Knowledge Transfer between For‐Profit Corporations and Their Corporate Foundations

• DOI: http://doi.org/10.1002/nml.21125
• Published date: 01 March 2015
• Date: 01 March 2015
• Author: Matteo Pedrini,Marco Minciullo

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N M  L, vol. 25, no. 3, Spring 2015 © 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21125

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Correspondence to: Marco Minciullo, Università Cattolica del Sacro Cuore, Milano (MI), Italy.

E-mail: marco.minciullo@unicatt.it.

Knowledge Transfer between For-Profi t

Corporations and  eir Corporate

Foundations

WHICH METHODS ARE EFFECTIVE?

Marco Minciullo, Matteo Pedrini

Università Cattolica Del Sacro Cuore

This article investigates the impact of knowledge transfer (Goh 2002) from founder firms

to the corporate foundations (CFs) on the CFs’ effectiveness. Starting from a typology of

CFs’ effectiveness (Ostrower 2006a), we conducted a survey addressed to a sample of Ital-

ian CFs to address the impact of different knowledge transfer methods (KTMs) on three

dimensions of CFs’ orientation to effectiveness: proactive orientation, social advocacy, and

capacity building. The research identified four different KTMs and, using a linear regres-

sion, pointed out that the methods adopted by founder firms have a significant influence

on proactivity, competences, and on social advocacy of CFs.

Keywords: corporate foundations, philanthropy, managerial spillover, effectiveness,

knowledge transfer

In recent years many for-profi t fi rms have been engaged in improving the social and envi-

ronmental consequences of their activities, implementing a set of corporate social respon-

sibility (CSR) initiatives. For-profi t fi rms exploited CSR activities with diff erent goals: to

feed the competitive advantage of the firm (Rumsey and White 2009; Smith 1994); to

promote the fi rm’s social reputation (Bronn and Vidaver-Cohen 2009; Carter 2006; File and

Prince 1998; Fry, Keim, and Meiners 1982; Haley 1991; Navarro 1988; Saiia, Carroll, and

Buchholtz 2003); to secure the availability of resources controlled by stakeholders (Brayden

and Whetten 2008; Levy and Shatto 1978); and to encourage positive behaviors in consum-

ers (Ellen, Mohr, and Webb 2000). In the fi eld of CSR, a long-established role has been

played by philanthropic initiatives and corporate giving (Godfrey 2005; Porter and Kramer

2002, 2006; Saiia 2002; Seifert, Morris, and Bartkus 2004).  is group of CSR activities are

usually managed directly by a fi rm or by transferring money to a specifi c organization, such

as a corporate foundation (CF) (Petrovits 2006).

Thanks to the growing attention paid by for-profit firms to CSR, the relevance of CFs

in terms of total managed financial resources and number has increased in recent years

Nonprofi t Management & Leadership DOI: 10.1002/nml

216 MINCIULLO, PEDRINI

(Anheier 2003; Marquardt 2001; Morweiser 2001; Voegele-Ebering 2003). CFs are regarded

by for-profi t fi rms as a substantial instrument with which to exploit benefi ts related to CSR

(Porter and Kramer 2011).

CFs diff er from other foundations because of their ties with a fi rm (the “founder fi rm”);

such ties are strengthened by frequent and repeated interactions, committed involvement,

and a high level of trust between the organizations (Granovetter 1973; Rowley, Behrens,

and Krackhardt 2000).  us, CFs have additional advantages over general foundations:

(1) they depend on a firm for funding; (2) they have close ties with the founder firm

because of annual endowments and nonfi nancial resource dependence (employees, staff sup-

port, relations, knowledge, and know-how) (Frooman 1999); and (3) they almost always

have founder firm’s executives as members of their boards of directors (Anheier 2001;

Webb 1994).

Although extensive academic research has been devoted to foundations, few studies on CFs

have been conducted (Ostrower 2006a). Previous research on CFs has been focused on the

defi nition of their unique characteristics (Anheier 2001), on their growth in economic rel-

evance and total population (Anheier 2003; Morweiser 2001; Voegele-Ebering 2003), and

on their diff erent business models (Pedrini and Minciullo 2011). Signifi cant eff orts have

also been dedicated to the impact of CFs’ activities on founder fi rms in terms of reputa-

tion (Webb 1994; Marquardt 2001), earnings management (Petrovits 2006), CSR activities

(Westhues and Einwiller 2006), and taxation benefits (Sansing and Yetman 2005; Webb

1994).

 e ties between the founder fi rm and the CF represent a signifi cant opportunity both for

the fi rms and CFs given that many advantages can be exploited by activating eff ective knowl-

edge transfer processes. It deserves a particular reference from the ongoing, sustained, and

repeated interactions and discussions between the CF and its founder fi rm (Ambos, Ambos,

and Schlegelmilch 2006; Gnyawali, Singal, and Mu 2009).

Previous research has shown that the knowledge transfer between two organizations has a

positive relation with economic performance (Lee, Kim, and Kim 2012; van Wijk, Jansen,

and Lykes 2008), innovation (Lyles and Salk 1996; Steensma and Lyles 2000), and the

development of organizational capabilities (Hutzschenreuter and Horstkotte 2010; Szulanski

1996).  is article analyzes the relationship between the mechanisms used by founder fi rms

to transfer knowledge toward CFs and CFs’ eff ectiveness. We focused our analysis on the case

of corporate foundations in Italy, which has emerged as an innovative context (Minciullo and

Pedrini 2011).  us, the article contributes to the literature on CFs in that it proposes that

founder fi rms can consciously use knowledge transfer methods (KTMs) to drive CF activities

toward desired eff ectiveness.

 e article is structured as follows. In the fi rst section, we discuss the role of CFs in cor-

porate philanthropy and then analyze the relationship between a CF and a founder fi rm,

focusing on the fi rm’s KTMs. In the second section, we examine how previous research

has defi ned and emphasized the concept of “foundation eff ectiveness,” and relate it to

knowledge transfer.  e third and fourth sections discuss the eff ectiveness of CFs and pre-

sent diff erent knowledge transfer methods, respectively.  e description of the methodol-

ogy in the fi fth section contributes to a better understanding of the results, derived from

a regression model, provided in the sixth section.  e discussion and conclusion end the

article.