Doctoral thesis: Close cooperation with for-profit companies more harmful than assumed for not-for-profit organizations
Close business cooperation can have a negative impact on the identity of not-for-profit organizations. This is something of a paradox since cross-sector cooperation is said to generate the most effective and innovative solutions to social and environmental problems.
In her doctoral thesis, “Cross-sector partnerships between companies and not-for-profit-organizations within corporate social responsibility: Aspects of legitimacy”, Heidi Herlin points out that not-for-profit organizations are particularly exposed to risks when engaging in close cooperation with large multinational or global companies.
“This is due to the complex supply chains of companies. If any of your subcontractors are implicated in a scandal, your company’s reputation may also come under fire. This can also harm your cooperation partners’ reputation,” says Herlin.
WWF, which is one of the organizations studied by Herlin, is a good case in point. Soon after WWF partnered with Coca-Cola, accusations began to surface blaming Coca-Cola for seeking to greenwash its operations through its cooperation with the environmental organization. The scandal naturally affected WWF as well.
Other organizations discussed in the doctoral thesis include the Red Cross and Folkhälsan in Finland. According to Herlin, not-for-profit organizations should preferably seek business cooperation that runs for a predetermined period (project-based cooperation) and their own staff can steer and control.
“Due to a lack of resources, not-for-profit organizations may find it difficult to choose the right business partner. Ideally, the cooperation partner should share the same values. However, there is a risk in blindly relying on companies’ sustainability reports, which may be distorted even if they sound reliable,” Herlin points out.
Moreover, instead of asking an outside “ethics expert” to choose a business partner, not-for-profit organizations should make the choice independently to ensure that the cooperation is relevant in view of their mission. For example, if the organization seeks to promote public health, a hamburger chain or fizzy drink company is probably not an ideal cooperation partner. Not-for-profit organizations must continue to have the freedom to criticize the business world and retain their identity instead of becoming too closely tied to the corporate world.
Heidi Herlin will defend her doctoral thesis in supply chain management and social responsibility at Hanken, in Helsinki, on 23 June 2021 at 12 noon.
Opponent: Ralph Hamann, University of Cape Town, South Africa
Custos: Nikodemus Solitander, Hanken School of Economics
Photo: Mikko Käkelä