Dancing with the Enemy: Overcoming Governance Challenges in International Corporate Citizenship Partnerships

39 Pages Posted: 25 Apr 2011

See all articles by Zahra Bhanji

Zahra Bhanji

University of Toronto

Joanne E. Oxley

University of Toronto - Joseph L. Rotman School of Management

Date Written: April 1, 2011

Abstract

In the face of increasing demands from stakeholders that they contribute to global economic, health and social development beyond the bounds of their immediate business activities, many MNCs active in developing countries have instituted corporate citizenship programs, leveraging their expertise and specialized resources in the creation of public goods. Many of these programs are implemented via partnerships with governments, NGOs, and local firms, which raise intriguing organizational and governance challenges. In this paper we explore these challenges, motivating our analysis with an illustrative case example of one high-profile corporate citizenship program in education, Microsoft Corporation’s 'Partners in Learning' program, focusing on the company’s partnerships with local organizations in two countries – South Africa and Jordan. We then assess the extent to which existing theoretical frameworks can illuminate the governance challenges confronting partners in corporate citizenship partnerships, and extend these frameworks to address two key features that we believe are inherent to this context: (i) the need for MNCs to address their potential 'liability of privateness' (in addition to the usual 'liability of foreignness') when implementing corporate citizenship investments; and (ii) limitations on the set of credible governance mechanisms available to participants in corporate citizenship partnerships. We describe a set of 'hostage arrangements,' which we argue may be useful in aligning incentives among alliance partners in this domain, and discuss how this extended governance framework may be applied in different institutional contexts

Keywords: Alliances, NGOs, Corporate Citizenship

JEL Classification: L33, M14

Suggested Citation

Bhanji, Zahra and Oxley, Joanne E., Dancing with the Enemy: Overcoming Governance Challenges in International Corporate Citizenship Partnerships (April 1, 2011). Rotman School of Management Working Paper, Available at SSRN: https://ssrn.com/abstract=1818066 or http://dx.doi.org/10.2139/ssrn.1818066

Zahra Bhanji

University of Toronto ( email )

105 St George Street
Toronto, Ontario M5S 3G8
Canada

Joanne E. Oxley (Contact Author)

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-0305 (Phone)

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