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Collaborative Value Creation : A Review of Partnering Between Nonprofits

and Businesses. Part 2: Partnership Processes and Outcomes
James E. Austin and Maria May Seitanidi
Nonprofit and Voluntary Sector Quarterly 2012 41: 929 originally published online 13
September 2012
DOI: 10.1177/0899764012454685
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Nonprofits and Businesses.

Part 2: Partnership Processes
and Outcomes
James E. Austin1 and Maria May Seitanidi2
Abstract
In this second of a two-part focused review of the nonprofit business and corporate
social responsibility (CSR) literature, the authors present the third and fourth
components of the collaborative value creation (CVC) framework: the partnering
processes that unpack the value creation dynamics and the collaboration outcomes
that examine the benefits and costs on multiple levels. The authors suggest that
greater value is created at all levels of analysis, micro, meso, and macro, as collaboration
moves from sole creation to co-creation of value. The CVC framework assigns equal
importance to all forms of value (economic, social, and environmental), types of actors
(individuals, organizations, and societies), and time scales (short/long term), providing
the analytical paths for assessing value creation holistically. Examining systematically
the processes and the outcomes of value co-creation allows for greater specificity,
dimensionality, and inclusivity. The article concludes by delineating the contribution of
the CVC framework and offering recommendations for future research.
Keywords
collaboration, value creation, nonprofits & businesses, corporate social responsibility,
collaborative value creation framework, co-creation, cross-sector partnering
1
Harvard Business School, Boston, MA, USA
2
Hull University Business School, University of Hull, Hull, UK
Corresponding Author:
James Austin, Harvard Business School, Cumnock 300, Soldiers Field Rd., Boston, MA 02163, USA
Email: jaustin@hbs.edu

930 Nonprofit and Voluntary Sector Quarterly 41(6)
Purpose and Content

This article is the second part of a focused review of the nonprofit–business collabora-
tion and related corporate social responsibility (CSR) literature. It extends the elabora-
tion and application of the collaborative value creation (CVC) conceptual and
analytical framework, presented in our previous NVSQ Part 1 review article (Austin
& Seitanidi, 2012), to the research question:
Research Question 1: How can collaboration between nonprofits and businesses

most effectively co-create significant economic, social, and environmental value
for society, organizations, and individuals?
The predecessor article presented the growing importance of partnering between

nonprofits and businesses and identified a set of problematic aspects of how value
creation has been treated in the literature, which pointed to the need for a new frame-
work. The first article specified and applied the first two components of the CVC
framework: (a) the value creation spectrum, which provides new reference terms for
defining the spectrum of value creation, and (b) collaboration stages, which reveals
how value creation varies across different types of collaborative relationships. In this
article we examine the next two components: (c) the nature of value creation processes
in collaboration, to reveal the value creation dynamics in the formation, selection, and
implementation stages, and (d) the resultant internal and external benefits costs, and
partnership outcomes at the micro, meso, and macro levels. These CVC framework
components are used to interpret and extend the existing literature where our review
revealed an insufficient treatment of the dynamics of how different underlying col-
laboration processes contribute differentially to value creation, as well as an often
underspecified, vague, and uneven assessment of different levels, types, and location
of value. Consequently, these two components particularly respond to the growing
interdependence of the sectors with continuously evolving new rules of collaboration,
which require greater clarity, more precise specification, and deeper understanding of
the value generation processes and delivery of outcomes.
CVC Component 3: Partnership Processes

In this component we first examine the value creation processes involved in the part-
nership formation and selection phase and then analyze the subsequent implementation
phase in terms of collaboration design, operations, and institutionalization. We employ
the value terminology set forth in CVC Component 1: the value creation spectrum
referring to the four sources of value (resource complementarity, resource nature,
resource directionality and use, and linked interests) and the four types of value (asso-
ciational, transferred resource, interaction, and synergistic), in order to make explicit
the interrelationships across the components of the framework that provide the dif-
ferent windows for the analysis of the co-creation process. We will also refer to the

Austin and Seitanidi 931
collaboration Stages analyzed in CVC Component 2: philanthropic, transactional,

integrative, transformational. As such, the application of the components suggest that
greater value is created at all levels of analysis—micro, meso, and macro—as col-
laboration moves across the value creation spectrum from sole creation to co-creation
of value.
Partnership Formation
Partnership formation (Selsky & Parker, 2005) is usually expressed in the literature as
initial conditions (Bryson, Crosby, & Middleton Stone, 2006), problem-setting pro-
cesses (Gray, 1989; McCann, 1983), coalition building (Waddock, 1989), and precon-
ditions for partnerships (Waddell & Brown, 1997). Some scholars present formation
as part of the partnership selection process (Gray, 1989; McCann, 1983; Waddock,
1989); hence the processes of formation and implementation appear to “overlap and
interact” (McCann, 1983, p. 178); others suggest that partnership formation consists of
a distinct phase or a set of preconditions (Seitanidi, Koufopoulos, & Palmer, 2010;
Waddell & Brown, 1997) that occur prior to the partnership implementation. We pro-
pose that the selection stage is positioned in a grey area functioning as a bridge between
partnership formation and implementation. Conceptually and analytically we follow
Seitanidi et al. (2010) and Seitanidi and Crane (2009) by separating the two to analyze
more systematically the determinants of the co-creation of value. As Vurron, Dacin,
and Perrini (2010) remark, the time dimension in the analysis of cross-sector social
partnerships (Selsky & Parker, 2005) is represented by studies that examine the static
characteristics of partnerships (Bryson et al., 2006) and by process-based views
(Seitanidi & Crane, 2009) that “extend the debate to the variety of managerial chal-
lenges and conditions affecting collaborations as they progress through stages” (Vurron
et al., 2010, p. 41). Consequently, we focus first on the formation stage with particular
emphasis on the initial assessment of the organizational fit potential, which is a funda-
mental determinant of the realization of value emerging from resource complementarity.
Formation can be seen as an early informal assessment mechanism that evaluates
the suitability of a collaboration to evolve into an integrative or transformational rela-
tionship where the long-term value creation potential of the partnership for the part-
ners and society is higher (Austin, 2000a). Underestimating the costs and negative
effects of poor organizational pairing can be the result of insufficient experience in
co-creation of value, planning, and preparation (Berger, Cunningham, & Drumwright,
2004; Jamali & Keshishian, 2009). Often managers “think about it,” but they do not
usually invest “a huge amount of time in that process” (Austin, 2000a, p. 50). Such
neglect carries consequences, as due diligence and relationship building are key pro-
cess variables that can determine the fit between the partners. This process will
increase managers’ ability to anticipate and capture the full potential for the partner-
ship for both the business and the nonprofit partner. More importantly, the steps that
we discuss below will provide early indications of the benefits that are likely to be
produced by both partnering organizations collectively (Clarke & Fuller, 2010;

Gourville & Rangan, 2004) indicating the co-creation of value and the potential to
externalize the value to society. However, deciding which partner holds the highest
potential for the production of synergistic value is time consuming and challenging.
Fit within a partnership refers to the degree the collaborating organizations can
achieve congruence in their respective perceptions, interests, and strategic direction. As
pointed out by Weiser, Kahane, Rochlin, and Landis (2006, p. 6) “The correct partner-
ship is everything”; hence organizations should seek early indications of partnership
compatibility. An important mechanism (Bryson et al., 2006) that offers an indication
of value co-creation potential is the identification of linked interests expressed through
the initial articulation of the social problem that affects both partners (Gray, 1989;
Waddock, 1986). Hence, examining partners’ social problem frames reveals common-
alities or differences on how they perceive the dimensions of a social problem (McCann,
1983). The process of articulation can identify incompatibilities signaling the need for
either frame realignment or abandoning their collaborative efforts. This moves the con-
cerns “beyond how the benefit pie is divided among the collaborators . . . to the poten-
tial of cross sector partnerships to be a significant transformative force in society”
(Austin, 2010, p. 13). More important, moving to the societal level is encouraging the
partners to look at the partnership’s “broader political implications” (Crane, 2010,
p. 17), elevating social partnerships to global governance mechanisms (Crane, 2010).
In effect, if the partners are able to link their interests, and also draw links with the
broader societal betterment, it would provide an early indication of high potential for
co-creation of value for the social good, that is, synergistic value capture at the societal
level. The more the social problem is linked to the interests of the organizations the
higher the potential to institutionalize the co-creation process within the organizations,
which will lead to better value capture by the partners and intended or unintended
beneficiaries (Le Ber & Branzei, 2010a).
Realizing the potential value creation from resource complementarity is dependent
on achieving organizational compatibility. The difficulties in developing high-value
integrative and transformational collaborations are extensively documented in the lit-
erature (Austin, 2000a; Berger et al., 2004; Bryson et al., 2006; Crane, 2010; Kolk, Van
Tulder, & Kostwinder, 2008; Seitanidi & Ryan, 2007; Teegen, Doh, & Vachani, 2004).
Differences in goals and characteristics (McFarlan, 1999), values, motives, and types of
constituents (Alsop, 2004; Crane, 1998; Di Maggio & Anheier, 1990; Milne, Iyer, &
Gooding-Williams, 1996), objectives, (Heap, 1998; Stafford & Hartman, 2001), mis-
sions (Shaffer & Hillman, 2000; Westley & Vedenburg, 1997), and organizational char-
acteristics and structures (Berger et al., 2004) require early measures of fit that can
provide indications for the potential of co-creation of value. Berger et al. suggest that
many of the partnership problems, but not all, can be predictable and dealt with. Such
problems include misunderstandings; misallocation of costs and benefits; mismatches
of power; lack of complementary skills, resources, and effective decision-making
styles; and mismatching of time scales and mistrust. They propose a useful set of nine
measures of fit and compatibility that can assist the partners to assess the existing and
potential degree of fit. We extend this fit framework by adding further measures of fit

