The Power of one? How corporate-provided social and economic resources affect NGO dependence, relationships and outcomes within the NGO-corporate alliance.

Abstract

Cross-sector organisational collaboration with corporate businesses has become an operational prerogative for non-governmental organisations (NGOs) as they battle the current climate of reduced government funding and philanthropy. One result of these NGO-corporate partnerships is an imbalance of power, which arises from the control of resources between the parties. Whereas commercial organisations are able to provide tangible resources (such as money) NGOs can generally only provide intangible benefits (like legitimacy). These are more difficult to quantify and therefore often valued less. Whilst the concept of power is important our general understanding of its effects from the perspective of the NGO is still fairly limited. This investigation provides the opportunity to examine how specific aspects of corporate-provided resource-based power can influence the structural (dependence) and relational (relationship) characteristics of the NGO-corporate alliance and ultimately partnership outcomes. This research adopts Resource Dependence Theory (RDT) to examine the concept of power within the NGO-corporate alliance. RDT argues that organisations are not resource independent and rely on the external provision of resources, which increases their dependence on external actors. These actors (i.e. corporates) can gain power through the control of critical resources and can influence management and threaten organisational autonomy. The current study examines a factor of NGO-corporate alliances not previously captured: the effects of power through the corporate provision of economic (financial) and social (legitimacy) resources to the NGO. These aspects of resource-based power are postulated to play the key role in shaping the alliance structure, governance and outcomes for the NGO. The objectives of this study were investigated from the perspective of the NGO using a two-phase research approach. Firstly, a qualitative study was undertaken to explore the concept of power within the NGO-corporate alliance. The second phase involved a large-scale quantitative online survey. Using Structural Equation Modelling, the extent that power influenced NGO dependence and partner relations was analysed. In addition, the impact of dependence and relationship on the alliance outcomes was examined. Findings from the qualitative study indicate that power within these relationships is based on the social and economic resources contributed to the partnership by the corporate partner. Results from the quantitative study indicate that resource-based power significantly affects the NGO’s dependence on their corporate partner as well as the likelihood of building positive relationships with them. These alliances are more likely to have successful outcomes where the relationship and dependence between the partners is strong. However, when dependence is strong NGOs feel that the alliance is not effective, regardless of the goals they achieve. A number of contributions to existing theory are offered through this large-scale empirical study. First, a new approach to measuring resource-based power is conceptualised and tested. Second, this research extends current thinking about alliance outcomes by offering a new way of measuring both tangible and intangible results. Third, it adds to the existing theory regarding NGO-corporate alliance governance by proposing relationship governance as the most effective way of managing the partnerships for the NGO. Fourth, it responds to concerns regarding how dependence can affect NGOs that receive resources from corporates, highlighting the positive and negative effects dependence can have on alliance outcomes. Fifth, it confirms and extends the use of Resource Dependence Theory as a relevant framework in the exploration of NGO-corporate alliances.