Partnership among NGOs
How changes in resource endowments and their availability influence the relation between local and international NGOs?
Abstract
Non-governmental organizations (NGOs) have important grounding in our welfare system. The cooperation between local NGOs (also named Southern NGOs, SNGOs) and international NGOs (also named Northern NGOs, NNGOs) is examined in this thesis. The Resource-Based View (RBV) and Resource Dependency Theory (RDT) from strategic literature are used to shape propositions about creating legitimacy, achieving self-sustainability of the SNGO, partnership between SNGO and NNGO, external environment and usage of resource. The findings contribute to the understanding of how the creation of legitimacy differs between environment and social-centered SNGOs and the different types of self-sustainability that can be achieved. Results about the external environment show the need of the SNGO to partner with the NNGO to achieve their mission(s).
University of Amsterdam Thesis April, 2014 Claire de Jager Studentnumber: 10409890 1st Supervisor: Dr. J. Lindeque 2nd Supervisor: Dr. ArnoKourula
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Table of Content
1. Introduction ...3
2. Literature Review ...6
2.1. Non-Governmental Organizations ...6
2.2. Partnership and External Environment ... 11
2.3. Partnership: Resource-based View (RBV)... 17
2.4. External environment: Resource Dependency Theory (RDT) ... 26
2.5. Dissolve Partnership: Combine RBV and RDT ... 30
2.6. Summary ... 32
3. Methodology ... 34
3.1. Multiple-case Study Research Design ... 34
3.2. Research Philosophy... 35
3.3. Selection Case Studies: Countries ... 36
3.4. Selection of Embedded Units of Analysis: SNGO and NNGO participants ... 39
3.5. Semi-Structured Interviews ... 46
3.6. Analyzing Interviews ... 47
4. Results ... 49
4.1. Results Environmental SNGOs ... 49
4.2. Results Social Centred SNGOs ... 54
4.3. Cross-case analysis ... 58 5. Conclusion ... 63 Appendix I ... 66 Appendix II ... 69 Appendix III ... 72 Appendix IV ... 74 References ... 75
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1. Introduction
Over the past decades, the number of non-governmental organizations (NGOs) has been growing as cause of an increased attention to humanity and our natural environment. Internationalization of the aid-system is initiating multiple unsatisfied needs, which are partly addressed by NGOs. Increasing needs and wants to reduce poverty, to maintain the environment and to establish equal human rights and emergency aid, provides grounds for the numerous NGOs arising (based on Fowler, 2000; Hudock, 2006). NGOs emerge in similar sectors across countries, as a result multiple NGOs are supporting the same objective(s), since the nineteen-seventies, ‘partnership’ has been a guiding principle for NGOs operations with a mutual cause or objective (Fowler, 2000). Partnership occurs often between Southern (local) NGOs (SNGOs) and Northern (international) NGOs (NNGOs) (Lewis, 1988).
Partnerships have been used by NGOs in the past and continue to be important. Partnering is a general accepted strategy for NGOs in the literature (based on Lewis, 1988). However, the literature does not address the critical factors that influence partnership between NGOs. Studying these factors is important to understand the nature and effects of cooperation between NGOs, as well as how these features have changed over time. Therefore, the aim of this thesis is to evaluate shared and external characteristics (Southern NGOs shared resource endowment and its dependency on the external environment consisting of government, firms, etc.) that could have positively or negatively influence the partnership, and thus the effects on the accomplishment of the goals/targets of both NGOs.
This thesis analyzed partnerships between Southern NGOs (SNGOs) and Northern NGOs (NNGOs) from a resource perspective. The term “resources” includes all financial and non-financial assets that an NGO possess (based on Eisenhardt, 1996; Grant, 1991; Barney, 2001, Silverman, 1999, Das and Teng, 1998). By analyzing the SNGO from a resource perspective, an extended theoretical model is proposed. The resources accessed by SNGOs flowing from partnership with NNGOs and external resource environment (e.g. their home government and firm’s active in the Southern country) influences the ability of the SNGO to perform their goal. This in turn influences the relationship between the SNGO and NNGO. Therefore, the effect for SNGOs to access shared resources by partnering with NNGOs and also interaction with the external environment is analyzed. This leads to the research question: How do changes in shared and external resource endowments and their availability influence the
4 partnership between SNGOs and NNGOs? In other words, how does the availability of shared and external resource factors (resources and alliance capability) influence the cooperation between international and local NGOs?
Two theories, from the strategic management literature, are used to explain the changing relationship between SNGOs and NNGOs by examining the shared (shared resources among NGOs; partnership) and external (stakeholder) environment of the partnership. The cooperation between SNGOs and NNGOs is explained by the Resource-Based View (RBV). The external environment (government and firms) is explained by the Resource Dependency Theory (RDT). In other words, this thesis explains how a widened resource base of SNGOs by accessing partnership with NNGOs or by cooperating with the external environment, influence the relationship between SNGOs and NNGOs.
To answer the main research question, seven cases are analyzed. These seven cases of NGO ‘partnership’ are found across four countries in Africa, with an NGO focused on environmental and another SNGO addressing social objectives studied in each of the focal countries. Thus, a multiple-case study approach with embedded units of analysis is taken, allowing within case and cross case analysis and so strengthening the credibility of the findings of the study (Eisenhardt, 1989; Yin, 2003). The four focal countries are Namibia, South Africa, Kenya and Tanzania.
Results show different ways of creating legitimacy for environmental and social-centered SNGOs. Whereas, environmental SNGOs focus on the importance of the problem, social centered SNGOs mainly focus on the ability they have to solve the problem. Furthermore, results suggest two types of financial self-sustainability. First, complete sustainability where no financial resources are needed because the SNGO has income-generation. Second, financial self-support from local society and no need for financial embeddedness from the NNGO. The benefits of the partnership for the NNGO and SNGO depend on the type of sustainability that can be achieved according to the character of the SNGO. Results about the external environment show consistency across the help received from the NNGO. SNGOs need their partner NNGO in the first phase of their existence to start accomplishment of their mission(s). If this need will be reduced once the external environment is developed, depends on the type of sustainability that can be achieved.
5 The study makes a contribution in two ways, first, a new theoretical view is proposed by examining partnership between NGOs from a resource perspective. This gives new insight regarding the efficiency and effectiveness of the partnership between NNGOs and SNGOs concerning their shared and external resources availability to the SNGO. Second, the strategic management literature is used and applied in the non-profit field, reflecting the position of the resource perspective as a key pillar in this literature (Barney, 1991; Das and Teng, 2000; Pfeffer and Salancik, 1987; Hillman, et. al, 2009). The theoretical perspective builds on the Resource-Based View (RBV) (Barney, 1991; Peteraf, 1993) and Resource Dependency Theory (RDT) (Pfeffer and Salancik 1978) from the strategic literature. Both theories are applied to the non-profit sector, as is done by Kong (2008) to a limited extent. This thesis has developed an extensive theoretical framework of applying resource theories grounded in the strategic management field to the non-profit field. This is done by analyzing the models and concepts about alliances in the RBV and RDT from a strategic management perspective. Only insights about alliances will be used and applied to the non-profit field.