that contribute to the anticipation of problems while focusing on the maximization of

the potential of the co-creation of value at the partnership formation stage.
The compatibilities and differences across the partners allow for diverse combina-
tions of tangible and intangible resources into unique resource amalgamations that can
benefit not only the partners in new ways but also externalize the socioeconomic inno-
vation value produced for society. In order to assess the complementarity of the
resources and their value creation potential it is important to recognize the nature of
the resources that each partner has the potential to contribute, including tangible
(money, land, facilities, machinery, supplies, structures, natural resources) and
intangible resources (knowledge, capabilities, management practices, and skills).
The more the partners are willing to deploy their distinctive organization-specific
resources, the greater will be the potential for value creation. This value potential is
also dependent on the directionality and use of the resource flow across the partners,
that is, the extent the exchange of resources is unilateral, or bilateral and reciprocal,
or a conjoined intermingling of the organization-specific and complementary
resources. Unilateral flows or parallel exchanges can create value, but combining
resources can co-create greater value. Potential partners’ resource availability and
likely directionality of flows can be assessed if the organizations had previous inter-
actions (Goffman, 1983) or information is available from collaborations with other
partners (Seitanidi, 2010).
Examining the partners’ motivations can reveal linked interests by providing an
early indication of partners’ intentions and expected benefits (Seitanidi, 2010), offer-
ing some evidence of the transformative intention of the partnership (Seitanidi et al.,
2010). Due to the required time horizon (Austin, 2000a; Rondinelli & London, 2003)
of such integrative and transformational relationships, it is useful to include in the for-
mation analysis instances of previous value creation through the transfer of assets of
what Gourville and Rangan (2004) label “first-order” (e.g., money) and subsequent
resultant “second-order” associational or interaction value (e.g., improved employee
morale, increased productivity, better motivated sales force). Linked to the motives, a
particularly important measure to assess organizational compatibility is the mission fit,
a key indicator of linked interests. When the mission of each organization is strongly
aligned with the partnership (Berger et al., 2004; Gourville & Rangan, 2004) the rela-
tionship has more potential to be important to both organizations.
The previous experience of the partners (Hardy, Lawrence, & Phillips, 2006),
including their unique organizational histories (Barnett, 2007) in developing value
relationships, is an important determinant for the partnership fit indicating the ability
of the partners to uncover novel capabilities and improve their prospects for social
value creation (Brickson, 2007; Plowman, Baker, Kulkarni, Solansky, & Travis, 2007).
This will indicate the degree of “structural embeddedness” (Bryson et al., 2006, p. 46),
that is, how positively the partners have interacted in the past (Jones, Hesterly, &
Borgatti, 1997; Ring & Van de Ven, 1994) in producing value. Therefore, the history
of interactions indicates potential for moving toward integrative or transformative
relations (Seitanidi et al., 2010).

One important motive for the formation of partnerships for both partners is to gain
visibility (Gourville & Rangan, 2004) that may enhance reputation (Tully, 2004), pub-
lic image (Alsop, 2004; Heap, 1998; Rodinelli & London, 2003), and public relations
(Milne et al., 1996). Visibility contributes to social license to operate, access to local
communities (Greenall & Rovere, 1999; Heap, 1998) for high-risk industries, credibil-
ity (Gourville & Rangan, 2004), and increased potential for funding (Heap, 1998;
Seitanidi, 2010). In effect, positive visibility, a form of associational value, is a highly
desired outcome for the partners, which we consider a fit measure that takes place
either explicitly or implicitly during the formation phase. It is essential that both part-
ners are comfortable with the potential benefits and costs of their partner’s visibility,
which will contribute to the organizational fit and the potential for co-creation of
value.
Finally, Rondinelli and London (2003) refer to the importance of identifying pre-
partnership champions, particularly senior executives with a long-term commitment
who will play a key role in developing cross-functional teams within and across the
partnership.
Figure 1 summarizes the measures of fit that were discussed above.
Partnership Fit Potential
Initial articulation of the social problem
Identify linked interests and resources across partners and for social betterment
Identify partners’ motives and missions
Identify the history of interactions and visibility fit
Identify Pre-partnership Champions
Figure 1. Partnership Formation: Organizational Fit
Partner Selection
The processes of selecting a partner build on and extend the previous assessment of
partner fit potential carried out in the formation phase. Despite being a common rea-
son for partnership failure, poor partner selection (Holmberg & Cummings, 2009) has
received relatively limited attention even in the more advanced strategic alliances
literature (Geringer, 1991). Selecting the most appropriate partner is a decision that,
to a large extent, determines the value creation potential of the partnership.
Simonin (1997) refers to the “collaborative know-how,” encompassing “knowl-
edge, skills and competences” (Draulans, deMan, & Volberda, 2003). It requires skills

in searching and negotiating as well as terminating early low-potential relationships

(Kumar & Nti, 1998). Partner selection might consist of a long or brief process
(London & Rondinelli, 2003; Seitanidi, 2010). Inadequate attention to the selection of
partners is associated with organizational inexperience (Harbison & Pekar, 1998),
which can result in short-lived collaborations. The highest potential for partnership
benefits is associated with long-term collaborations (Pangarkar, 2003). Thus, accurate
value assessment potential is a predictor of partnership longevity.
Developing partnership-specific criteria facilitates the process of assessing potential
partners; examples of selection criteria suggested in the literature include industry of
interest, scope of operations, cost-effectiveness (investment required vs. generation of
potential value), time scales of operation, personal affiliations, availability and type
of resources (Holmberg & Cummings, 2009; Seitanidi, 2010; Seitanidi & Crane, 2009).
One approach to systematize this process would be to specify criteria that would reveal
how well the potential partnership could tap into each of the four sources of value,
resource complementarity, resource nature, resource directionality and use, and linked
interests and how that resource configuration would produce what mix of the four types
of value, that is, associational, transferred, interaction, and synergistic.
Despite the important role of risk management in partnerships (Andrioff & Waddock,
2002; Bendell, 2000b; Heap, 1998, 2000; Le Ber & Branzei, 2010b; Selsky & Parker,
2005; Tully, 2004; Warner & Sullivan, 2004; Wymer & Samu, 2003), models of part-
nership implementation do not usually incorporate risk assessment (for exceptions, see
Andrioff, 2000; Le Ber & Branzei, 2010b; Seitanidi, 2010; Seitanidi & Crane, 2009).
The risk assessment would be a necessary process, particularly in the case of high
adverse visibility (i.e., negative associational value) of one of the partners, due to expo-
sure to public criticism or due to early termination of the partnership as a result of
failure to adjust their value creation frames (Le Ber & Branzei, 2010c). The formal
internal risk assessment process aims to collect interaction intelligence across the
potential partner organizations (e.g., internal process and output reports, external
assessment of previous collaborative projects). The formal external process aims to col-
lect intelligence from previous partners in order to develop an awareness of any formal
incidents that took place or any serious concerns that may be voiced by previous partner
organizations. Moving to the informal risk assessment process, we follow the sugges-
tions of Seitanidi and Crane (2009) consisting of open dialogue among the constituents
of each partner organization (in the case of the nonprofit organization: employees, trust-
ees, members of the board, beneficiaries) and informal meetings between the partners,
particularly the potential members of the partnership teams. The informal external pro-
cess consists of open dialogue of each partner with its peer organizations within their
own sector and across other sectors to collect intelligence (e.g., anecdotal evidence)
revealing accountable decision-making mechanisms (Hamman & Acutt, 2003). The
partnership selection consists predominately of microprocesses (Seitanidi & Crane,
2009) that take place on the organizational level of each partner. Interactions across
multiple stakeholder groups are encouraged as a way of managing power distribution,

demonstrating that collaboration can be a different model of political behavior rather

than being devoid of political dynamics (Gray, 1989; Seitanidi, 2010).
Figure 2 offers an overview of the process of partnership selection. We agree with
the incorporation of feedback loops suggested by Clarke and Fuller (2010), which are
Partnership Selection for Co-Creation of Value
Assessing Partnership Potential

Assessing co-creation potential & transformational intent
Developing Partnership Criteria

Assessing operational complementarity
Risk Assessment Processes

Assessing potential sources of value loss
Formal Risk Assessment Process Informal Risk Assessment Process
External Process Internal Process Internal Process External Process
Collecting intelligence from Collecting interaction Open dialogue among Open dialogue among similar
previous partners intelligence across partners employees organizations within sector
Informal Meetings between Collecting intelligence from

NPO & BUS employees organizations outside sector
Figure 2. Partnership Selection for Co-creation of Value

Adapted From Seitanidi and Crane (2009)
particularly important in the role of the risk assessment informing the final options of
potential partners.
Partnership Implementation
Implementing the partnership is the value creation engine of cross-sector interactions
where the value creation process can be either planned or emergent. The co-creation
process not only requires the partners to have linked interests but also to be embedded
in the local communities of beneficiaries and stakeholders in order to incorporate
perceptions of value beyond the partnership dyad. This facilitates the value capture
and diffusion on different levels. In order to examine the value creation processes in
the implementation phase involving design and operations and partnership institution-
alization, we employ the microstage model of Seitanidi and Crane (2009), which

responded to previous calls (Clarke, 2007a, 2007b; Godfrey & Hatch, 2007; Waddock,
1989) for more studies on the processes of interactions required, in order to deepen
our understanding. The model moves beyond the chronological progression models
that define broad stages (Berger et al., 2004; Bryson et al., 2006; Googins & Rochlin,
2000; McCann, 1983; Westley & Vredenburg, 1997; Wilson & Charlton, 1997) to a
process-based dynamic view (Vurron et al., 2010), introducing microprocesses as a
way of overcoming implementation difficulties (Pressman & Wildavsky, 1973) and
demonstrating the quality of partnering. The model focuses only on the implementa-
tion of partnerships rather than incorporating outcomes as part of the examination of
partnership processes (Clarke & Fuller, 2010; Dalal-Clayton & Bass, 2002; Hood,
Logsdon, & Thompson, 1993). We extend the model of Seitanidi and Crane by dis-
cussing how the dynamics between the partners can facilitate the co-creation of social,
environmental, and economic value. Responding to the call of Clarke and Fuller
(2010), we further indicate the two levels of implementation (organizational and col-
laborative).
Partnership Design and Operations

