Power, profit, and principles:
explaining firm responses to NGO
pressure
Michael John Bloomfield
PhD Candidate
International Relations Department
London School of Economics
Creating global governance from the
interaction of private actors
• Interdependent nature of markets and politics
• Difference between social interactions and social
institutions
• Emergence of private governance and private
international regimes
Variation in firm responses to NGO
pressure
• Firm strategy critical to understanding dynamics
of private regime creation and maintenance
• Need to understand why some firms engage in
governance creation and why others do not
• Leaders, laggards, and followers
Ways of understanding firm
preferences
Rationalist model
Reflectivist model
Industry-level
Industry structure with firms as
rational, unitary actors
Cultural context with firms as norm
entrepreneurs
Firm-level
Firm structure with actors within
firms as rational actors
Agents within firms as norm
entrepreneurs
Analytical framework incorporating
existing theories of firm responses to
NGO pressure
firm responses
to NGO
pressure
rationalist
industry-level
supply chain
structure
reflectivist
firm-level
inter-firm
competition
intra-firm
competition
industry-level
cultural
setting of
industry
firm-level
corporate
culture of firm
internal
pressure from
moral agent
Rationalist v. Reflectivist
• Both are useful, but rationalist approach offers
higher returns for studying firms
▫ fiduciary responsibility
▫ corporate governance oversight
• Therefore, we can expect the median firm to act
as a rational, profit-maximizing entity
Analysis must begin at the industrylevel and continue at the firm-level
Industry-level
Firm-level
• Gold supply chain
• Jewellery industry
• Complex supply chains with
multiple intermediaries in
multiple jurisdictions are prime
candidates for private
governance
• Targeted node will be the most
branded, most visible, with the
most malleable consumer
demand
• However, firms within
this node display
variation in their
responses!
Variation in business responses to NGO
pressure is a function of the
willingness and ability of each firm to
engage in governance creation
Thank you!
• Special thanks to the London School of Economics
and the Social Sciences and Humanities Research
Council of Canada for their generous support.