The Power of Activism: Assessing the Impact of NGOs on Global Business (original) (raw)
Related papers
American Economic Journal: Economic Policy
Activist nongovernmental organizations (NGOs) increasingly oppose firms’ practices. We suggest this might be related to the vulnerability of public regulation to corporate influence. We examine a potentially harmful industrial project subject to regulatory approval. Under industry influence, the regulator may approve the project even though it is harmful. However, an NGO may oppose it. We characterize the circumstances under which NGO opposition occurs and under which it is socially beneficial. Our theory explains the role that NGOs have assumed in the last decades, and has implications for the social legitimacy of activism and the appropriate degree of transparency of industrial activities. (JEL D21, D74, D82, L31, L51)
Watchdogs of the Invisible Hand: NGO monitoring and industry equilibrium
Journal of Development Economics, 2015
Globalization has been accompanied by rising pressure from advocacy non-governmental organizations (NGOs) on multinational firms to act in socially-responsible manner. We analyze how NGO pressure interacts with industry structure, using a simple model of NGO-firm interaction embedded in an industry environment with endogenous markups and entry. We explain three key empirical patterns in developing-country industries under activist pressure: the degree of exit under more intense activist pressure, the differential response of industries to NGO activism, and the general rise of NGO activism following globalization.
Inconsistencies in Activists’ Behaviours and the Ethics of NGOs
Journal of Business Ethics, 2009
Non-governmental organizations (NGOs) and pressure groups have taken up the mission of counterbalancing the huge power of the multinational corporations. Curiously, while most NGOs have a sincere ethical background and a genuine ethical motivation, the way some activist groups and NGOs themselves act does not always live up to the principles they advocate. Research using a multiple case study methodology is used to provide an illustration of various questionable practices followed by pressure groups revealing a range of tactics. The concerns, the objectives and the legitimacy of NGOs and activist groups will be discussed, along with their strategies and tactics. A framework will be developed as a basis for analysing the ethical aspects of the various NGO actions. The analysis of the cases will reveal some worrisome inconsistencies between the demands and the practices of NGOs and activist groups. Should not the means employed by activists and NGOs be consistent with their own espoused or implied values? As power gives responsibility, NGOs should be seen as having corporate stakeholder responsibility.
A Framework for Firm-NGO Collaboration
2007
We propose a framework for structuring corporate-NGO collaborations that are directed at responding beyond economic and philanthropic responsibilities to addressing ethical responsibilities. The framework outlines four different types of relationships that forprofit organizations and not-for-profit organizations can develop to more effectively address different types of social and environmental issues. The Need for Change The increasing emphasis on corporate social responsibility is creating pressure for corporations and NGOs to develop mutually beneficial relationships. Firms are able to provide funds to support the work of NGOs in solving societal problems such as literacy, nutrition, health care, disease and build public infrastructure such as hospitals, roads, bridges and sanitation facilities (Walsh, 2005). As a consequence, the number and scope of NGOs has increased dramatically, as has their clout with the business community (Argenti, 2004; Edwards, 2006; Teegan, Doh & Cachani, 2006). There are now over two million NGOs in the United States, and 190,000 in the U.K. Further countries like Russia, where many such organizations were excluded under communism, are now home to tens of thousands of NGOs (Edwards, 2006). Although firm/NGO relationships should represent a "win-win" outcome for corporations, NGOs, and society, pessimism has also grown as CSR initiatives are often viewed as public relations efforts, even lowering social welfare (The Good Company, 2005).
Corporations and NGOs: When Accountability leads to Co-optation
Journal of Business Ethics, 2012
Interactions between corporations and nonprofits are on the rise, frequently driven by a corporate interest in establishing credentials for corporate social responsibility (CSR). In this article, we show how increasing demands for accountability directed at both businesses and NGOs can have the unintended effect of compromising the autonomy of nonprofits and fostering their co-optation. Greater scrutiny of NGO spending driven by self-appointed watchdogs of the nonprofit sector and a prevalence of strategic notions of CSR advanced by corporate actors weaken the ability of civil society actors to change the business practices of their partners in the commercial sector. To counter this trend, we argue that corporations should embrace a political notion of CSR and should actively encourage NGOs to strengthen “downward accountability” mechanisms, even if this creates more tensions in corporate–NGO partnerships. Rather than seeing NGOs as tools in a competition for a comparative advantage in the market place, corporations should actively support NGO independence and critical capacity.
Journal of Management Studies, 2006
Corporate social responsibility (CSR) is an increasingly pervasive phenomenon on the European and North American economic and political landscape. In this paper, we extend neo-institutional and stakeholder theory to show how differences in the institutional environments of Europe and the United States affect expectations about corporate responsibilities to society. We focus on how these differences are manifested in government policy, corporate strategy, and nongovernmental organization (NGO) activism towards specific issues involving the social responsibilities of corporations. Drawing from recent theoretical and empirical research, and analysis of three case studies (global warming, trade in genetically modified organisms, and pricing of anti-viral pharmaceuticals in developing countries), we find that different institutional structures and political legacies in the US and EU are important factors in explaining how governments, NGOs, and the broader polity determine and implement preferences regarding CSR in these two important world regions.