In the next chapter, the main contribution to the literature relevant for this thesis is discussed. Chapter 3 explains the methodology for selected cases and analysis (within-case and cross-case analysis). Chapter 4 outlines the results of the interviews and the last chapter concludes.
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2. Literature Review
This chapter analyzes existing literature about NGOs and partnership between NGOs. The first part of this chapter outlines a definition of NGOs, framework of important stakeholders in their environment; indicate different levels of partnership between NGOs and their legitimacy reasons. The second part analyzes partnership from a resource perspective. The perspective obtained by the Resource-based view (RBV) regarding alliances (in non-profit terms; partnership) will be used to explain the benefits from a partnership between Southern NGOs (SNGOs) and Northern NGOs (NNGOs) (chapter 2.3). The external environment of the South (e.g. government and firms) is evaluated by using insights from the Resource Dependency Theory (RDT) concerning their understanding of alliances (chapter 2.4). The last part of this chapter will display possible scenarios when partnership between SNGOs and NNGOs will be terminated considering the conditions met by the RBV and RDT. In this chapter a distinction is made between working assumptions and working propositions. Working assumptions are statements that are fundamental and assumed to be true while working propositions are expected outcomes drawn from a theoretical understanding.
2.1. Non-Governmental Organizations
With the increasing importance of NGOs, scholars have pointed out interesting phenomena and learned more about the context in which these organizations work. Three terms have been used to describe a charitable organization: NGO, private voluntary organization (PVO) and nonprofit organization (NPO) (Vakil, 1997). Throughout this paper, the term NGO will be used to refer to all three descriptions (disregarding the debate about minor differences between definitions, which do not influence the objective of this thesis).
Several authors have defined the term NGO (or substitutes to it) (Salamon and Anheier, 1992a; Gorman, 1984; Korten, 1990; McCarthy et al., 1992; Gordenker and Weiss, 1995; Martens, 2002; Vakil, 1997), but no general definition has been accepted (Vakil, 1997). There are however some features that are generally recognized by several authors (Salamon and Anheier, 1992a; Gordenker and Weiss, 1995; Martens, 2002; Vakil, 1997) and institutions (United Nations, 1950; World Bank, 2001; Overseas Development Institute Organization for Economic Co-operation and Development, 2011): an NGO works independently (no form of control by any government or business), it is perceived as an open system (continuously interaction with its environment), it will have a non-profit structure, it will be non-criminal and non-violent, and it will mostly depend on donations (financial and non-financial) and
7 volunteers. By listing these characteristics of NGOs, their existence is based on altruism and voluntarism. For the purpose of this thesis, an NGO is defined as an independent voluntary private organization that satisfies a common purpose by serving human or environmental needs on a local, national or international level (Willetts, IHRM; Gordenker and Weiss, 1995; World Bank, 2001). Closely related to the classification based on the demographic level of the working area of an NGO (local, national or international level), is the distinction made between NGOs working in developed and less developed countries (Lewis, 1988; Elliot, 1987). This twofold is often called North and South and is used in the NGO field: Northern NGOs (NNGO) and Southern NGOs (SNGO) both originally found in respectively industrialized parts of the world (e.g. Europe, US, etc.) and less developed parts of the world (e.g. Africa, parts of Asia) (Lewis, 1988). In most cases, NNGOs are working on an international level, while SNGOs are working at a local or national level in their country of origin (Elliot, 1987). This leads to a difference in their resource (assets, capital, support, property) availability. SNGOs are found in less developed countries and thus conceptualized as resource (asset) poor (Fowler and James, 1994) and located in a resource-poor environment (Hudock, 2006). Contrasting, NNGOs have a rich initial resource endowment and also founded in a resource-rich environment (ibid). This lead to working assumption 1.
Working Assumption 1: SNGOs are established as resource poor entities (poor initial endowment of required resources) and located in a resource poor environment (required resources are not present in their external environment).
Between and across North and South, different stakeholders interact with each other. There are three main stakeholders relevant to NGOs in the Northern and Southern countries: government, firms (Lewis and Sobhan, 1998; Atack, 1999) and civil society (Brown and Tandon, 1994; Chambre, 1997; Atack, 1999). Figure 1 (see next page) conceptualizes the relationships between the actors in the non-profit environment relevant for NGOs, including the connection between industrialized and aid-recipient countries and Southern civil society.
8 Figure 1. Conceptualization of players in the non-profit environment and actors related to
NNGOs and SNGOs, including Civil Societysouth Source: Author
In general, the goal of an (S/N)NGO is to address minority concerns that are not addressed by the government, businesses or other stakeholders in society. For example, Vakil (1997) states that the goal of NGOs is to improve “the quality of life for the vast majority of the world’s peoples” (p. 2068). Another example of a goal is outlined by Schwartz (2004); “improve capacity and awareness […] to implement environmental protection policies” (p. 44). Specifically to the goal of SNGOs, the question arises why, with that many stakeholder who contribute to Southern society (see figure 1), do so many SNGOs exist and why the number of new SNGOs is still rising (Hudock, 2006). Fowler and James (2004) argue as a reason for the rise of SNGOs the perceived gap in civil society not addressed by other stakeholders in the Southern country (e.g. the government or firms) or NNGOs, therefore, private aid is needed. Giving private aid can take form in many ways, in some contexts SNGOs will link governments and communities (Stromquist, 1998). In other contexts, SNGOs “are essential to act as the voice of the suppressed conscience […] and, especially, to help visualize societies and relations among individuals and groups that are based on more egalitarian and ethical rules and assumptions” (Stromquist, 1998, p. 66). Meaning, there is a need to direct resources to solve a certain problem in society but the external environment does not hold these resources (or holds theses needed resources partly) to address or successfully address that problem. Efficiency reasons might be part of the explanation why NNGOs do not address that
Governmentnorth
Firmnorth
Governmentsouth
NNGO SNGO
Civil Societynorth
Firmsouth
Civil Societysouth
= possible co-operation or overarching entity = possible partnership between entities = flow of value
9 need directly in Southern civil society. This does not mean that the presence of SNGOs will guarantee successful attainment of their goals, it only creates attention and possible action to permeate civil society with the mission of the NGOs (Stromquist, 1998). This leads to working assumption 2.
Working Assumption 2: SNGOs are found to meet a need not (successfully) addressed by other stakeholders in southern society (government and firms) or NNGOs.
