Dual Responsibilities of NGOs: Market and Institutional Responsibilities and Ethics

NON-GOVERNMENTAL ORGANISATIONS (NGOs) are facing an economic reality of cutbacks in funding. In this sense, their changing role is to create partnerships and strategic alliances with governments as well as with multinational enterprises (MNEs). NGOs have to enter the global membership of governments

and MNEs. However, such value can be enhanced if MNEs take into account the non-market advantages of partnering with NGOs, such as the social capital (Putnam et al. 1993) and institutional linkages of NGOs. Similar to two-level game analysis (Putnam 1988), understanding the partnerships between MNEs and NGOs needs to take into account the two key areas of economics: market versus social, cultural and institutional criteria. At the same time, the linkage to both institutions and markets leads to a greater responsibility for NGOs. From a pure market or economic perspective, MNEs may be relatively unwilling to undertake partnerships with NGOs.

However, due to globalisation, and the increase in public-private partnerships, some MNEs have begun to undertake such partnerships with NGOs: for example, Ford Motor company's proactive dealing with HIV/AIDS in South Africa, and Bank of America's partnership with The Natural Step (a Swedish environmental organisation). This article provides a conceptual and analytical framework that justifies the increased number of such partnerships between MNEs and NGOs throughout the global business environment. We analyse NGOs, in terms of potential partnership with governments and MNEs, and why such partnerships will accelerate in the future. We believe that such partnerships also have fundamental implications for business ethics and social responsibility.