Inger Jensen, John Damm Scheuer, Jacob Dahl Rendtorff
Focus of this chapter is society’s megatrends as they transform the frames for organisational legitimacy in a way which implies that decision-making paradoxically should balance as mutual preconditions what was formerly seen as opposites. Society’s turbulence strikes in organisations. As society faces new challenges, the legitimating notions me-diating the interrelation between organisation and environment change and transform the premises of organisational decision-making. Six megatrends provoked by the side-effects of modernity’s full functional differentiation on different aspects of society in each their way complicate legitimate decision-making (Holmström 2007, 2008, 2009, 2010a, 2010b). A common denominator is that organisational legitimacy today implies the paradoxical balancing as mutual preconditions what was formerly seen as opposites. First, from norms being based on a given rationality in solid modernity to a discursive rationality in today’s fluid modernity contributes to provoke the need for trust, and consequently for decision processes to bal-ance authenticity and responsiveness, consistent identity and continuous change (Javala 2006, Luhmann 1982). Second, as society’s structurally determined (in)sensitivity to life and nature reaches a critical mass, it provokes new ideals of balancing society’s logics on the one hand with considerations of life and nature on the other, as in the triple bottom line concept (Luhmann 1989). Third, the increasing diversity and speciali-sation of society’s logics make independence and interdependence, integrity and collaboration mutual preconditions. Fourth, the explosion of social complexity together with globalisation provoke new forms of political governance characterised by co-regulation (known for instance as CSR) and the politicisation of private organisations, and consequently the need for them to balance particular interest and common in-terest, market and society-at-large (Sand 2004, Sørensen & Torfing 2005, Teubner 2005, Willke & Willke 2008). Fifth, the growing awareness of the asymmetry between decision-maker and those influenced by decisions leads to anxiety and a continuous questioning of organisational decision premises, and to the paradox of organisations strengthening their decision power by sharing it with stakeholders, of increasing the autonomy of decision- making not by closure, but by accountability and transparency (Holmström 2005a, Luhmann 1993). Sixth, the growing interdependence and consequently growing sensitivity between different societal forms and cultures with globalisation leads to the demand for global decision premises to be local: being truly global means understanding local cultural and societal forms, including the roots of your native values and perspective (Baraldi 2006; Holmström et al. 2010, Kostova & Zaheer 1999). Each megatrend constitutes a specific issue arena with different conflicts, interests, rationales, positions, interrelations, semantics, criteria of relevance and urgency, forms of power and drivers of social change, on which legitimacy and legitimating notions are continuously negotiated. Where legitimacy in solid modernity was more or less given by common, solid norms, control and central state regulation, in today’s fluid mo-dernity characterised by fluid, ambiguous norms organisations have to justify and legitimise their decisions and their premises in communicative processes and poly-contextual interplays (Holmström 1997, 2002, 2004, 2005b). The chapter will unfold these megatrends and their respective balancing acts and issues arenas, and will discuss their pitfalls to organisations as well as to society-at-large. The analyses are based on several years of studying the co-evolution of society and organisation in modern society since the mid-1900s, and of the changing legitimating ideals and practices mediating the interrelations between society and organisation. The basic theoretical optics applied is Niklas Luhmann’s theories on the dynamics of social processes (Luhmann 1995, 1997), the evolution and constitution