To increase the chances of successfully addressing the need in society, SNGOs have to achieve legitimacy (Atack, 1999). Without acceptability from society, the ideas and work of the SNGOs will be rejected, in other words, SNGOs need to earn “the right to assert leadership, to organize people, and to allocate resources” in civil society (Bratton, 1989, p. 570). Legitimacy is defined by Edwards (1999), who applied the concept from businesses to NGOs, as “having the right to be and do something in society - a sense that an organization is lawful, proper, admissible and justified in doing what it does, and saying what it says, and that it continues to enjoy the support of an identifiable constituency” (Edwards, 1999, p. 258). There are several ways to create legitimacy, but as is pointed out in the literature “NGOs’ legitimacy […] is increasingly linked to their resource base” (Tandon, 2001, p. 57). Logically, when NGOs have an extensive, specialized and varied resource base, they will be more legitimate than others to adress problems in civil society. Or when (S)NGOs, who experience limited resource availability, are able to use their resources in a most effective and efficient way. In that manner, (S)NGOs have a greater chance of succesfully satsify their goals or solution/reduction to a perceived problem in society (Lister, 1999; Brown, 1990).
According to Edwards (2002), there are two ways an NGO can justify “the right to do what they do and say what they say” (p. 58), that preferably, interact and mix with each other. First, legitimacy is created through social actor route, which claims that legitimacy is achieved by forming connections with members or equal associates (Edwards, 2002). Having linked legitimacy to the resource base of NGOs, the social actor route widens the resource base by sharing resources between NGOs or other entities. For SNGOs, partnership with NNGOs to share resources, is an example of how to achieve legitmacy via the social actor route. However, as Edwards (2002) claims, legitimacy through such a partnership does not include donation flows (e.g. one-directed flow of assets from NNGOs to SNGOs). Second, NGOs
10 achieve legitimacy through the market based actor route, which argues that NGOs claim legitimacy by their achieved results and their accountablility for succesfully accomplishing their goals (Edwards, 2002). In this case, the NGOs are dependent on the development of their external environment in which they work, when there is progress in the development of their area concerning (parts) their mission, they will achieve legitimacy. This legitimacy is created by the confirmation that the SNGO can effectively and efficiently use their resource base. The basis for legitimacy via this route is the self-financing and self-support of succesfully achieving (parts of) the mission of the SNGO (based on Esman and Uphoof, 1984; Bratton, 1990).
Thus, the thrid assumption is that legitimacy is needed for NGOs to exist over time (Atack, 1999). Looking from a resource perspective, NGO legitmacy is assumed to be achieved in two ways: social actor or market based routes (Edwards, 2002). The first includes, intensive connection with members or equal associates (partnership) to widen the NGO resrouce base. The second includes, (partial) successful development of the external environment by the NGO in order to prove to have a sustained resource base. Specifically for SNGOs, parntering with NNGOs and development of Southern government, firms and civil society (e.g. external environment)
Working Assumption 3: Legitmacy is linked to the specialization, effectivity, extensiveness and variety of the resources base of SNGOs. This type of resources base can be created by partnerships with NNGOs or development of the external enviornment.
The next paragraph explains different interactions between SNGOs, NNGOs and their external environment. Linked to partnership with NNGOs to achieve legitimacy for SNGOs, different types of partnerships are outlined and explained. Also the external environment, related to the second way of achieving legitimacy, is researched more in detail.
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2.2. Partnership and External Environment Partnership
Among different interactions between NGOs and with their environment (divided in North and South parts), cooperation is a commonly used strategy for NGOs to pursue their goals (e.g. Elliott, 1987; Fowler, 2000; Mohiddin, 1999). Cooperative agreements between three main players (NGOs, governments and firms) are actively researched (Dahan et al., 2009). All these players interact with each other on a local and international level. In the strategic management literature, cooperative strategy refers to two or more entities showing mutual beneficial behavior that allows all partner-entities to pursue their (similar) goals and do well in their environment (Axelrod, 1984; Nielsen, 1985; Dyer and Singh, 1998). Figure 2 shows possible cooperation and interactions in the non-profit fields. This includes connections between main partners relevant for NNGOs and SNGOs.
Figure 2. Relationships between players in the economic environment Source: Author
Note: Firmnorth and Firmsouth could be one and the same firm (e.g. a multinational firm both present in the industrialized country –North– and the local country –South–).
As shown in figure 2, there is a possible cooperative connection between SNGOs and NNGOs. The strategic management definition of cooperative strategy can directly be applied to the non-profit sector; two or more NGOs (in this case SNGOs and NNGOs) can collaborate to pursue their (common) goal(s) (Dahan et al., 2009). In other words, when NGOs collaborate, they will enhance and/or upsurge their own goal but also the goal of their partner-Governmentnorth Firmnorth Governent south NNGO SNGO Firmsouth
= possible co-operation or overarching entity = possible partnership between entities
12 NGO (based on Axelrod, 1984). The use of cooperative strategies between NGOs is often called “partnership” in social science (Mohiddin, 1999; Lewis, 1998). Partnership is defined as “a temporary social arrangement in which two or more social actors work together towards a single common end requiring the transmutation of materials, ideas, and/or social relations to achieve that end” (Roberts and Bradley, 1991, p. 212). The term “accompaniment” or “collaboration” is also used to describe partnership between NGOs (Lister, 1999; Lewis, 1998). Partnership between NGOs occurs frequently between NNGOs and SNGOs (Lewis, 1998) to increase the possibility of successfully accomplish their goal.
Different types of partnerships between NNGOs and SNGOs have received significant attention in the literature. Fowler and James (1994) and Lewis (1998) argue the essence of the changing relationship between NNGOs and SNGOs, perceiving different shifts of interactions between NNGOs and SNGOs. They conceptualize a donor- relation versus an active involved relationship between SNGOs and NNGOs. Mohiddin (1999) distinguishes between a “free” and “imposed” relation between partners. A free relationship between NGOs is created when they are based on shared objectives and ownership whereas an imposed relationship is forced by the NNGO but beneficial to the SNGO (ibid). Combining these views, three different levels of interaction between NNGOs and SNGOs can be constructed. At the lowest level, there is no relationship; NNGOs implemented their own program in the aid-recipient country. A “donor”-partnership results in an asset flow from North to South, also called a dependent-partnership. The last type is an “active” partnership; this includes an ongoing and intensive relationship of sharing assets. Note that the term “donor” relation might be confusing since the term refers in this thesis not only to financial donations, it also includes other financial and non-financial assets. The main importance of a “donor” relation is the absence of resources given in return from the SNGO to the NNGO as is the case with an intensive relationship. Overtime the interaction between NNGOs and SNGOs can shift between the different types of interactions between NNGOs and SNGOs.