Partnership design and operations encompass formal processes that influence the
implementation leading to outcomes. The literature has pointed to several design
parameters and operating actions that contribute to partnering effectiveness. In social
partnerships, Austin, Leonard, Reficco, and Wei-Skillern (2006) suggested that social
value is created by missions and design. Partnership design includes the experimenta-
tion with the procedural and substantive partnership processes (Gray, 1989) such as:
setting objectives and structural specifications (Andreasen, 1996; Arya & Salk, 2006;
Austin, 2000b; Bryson et al., 2006; Glasbergen, 2007; Googins & Rochlin, 2000;
Halal, 2001); formulating rules and regulations (Das & Teng, 1998; Gray, 1989);
drafting a memorandum of understanding (Seitanidi & Crane, 2009); establishing
leadership positions (Austin, 2000a; Waddock, 1986); deciding organizational struc-
tures (Berger et al., 2004; McCann, 1983); agreeing on the partnership management
(Austin & Reavis, 2002; Seitanidi & Crane, 2009).
The above processes add structural and purpose congruency (Andreasen, 1996),
which contributes to organizational compatibility and generates interaction value.
They take place individually and jointly by the partners (Bowen, Newenham-Kahindi,
& Herremans, 2010; Bryson et al., 2006; Clarke & Fuller, 2010). Coordination is
required to codesign mechanisms that will collectively add value to the partnership
(Brinkerhoff, 2002; Bryson et al., 2006; Milne et al., 1996; Seitanidi, 2008; Selsky &
Parker, 2005). Value creation requires and produces the valuable intangibles through
the processes of working together. Decisions gradually reach operationalization, struc-
tures form, passing through several adaptations due to internal or external factors
(Austin, 2000a; Gray, 1989), leading to stabilization of partnership content, processes,
and structures (Seitanidi & Crane, 2009) until the next cycle of iteration.

Recent literature on social partnerships presented factors that determine the social
change potential within the partnership relationship. Seitanidi (2008) suggested that
partners are required to embrace their adaptive responsibilities allowing them to move
away from their limiting predefined roles and transcend beyond a single dimension of
responsibility to offer solutions to problems that require fundamental change. The
above confirms our assertion that the company’s CSR and perception of its responsi-
bilities need to evolve to higher levels to coproduce synergistic value. Similarly, Le
Ber and Branzei (2010b) proposed that deliberate role recalibration can tighten the
coupling between social value creation and risk. As such, the above research stresses
the need for change within the partnership facilitated by the partners’ linked interests
to contribute to the potential for change outside the relationship, for example, moving
the relationship to the transformational stage.
The above processes constitute forms of formal control mechanisms in collabora-
tion (Das & Teng, 1998) that are generally introduced during early stages and play an
important role in developing familiarity across the organizations. However, informal
measures are more likely to be effective in dealing with tensions around indetermi-
nacy, vagueness, balancing the interpretations between the partners (Ben, 2007;
Orlitzky, Schmidt, & Rynes, 2003), and uncertainty (Waddock, 1991) by exerting
symbolic power that can influence individual organizations and industry macroculture
(Harris & Crane, 2002). Informal measures of control such as trust-based governance
may play an important role in nonprofit–business partnerships (Rivera-Santos &
Rufin, 2010a) in determining the alliance viability (Arya & Salk, 2006) and co-
creation of value. These include: managing alliance culture to blend and harmonize
two different organizational cultures (Wilkof, Brown, & Selsky, 1995); charismatic
leadership inspiring employee participation (Andreasen, 1996; Berger et al., 2004;
Bhattacharya, Sen, & Korschun, 2008); forms of communication that enable formation
of trust (Austin, 2000a; Googins & Rochlin, 2000), mutual respect, openness, and
constructive criticism to both external and internal audiences (Austin, 2000a); con-
tinual learning (Austin, 2000a; Bowen et al., 2010; London & Rondinelli, 2003;
Senge, Dow, & Neath, 2006); managing conflict (Covey & Brown, 2001; Gray, 1989;
Seitanidi, 2010), and encouraging open dialogue (Elkington & Fennell, 1998).
The above produce interaction value and also serve as enablers and preservers of
value. Among the intangible resources that are produced are trust, relational capital,
learning, knowledge, joint problem solving, contributing to the co-creation of value,
thereby generating benefits for partners, individuals, and society.
Figure 3 below summarizes the partnership design and operations that set up the
structures and processes generating value. This is the first instance that partners iden-
tify their value distance between their resources, goals, perceptions, and capabilities.
The partnership design may be the end if the partners realize that their value distance
is too great. The double arrows in Figure 3 demonstrate feedback loops across pro-
cesses that lead to redesign and adaptations.

Partnership Design & Operations
Experimentation
Setting up structures & processes for co-creation of value
Organizational Collective
Experimentation Experimentation
Adaptations
Iterations of processes & structures
Organizational Collective
Adaptations Adaptations
Operationalization
Gradual stabilization of processes & structures
Exit or Continuance Strategy
Figure 3. Partnership Design and Operations
Partnership Institutionalization
A partnership has reached institutionalization when its structures, processes, and pro-
grams are accepted by the partner organizations (Seitanidi & Crane, 2009) and their
constituents and are embedded within the existing strategy, values, structures, and
administrative systems of the organizations. Organizational and personal familiariza-
tion solidifies the partnership relationship within and between both organizations and
enables it to survive the exit of key leaders on both sides.

One of the important institutionalization processes is interaction value accumula-

tion that iteratively builds from information to knowledge to capabilities. This has
been an implicit process emerging from our examination of various nonprofit–
business partnership cases. Below we suggest explicitly how information trans-
forms to capability as a result of the partners’ interactions and as such contribute a
new process in the literature that focuses on partnership implementation. During the
formation, selection, and the early design of the partnership the partners have origi-
nally only information about each other. The basic information about the key product/
service proposition gradually increases, first within the members of the partnership
team and later it diffuses within other departments of the organization; the intensifica-
tion of interactions gradually transforms the information to knowledge. The explicit
knowledge grows and the interactions increase familiarity, incorporating tacit knowl-
edge about each other. This knowledge, together with positive informal conditions,
lock in the emotional engagement of partners; hence a higher level of knowledge is
integrated with enthusiasm, pride, trust, and with the explicit aim to share the unique
resources of the organizations. As the partnership progresses the knowledge about the
partner organization, its resources and use of resources becomes deeper and turns into
a capability; that is, at this stage the partner is able to apply the knowledge in the con-
texts of both organizations. The partners are able to speak the “same language” and
embark in co-creation that may produce innovative products, services, and skills. This
is a manifestation of the iterative and accumulating generation of interaction value
that can also progress to synergistic value.
If partners are to co-create social, environmental, and economic value, adjustment
of their value frames is required to reach frame convergence (Noy, 2009) or frame
fusion (Le Ber & Branzei, 2010b). Frame fusion is defined as “the construction of a
new prognostic frame that motivates and disciplines partners’ cross sector interactions
while preserving their distinct contribution to value creation” by retaining the identity
and differences of each partner1 (Le Ber & Branzei, 2010b, p. 164). Value frame fusion
assists in overcoming the partners’ disagreements and allows for transformation of the
“current means into co-created goals with others who commit to building a possible
future” (Dew, Read, Sarasvathy, & Wiltbank, 2008, p. 983). The above process takes
place by each partner perceiving the strategic direction of the other’s decisions
(Kaplan, 2008), observing organizational change processes (Balogun & Johnson,
2004), participating in multiplayer interaction (Croteau & Hicks, 2003; Kaplan &
Murray, 2008), and monitoring and interpreting each other’s frames (Le Ber & Branzei,
2010c). Value frame fusion plays an important role in the alignment of perceptions and
the creation of a mutual language by developing a vocabulary of meaning (Crane,
1998) and is likely to take place within the advanced integrative or transformational
relationship stages. Stafford, Polonsky, and Hartman (2000, p. 122) provide evidence
on how the partners align their socioeconomic value frames to co-create “entrepre-
neurial innovations that address environmental problems and result in operational effi-
ciencies, new technologies and marketable ‘green’ products.” They demonstrate that
partners may consciously decide to embark onto a transformational collaboration

