Business outcomes of strategic partnerships with NGOs: A case study of actors in the Norwegian aquaculture industry

Kjell-Kristian Sæther & Rikke Linn Salbu

Student thesis: Master thesis

Abstract

Globalization, stakeholder activism and increased power from media and Non-Governmental Organizations (NGOs), have resulted in companies and industries concentrating more attention and emphasis on reputation management than ever before. Companies in the 21st century need to provide a decent return on shareholders’ investments, while simultaneously being socially adjusted and environmental responsible. Furthermore, companies have multiple stakeholders with different needs and expectations. In order to remain profitable with a strong reputation all these demands must be satisfied. This extended focus on reputation and environmental responsibility has also resulted in new cross-sector partnerships between NGOs and businesses. These forms of collaboration have become increasingly popular, and are highly appreciated by many actors, including governments and environmentally aware customers. Research states that these partnerships give companies stronger reputation, while simultaneously contributing to solve environmental and social challenges facing the world. In this thesis, the authors have investigated how strategic NGO-business partnerships influence companies’ corporate reputation by working together on a common problem which they both would like to see solved. Additionally, the authors have investigated which criteria that are required to have a beneficial partnership, from a business perspective. The first part of the analysis suggests that businesses engage in NGO-business partnerships due to the increased focus and institutionalization of Corporate Social Responsibility (CSR) in the western world. This area of concern has led to more demanding stakeholder expectations regarding initiatives in this respect. Hence, NGO-business partnership can be seen as a response to stakeholders’ requirements. Furthermore, these partnerships show the outside world that the company has a social conscience, and take the NGOs and the public seriously. This may simultaneously give a positive reputational effect. This case study consist of companies and NGOs, where some of them were involved in strategic NGO-business partnerships and others not. The authors were able to find positive outcomes, along with obstacles and challenges that can explain how these partnerships influence companies’ reputation. The most important positive consequences were: increased trustworthiness, improved awareness and responsiveness on relevant issues in the environmental movement, help to dispel false rumors regarding the company, and support to become more sustainable. The challenges emphasized by our respondents were: the legitimacy of the partner NGO, the danger of being accused of greenwashing, and the ongoing dilemma of short term profit vs. having a sustainable production. In order to cope with these challenges and have a meaningful and beneficial partnership it is essential that the companies are willing to change and that the participants create a common understanding and language. Additionally the firms should have concrete and common goals with involvement from all levels of the company- from top management to the “blue-collar” worker. Lastly, both parties need to have sufficient knowledge about the field of interest and a dialogue characterized by openness and trust. Through our case study it became evident that companies involved in NGO-business partnerships are hesitant to communicate their partnerships extensively. External communication can be a tool to create positive public awareness but also fuss. In general, public awareness around a partnership is likely to help companies in their reputation management, and make both parties work harder to reach their common goals, as awareness also generates expectations. Lastly, it is important to note that the partnerships in this thesis represent strategic partnerships - where the goal often is to improve companies’ production and procedures in order to make them more sustainable. This is essential as there are other forms of partnerships that are more philanthropic, and it is likely that these will have different outcomes and criteria for success. In the discussion we elaborate on why there are not more strategic partnerships between NGOs and businesses, and argue that many companies feel that they cannot meet all the criteria for success due to lack of resources or simply do not trust NGOs.

EducationsMSc in Strategy, Organization and Leadership, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2012
Number of pages119