Figure 3. Interaction between NNGOs and SNGOs in terms of resource exchange Source: Author
NNGO
SNGO SNGO SNGO
NNGO NNGO
13 External Environment
The external environment is of great importance for the NGO. As explained before, the existence of NGOs is based on needs not adressed by their external enivronment (Fowler and James, 2004). At the same time, NGOs try to improve their external environment (Edwards, 2002). The external environment in North and South differs with respect to their available resources (Hudock, 2006) and thus, in their power to execute their goals. As is assumed before, NNGOs are located in a resource rich environment. In this context, NNGOs largely depend on governments or firms located in the North or civil society for their funding (Malhotra, 2000) and critical resource supply. These organizations are most often self-supporting because they have a rich initial resource endowment (Hudock, 2006) that ensures their existence and embeddedness in Northern society. Several authors have research the frequent collaboration between Northern firms and NNGOs (e.g. Berger et al., 2004) and between the Northern government and NNGOs (e.g. Salm, 1999). Especially Northern firms are supporting (N)NGOs due to Corporate Social Responsibility (CSR) reasons (Weber, 2008). However, as Cowe (2006) suggested there are benefits from a partnership between (N)NGOs and business besides responsibility feelings because both contribute resources and expertise to the partnership. For both parties, it will help to “achieve something it otherwise couldn’t”, this can include achieving legitimacy for the NGO and allocate wasting or surplus resources for the business (Cowe, 2006, p. 2). The Northern government also has its stake in supporting the mission of NNGOs. According to Salm (1999) the Northern government is important for the NGO to back donations. However, the relationship between NNGOs and the government also disadvantages the NNGO because the initial missions of the NGO are to secure an “enhanced voice in public policy forums” (Salm, 1999, p. 91). By having partnerships with the government it could be that the legitimacy of NNGOs is jeopardized because of government funding, the “governments look to NGOs to fill the humanitarian and social welfare gap” that is important for governmental purposes and thus, not as an “independent check on government and corporate policies” (Salm, 1999, p. 96). Important to know about the Northern external environment for the purpose of this thesis, is their embeddedness in their external resource-rich environment which ensures the availability critical resources if these are missing in the initial resource endowment of the NNGO. This thesis will consider the external northern environment as given and not take their influence into account.
14 Contradicting, SNGOs are located in a resource poor environment. In this case, the SNGO cannot depend on the government or firms located in the South because of the unavailability of resources to support the goal of the SNGO. Little literature is found about partnerships between SNGOs and firms. Maybe due to the inability of research to study this particular niche or because of the inexistence (or not frequent existence) of a partnership between SNGO and firms in Southern society. Collaboration activities between SNGOs and Southern government are more actively researched. The main question raised is how Southern governments respond to the existence of SNGOs (Bratton, 1990). On the one hand, SNGOs “contribute to the improvement of living standards, a development goal to which [Southern] government are themselves committed” (Bratton, 1990, p. 7). On the other hand, “effective NGO initiatives may reflect unfavorable on the government’s performance” (Bratton, 1990, p. 8). Especially when the legitimacy of the Southern government is not secured (e.g. corruption) (Bratton, 1990). Important to know from the Southern external environment for the purpose of this thesis, is that SNGOs are not embedded in society to maintain and accomplish their goals due to the lack of critical resources missing in the SNGO’s initial resource endowment and impossibility of accessing these resources in their external environment.
Summing up so far, the context of sharing resources (between NGOs and the external environment) to create a wider resource-base for the SNGO can be divided into three different levels of cooperation. The first level (figure 4, white, next page) is the resource endowment owned by the NGO itself and not shared with any other entity. This internal resource availability will be held constant and only be assessed in terms of resource-rich or -poor. In other words, the internal resource availability will only be examined in joint perspective from the SNGO and NNGO, thus not separate analysis of how the internal resource endowment of the (S/N)NGO will influence the partnership between SNGOs and NNGOs. The second level is the partnership, conceptualized as the shared resources as result of the partnership between the two NGOs (light grey). Whereas the external environment is conceptualized as the other stakeholders influencing the partnership of the two NGOs (dark grey).
15 As argued, this thesis will focus on the shared resources between SNGOs and NNGOs and the dependency of the SNGOs on the government and business environment in their home country. All other interactions (as described in figure 1 and 2) will be considered to remain constant to enable the successful operationalization of the study. Therefore, the model will be conceptualized as in figure 5, which indicates the partnership between NNGOs and SNGOs marked with blue and the external environment, consisting of stakeholders in the southern home country, marked with grey.
Figure 5. Theoretical model. Source: Author
Figure 4. Different interaction and levels between NGOs Source: Author
Firmsouth
NNGO SNGO
16 In order to explain how SNGOs and NNGOs work together (first part of the theoretical model), the Resource-Based View (RBV) from the strategic literature is used. The second part of the theoretical model is explained by the Resource Dependency Theory (RDT). In the following two sections, the theory (RBV and RDT) will be shortly explained when applied in the strategic management field, especially with respect to alliances. Thereafter, the theoretical perspective on alliances will be applied to partnerships in the non-profit sector.
Before explaining the two theories, an important note has to be made. As noticed before, researchers who study the non-profit sector and performance of NGOs, apply theories and concepts from the strategic literature because not enough research has been done about theories in the non-profit sector. Especially resource factors and definitions (as well as theories such as resource-based view and resource dependency theory) are borrowed and applied from strategic management to the non-profit sector; there is not a specific resource theory developed to explain the performance of non-profits organizations (Kong, 2008). Therefore, Kong (2008) suggests that the resource-based theories from strategic management can be applied in a non-profit context.
In order to have sense of understanding of the non-profit, researchers use strategic theories “through the lens of strategic management development in the non-profit context” (Kong, 2008, p. 281). In his article, Kong (2008) discusses how strategic literature can be applied to the non-profit sector and what strategic theories are most relevant to explain performance of NGOs. Following the logic of Kong (2008) it is reliable to use theories about resources from strategic management directly applied to the non-profit sector. Logically, there are shortcomings of using theories developed for profit sectors to non-profit sectors. The most important differences, is not having a direct competitive force. In the business environment there is competition among firms for customers, innovations, prices, etc. This important factor is only partly present in the non-profit sector. In the non-profit sector, NGOs compete over “money, turf, and influence” (Dichter, 1999, p. 49). Resulting in similar behavior compared to firms in the business environment. In order to compete on these three factors, NGOs need to be more efficient, satisfy customers (donors) and differentiate by means of specialization (Dichter, 1999). These are similar pressures of the business environment also present in the non-profit sector. Although there exists some competitive pressures, the non-profit sector is mostly anti-competitive. This is important to keep in mind when using a competitive theory in a non-competitive sector.