(Stafford & Hartman, 2001); however, we assume that in most cases the social change
or social innovation potential emerges within the process (Austin, 2000a; London &
Rondinelli, 2003).
If frame fusion is not successful, then frame divergence will shape the degree to
which the organization will pursue its strategy and to what extent change will be cre-
ated (Kaplan, 2008). In fact, “it is the interactions of individuals in the form of framing
contests” that shape the outcomes (Kaplan, 2008, p. 744). The plurality of frames and
the existence of conflict (Glynn, 2000; Gray, 1989) within a partnership allow for
divergent frames that can consist of opportunities for co-creation. Particularly novel
tasks (Heap, 2000; Le Ber & Branzei, 2010c; Seitanidi, 2010) allow for balancing
potential bias associated with power dynamics (Bendell & Lake, 2000; Crane, 2000;
Hamman & Acutt, 2003; Millar, Choi, & Chen, 2004; Tully, 2004; Utting, 2005).
Adaptations are essential for survival (Kaplan, 2008) and present opportunities on the
individual, organizational, and sectoral levels (Seitanidi & Lindgreen, 2010) to unlearn
and (re)learn how to frame and act collectively to develop a synergistic framework,
which is essential for providing solutions to social problems. The value capture will
depend on the linked interests of the partners that will influence the level of institution-
alization of the co-creation of value (Le Ber & Branzei, 2010a).
The institutionalization process enters a point of emerged collective meaning
between the partner organizations, which require a reinstitutionalization of partnership
processes, structures, and programs after each cycle of co-creation of value. When the
partners have captured either unilaterally or jointly (Le Ber & Branzei, 2010a;
Makadok, 2001) some value, a necessary prerequisite for continuing, they are ready
for the next iteration of co-creation of value, including synergistic value arising from
further innovation.
Partnerships are still faced with concerns, including issues of accountability (Reed
& Reed, 2009), appropriateness of the standards developed, effectiveness and enforce-
ability of mechanisms, decision-making differences, and control (Brown, 1991).
Hence, calls for shared (Ashman, 2000; Austin, 2000a), consensus (Elbers, 2004)
decision making and coregulation (Utting, 2005) have been suggested to balance the
power dynamics across the partners (Seitanidi & Ryan, 2007). Decentralized control
by allowing multiple stakeholders to voice concerns, incorporating feedback loops
(Clarke & Fuller, 2010), and decentralized social accountability checkpoints, inviting
suggestions from the ground to facilitate answerability, enforceability, and universal-
ity (Newell, 2002; Utting, 2005) can address previous criticisms.
In effect, the co-creation of social, environmental, and economic value, particularly
as one moves into a transformational stage, would be the result of a highly engaged,
decentralized community of voices allowing for the diffusion of outcomes pointing
toward a participative, network perspective (Collier & Esteban, 1999; Heuer, 2011).
This could include engagement with fringe stakeholders as a means to achieve creative
destruction and innovation for the partners and society (Gray, 1989; Murphy & Arenas,
2010). The above expands prioritization of a few stakeholders to the engagement of
many stakeholders associated directly or indirectly with partners.

Social betterment becomes central in the integrative and transformational stages of

collaboration; hence, multiple stakeholders become a key component in the co-cre-
ation process and in reshaping the dialogue (Barrett, Austin, & McCarthy, 2002;
Cornelious & Wallace, 2010; Fiol, Pratt, & O’ Connor, 2009; Israel, Schulz, Parker, &
Becker, 1998), allowing for value capture on multiple levels. Embedding the partner-
ship across interested communities introduces a new layer of partnership institutional-
ization outside the dyad of the profit and nonprofit organizations.
Figure 4 below presents the partnership institutionalization process commencing
by embedding the partnership within each organization, reaching value frame fusion,
including reinstitutionalization of partnership processes, structures, and programs
based on newly emerged shared perceptions. There is an inner circle of iterative pro-
cess change to develop new capabilities, value propositions, and frame fusion.
Institutional viability and expanding value co-creation also requires ongoing inputs
from outside stakeholders. Partnerships have the potential to deliver several cycles of
value creation or may end unexpectedly depending on: the quality of the processes; the
evolution of the partners’ interests, capabilities, and relationships; and changes in the
environment.
Partnership Institutionalization
Embedding Collaboration in strategy, mission,

value, structures administration systems
Deepening personal relations and strengthening

interactions
Fusing and revitalizing value frames
Engagement of external stakeholders
Figure 4. Partnership Institutionalization
Partnering Processes Case Illustration

We present an illustration of the above partnering processes based on the descriptions
and analyses of Austin and Reavis (2002) and London and Rondinelli (2003) of a

multiyear collaboration between Starbucks and Conservation International (CI), per-

ceived by both partners as very successful. The partnering centered initially on assist-
ing small coffee growers in southern Mexico to improve their environmental practices
and quality of coffee.
Formation and selection. Both organizations were experienced in cross-sector part-
nering and consequently engaged in systematic due diligence focused on assessing
potential fit with each other relative to other candidates. They discovered shared val-
ues regarding environmental conservation and strategic linked interests in small coffee
growers—a major source of supply for Starbucks but whose practices could have
adverse impacts on the environment in terms of habitat destruction and waste disposal
pollution. CI, with its conservation and field-level project management expertise, was
assisting farmers to shift to shade-grown and organic cultivation techniques but needed
to provide farmers with greater market knowledge and access, capabilities held by
Starbucks. Value creation potential assessment in the early dialogues between the
potential partners focused primarily on resource complementarity and deploying their
respective distinctive competencies. High aspirations for significant change were
expressed, revealing potential for synergistic value creation with transformative
effects. Early project champions emerged on both sides.
Design, operations, and institutionalization. A memorandum of understanding clearly
and formally delineated implementation roles, responsibilities, and timelines that lev-
eraged and combined the partners’ distinctive capabilities. Risk was managed explic-
itly by starting with a small scale in terms of numbers of farmers and without an
obligation to buy their coffee output. As the partners worked together and with the
farmers, they engaged in collaborative discovery and learning leading to adaptation
and redesign. Shared working experiences in the field deepened their understanding of
each other’s organizational cultures and created interpersonal bonds, mutual trust, and
shared commitment to the project. These intangibles represented interaction value and
became enabling capabilities and informal control and coordination mechanisms for
further advancement of the collaboration. The program expanded the number of farm-
ers assisted, added production credits, instituted quality standards, and increased the
quantity of coffee purchased at premium prices. The project became integrated into
Starbucks procurement operations. The collaboration then moved into a more transfor-
mative stage aimed at creating new procurement guidelines, not just for Starbucks but
for the entire industry, based on scaled premium prices that rewarded and aimed to
achieve quality, environmental betterment, economic fairness, and social standards.
The formulation of these guidelines involved a multistakeholder initiative and delib-
erative dialogue encompassing many environmental and advocacy NGOs, coffee
growers, processors, and marketers. In effect, the collaboration moved from an inte-
grative stage into a higher and broader institutionalization and transformation phase,
co-creating additional and different types and levels of value outcomes, which we
shall continue to elaborate as illustrations in the next and final component of the CVC
framework.

CVC Component 4: Collaboration Outcomes

We are experiencing an unprecedented proliferation of “accelerated interdepen-
dence” (Austin, 2000b, p. 69) across the public, profit, and nonprofit sectors due to
the double devolution in functions, from central governments to the local authorities,
and in sectors, from the public to the private and nonprofit (Austin, 2000b). The
increasing fiscal needs of the public and nonprofit sectors contribute to the diffusion
of responsibilities promoting cross-sector collaboration as an effective and efficient
approach to manage assets and provide solutions to social problems (Austin, 2000b).
However, the intense needs for resources can capture and perhaps divert the critical
role of the state and, in some cases, of the nonprofit sector (Bendell, 2000a, 2000b;
Mitchell, 1998; Ndegwa, 1996; Raftopoulos, 2000; Seitanidi, 2010). Hence, criticism
toward partnerships (Biermann, Chan, Mert, & Pattberg, 2007; Hartwich, Gonzalez,
& Vieira, 2005; Reed & Reed, 2009) and the outcomes achieved (Austin, 2010;
Brinkerhoff, 2007; Seitanidi, 2010) is not a surprise, but rather a call for a paradigm
change. The examination of nonprofit–business partnership outcomes (Selsky &
Parker, 2005) is an evolving area in practice and research, particularly when the focus
is not only on the benefits for the partners but also for the society (Austin, 2000, 2010;
Margolis & Walsh, 2003; Seitanidi, 2010). Although what makes collaboration pos-
sible is “the need and the potential” for benefit (Wood & Gray, 1991, p. 161) given
that social partnerships aim to address social issues (Waddock, 1988), the definition
of what constitutes positive partnership outcomes “should encompass the social
value generated by the collaboration” (Austin, 2000b, p. 77) on different levels of
analysis (Seitanidi, 2008, 2010).
The shift in the literature from social partnerships (Waddock, 1988) to strategic
partnerships (Andrioff, 2000; Birch, 2003; Elkington & Fennell, 2000; Warner &
Sullivan, 2004) is turning full circle as new found significance is assigned to collective
impact (Kania & Krammer, 2010), social value measurement (Mulgan, 2010), and the
very recent creation of a new class of assets, named by JP Morgan and the Rockefeller
Foundation, ‘impact investment’ that aims to “create positive impact beyond the finan-
cial return” (O’Donohoe, Leijonhufvud, Saltuk, Bugg-Levine, & Brandeburg, 2010, p.
5). The Monitor Institute (2009, p. 9) estimates that social impact investing will reach
US$500 billion over the next decade.
Reconfiguring the meaning of financial value by incorporating social and environ-
mental value is of critical importance (O’Donohoe, Leijonhufvud, Saltuk, Bugg-Levine,
& Brandeburg, 2010, p. 7). The reconstitution of value creates a unique opportunity for
intentional social change mechanisms to provide opportunities for social and environ-
mental impact as forms of superior value creation for economic and social returns, not
only for few but for many, what Porter and Kramer refer to as “shared value” (Porter &
Kramer, 2011). To assess whether nonprofit–business partnerships constitute such
intentional mechanisms for social change and innovation, we need to move forward by
locating where value is created, that is, loci2 of value creation.

