of the United nations, argued at the Davos World Economic Forum in 1999 that “shared values provide a stable environment for a world market that without these explicit values business could expect backlashes from protectionism, populism, fanaticism and terrorism” (Williams 755). Annan’s statements situate CSR campaigns within a broader initiative to buffer some of the adverse effects of contemporary capitalism including grave disparities in wealth, environmental devastation and unequal access to resources.

On March 6, 2009 Chairman of the Coca-Cola Board, Neville Isdell delivered a speech entitled “Connected Capitalism: Growing Sustainability for the 21st Century.” During the speech, Isdell warned of the dangers of embracing protectionist policies during the growing global economic crisis. Instead, he urged for the continued advancement of free market economics, but with adjustments to how capitalism is practiced. His proposed solution was embodied in what he termed “Connected Capitalism” which is “a new model of how businesses must engage with society across four platforms – communities, institutions, social challenges and values” (Isdell 2009). These “four connections” include working with communities, civil society, and governments. One of the means to forge such connections is through partnerships with communities, non governmental organizations (NGOs), and governments around social responsibility initiatives.

“Connected Capitalism” and the partnerships created over CSR initiatives (like the Global Compact) signal a shift in the role of the private sector in social responsibility discourse and initiatives. Haufler explains that many countries are “moving toward a more market friendly system of regulation, in which governments often delegate numerous responsibilities to the private sector” (1). Many CSR initiatives include projects that were previously conceptualized as public sector responsibilities. For example, the Coca-Cola Chile Foundation (CCCF) was created in 1992 to help “meet the challenge of the Chilean Government to have a TAVEC [Tecnología Avanzada en Educación Científica] Laboratory in every city with more than 50,000 inhabitants by 2012” (Herrera 1). Coca-Cola is also the main donor for the Colombian Foundation for Education and Opportunity whose goal is to “create sustainable programs by generating joint and articulated efforts (with public & private entities) aimed to respond to basic needs related to education and decent labor” (Funda Colombia). In both of these initiatives, the Coca-Cola Company is teaming up with national governments to address the country’s educational demands. Muhtar Kent, the current CEO of Coca-Cola explained “for our Company and our bottling partners, sustainability reflects an understanding of the role our business must play in society if we are to be successful in the 21st century” (The Coca-Cola Company 2008). Kent is viewing sustainability not as an environmental initiative, but as a way to rescue and sustain business in the 21st century.

CSR campaigns, while bringing together the private sector, state institutions and nongovernmental agencies, are altering society-state-market relationships and creating new areas of corporate governance. Claire Cutler points out that “there are clear links between the CSR movement, alongside the increasing multiplicity of sources of and mechanisms for corporate governance, and political economic changes brought about by the neoliberal discipline of global capitalism” (May 214). Cutler also explains that part of the CSR movement includes expanding corporate operations into the “public” dimension (May 222). I argue that these partnerships, formed over CSR initiatives, constitute new “field[s] of intervention” (Foucault 135).

Foucault traces the development of governmentality, or the art of government, from the sixteenth to the eighteenth century noting shifts in the aim and function of state apparatuses. In the eighteenth century, he points to a number of developments which added complexity to the nature of governing. Tagg describes this ensemble of forces as a:

constellation of institutions – including the hospital, the asylum, the school, the prison, the police force – whose disciplinary methods and techniques of regulated examination produced, trained and positioned a hierarchy of docile social subjects in the form required by the capitalist division of labour. (Evans 245).

CSR initiatives allow states and corporations to combine institutional resources and knowledge to create new campaigns aimed at social control. New information technologies coupled with relatively flexible corporate capital enables these initiatives to appear highly coordinated and responsive to public impulses. CSR initiatives are creating relationships between the private sector, state institutions and NGOs which may potentially address some of the state’s needs, but simultaneously create complex spaces of corporate governance. For example, if the private sector takes on some of the functions previously carried out by the state (e.g. providing access to education), private institutions are not held to the same standards of accountability, transparency, or monitoring as a state institution. Thus the private sector can take on “public” projects, but with more freedom from public oversight and with the added value of potentially improving reputability. These new techniques can be understood using Foucault’s notion of governmentality, yet in the context of contemporary capitalism corporations can be added to the ‘constellation of institutions’ initially conceptualized by Foucault as coordinating efforts to ensure the “orderly conduct of social and economic life” (Evans 245). CSR initiatives are one example of new governing strategies with distinct characteristics which raise questions about the transparency, accountability, monitoring, and ultimate intentions of these projects.

Antonio Gramsci pointed to the coordination of politics, economics, intellect, and morals in establishing and maintaining hegemony. As Gavin Smith explains, hegemony is used "to refer to the complex way in which power infuses various components of the social world" (216). Gramsci also draws attention to the economy as a potential site for the consolidation of power. Smith states,

Gramsci identified a very particular compact for securing social order between corporations and the state: “an intensification of exploitation achieved through new forms of management and corporatist strategies, and expansion of state intervention in the economy and society" (225).