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2.3. Partnership: Resource-based View (RBV)
In the strategic literature, the main objective is to explain differences in firm performance. Competitive strategists focus on the explanation why some firms are doing better than others and thus, achieving a competitive advantage (Rumelt, 2003). One theory that is used to explain these differences is the Resource-Based View (RBV) (e.g. Barney, 1986; 1991 and Peteraf, 1993). The RBV holds that firms are different because they possess different resources (Barney, 1986; 1991; Peteraf, 1993). The RBV explains a competitive advantage by acknowledging heterogeneity of firms: due to factor market imperfections, some firms require more relevant resources than other firms (initial resource endowment) (Barney, 1986; 1991; Peteraf, 1993). In order to understand insights of the RBV to explain changes in partnerships between SNGOs and NNGOs in the non-profit field, first, explanation is needed of what resources are. In strategic management literature, resources are defined as strengths of the organization (in terms of assets, skills, knowledge, etc.) to implement strategies to produce products or services (Daft 1983; Learned et al., 1969; Porter, 1981; Barney 1991). Bringing this definition to the non-profit field, resources are the strengths of the NGO to implement strategies to provide solutions or reduce problems in society.
A distinction is made between capabilities and resources. An organizational capability is the process of creating value for the organization through the transformation of (resource) inputs into (product or service) outputs (Grant, 1996). In other words, resources are the building blocks and capabilities are the ability to combine those inputs into valuable outputs (process). Both, inputs (resources) and processes to transform inputs into outputs (capabilities) are important influences on the relationship and dependency between NGOs. This thesis will underline the importance of resources but not neglect capabilities. The interest of this thesis is to assess the influence on a partnership of the resource configuration processes and the changes in the resource availability of the SNGO due to shared resources or external changes in the resource environment. Concerning resources, to enable the analysis of partnerships from a resource perspective, classification of resources is necessary. However, little coherence exists in the literature on the classification of different resources. The table 1 (next page) classifies the most important and influential categorizations and typologies in the strategic literature.
Taking a look at capabilities, there is a distinction made between dynamic capabilities and (organizational) capabilities. An (organizational) capability is defined as the above definition
18 used by Grant (1996); they are the daily operational routines to change resources (inputs) into products or services (outputs). When looking at dynamic capabilities, it is difficult to address concrete definitions because of incoherence in the strategic literature. Helfat et al. (2009, p.4) uses a more recent definition to describe dynamic capabilities; “a dynamic capability is the capacity of an organization to purposefully create, extend, or modify its resource base”. This definition does not only apply to the profit-field, but equally is relevant to the non-profit field because NGOs have a resource base and initiate change, like organization in the profit-field (Helfat et al, 2009). In other words, every strategic move that results in a change in the resource base of the NGO can be seen as a dynamic capability (Eisenhardt and Martin, 2000). Indirectly, a change in resource base will automatically change organizational capabilities (change in daily routines transforming inputs into outputs) because the inputs are changed; inputs are changed so the way inputs turn into outputs as well. This thesis will only assess the direct influence of changes in the resource base on the relationship between SNGOs and NNGOs. Therefore, it assumed that (organizational) capabilities are given and not directly influence the relationship between SNGOs and NNGOs and thus, not the objective of this thesis.
Looking at dynamic capabilities, a partnership (in strategic terms alliance) can be seen as a process to extend the resource base of both the NGO and the partner-NGO (based on e.g. Gulati, 1999; Lane and Lubatkin, 1998; Powell et al., 1996). The term used to address the ability to form (successful) alliances, is called “alliance capability” (Grant, 1990; Makadok, 2001; Thomke and Kuemmerle, 2002; Heimeriks and Duysters, 2007). Alliance capability can be seen as the ability of the organization to internalize and adopt knowledge obtained by the alliance (in the non-profit field termed partnership) (based on Eisenhardt and Martin, 2000; Kale et al., 2002). The concept includes available learning mechanisms to adopt external knowledge of the NGO-partner (alliance-partner) but also internal knowledge of identifying possible partners and initiating relationships (Heimeriks and Duysters, 2007). Research shows that the greater the alliance capability of organizations, the higher alliance long-term success (Kale et al., 2002). The study done by Kale et al. (2002) confirms this hypothesis in a business context, but it is assumed that this argument equally holds in the non-profit context. In order to assess the relationship in an NGO partnership and dynamic capabilities, the alliance capability is most relevant. The SNGO should be able to identify partner benefits and missing resources in the resource base of the SNGO itself that could be obtained through partnership. These two tasks will directly influence the benefits and success of the collaboration with the
19 A U TH O R S Eisenhardt (1996), Silverman (1999), Barney (2001). Grant (1991)
Das & Teng (1998) Hofer & Schendel (1978) Mahoney & Pandian (1992) Saltmarshe (2002)
Typology of Resources for non-profit sector Typology Examples R ES O U R C E C LA S S IF IC A TI O N
Tangible Resources Tangible Financial Financial Financial - Financial Cash flow, donations.
(Hofer & Schendel, 1978)
Physical Physical Physical Material Physical Buildings, machinery, equipment, inventory.
(based on Hofer & Schendel, 1978)
- - - Natural Natural Raw resources (like oil, etc.), water,
sanitation. (Saltmarshe, 2002)
Intangible Resources Intangible - - Intangible - Intangible Brand name, reputation, good will.
(Mahoney & Pandian, 1992)
Technological Technological Technological - Technological Quality improvement, innovations.
(Das & Teng, 1998)
- Organizational Organizational Cultural Cultural Corporate Culture, Working environment,
well-being of employees, traditions and history.
(Saltmarshe, 2002; Hofer & Schendel, 1978)
Personnel - Human Human Human /
social
Human Employees, volunteers.
(based on Hofer & Schendel, 1978)
Managerial Managerial - - Managerial Management.
(Das & Teng, 1998; Hofer & Schendel, 1978)
Table 1. Resource Classification Source: Author
20 Northern partner. Transformation of resources, ability to do research, and other sources of capabilities will indirectly influence the outcomes of the partnership between North and South and, therefore, not be part of this thesis. In the table below examples of what actions can be listed as the ability of forming a successful long-term partnership.
As shown in table 2, alliance capability can be divided in two main divisions: learning mechanisms and alliance experience. Both can be divided in other subdivisions. All terminologies used in table 2 are subtracted from literature in the strategic management field. Nonetheless, when looking at the definition, one sees that they are also relevant for the non-profit sector. For example, in the strategic literature, absorptive capacity is defined as the ability of a firm to process and assimilate new information and make use of that information (Cohen and Leventhal, 1990). Applied to the NGO field, when receiving new information it depends on the NGO how to make use of and integrate that information within their organization. Alliance mechanisms refers to the degree to which an organiztion (NGO) makes use of trainings, consultant, etc. to form an alliance (Heimeriks and Duysters, 2007). Alliance experience is also important. Logically, the more experienced an NGO is, the better it will be able to form alliances. Another subdivision is know-how generated from former alliances, defined as (tacit) knowledge that is embodied in the organizations to be able to perform certain tasks (Teece, 1995). Know-how relevant for forming alliance means the knowledge within the organization to form and pursue successful alliances (Kale et al., 2002). Also this term is relevant for the non-profit field, forming partnerships with NGOs requires know-how to form a successful partnership with another NGO/entity.