Where Value Is Created: Loci of Value Creation

In our (Austin & Seitanidi, 2012) definition of collaborative value as “the transitory and
enduring benefits relative to the costs that are generated due to the interaction of the col-
laborators and that accrue to organizations, individuals, and society” the locational
dimension is central. The CVC framework incorporates multilevel value assessment by
introducing three levels of analysis: meso, micro, and macro. The focus in this element of
the framework is on who benefits from the collaboration. Collaborations generate value,
often simultaneously, at these multiple levels. For our purpose of examining value, we
distinguish two loci: within the collaboration and external to it. Internally, we examine
value accruing at the meso level for the partnering organizations and at the micro level for
the individuals within those organizations. Externally, we focus on societal welfare and its
improvement as a result of the collaboration in the form of benefits at the micro (to indi-
vidual recipients), meso (other organizations), and macro (systemic changes) levels.
Internal Value Creation

Meso level. The most common focus in the literature and in practice is on the value
accruing to the partners, which are the organizational benefits that enhance the perfor-
mance of the nonprofit or the company. The literature abounds with long and at times
confusing arrays of benefits. To create greater coherence and identify areas of focused
analysis, we apply the CVC framework’s referent terms to organize below the cited
benefits into the value constellations using the four different types of value explained
in Austin and Seitanidi (2012), first for nonprofits and then for businesses.
For nonprofits the summarized cited benefits of collaboration include the following.
Associational value:
higher visibility (Austin, 2000; Elkington & Fennell, 1998; Gourville & Rangan,
2004; Seitanidi, 2010), and credibility (Austin, 2000b; Googins & Rochlin, 2000;
Heap, 1998; Huxham, 1996; Yajizi & Doh, 2009); increased public awareness of the
social issue (Gourville & Rangan, 2004; Waddock & Post, 1995); greater support for
organizational mission (Pearce & Doh, 2005).
Transferred value:
financial support received by the business (in cash or in kind) and additional sup-
port (Brown, & Kalegaonkar, 2002; Galaskiewicz, 1985; Googins & Rochlin, 2000;
Yaziji & Doh, 2009); increased volunteer capital (Googins & Rochlin, 2000; Vock,
van Dolen, & Kolk, 2011); complementary and organization-specific assets (Austin &
Seitanidi, 2012).

Interaction value:
opportunities for learning (Austin, 2000b; Googins & Rochlin, 2000; Huxham,
1996; Yajizi & Doh, 2009); development of unique capabilities and knowledge cre-
ation (Googins & Rochlin, 2000; Gray, 1989; Hardy, Phillips, & Lawrence, 2003;
Huxham, 1996; Porter & Kramer, 2011; Yaziji &Doh, 2009); access to networks
(Heap, 1998; Millar et al., 2004; Yaziji & Doh, 2009); greater technical expertise
(Austin, 2000a; Seitanidi, 2010; Vock et al., 2011); increased ability to change behav-
ior (Le Ber & Branzei, 2010a, 2010b; Stafford et al., 2000); improved relations with
profit sector (Austin, 2000a; Vock et al., 2011); market intelligence (Austin, 2000b;
Yaziji & Doh, 2009).
Synergistic value:
innovation (Holmes & Moir, 2007; Stafford et al., 2000); process-based improve-
ments (Seitanidi, 2010); positive organizational change (Glasbergen, 2007; Murphy
& Bendell, 1999; Seitanidi, 2010; Waddock & Post 2004); sharing leadership (Bryson
& Crosby, 1992); increased long-term value potential (Austin, 2000a, 2000b; Le Ber
& Branzei, 2010a, 2010b); greater ability to change behavior (Gourville & Rangan,
2004; Waddock & Post, 1995); more political power within sector and society
(Seitanidi, 2010).
As a result, attainment of its social mission can be strengthened.

Costs for the nonprofit organizations are often reported to be more than the costs for
business (Ashman, 2001; Seitanidi, 2010; Yajizi & Doh, 2009) and may include the
decrease in potential donations due to the high visibility of a wealthy partner (Gourville
& Rangan, 2004), increased need for resource allocation and skills (Seitanidi, 2010),
internal and external skepticism ranging from decrease in volunteer and trustee sup-
port to reputational costs (Millar et al., 2004; Rundall, 2000; Yaziji & Doh, 2009),
decrease in employee productivity, increased costs due to unforeseen exit of a partner
from partnership, effectiveness and enforceability of the developed mechanisms, and
legitimizing mechanism of “greenwashing” (Utting, 2005).
For businesses the summarized cited benefits of collaboration per type of value
generated include the following.
Associational value:
credibility (Austin, 2000a, 2000b; Heap, 1998); company, brand reputation, and
image (Alsop, 2004; Greenall & Rovere, 1999; Heap, 1998; Yaziji & Doh, 2009);
legitimacy (Glasbergen & Groenenberg, 2001; Heugens et al., 2002; Yaziji & Doh,
2009); increased sales (Gourville & Rangan, 2004; Polonsky & Macdonald, 2000;
Steckel & Simons, 1992), broader usage of products/services (Gourville & Rangan,

2004; Polonsky & Macdonald, 2000), and improved media exposure (Seitanidi,
2010); public support (Gourville & Rangan, 2004); greater stakeholder loyalty
(Gourville & Rangan, 2004; Ishikawa & Morel, 2008); stakeholder communication and
accountability (Andreasen, 1996; Bowen et al., 2010; Pearce & Doh, 2005).
Transferred value:
market intelligence and development (Milne et al., 1996); competitiveness (Porter

& Kramer, 2002); second-generation customers (Seitanidi, 2010).
Interaction value:
access to networks (Ishikawa & Morel, 2008; Millar et al., 2004; Seitanidi, 2010);
technical expertise (Polonsky, 1996; Stafford & Hartman, 1998); community and
government relations (Austin, 2000a; Pearce & Doh, 2005; Seitanidi, 2010); corpo-
rate values (Austin, 2000b; Crane, 1997); decreased long- and short-term costs
(Newell, 2002); speeding up approval for license to operate (Ishikawa & Morel,
2008); exposure to different organizational culture (Seitanidi, 2010); increased poten-
tial meeting government’s and society’s priorities (Seitanidi, 2010); more political power
within nonprofit sector (Seitanidi, 2010); improved accountability (Seitanidi, 2010);
employee-specific benefits: morale, recruitment, motivation, skills, productivity, and
retention (Bishop & Green, 2008; Googins & Rochlin, 2000; Pearce & Doh, 2005;
Porter & Kramer, 2002; Seitanidi, 2010; Turban & Greening, 1997); investor-specific
benefits: increased allegiance, investor recruitment fit (Gourville & Rangan, 2004);
consumer-specific benefits: consumer preference (Brown & Dacin, 1997); reduced
asymmetry between consumer and business; market, product, process innovation, and
learning (Austin, 2000b; Googins & Rochlin, 2000; Kanter, 1999); external risk man-
agement (Bendell, 2000a; Das & Teng, 1998; Selsky & Parker, 2005; Tully, 2004;
Wymer & Samu, 2003); psychological satisfaction of employees and new friendships
(Seitanidi, 2010).
Synergistic value:
product and process innovation and learning (Austin, 2000a; Kanter, 1999;
London et al., 2005; Seitanidi, 2010; Stafford et al., 2000; Yaziji & Doh, 2009); better
risk management skills (Tully, 2004); adaptation of new management practices due to
the interaction with nonprofit organizations (Drucker, 1989); increased long-term
value potential (Austin, 2000a, 2000b); more political power within sector and society
due to partnership networks (Seitanidi, 2010).
As a result, the financial performance and corporate sustainability can be strength-

ened. In the above cases the value of the partnership is located within the partner
organizations.

On the other hand, business can incur costs, including increased need in resource
allocation and skills; increased risk of losing exclusivity in social innovation (Yaziji &
Doh, 2009); internal and external skepticism and scrutiny (Yaziji & Doh, 2009);
potential for reduced competitiveness due to open access innovation (Stafford et al.,
2000); increased credibility costs in case of unforeseen exit of a partner from partner-
ship or reputational damage due to missed opportunity of making a difference (Steckel,
Simons, Simons, & Tanen, 1999).
Micro level. Collaborations can produce benefits within the partnering organizations
for individuals. This value can be two fold: instrumental and psychological. For exam-
ple, instrumental benefits can include new or strengthened managerial skills, leadership
opportunities, technical and sector knowledge, broadened perspectives; emotional ben-
efits encompass the individual’s psychic satisfaction from contributing to social better-
ment and developing new friendships with colleagues from the partner organization.
The micro-level benefits are largely underexplored in the literature despite the broad
acceptance that implementing CSR programs should benefit a wide range of stakehold-
ers beyond the partner organizations (Bhattacharya & Sen, 2004; Green & Peloza,
2011; Vock et al., 2011). In a recent study Vock et al. (2011) argue that the participation
of employees in partnerships can affect consumers either favorably or unfavorably.
Bhattacharya et al. reported that a company’s involvement in CSR programs can
satisfy several psychological needs, including personal growth, the employees’ own
sense of responsibility for the community and reduction in levels of stress; the precon-
dition is that employees should get involved in the relevant programs. More instru-
mental benefits comprise the development of new skills, building a connection
between the company and the employee, particularly when there are feelings of isola-
tion due to physical distance between the employee and the central office; potential
career advancement (Burchell & Cook, 2011); and using the resultant positive reputa-
tion as a “shield” for the employee when local populations are negative toward the
company (Bhattacharya et al., 2008). Similar psychological mechanisms associated
with the enthusiasm of employees have the potential to cause spillover effects, trigger-
ing favorable customer reactions (Kolk, Van Dolen, & Vock, 2010). Employee volun-
teering, an important component of transactional partnerships (Austin, 2000a; Austin
& Seitanidi, 2012), may improve the work motivation and job performance (Bartel,
2001; Jones, 2007), customer orientation, and productivity, and in effect, benefit con-
sumers (Vock et al., 2011).
The partnership literature makes extensive reference to the partnership outcomes,
concentrating more on the benefits rather than on the costs, that contribute to the value
creation internally, either for the profit or the nonprofit partners as demonstrated
above. However, there is a notable lack of systematic in-depth analysis of outcomes
beyond the descriptive level; in effect, the full appreciation of the benefits and costs
remains relatively unexplored. The majority of the literature discusses outcomes as
part of a partnership conceptual framework or by reporting outcomes as one of the
partnership findings. A limited number of studies are available on addressing

