Political and Social Games Corporations Play

Masahiko Aoki

in Corporations in Evolving Diversity

Published in print March 2010 | ISBN: 9780199218530
Published online May 2010 | e-ISBN: 9780191711510 | DOI:

Series: Clarendon Lectures in Management Studies

Political and Social Games Corporations Play

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This chapter formulates political-exchange and social-exchange games that corporations and their stakeholders play along with other agents in society. Multiple equilibria of the political exchange game are identified as discrete forms of political states, and institutional complementarity of each of them with a particular corporate governance form is discussed. Agents, including corporations, also engage in social-exchange games using social symbols to derive social payoffs, and strategically calculate tradeoffs between social and materialistic payoffs. CSR is understood as a means for corporations to accumulate their own social capital in this game. The chapter then inquires why the value of corporate social capital is partially internalized by share markets and what its implications are to stakeholders' interests, corporate governance, and social welfare.

Keywords: political-exchange game; institutional complementarities; social exchange game; social capital; social payoff; CSR

Chapter.  20636 words.  Illustrated.

Subjects: Business Strategy

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