Alliance Capability Learning mechanisms Absorptive capacity
(Hamel et al., 1989; Grant, 1996b)
Alliance mechanisms (tools/training/use of consultants) (Heimeriks and Duysters, 2007)
Alliance experience Lessons learned
(Kale et al., 2002)
Know-how generated from former alliances (Kale et al., 2002)
Table 2. Typology of Alliance capability Source: Author
21 Outlining different definitions of resources and alliance capabilities applied to the non-profit field is important to understand insights from the Resource-based view (RBV) to explain relationship between Southern and Northern NGOs. Positioning towards a framework to explain cooperative agreement (partnership), in strategic terms alliance, the RBV suggests that firms have an option to exchange and access resource endowments of other firms
(Cantner and Meder, 2007; Das and Teng, 2000). As a result, there is access to a larger and
better resource endowment because both firms allow exchange of their resources and both firms will have a greater stake of creating more value (ibid) and executing their goal. Applying this logic to the non-profit field, resources are limited (Snavely and Tracy, 2000; Minear, 1987) and heterogeneous spread among NGOs. By cooperation both NGOs will have a greater stake of executing their resolution to a perceived problem in society or their purpose of reducing the perceived problem (Lister, working paper; Brown, 1990). More specifically positioned towards the relationship between NNGOs and SNGOs: a partnership between NNGOs and SNGOs is beneficial and relevant because of access to a greater pool of resources created and shared by both entities. Therefore, participating in a partnership is a beneficial and efficient way to optimize the execution the goal of both NGOs. Linking back to create legitimacy for the SNGO; by having a greater pool of resources and thus, optimize the statistical chance to successfully address the goal of the SNGO, legitimacy is created (based on Edwards, 2002). Even more forced, a partnership can be necessary in order to fulfill the goal of the SNGO because of missing resources in their internal resource endowment and not present in their near environment. As previously discussed, SNGOs are conceptualized as resource poor (Fowler and James, 1994) and located in a resource-poor environment (Hudock, 2006). While NNGOs have a rich initial resource endowment and also founded in a resource-rich environment (ibid). This could indicate why partnership among SNGOs and NNGOs are present; the missing resources in the SNGO will be (partly) gathered and transferred from the North and thus, creating legitimacy (based on Edwards, 2002).
In other words, due to the resource-poor conception of SNGOs, they will not have a sufficient resource base to fulfill their goal at their best on their own (financially or a lack of knowledge, assets, etc.) and they do not have enough support from their external environment (government and firms) to provide the needed resources. As a consequence, cooperation with NNGOs would provide an easy and quick solution because they possess the necessary and credible resources that SNGOs and their external environment are missing. In this way, legitimacy is created via the social actor route.
22 Working Assumption 4: By accessing a partnership with NNGOs, SNGOs access needed resources in order create a wider resource base, which implies a higher chance of fulfilling their goal(s) and creates legitimacy.
By accessing a partnership, it is desired to hold the most optimal partnership possible. Striving towards an optimal partnership, there should be mutual beneficial behavior in order to be economically logic and efficient (e.g. Axelrod, 1984; Nielsen, 1985; Dyer and Singh, 1998). Therefore, by accessing a partnership between SNGOs and NNGOs, there is mutual beneficial behavior when there is mutual exchange in some way. If there is no mutual beneficial behavior, it would be an unequal relationship (Kazibwe, 2000). Thus, an optimal partnership will be beneficial for both entities. For example, the SNGOs’ financial pool of resources will increase and the NNGO will receive knowledge of the local area (Kazibwe, 2000). This is a relatively quick solution to the limited resource availability of the SNGO’s initials resources endowment and the limited resource availability in the external environment. For the NNGOs it is a relatively quick solution in receiving specialized knowledge or satisfies parts of their mission, instead of starting from scratch and doing the work themselves.
Note that the type of partnership (outlined in section 2.2) can be linked to mutual beneficial behavior in terms of resource exchange or mission accomplishment. Both type of partnerships between SNGOs and NNGOs (a donor relation as well as an intensive relationship) can be mutually beneficial. A donor relationship can be mutually efficient in terms of mission accomplishment. For example, when the SNGOs financial resources are widened while the NNGO satisfies parts of their mission because of collaboration with the SNGO, both NGOs will entail mutually beneficial behavior. In this case it is important that the SNGO has an executive task in order to accomplish development and satisfy parts of the mission of the NNGO. Note that in this relationship no resources are exchanged, nor the successful accomplishment of goals by the existence of the SNGO is enough reason for the NNGO to collaborate. An intensive relationship will hold mutually beneficial behavior when, for example, the SNGO receive technological and organizational resources while the NNGO receives the familiarity of the brand name of the SNGO in the local area (trust from the local communities; intangible resources) or local knowledge. This example displays mutually efficient behavior in terms of resource exchange. Both ways lead to working assumption 5.
23 Working Assumption 5: In the short run, SNGOs and NNGOs will access a (donor or intensive) partnership when there is mutual beneficial behavior (in terms of goal-accomplishment or resources).
Considering mutual beneficial behavior in terms of resources (intensive partnership), there is a risk of inequality between partners overtime. Drabek (1987) argues negatives aspects related to the share of resources in the partnership environment of the NGO; there is low autonomy and self-reliance of SNGOs because NNGOs provide the most relevant and necessary resources (e.g. financial support). Because of the little autonomy and self-reliance a constant flow of resources from North to South is needed; support that never will increase the self-support of SNGOs and executing their purpose in the long run (based on Draek, 1987). This means, that in the long run there will be no mutual beneficial behavior. Thus, the partnership will become unequal and inefficient (Drabek, 1987).
Working Assumption 6: In the long run, partnership between NNGOs and SNGOs in which there is little autonomy and self-reliance in the nature of the SNGO participation will increase the dependency of SNGOs.
Working assumption 6 will negatively influence the SNGOs legitimacy, as pointed out by Edwards (2002) who states that legitimacy will not be achieved when there is no mutual beneficial behavior and solely a flow of resources from North to South (this neglects the mutual beneficial behavior in terms of goal-accomplishment for the NNGO, however, note that goal-satisfying relationship can also become unequal if the mission is satisfied). A more theoretical argument from the strategic literature can be used to explain how dependency in terms of resource exchange in the relationship between NNGOs and SNGOs occurs. In the literature, the term “partner resource alignment” is used. This term refers to the resource-based relationship between partners in an alliance (or in the non-profit field; partnership) (Das and Teng, 2000). It contains an examination of resources shared in partnerships in terms of resource similarity and resource utilization (ibid). Resource similarity refers to the degree to which the NNGO and SNGO contribute resources “comparable, in terms of both type and amount” to a partnership (Chen, 1996, p. 107). Resource utilization refers to the degree to which the NNGO and SNGO contribute resources that are utilized for achieving the common purpose of the NGOs (based on Das and Teng, 2000). The utilization of resources is divided in performing and non-performing resource, where performing resources are key to the
24 partnership while non-performing resources are not used but brought into the partnership because of inseparability with performing resources (ibid). Table 3 gives an overview.