Table 1. Loci of Value Creation: Partnership Outcome per Level of Analysis
Partnership Outcomes
Levels of Outcomes Benefits Costs
Internal to the partnership

Meso: Organizational
Nonprofit organization Associational value: Credibility and visibility, increased public awareness, Increased management costs, decrease in donations;
increase in support for organizational mission. decrease in potential donations due to the high
Transferred asset value: Financial support in cash or in kind; land, visibility of wealthy partner; increased needs for
materials; increase of cash donations, of money, land, material from resource allocation; increased need in skills; decrease
partner or others due to higher visibility; additional financial support; in volunteer support; decrease in trustee support;
volunteer capital public criticism; decrease in support from other
Interaction value: Opportunities for learning, development of unique nonprofit organizations; media criticism; decrease
capabilities, access to networks, technical expertise, increased ability in employee productivity; decreased support
to change behavior, improved relations with profit sector, exposure to from volunteers; decreased credibility; decreased
different organizational culture, market intelligence reputation; internal and external skepticism;
Synergistic value: Opportunities for innovation, opportunities for increased costs due to unforeseen exit of a partner
improvement of processes, development of new partnerships increase from partnership; effectiveness and enforceability of
in performance, sharing leadership, increased long-term value potential, the developed mechanisms; legitimizing mechanism
increased ability to change behavior, exert more political power within of “greenwashing”
sector and society
Micro: Individual
Nonprofit Instrumental: New strengthened managerial skills, leadership
(individuals internal to the opportunities, technical and sector knowledge, broadened perspectives

partnership) Psychological: New friendships
Business (organizational) Associational value: Credibility, brand reputation, increased sales, Increased management costs, increased costs for the
legitimacy, increased usage of products/services, improved media development of new markets and new products,
exposure, public support, increased stakeholder loyalty, stakeholder increased need in resource allocation, increased need
communication in skills, increased risk of losing exclusivity in social
Transferred asset value: Acquire market intelligence, competitiveness, innovation, internal and external skepticism, potential
second-generation customers, strengthened CFP for reduced competitiveness due to open access
innovation, increased credibility costs in case of
unforeseen exit of a partner from partnership
949
(continued)
Table 1. (continued)
950
Interaction value: Access to networks, technical expertise, improved

community and government relations, decreased long- and short-
term costs, speeding up approval for license to operate, exposure
to different organizational culture, increased potential meeting
government’s and society’s priorities, exert more political power
within nonprofit sector, improved accountability
Employee-specific benefits: Unique capabilities, increased employee
morale, productivity, reduced recruitment and retention costs; lower
absenteeism; motivated sales force; higher-quality products
Investor-specific benefits: Increased allegiance, investor recruitment fit
Customer-specific benefits: Reduced importance of price in the process of
choice and reduced asymmetry between consumers and business
Synergistic value: Product and process innovation and learning, increased
risk management skills, opportunities for innovation, opportunities
for improvement of processes, development of unique capabilities,
adaptation of new management practices due to the interaction with
nonprofit organizations (increased long-term value potential), exert
more political power within sector and society
Business (individuals Instrumental: New strengthened managerial skills, leadership Confusion; demotivation; diminishing trust due
internal to the opportunities, technical and sector knowledge, broadened perspectives to miss-matches of missions, goals, strategies,

partnership) Psychological: Psychic satisfaction (self-actualization), and new value frames; feeling of selling out; potential
friendships accountability problems to the beneficiaries
External to the partnership
Macro: Societal
Individuals (external to Increased disease/illness awareness and prevention, reduced death rates, Potential accountability, credibility, and
the partnership, intended increased life expectancy, reduced substance abuse, improved health, implementation problems
and unintended) improved well-being, improved social inclusion, improved independence
and responsibility, reduced asymmetry between consumers and
business, improved literacy, increased disposable income
(continued)

Other organizations Adoption of technological advantage through available open innovation/ Costs for the development of new markets,
intellectual property, adoption of social innovations, improved appropriateness of the standards developed
standards, reduced social costs, increased profit margin, increased
long-term value potential, increased potential to meet government’s
and society’s priorities, development of new markets
Society (including Decreased pollution, deaths; increased recycling, improved adoption Decrease in the credibility of the institution of
outcomes to the rates of new practices; improved environmental standards; improved partnership to deliver in case of rhetorical
environment) global governance mechanisms; reduced social costs; increased claims, increase in cynicism, potential decrease
capacity of societies to create social well-being; increased values; in institutional trust in business and nonprofit
increased long-term value potential; improved social standards; organizations, diluting ethical and emotional
enabling societies to take charge of their own needs, interacting with dimensions of social problems and replacing with
government and jointly designing welfare provision instrumental perceptions, appropriateness of the
standards developed
Systemic changes Introduction and adoption of new technology by industries, reduced Decrease of trust across sectors in case of miss-

social costs through interaction effects of social problems, matched partners, negative publicity, and inability
improved cross-sector relations, increased global value, improved to deliver
health, improved well-being, improved social inclusion, improved
independence and responsibility
Note. CFE: corporate financial performance.
951
outcomes as a focal issue and offering an outcomes-centered conceptualization (Austin

& Reavis, 2002; Hardy et al., 2003; Seitanidi, 2010). A precondition to address the
above deficiency is to study the links across levels and loci of benefits. As Bhattacharya,
Korschun, and Sen (2009) remark, to understand the full impact of CSR initiatives we
first need to understand how CSR can benefit individual stakeholders. Similarly,
Waddock (2010) refers to the individual level of analysis as the “difference makers”
comprising the fundamental element for the development of institutional pressures.
Hence, either the effects of initiatives on individuals or the role of individuals in affect-
ing value creation require further analysis on the micro level.
Table 1 presents the categorization of benefits on different levels of analysis and
according to the loci of value. Understanding the links across the different levels of
value creation and value capture is challenging. Interestingly, the most recent research
on the micro level of analysis is leading in capturing the interaction level across the
internal/external dimension (employees/customers) of benefits (Kolk et al., 2010;
Vock et al., 2011). The conceptualization of the links between employees and custom-
ers herald a new research domain that captures the missing links of cause and effect in
partnerships either directly or indirectly and focuses on interaction as a level of analy-
sis. In Table 1 value creation is divided also according to the types of value generated
and it provides examples of benefits and costs as evidenced by the literature. As such
it provides a time and value dimension in the categorization.
External Value Creation

Macro level. Beyond the partnering organizations, collaborations aim to generate
social, environmental, and economic value for the broader external community or
society. Although actions that alleviate problems afflicting others can take countless
forms, we define CVC at the macro level as societal betterment that benefits others
beyond the collaborating organizations but which happens only with their joint actions.
External to the partnering organizations, the collaboration can create social value for
individuals—targeted beneficiaries with needs that are attended to by the collaborative
action. It can also strengthen other social, economic, or political organizations that are
producers of social value and, hence, increase society’s capacity to create social well-
being. At a broader societal level the collaboration may also contribute to welfare-
enhancing systemic change in institutional arrangements, sectoral relationships,
societal values and priorities, and social service and product innovations, as well as
improving the environment with multiple societal benefits.
The benefits accruing to the partnering organizations and their individuals inter-
nal to the collaboration are ultimately due to the value created external to the social
alliance. Ironically, although societal betterment is the fundamental purpose for
cross-sector CVC, this is the value dimension that is least thoroughly dealt with in
the literature and in practice.
We provide examples of value creation external to the partnership in Table 1. On
the macro level the benefits for individuals or beneficiaries include the creation of

value for customers as we have seen above, an indirect benefit (Kolk et al., 2010; Vock
et al., 2011) mediated by the direct benefit that accrues to the employees as a result of
partnerships. Creating direct value for customers is an important distinction between
philanthropic and integrative/transformational interactions for socioeconomic benefit
(Reficco & Márquez, 2009). Rivera-Santos and Rufin (2010b) pointed to the linearity
that characterizes business value chains, that is, “a sequential process in which differ-
ent actors members contribute to value creation in a chronological sequence, with each
member receiving a product and enhancing it through the addition of value before
handing to the next” (Reficco & Márquez, 2009, p. 6). However, in nonprofit–business
partnerships the duality of the nature of benefits (economic and social) exhibit nonlin-
earity (Reficco & Márquez, 2009) in the process of value creation. Hence, the isolation
and attribution of socioeconomic benefit is rather complex. An example of a socioeco-
nomic customer benefit is derived from the collaboration of HP and an African social
enterprise mPedigree. The solution they developed using cloud and mobile technology
allows customers to check the genuineness of drugs in Africa and avoid taking coun-
terfeit drugs, which in effect saves lives (Bockstette & Stamp, 2011). Individuals who
may benefit from partnerships include the beneficiaries of the partnership programs
such as the dairy farmers receiving support in rural areas, for example, creation of jobs
for women in rural India (Bockstette & Stamp, 2011). Costs might include account-
ability and credibility issues and possible problems with administering the solution.
The benefits for other organizations result from the complexity that surrounds
social problems and the interdependence across organizations and sectors. The overall
benefits, for example, reduced pollution and deaths, increasing recycling, improved
environmental standards, result in value to society at large benefiting many people and
organizations either directly or indirectly. Moving to systemic benefits for other orga-
nizations can include the adoption of technological advantage through available open
innovation/intellectual property, changing processes of “doing business” that may
result in industry-wide changes. For example, developing environmentally friendly
technology in partnership between a firm and an environmental organization to
decrease the environmental degradation and in effect creating new industry standards
(Stafford et al., 2000); changing a banks’ lending policies to facilitate job creation for
socially disadvantaged young people, leading to change in banking industry policies
(Seitanidi, 2008); contributing to the development of community infrastructure;
increasing the paid-time allocation for employee community service; and developing
a foundation that supports community initiatives (Austin, 2000a). In all the above
examples the value is located outside the partner organizations. In cases where part-
ners raise claims that are unable to be substantiated, possible costs can include decrease
in the credibility of the institution of partnerships to deliver societal benefits, increase
in cynicism, and potential decrease in institutional trust in business and nonprofit
organizations.
Waddock and Post (1995) suggested that catalytic alliances focus their efforts for a
brief period of time in the generation of public awareness through the media for com-
plex and worsening social problems. Some of the characteristics of catalytic alliances

