Building Successful NGO‐Business Relationships: A Social Capital Perspective

Abstract

While NGO‐business relationships have much in common with buyer‐supplier relationships, the literature specifically indicates several additional challenges in achieving effective and efficient NGO‐business relationships. The present study seeks to understand how NGOs and businesses can overcome these additional challenges. From a practitioner’s viewpoint, we not only strive to acknowledge the complementarity of NGOs and businesses for implementing successful relationship practices but also seek to understand how these understudied cross‐sector relationships can be successfully built. We use a multi‐case study design to investigate nine NGO‐business relationships in a humanitarian context. This study contributes to the supply chain literature by demonstrating how social capital mitigates tensions within NGO‐business relationships, i.e., by indicating that social capital has not only a bonding, but also a bridging role when building cross‐sectoral relationships. In summary, our analysis enabled us to present a more generic process framework for creating social capital within NGO‐business relationships. It shows that trust within NGO‐business relationships appears to develop more naturally compared to commercial relationships, but that these relationships require more effort in terms of structural and cognitive capital to ensure that partners communicate and share knowledge efficiently, as there are inherent differences in goals and communication languages between NGOs and businesses.