Resource Utilization
Performing Non-Performing
Resource similarity Similar Supplementary Resources Surplus Resources Dissimilar Complementary Resources Wasteful Resources Table 3. Overview of Resources shared in a Partnership
Source: Adapted from Das and Teng (2000)
Resource alignment is supplementary when both entities contribute the similar performing resources to the alliance (or in the non-profit field; partnership) (Das and Teng, 2000). Both entities contributing supplementary resources, meaning risk sharing or efficiency due to economies of scale and scope (ibid). This will lead to synergy – two entities will create more value in a partnership than the sum of value created by the individual entity (ibid). However, when similar resources are not fully utilized in the partnership, it is called surplus resources (ibid). This means that there is an excess of the minimum amount of resources needed to achieve the goal of both entities (Nohria and Gulati, 1996). Complementarity refers to the different nature of resources (Das and Teng, 2000). Several authors implicitly state that that resource dissimilarity is causing an optimal partnership performance (based on Das and Teng, 2000, Hill and Hellriegel, 1994; Olk, 1997). When resources are different but not compatible, it is called wasteful alignment and in this case, resources cannot be integrated in an effective manner (Das and Teng, 2000).
When having an intensive partnership, NNGOs are more likely to share complementary resources to the initial resource endowment of the SNGO in the partnership, SNGOs are probably more likely to share non-performing or similar resources (surplus or wasteful resources) to the initial resource endowment of the NNGO in the partnership because they are smaller and do not have the wide resource endowment that NNGOs have built over time. Linking back to the resource classification in table 1, it can be hypothesized which resources are contributed to the partnership by SNGOs and NNGOs. In terms of a donor-relation, the SNGO itself can be seen as wasteful or surplus (i.e. the NNGO has multiple (optional) relations with SNGOs, a mutual goal is satisfied, etc.). This argument leads to working proposition 1a.
25
Working Proposition 1a: Overtime, a mutual exchange of resources will not be possible because the nature of most resources SNGOs contribute to the partnership will be wasteful or surplus resources, and thus, irrelevant for the NNGO in the long term.
When the SNGO shares complementary resources, the relationship between SNGOs and NNGOs might be equal at the start at the partnership. However, the capacity of the NNGOs to absorb, copy and build on these complementary resources shared by SNGOs is much more advanced in comparison with SNGOs. In this case, SNGOs cannot built or copy the complementary resources from NNGOs because they do not have the capacity and ability to do so but NNGOs can do so. The SNGO will become dependent on the resources of the NNGO (Tandon, 2001). This means that, when the NNGO shares complementary resources, SNGOs cannot enjoy the benefits of the resources because they do not have the dynamic capabilities to do so. In other words, SNGOs have widened their resource base by accessing the resource base of NNGOs but efficient and effective integration of these resources will be difficult, if not impossible. Giving examples, the SNGO receives financial resources but does not know how to efficiently use the donations or what is the most effective way to use the donations. Another example, the SNGO receive technological resources but does not know how to efficiently use these new innovations or what is the most effective way to use these innovation. In both cases there is no mutual beneficial behavior.
In other words, the dynamic capability to form and pursue an alliance (outlined in table 2), that is an important factor when analyzing the effect of the partnership between SNGOs and NNGOs, will be limited for the SNGO. It is more likely that NNGOs are more able to form alliances because they have the right learning mechanism (absorptive capacity and alliance mechanism) in place. Also it is likely that they are more experienced when forming alliances (lessons learned and know-how generated from former alliances). This leads to working proposition 1b.
Working Proposition 1b: Overtime, a mutual exchange of beneficial resources will not be possible because the nature of resources NNGO contribute to the partnership need “alliance capabilities” (absorptive capacity, learning mechanism, lessons learned and know-how) which are only limitedly present in SNGOs.
26 The above propositions suggest that in the short run, effect of a partnership between SNGOs and NNGOs will be positive. However, aspects of the partnership overtime will be negative. Therefore, the effect of the partnership will not be socially desirable in the long run. In fact, the SNGOs will not be helped (and therefore the Southern social society as well) by having a constant flow of resources from North to South without any returns (i.e. no mutually beneficial behavior). Therefore, working proposition 1a and ab suggests that partnerships can only be relevant when the right resources and capabilities (or exclusive mission-fulfilment in the local area) are present in both the SNGO and NNGO. In other cases, partnership between SNGOs and NNGOs is not beneficial and thus, not desirable. This would mean that the shared resources in partnership will have a negative effect on the partnership when SNGOs contribute wasteful and/or surplus resources and when the SNGO has limited ability to from an alliance (alliance capability). More precisely, shared resources will have a positive influence on the partnership in the short run but will likely be inefficient in the long run.
Pointing out the little self-support, one could think that, overtime, SNGOs are fully dependent of the NNGO. However, providing the necessary resource endowment in order to execute their purpose can also be externally achieved. Therefore, also the external environment is important in order to create SNGOs that aim at continuity and existence in the long run. To this point, the theoretical framework only examines the influence of shared resources and not the development of the external environment on the possibilities to widening the resource base for SNGOs. However, what happens to the relationship between SNGOs and NNGOs when the external environment develops? The external environment will be explained by the Resource-dependency theory from the strategic literature.
2.4. External environment: Resource Dependency Theory (RDT)
In the strategic literature, the Resource Dependency Theory (RDT) argues that the firm is dependent upon its environment (Pfeffer and Salancik, 1987). In general, the RDT “recognizes the influence of external factors on organizations” (Hillman, et. al, 2009, p. 1404) and the access to resources provided by the external environment to the firm. According to this theory, organizations obtain a competitive advantage by using resources from the external environment which, combined with internal resources, provide greater value or lower cost for the consumer (Hillman, et. al, 2009). In other words, any outcome of a decision or action made by the firm will be interdependent with its environment, and thus depend on “more than
27 a single causal agent” (Pfeffer and Salancik, 1987, p. 40). This means that the outcome is always created by two or more factors and the firm is not solely responsible for its outcome on its own. For firms it is important to take dependency into account “because of the impact it has on the ability of the firm to achieve its desired outcomes” (Pfeffer and Salancik, 1987, p. 41). This implies that firms always need to consider actions and resource configurations of others. Especially when a firm needs specific required resources which are not present in their internal resource endowment and these resources are obtained by relying on others, dependency between the firm and other actors can be created (Pfeffer and Salancik, 1987). The level of dependency of a firm to its partner depends on the availability and demand of needed resources (ibid). When availability of the needed resources is high but demand is low, there will be a less dependency created between entities (ibid). Conversely, when demand of the resource is high but availability is low, a more dependent relationship is created.
