Social Alliances: Company/Nonprofit Collaboration

Multinational Corporations at the Base of the Economic Pyramid: A Strategic Analysis Framework

“…First, partners in cross-sector alliances are fundamentally different, with different goals, dominant logics, and governance structures (Austin, 2000;Berger, Cunningham, and Drumwright, 2004;Doh and Teegen, 2003;Hardy, Lawrence, and Phillips, 2006;Kanter, 1999;LeBer and Branzei, 2010;Rondinelli and London, 2003;Waddell and Brown, 1997). Second, the objectives of B2N alliances are distinct from those of B2B alliances, as cross-sector alliances typically prioritize the creation of social value over economic value (Alvord, Brown, & Letts, 2004;Berger et al, 2004;LeBer and Branzei, 2010;Nelson and Zadek, 2000;Teegen, et al, 2004;Waddell and Brown, 1997;Waddock, 1991). This is particularly true at the BOP, where business models tend to explicitly combine social and economic goals (London, Anupindi, and Sheth, 2010;Prahalad, 2005;Simanis and Hart, 2008).…”

“…Cross-sector partners tend to share less in terms of organizational culture (Austin, 2000;Berger et al, 2004;Waddell and Brown, 1997), missions (Kanter, 1999;Rondinelli and London, 2003;Waddell and Brown, 1997), views about what constitutes performance and social value (Hardy et al, 2006;LeBer and Branzei, 2010), mindsets and professional language (Austin, 2000;Lucea, 2007), compensation practices (Preston, 1989;Weisbrod, 1983), organizational structures (Berger et al, 2004), governance structures (Doh and Teegen, 2003;Leete, 2000;Rondinelli and London, 2003), and, most importantly, organizational goals (Anheier and Ben-Ner, 2003). As a consequence, B2N alliances exhibit significantly different governance structures and pursue different objectives than B2B alliances both in developed countries (Rivera-Santos and Rufín, In press) and at the BOP (Rivera-Santos and Rufín, 2010).…”

“…While B2B alliances typically have objectives related to creating greater economic value for their partners (Lane and Lubatkin, 1998), cross-sector alliances tend to have objectives prioritizing the creation of social value through social innovation (Berger et al, 2004;LeBer and Branzei, 2010;Nelson and Zadek, 2000;Waddell and Brown, 1997;Waddock, 1991). Social innovation is "a novel solution to a social problem that is more effective, efficient, sustainable than existing solutions and for which the value created accrues primarily to society as a whole rather than to private individuals" (Phills, Deiglmeier, and Miller, 2008: 36).…”

“…In other terms, the commercial application of new knowledge will be more challenging in B2N alliances relative to B2B alliances, and competitive advantages in the form of increased flexibility, performance, and business innovation, which are typical of B2B alliances (Cohen and Levinthal, 1990;Zahra and George, 2002), will be more elusive in B2N alliances. By contrast, social innovations originating from B2N alliances will emphasize the creation of social value, in combination with economic goals (Berger, et al, 2004;LeBer and Branzei, 2010;Nelson and Zadek, 2000;Waddock, 1991;Waddell and Brown 1997), and the outcomes will accrue primarily to society rather than the firm. This reasoning leads to the following propositions:…”

“…-B2B partners are likely to share more in terms of org culture -B2B partners are more likely to share professional language -B2B partners are more likely to share views of what constitutes social value and how to obtain it -B2B partners are more likely to share similar missions at a fundamental level (e.g., profit) -B2N partners are likely to share less in terms of org culture (Austin, 2000;Berger et al, 2004;Waddell and Brown, 1997) -B2N partners are less likely to share professional language (Austin, 2000;Lucea, 2007) -B2N partners are less likely to share views of what constitutes social value and how to obtain it (Hardy et al, 2006;LeBer and Branzei, 2010) -B2N partners are less likely to share similar missions at a fundamental level (e.g., societal) (Kanter, 1999;Rondinelli and London;2003;Waddell and Brown, 1997) Assimilate New External K Similar knowledge processing systems facilitate internalization of new K from external sources (Cohen and Levinthal, 1990).…”