ABSTRACT
In a rapidly changing international society a long list of unresolved, controversial and hotly debated issues has been brought back to the negotiating table (Chapter 10). But international societal change also introduced one mechanism that was deemed particularly appropriate to address the social responsibility of companies: reputation. Governments around the world were asked by NGOs to start regulating the behaviour of companies more strictly, to introduce new laws and standards and to impose strict sanctions on the culprits. Instead of following this advice, most governments put their faith in the so-called ‘reputation mechanism’. It was believed that companies that ‘do something wrong’ would immediately be corrected by the reputation mechanism. Reputation build-up can take ages, but it can disappear in an instant. Critical NGOs and customers would ‘punish’ the company for irresponsible and unaccount-able behaviour. Governments additionally argued that a legalistic approach would probably only result in unwanted ‘escape’ behaviour by the companies. Besides, they had just decided to lower their profile in society, so stepping up regulation seemed an ideological anachronism. Thus, instead of warding off the bargaining society, governments increasingly tried to use its mechanisms to solve some of the issues.