Positioning towards a framework to explain cooperative agreements, in strategic terms alliance, the RDT explores how organizations can acquire critical scarce resources and reduce uncertainty and dependency on other entities (Pfeffer and Salancik, 1978). When an alliance is formed where the firm is entirely dependent on another entity because they possess the needed and critical resource, there will be great interdependence between the organization and entity (ibid). The possibility of only having the required resource obtained from one partner can be risky and creates uncertainty. Therefore, it is important for a firm to have multiple sources of requiring the needed resource (based on Pfeffer and Salancik, 1978). Applied to the non-profit field, the SNGO should create multiple sources of obtaining the required resources. This thesis considers their collaborative activities with the environment can be in the form of a partnership with NNGOs or collaboration with their external environment (e.g. government and firms). Reconsidering figure 5, multiple sources of access to critical resources for the SNGO can be achieved by having more collaborative agreements with other NNGOs or with collaboration of the SNGO’s external environment. This thesis will only considers the influence of the development of the external environment on the relationship between SNGOs and NNGOs and therefore, assume the (multiple) collaboration(s) with NNGO(s) as given. Thus, the RDT is only used to explain the influence of the development of the external environment on the relationship between SNGOs and NNGOs; the influence of the external environment on the partnership between SNGOs and NNGOs will be examined.
28 The main assumption of the RDT is that there is scarcity among resources. Scarcity is shaped in two ways (Leblebici et al., 1991). Either because there is finite supply of an increasingly used resource or because there is an increased demand of outputs that need that specific resources (ibid). When scarcity occurs, the need of required resources creates dependency with other entities that possess the needed scarce resources. Consequently, one relies on the actions of others in order to have a complete resource base in order to create output. The collaboration of an organization to another is not without costs, collaboration always inclines giving up a certain level of autonomy (Provan, 1984). Applied to the non-profit field, linking back to assumption number 1 (resource-poor conception of SNGOs), one might assume that “given their greater resource scarcity, smaller organizations [SNGOs] might be more inclined to give up their autonomy and develop formal types of collaborative activities to gain better access to critical resources” (Guo and Acar, 2005, p. 346). This in contrast with NNGO because of their resource-rich endowment and environment. Conversely, NNGO will be more independent because they already have access to critical resources. Either because they possess these in their initial resource endowment or because they are widely available in their external environment and therefore, have multiple partnerships providing the same critical resource.
In contrast to the NNGO’s environment, it is assumed that at the start of the partnership between SNGOs and NNGOs, the Southern external environment will be less developed. This can be stated because there are strong references present that SNGOs cannot generate a wider resource base from the external environment; therefore, lots of authors (e.g. Tandon, 2001; Husselbee, 2001) argue the dependence on the North. However, over time the external environment (government, firms, etc.) will be more developed, due to the work of SNGOs, firms entering the less developed country because of profitable expanding reasons, government stability etc. Therefore, it is assumed that overtime the external environment will become more developed and has the possibility to contribute to the resource base of the SNGO.
Working assumption 7: In the beginning of the existence of the SNGO, the external development will be less developed.
Working assumption 8: Overtime, the external development will develop and therefore, have the possibility to contribute to a wider resource base of the SNGO.
29 At the beginning of the existence of the SNGO, it is assumed that SNGOs are looking for partnerships with NNGOs because they cannot generate a wider resource base in their Southern external environment because the external environment in underdeveloped (based on Guo and Acar, 2005). SNGOs will be actively and more dependent on their Northern partner because their initial resource endowment is not sufficient to successfully accomplish their goal and needed resources cannot be generated from the external environment. This will stimulate the SNGOs to look for other resource backing, e.g. it will stimulate to partner with NNGOs. This leads to working proposition 2a.
Working proposition 2a: In the short run, the external environment will not have sufficient required resources to support the SNGOs activities, increasing the need for the SNGO to partner with a Northern NGO to establish a wider resource base and create legitimacy.
By having the option to partner with NNGOs because of limitedness in the external environment, there is dependency created between SNGOs and the North. Linking back to the development of the external environment over time, the RDT argues that the more developed NGOs (firms) are in terms of their external environment, the less dependent they are on their (strategic alliance) partner (Hillman et al., 2009; Sheth and Parvatiyar, 1992). Thus, the RDT theorizes that SNGOs should achieve a minimized dependency on a strategic alliance partner (NNGO) when the supply of resources from the external environment strengthens. Therefore, the more the SNGO is dependent on its external environment (e.g. local government or local/international firms), the less dependent the SNGO is on the partnership with the NNGO to achieve legitimacy and its goals. As assumed, when the external environment develops and therefore generate another possibility for SNGOs to widen their resource base, dependency between SNGOs and NNGOs is reduced. Because firms and governments located in the Southern country develop and increase potential assets and funds, the potential resource availability to share has increased. This means that the SNGOs will be able to widen their resource base by accessing this external pool of resources in their external environment. This makes the SNGO less dependent on the NNGO for their shared resources needed to fulfill or continue their goal(s) and achieve legitimacy.
30
Working proposition 2b: In the long run, the external environment will develop sufficiently to provide sufficient required resources to support the SNGOs, reducing the need for the SNGO to partner with a Northern NGO to establish a wider resource base and legitimacy.
Summing up so far, at the start of the existence of the SNGO, they can access their needed resources by partnering with NNGOs in order to fulfill their goal and achieve legitimacy. Because of the resource-poor environment of the South, partnering with NNGOs will be the most convenient option. However, as previously explained, the benefits of this partnership are only present in the short run. Overtime, the partnership will not entail mutually beneficial behavior between the SNGO and NNGO. In other words, the SNGO will become dependent on the NNGO. Congruently, overtime, the external environment will develop and provide a solid opportunity to widen the resource base of SNGOs. This will make the SNGO less dependent on the NNGO because certain resources can be obtained via another approach.
Note that it could be that the two scenarios (SNGO becoming dependent on the NNGO and development of the external environment) are congruent in time. However, it is more likely that the partnership between SNGOs and NNGOs excludes mutual beneficial behavior much earlier or later in time than the development of the external environment. The exact interaction between the two scenarios is not the objective of this thesis. This thesis is only concerned with the influence the two scenarios have on the partnership between SNGOs and NNGOs. This means that it is only argued that in the short run the external environment is underdeveloped but will become more developed when time passes. On the other hand, partnerships between SNGOs and NNGOs will at the start be mutually beneficial but in time become dependent. The time between the development of the external environment and the change from a beneficial to a dependent partnership can differ.
2.5. Dissolve Partnership: Combine RBV and RDT
Important is to sketch possible scenarios when the relationship between SNGOs and NNGOs is not mutual beneficial anymore from a resource-perspective but the external environment is developed enough to support the SNGO with the needed resources to perform their goal. Sketching these circumstances, one might see characteristics of a developed country. Are