are quite different from the nonprofit–business partnerships (temporary nature vs. long
term; direct vs. indirect long-term shifts in public attitude). However, they have some
unique characteristics that potentially can be beneficial for partnerships: They are
driven by a core central vision rather than the instrumentality that predominately char-
acterizes cross-sector partnerships (Selsky & Parker, 2005). Hence, catalytic alliances
successfully link the work of previously fragmented agencies that work on related
issues, for example, hunger and homelessness. They can also create an expectations
gap between the public’s awareness of an issue and action on it, inducing other orga-
nizations and institutions to address it. New funding emerges, but the money’s impor-
tance “paled by comparison to the [value of the] organizational cooperation the process
stimulated” (Waddock & Post, 1995, p. 959). Social partnerships develop socioeco-
nomic value for a broad constituency and can function increasingly as governance
mechanisms (Crane, 2010) while providing diverse and multiple benefits. In effect,
they will be required to move from an instrumental to an encompassing normative
approach focusing on a central vision that can assist in the engagement with internal
and external stakeholders early on and produce “catalytic- or ripple-effect” (Waddock
& Post, 1995) that will be beneficial on all levels of analysis directly or through the
virtuous circle of value creation.
Partnering Value Creation Case Illustration

We return briefly to the partnership between Starbucks and Conservation International to
illustrate some of the above-mentioned types and levels of value creation outcomes.
Although associational value was not a primary objective or motivator for either part-
ner, it was generated nevertheless. The project’s first shipment of shade-grown coffee
attracted major press coverage due to its novelty resulting in 45 million free news
impressions, thereby giving positive visibility to both partners and their relationship.
This produced internal value at the meso level, but it also has external value at the
societal level, as it creates awareness of a desirable innovation and perhaps stimulates
imitation. Transferred value was more important to the partners. Although there was a
philanthropic component, more valuable was the deployment of their distinctive
assets. By combining their environmental and market knowledge and systems, the
partners were able to change the supply system in ways that they could not have done
either alone or in parallel. This gave rise to synergistic value in which social and envi-
ronmental benefits produced economic value in the form of higher-value coffee and
higher farmer prices. This, in turn, motivated and enabled the continuation of the con-
servation practices and environmental benefits, thereby stimulating a virtuous value
creation circle.
At the micro level, the farmers were benefitted by income increases of 40% with
the resultant social betterment of their families and communities. At the meso level,
the farmer cooperatives were strengthened organizationally and economically as
export sales rose 100%. Starbucks benefitted financially from achieving a new quality
supply source and a distinctive addition to its product line, also a benefit to its custom-
ers. The farmers’ environmental knowledge and technical capabilities were increased

and the natural habitat conserved. CI was able to contribute to its conservation goals
and to societal benefit, by preserving the habitat surrounding the major biosphere
reserve adjacent to the coffee producers. Both partnering organizations and their mem-
bers were enriched by the interaction value in the form of intangibles such as learning,
new knowledge, relational capital, trust, teamwork skills, and motivation. Those intan-
gibles, increasing and accumulating over time, enabled the partners to undertake the
more ambitious task of creating new purchasing guidelines by involving a broader set
of stakeholders and moving toward the co-creation of a larger, industry-wide impact
with potentially greater value creation at all levels internally and externally.
Furthermore, the partners replicated and expanded their collaboration into Central and
South America.
Filling the Gaps and Pushing the Frontiers

We end with concluding observations about what the CVC framework in its totality,
as elaborated in the Part 1 article (Austin & Seitanidi, 2012) and this Part 2 article,
adds to the field and then suggest some avenues of further exploration to advance our
collective knowledge. Our review of the nonprofit–business collaboration and related
CSR literature focused on the research question: “How can collaboration between
businesses and NPOs most effectively co-create significant economic and social value
for society, organizations, and individuals?”
First, a summary description of the proposed CVC framework: It is a conceptual
and analytical vehicle for the examination of partnerships and aims to assist researchers
and practitioners to position and assess collaborative interactions as multidimensional
and multilevel value creation vehicles. The first CVC component examines what the
sources of value employed by the partners are, what types of value are produced, and
how these change as one moves across the value creation spectrum from sole creation
to co-creation; the second component aims to position partners’ cross-sector interac-
tions within the collaboration continuum’s stages and examine the nature of the rela-
tionship according to the value descriptors; the third component presented in this
article answers the question how do the partnership processes contribute to the value
co-creation of the partners. The final component of partnership outcomes positions
the benefits and costs created internally and externally at the micro, meso, and macro
levels, and it categorizes value outcomes according to the type of value produced.
The CVC framework provides a distinct perspective on and approach to four basic
questions: Where does collaborative value come from? How is it created? What gets
created? Who benefits? The framework’s value creation spectrum moves us beyond
the literature’s evolving important recognition and conceptualizations of multiple
value, such as triple bottom line (Elkington, 1997), blended value (Emerson, 2003),
and shared value (Porter & Kramer, 2011). The new frontier is to launch research into
the next deeper level of analysis underlying the generation of economic, social, and
environmental value. The CVC framework moves to a more disaggregated and deeper
process-based understanding of the types of value and their underlying sources.

Furthermore, unlike previous concepts, our primary emphasis is on the level of co-
creation, where the value is generated. It enables the analytics of value co-creation
with greater specificity, dimensionality, and inclusivity. Although the literature
abounds with long lists of benefits from collaboration, they are neither equal in impor-
tance nor share the same origins or genesis. The framework organizes these benefits
into value constellations that facilitate focused analysis and helps identify and exam-
ine differences and interrelationships of benefits more systematically. This allows one
to think more strategically about the sources, their combinations and interactions, and
the resultant value they produce. Accordingly, partners can more systematically and
rigorously identify and weigh trade-offs across types of values and beneficiaries at the
micro, meso, and macro levels. This permits a more refined examination of value cre-
ation than existing conceptualizations. Whereas other conceptualizations have focused
primarily on businesses as primary actors and have given salience to the compatibility
of social and environmental value with economic value, the CVC framework gives
equal importance to all forms of value, as well as types of actors (individuals, organi-
zations, and societies) and time scales (short/long term), providing the analytical paths
for assessing value creation holistically.
The framework enables one to specify and analyze what in effect is a “collaboration
value chain” and the underlying “critical pathways of the co-creation of value.” The
framework’s focus on partnering processes and microprocesses identifies the specific
drivers and dynamics of value creation and relates them to the sources of value they
affect and the kinds of value they produce. This analytical approach is not only more
specific in its identification and definition of the value creation pathways, it also takes
a more comprehensive approach by examining the evolution of value creation through
the phases of formation, selection, operation and design, and institutionalization. In
addition, the framework recognizes that the collaborative relationship can pass through
stages and take different forms, each of which has different value creation dynamics
and potential in terms of which value sources are tapped and which types of value are
generated.
The framework’s formulation of new referent terms contributes to the development
of a common linguistic currency for the discussion and assessment of value in collabo-
ration, advancing theoretical discussions about value creation in interaction and col-
laboration research. It extends Austin’s (2000a, 2000b) “Collaboration Continuum” by
adding a fourth “Transformational” stage with distinct value creation characteristics.
Moreover, the CVC framework regroups and extends partnership processes adding
significant level of detail; for example, it introduces “interaction value accumulation”
as part of the institutionalization process. The outcomes component contributes to
overcome the narrowness or lack of evaluation analysis of value creation. The frame-
work enables one to envision and formulate a “collaboration value portfolio” in terms
of loci and levels of analysis (internal/external and micro/meso/macro) as well as by
type of value created. Through these multiple levels the framework is compatible with
assessing any type of social, environmental, or economic problem and the interrela-
tionships over any time frame. At the higher levels of co-creation, it spotlights syner-
gistic value and the virtuous value circle and also flags the general lack of analysis of

the value created at the macro level. There is a tendency to assume societal betterment
rather than provide the necessary evidence. Consequently, the core question, “How is
society better off due to the collaboration?,” remains underdocumented in practice.
The framework does not remove the many well-known assessment complications, for
example, of precision and attribution of impacts that occur over long periods of time.
However, it does provide an organizing frame for categorizing measurements and
measurability as well as for formulating theories of change and tracking causal chains
of value creation. Finally, the levels of analysis, meso-macro-micro, previously pre-
sented by the extant literature as linear systems, are conceptualised in our framework
as nested systems representing more closely social reality. As such it contributes a
dynamic perspective to our understanding of complex social issues demonstrating the
connections across the levels of analysis and types of benefits.
For Practitioners
Galbreath suggested that what constitutes value and what the rules of value creation
are is one of the most far-reaching changes in the 21st century: “what becomes easily
apparent is that the firm’s success is ultimately derived from relationships, both inter-
nal and external” (Galbreath, 2002, p. 11), with cross-sector social partnerships consti-
tuting a central mechanism for value creation. Large and varied amounts of resources
are required for the generation of value in multiple combinations for the production of
economic, social, and environmental value. The CVC framework can assist practitio-
ners manage the value creation variable by guiding deeper and systematic analyses of
the following core questions: (a) What and where are the sources of value? (b) How
and in what mix can these sources be most effectively tapped in each partnering
phase: formation, selection, implementation, and outcomes? (c) How can different
partnering processes affect differentially value creation across different collaboration
relationships: philanthropic, transactional, integrative, transformational? What value
outcomes are being produced by the collaboration for which organizations, individu-
als within and outside of the partnership, and for society in general? (d) What value
outcomes are being produced by the collaboration for which organizations, individu-
within and outside of the partnership, and for society in general?
For Researchers
Collaborations do not always produce value as sometimes partners may reach bad
solutions, create new problems, or not solve the target problems (Bryson et al., 2006;
Austin, 2000a). The partnership literature is in the early stages of addressing issues of
mapping the value creation road on different levels of analysis. Some macro-level
benefits and costs require longitudinal studies by groups of researchers collaborating
across interrelated fields across multiple organizations in order to capture how a direct
social benefit has long term economic and social effects across organizations. Such
research teams are just emerging as policy makers have only recently demonstrated
an interest in capturing such impacts (ESRC, 2011). Furthermore, multilevel value