Social order and hegemony are described more as an ideal state of social control for forces in power, than a present social state. Therefore, I think it is important to focus on “hegemonic processes” which Smith describes as “when power is used to organize, consent, and when consent is used to facilitate the securing of a political project” (217). Tracing the relationship between state institutions and corporations provides an entry point to examine how hegemonic processes are established and coordinated through relationships between educational, state, and economic institutions, as well as the media. I argue that CSR campaigns are an example of a corporate-state compact and can be understood as part of a larger trend to couple free market economics with progressive politics as a way to gain wider legitimacy for capitalism. In a broader sense and with Gramsci’s insight in mind, this compact is part of a new “corporatist strategy” which allows the state and corporations to increase its intervention into society as a way to gain widespread consent for free market policies.

Using Gramsci’s understanding of hegemony and Foucault’s concept of “field[s] of intervention,” this project argues four main points:

1.) Corporate social responsibility initiatives are part of a broader initiative to bolster legitimacy for free market policies by attempting to incorporate social concerns. The result of partnerships formed over CSR initiatives has been the creation of new forms of governmentality.
2.) The Coca-Cola Company utilizes corporate sanctioned studies, technology, and institutional research to create an image of social responsibility. This ‘top down’ approach serves three main functions: first, to gain specific information about the local environment, which is incorporated into a micro-organizational strategies; secondly, it serves as a mechanism to co-opt and control local discourses on social responsibility; and third Coca-Cola is able to position themselves (amongst various institutions) as a moral authority.
3.) CSR campaigns allow Coca-Cola to create relationships with powerful NGOs and state institutions like the United Nations, the World Wildlife Fund, and the Chilean Ministry of Education. Out of these partnerships Coca-Cola gains access to new locations for corporate advertising, increasing its corporate encroachment into local spaces.
4.) The image of a ‘socially responsible’ corporation is used to distract from unethical international corporate practices, as a way to discredit ‘grassroots’ organizations calling for corporate accountability, and as part of a preemptive plan to counter any accusations of unethical business practices, as well as to avoid government regulation.

In order to understand the changes brought about by CSR initiatives, I focus on three sites of Coca-Cola’s operations; the global, the national and the local. Stohl, Stohl and Townsley emphasize the importance of a global perspective stating “CSR issues, concerns, and behaviors are often obscured or hidden when examined solely at the local or national level” (34). Yet, in order to understand how global trends in CSR are tailored to various localities as part of a global strategy or how local or national contestations impact the global operations of Coca-Cola, I trace CSR initiatives along the three sites, starting with the global and moving to the local. While mapping out CSR initiatives at these three interconnected sites, I focus specifically on the interaction between corporations and social movements calling for reform. Juxtaposing corporate rhetoric and images with critiques and contestations allow me to examine the interplay between corporations and social movements. Focusing on corporate-social interactions also raises broader questions about the direction of social-market relations. Ngai-Ling Sum points out that many have questioned “whether the adoption of corporate social responsibility is leading to the ‘marketization of the social’ and/or ‘socialization of the market’” (1). Are corporations legitimately responding to social pressures? Or do CSR campaigns function as a mechanism to control and co-opt critiques?

Coca-Cola’s publications often appear as if they are divorced from social processes. Yet, I understand that branding campaigns are products of a dialectical relationship between consumers and producers. Corporations and their employees are embedded within a social context. Robert Foster explains the concept of cross-cultural consumption, drawing on the work of Nicholas Thomas (1991) he states, “cross-cultural consumption is a multi-directional process… meanings and qualifications are being generated by all the agents assembled in a network of production, distribution, and exchange, a commodity or product network” (17). Even though the process of ascribing meaning to words and images is multi-directional, within the context of a product network, power relations have a strong impact on the messages (whether blatant or latent) that are broadcast to a wide audience. Coca-Cola, through international production and distribution networks, has access to a wide audience. Therefore, how the company incorporates and articulates social responsibility and sustainability has an impact on how people conceptualize those initiatives.

I focus on partnerships between the Coca-Cola Company and various international organizations, like the World Wildlife Fund (WWF) and the United Nations, to understand how CSR operates on a global level. Publications from SINALTRAINAL, the Stop Killer Coke Campaign, and War on Want are utilized to examine how an international campaign has impacted Coca-Cola’s articulation of workers’ rights on a global level. Chile is the focus of the national case study to understand corporate relations within the country in comparison to other areas of Latin America. The local level includes high schools in Chile that have received donations from the Coca-Cola Company through the Coca-Cola Chile Foundation (CCCF). I focus on corporate documents including websites, statements and advertisements, as well as publications and material from social movements calling for corporate reform at each of these three sites. The Coca-Cola Company publishes annual reports on corporate responsibility and environmental sustainability. These reports vary depending on the location and intended audience. Since CSR is a relatively new trend, analysis is limited to the period between 1990 and 2009.

This project is divided into five chapters. Chapter 1 is the introduction, which includes an explanation of the theory and methods use to analyze Coca-Cola’s CSR campaigns. Chapter 2 explores the history and logic behind the “Coca-Cola System” or Coca-Cola’s approach to business on three levels (global, national, and local). Chapter 3 includes an analysis of how Coca-Cola has marketed social responsibility. This chapter also includes material from SINALTRAINAL, the Stop Killer Coke Campaign, and War Against Want to explore issues arising on a global level in response to national and international contestations. Chapter 4 focuses on the case study of Coca-Cola in Chile and the Coca-Cola Chile Foundation. In Chapter 5, I tie together material from the previous chapters and comment on how CSR campaigns function on the three levels.