of society (Luhmann 1997, 1998), of organisations as constituted by decision (Bakken & Hernes 2003, Luhmann 2000), and of social systems as our epistemological filters. Bakken, T., & Hernes, T. (Eds.). (2003). Auopoietic organization theory. Copenhagen, Denmark: Copenhagen Business School Press. Baraldi, C. (2006). New forms of intercultural communication in a globalized world. International Communi-cation Gazette, 68(1), 53–69. Holmström, S. (1997). An intersubjective and a social systemic public relations paradigm. Journal of Com-munications Management, 2(1), 24–39. Holmström, S. (2002). Public relations reconstructed as part of society’s evolutionary learning processes. In D. Vercic, B. van Ruler, I. Jensen, D. Moss, & J. White (Eds.), The status of public relations knowledge (pp. 76–91). Ljubljana, Slovenia: Pristop Communications. Holmström, S. (2004). The reflective paradigm. In B. van Ruler & D. Vercic (Eds.), Public relations in Europe (pp. 121–134). Berlin, Germany: de Gruyter. Holmström, S. (2005a). Fear, risk, and reflection. Contatti (Udine University:FORUM), 1(1), 21–45. Holmström, S. (2005b). Reframing public relations: The evolution of a reflective paradigm for organizational legitimization. Public Relations Review, 31(4), 497–504. Holmström, S. (2007). Niklas Luhmann: Contingency, risk, trust and reflection. Public Relations Review, 33(2), 255–262. Holmström, S. (2008). Reflection: Legitimising late modernity. In A. Zerfass, B. v. Ruler, & K. Shriramesh (Eds.), Public relations research: European and international perspectives and innovations (pp. 235–250). Wiesbaden, Germany: Westdeutscher Verlag. Holmström, S. (2009). On Niklas Luhmann: Contingency, risk, trust and reflection. In Ø. Ihlen, M. Fredriksson, & B. van Ruler (Eds.), Public relations and social theory (pp. 187–211). New York: Routledge. Holmström, S. (2010a) Society’s Constitution and Corporate Legitimacy, in Rendtorff, J.D. (ed.) Ethics in the Economy: Power and Principle in the Market Place, Ashgate, UK. Holmström, S. (2010b) Reflective Management: Seeing the Organization as if From Outside. In R. Heath (ed) Sage Handbook of Public Relations, New York, Sage. Holmström, S., Falkheimer, J., & Gade Nielsen, A. (2010). Legitimacy and strategic communication in globali-zation: The Cartoon Crisis and other legitimacy conflicts. International Journal of Strategic Communication, 4, 1–18. Jalava, J. (2003). From norms to trust: The Luhmannian connections between trust and system. European Journal of Social Theory, 6(2), 173–190. Kostova, T., & Zaheer, S. (1999). Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24(1), 64–81. Luhmann, N. (1982). Trust and power. Hoboken, NJ: Wiley. (Original work published 1968) Luhmann, N. (1989). Ecological communication. Cambridge, UK: Polity Press. (Original work published 1986) Luhmann, N. (1993). Risk: A sociological theory. New York: de Gruyter. (Original work published 1991) Luhmann, N. (1995). Social systems. Palo Alto, CA: Stanford University Press. (Original work published 1984) Luhmann, N. (1997a). Die Gesellschaft der Gesellschaft. [Society’s Society] Frankfurt, Germany: Suhrkamp. Luhmann, N. (1997b). Limits of steering. Theory, Culture & Society, 14(1), 41–57. Luhmann, N. (1998). Observations on modernity (W. Whobrey, Trans.). Palo Alto, CA: Stanford University Press. Luhmann, N. (2000). Organisation und Entscheidung.[Organization and Decision] Opladen, Germany: West-deutscher Verlag. Sand, I.-J. (2004). Polycontexturality as an alternative to constitutionalism. In C. Joerges, I.-J. Sand, & G. Teubner (Eds.), Transnational governance and constitutionalism. Oxford, UK: Hart. Sørensen, E., & Torfing, J. (2005). The democratic anchorage of governance networks. Scandinavian Political Studies, 28(3), 195–218. Teubner, G. (2005). Substantive and reflexive elements in modern law. In C. Seron (Ed.), The law and society canon (pp. 75–122). Aldershot, UK: Ashgate. Willke, H., & Willke, G. (2008). Corporate moral legitimacy and the legitimacy of morals. Journal of Business Ethics, 81, 1–12.
Balanced Company: Organizing for the 21st Century, 2013, p. 9-32