958
Table 2. Research Avenues by Collaborative Value Creation Component
Collaborative
Value Creation
Components Research Avenues
Component How can partners maximize their partnership fit potential?

3: Partnering How do partners articulate social problems and how do they develop frames that connect them with their interests and the social good?
processes Do partners’ motives link with their partnership strategies? How can we examine systematically the history of the partners’ interactions
in time?
What is the role of partnership champions before and during the partnership?
Should partners reconcile their value frames, to what extent and how?
How can partnership process increase the potential for co-creation of synergistic value?
How can partnerships strengthen their accountability through their processes mechanisms?
How can partnership processes enhance societal outcomes?
How can the processes in partnerships facilitate the development of new capabilities and skills?
How can processes in partnerships facilitate value renewal?
How can evaluation of the partnership implementation strengthen the value creation process?
How can the evaluation of partnership implementation improve the benefits for both partners and also for society?
Component How do partners view their own and each other’s benefits and costs from the collaboration?
4: Partnering How is social value generated as a result of the partnership outcomes?
outcomes Do partnerships constitute intentional social change mechanisms? And how?
How do the loci of value creation in partnerships interact?
Are the multiple levels of value creation interdependent and what are the links between the micro, meso, and macro levels?
What is the relationship between benefits and costs in partnerships?

What are the links between the social and economic value creation and the different types of benefits and costs in partnerships?
What are the partnership benefits and the costs for the stakeholders? And the beneficiaries of partnerships? How can we conceptualize
the links between the benefits and costs in cross-sector social partnerships?
How does external value created in partnerships contribute to the socioeconomic value creation for the partners?
How do partnerships’ direct and indirect benefits link to the different levels of value creation (macro-meso-micro)?
What is the role of vision in producing socioeconomic value in partnerships?
(continued)

Collaborative
Value Creation
Components Research Avenues
How can the different types of value be assessed in partnerships?

How can we develop a systematic and transparent value assessment in partnerships?
How can assessment in partnerships strengthen decision making?
How can indicators of value assessment in partnerships account for the different levels of value creation?
How can we connect the different points of evaluation in partnerships (process outcomes and program outcomes and impact) to
strengthen value creation on different levels?
How can we assess the long-term impact of partnerships? Which are the most appropriate methods to assess impact? To what extent
do partnerships deliver synergistic impacts? For whom? And how?
Overarching How and to what extent does economic value create social and environmental value and vice versa?
themes across Is social, environmental, and economic value being created simultaneously or sequentially?
components Can we invent a new measure that assess multidimensional (economic-social-environmental) and multilevel (macro-meso-micro) value?
How do partnerships reconstitute value?
How can partnerships function as global mechanisms of societal governance?

959
assessment, that is, introducing all three levels of analysis: organizational, individual,
and societal is a recent focus in the literature (Seitanidi, 2008, 2010; Seitanidi &
Lindgreen, 2010). Examples include the study of the impact of social regeneration
through partnership in disadvantaged communities (Cornelious & Wallace, 2010);
studying the orchestration of multilevel coordination that shapes relational processes
of frame fusion in the process of value creation (Le Ber & Branzei, 2010c); and
addressing the reciprocal multilevel of change through the interplay between micro,
meso, and macro levels of reality in the stage of partnership formation (Seitanidi
et al., 2010). The empirical studies that aim to capture societal or systemic benefits
(Seitanidi, 2010) tend to employ the perceptions of organizational actors in the focal
organizations without involving beneficiary voices, or if they make reference to the
beneficiaries, they generally employ a theoretical perspective (Le Ber & Branzei,
2010a). Overcoming the existing limitations of research that focus on single organiza-
tions requires a shift in focus, means, and methods. Such changes will allows us to
capture the interconnections of cross-sector social interactions on multiple levels and
possibly unlock the secrets to the ability of our societies to achieve positive social
change intentionally in a short period of time.
Just as we provided at the end of the Part 1 article for Components 1 and 2, Table 2
provides sets of research avenues for the Components 3 and 4 of the CVC framework.
What partners do and how they implement partnerships will have a significant
impact on the micro, meso, and macro levels whether or not partners are considering
co-creation of value explicitly or implicitly during the partnership processes.
Furthermore, there is a need to demonstrate how and to what extent social and envi-
ronmental value creates economic value and vice versa, whether simultaneously or
sequentially. Understanding more deeply this virtuous value circle is at the heart of the
paradigm change. As for any theoretical construct, we expect and hope that for the
CVC conceptual and analytical framework researchers and practitioners will apply,
test, refine, and expand it.
The starting premise for our framework was that co-creating value is the fundamen-
tal purpose of cross-sector collaboration. The aim of the CVC framework is to improve
our understanding of the value creation spectrum, collaboration stages, partnering pro-
cesses, and outcomes on multilevels and multidimensions of analysis to facilitate sys-
tematic thinking of partnerships as internal and external value creation mechanisms.
As such our ending and enduring aspiration remains that every collaboration scholar
and practitioner should strive to have their research or actions create significant value
for society, organizations, and individuals.
Acknowledgement
The authors thank Ulrike Veske for her valuable assistance with reference documentation.
Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship,
and/or publication of this article.

Funding
The author(s) received no financial support for the research, authorship, and/or publication of
this article.
Notes
1. Diagnostic frames are encoders of individuals’ experiences that assist in the assessment of
a problem and prognostic frames are the use of the experiences to assess a possible solution
(Kaplan, 2008; Le Ber & Branzei, 2010c)
2. In Latin locus refers to the place, location, situation, spot; loci is the plural, that is, where
we position the value creation.
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Bios
James E. Austin is the Eliot I. Snider and Family Professor of Business Administration,
Emeritus at the Harvard Business School. His research over the past two decades has concen-
trated on cross-sector collaboration, corporate social responsibility, and social
entrepreneurship.
Maria May Seitanidi (FRSA) is a Senior Lecturer in CSR at the Hull University Business
School and a Visiting Fellow at the International Centre for Corporate Social Responsibility,
Nottingham University Business School. Her work for over 20 years, as a practitioner and aca-
demic, concentrated on cross sector social interactions including philanthropy, socio-sponsorship
and social partnerships.

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Nonprofit and Voluntary Sector

Collaborative Value Creation : A Review of Partnering Between Nonprofits

The online version of this article can be found at:

Association for Research on Nonprofit Organizations and Voluntary Action

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>> Version of Record - Nov 18, 2012

OnlineFirst Version of Record - Sep 13, 2012

Collaborative Value 41(6) 929­–968

Nonprofits and Businesses.

James E. Austin1 and Maria May Seitanidi2

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Purpose and Content

Research Question 1: How can collaboration between nonprofits and businesses

The predecessor article presented the growing importance of partnering between

CVC Component 3: Partnership Processes

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collaboration Stages analyzed in CVC Component 2: philanthropic, transactional,

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that contribute to the anticipation of problems while focusing on the maximization of

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Partnership Fit Potential

Initial articulation of the social problem

Identify partners’ motives and missions

Identify the history of interactions and visibility fit

Identify Pre-partnership Champions

Figure 1. Partnership Formation: Organizational Fit

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in searching and negotiating as well as terminating early low-potential relationships

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demonstrating that collaboration can be a different model of political behavior rather

Partnership Selection for Co-Creation of Value

Assessing Partnership Potential

Developing Partnership Criteria

Risk Assessment Processes

Formal Risk Assessment Process Informal Risk Assessment Process

External Process Internal Process Internal Process External Process

Informal Meetings between Collecting intelligence from

Figure 2. Partnership Selection for Co-creation of Value

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Partnership Design and Operations

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Partnership Design & Operations

Exit or Continuance Strategy

Figure 3. Partnership Design and Operations

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One of the important institutionalization processes is interaction value accumula-

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Social betterment becomes central in the integrative and transformational stages of

Embedding Collaboration in strategy, mission,

Deepening personal relations and strengthening

Fusing and revitalizing value frames

Engagement of external stakeholders

Figure 4. Partnership Institutionalization

Partnering Processes Case Illustration

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multiyear collaboration between Starbucks and Conservation International (CI), per-

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CVC Component 4: Collaboration Outcomes

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Where Value Is Created: Loci of Value Creation

Collaborative Value 41(6) 929–968

Figure 2. Partnership Selection for Co-creation of Value