Value Creation from Strategic Partnerships between Companies and NGOs

Abstract

Recent years have witnessed a change in the corporate social responsibility (CSR) debate from questioning whether to make substantial commitments to CSR, to questions of how such a commitment should be made. Given that CSR initiatives increasingly are carried out in collaboration with non-governmental organizations (NGOs), business–NGO (Bus–NGO) partnerships are becoming an increasingly important instrument in driving forward the sustainable development agenda. The aim of this chapter is to explore motivations to partner, the value-added of Bus–NGO partnerships as well as what is enabling and impeding the realization of this value.

An analytical model is developed based on contributions from partnership literature (Austin, 2000, 2007; Austin & Seitanidi, 2012a, 2012b; Seitanidi & Ryan, 2007) and the resourced-based view. This has resulted in a process model with the following three phases: (1) formation and motivation; (2) implementation and execution; and (3) outcomes and challenges.

The empirical part of the chapter focuses on three specific partnerships in Kenya. Kenya is one of the most prosperous and politically stable states in Africa, with high growth rates making it an attractive launch pad for businesses to enter partnerships with NGOs.

The partnerships studied were all pilots still flirting with this new form of collaboration modality and struggling themselves to clearly define the value-added. Partnerships are still experimental efforts involving a steep learning curve, and showing signs that they have to evolve further as well as innovate in order to produce the expected benefits. All three partners referred to learning as one of the most important intangibles.

Business and NGOs had both different and overlapping motivations that made them propel into cross-sector alliances. The partnerships have to be configured to satisfy a variety of different motivations, resulting in complex stakeholder management. For the NGOs, it is about designing new development models, due to an instrumental need of resource enhancement and idealistic need to deliver more sustainable and efficient solutions. The analysis shows clear signs of NGOs beginning to realize the importance of classical business skills, such as management, marketing, and technical systems that companies can provide. Looking at the business, the partnership fit right into the wider strategic sustainability “umbrella” of the corporation, notably the employees are central stakeholders. It is argued that a business’s approach to CSR and perception of its own responsibilities need to evolve to higher levels according to Austin’s Collaboration Continuum to produce valuable synergies in a partnership with an NGO (Austin, 2000).

Finally, the analysis shows a Bandwagon effect throughout the sectors, where the reason to form a partnership is because everybody else is doing it, and both NGOs and businesses do not want to miss out on potential benefits.

Citation

Nielsen, L.H. and Neergaard, P. (2018), "Value Creation from Strategic Partnerships between Companies and NGOs", Stakeholders, Governance and Responsibility (Developments in Corporate Governance and Responsibility, Vol. 14), Emerald Publishing Limited, Leeds, pp. 3-32. https://doi.org/10.1108/S2043-052320180000014001