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NGOs and the Creation of Value in Supply Chains

Author

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  • Chatain, Olivier
  • Plaksenkova, Elena

Abstract

Firms and NGOs often collaborate to establish new supply chains. With a formal model, we analyze how NGOs can alleviate market failures and improve supplier economic inclusion while strategically interacting with firms. We account for the specific goals of the NGO and the need to induce collaboration between firms and their suppliers. The analysis reveals a "valley of disappointment", when NGO efforts benefit all actors but only marginally the firm. We also show that more powerful firms might prefer to internalize NGO functions, while firms with lower bargaining power and higher investment requirements are better off collaborating with NGOs. Finally, we study NGOs-firms matching patterns and find that firms with higher bargaining power match with NGOs holding stronger capabilities.

Suggested Citation

  • Chatain, Olivier & Plaksenkova, Elena, 2017. "NGOs and the Creation of Value in Supply Chains," HEC Research Papers Series 1191, HEC Paris.
    • Handle: RePEc:ebg:heccah:1191
    DOI: 10.2139/ssrn.2925276
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    Cited by:

    1. David Gaddis Ross, 2018. "Using cooperative game theory to contribute to strategy research," Strategic Management Journal, Wiley Blackwell, vol. 39(11), pages 2859-2876, November.

    More about this item

    Keywords

    NGO; Non-Governmental Organizations; Nonprofit; Firm-NGO Collaboration; Value Creation;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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