The Gatekeeping Function of Trust in Cross‐sector Social Partnerships

• DOI: http://doi.org/10.1111/basr.12038
• Published date: 01 September 2014
• Date: 01 September 2014

The Gatekeeping Function

of Trust in Cross-sector

Social Partnerships

RONALD VENN AND NICOLA BERG

ABSTRACT

Hunger and deprivation, lack of education, sanitation,

and health care are only a few pressing issues related

to poverty in developing countries. Addressing such

complex social issues requires pooling complementary

resources of the civil, public, and private sector. Over the

last decade, stakeholders tried to cocreate innovative

solutions in cross-sector social partnerships (CSSPs) at

the base of the economic pyramid (BoP), but collabora-

tion proved to be very challenging. Practitioners become

increasingly frustrated with operational differences,

intransparency, and mismatched goals in partnerships.

This study unravels the black box of collaboration and

delivers empirical insights on trust and power in CSSPs

based on social exchange theory. Structural equation

modeling (SEM) enables us explore relationships beyond

case-based insights. Our rigorous empirical analysis

covers 207 interorganizational relationships and outlines

a crucial gatekeeping function of trust in CSSPs. Find-

ings provide strong empirical support for conceptual

Ronald Venn is a doctoral candidate at the Chair of Strategic Management at University of

Hamburg, Hamburg, Germany. E-mail: ronald.venn@uni-hamburg.de. Nicola Berg is a full

professor at the Chair of Strategic Management at University of Hamburg, Hamburg,

Germany. E-mail: nicola.berg@uni-hamburg.de.

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Business and Society Review 119:3 385–416

© 2014 Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc.,

350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

works calling for an “integrative orientation” in CSSPs.

Furthermore, we pinpoint the role of intermediates and

draw implications for future research.

CROSS-SECTOR SOCIAL PARTNERSHIPS FOR

POVERTY ALLEVIATION

According to the World Bank (2010), 1.4 billion people suffer

from extreme poverty. Hunger and deprivation, lack of

education, sanitation, and health care are only a few

pressing issues related to poverty at the base of the economic

pyramid (BoP). Its tremendous complexity makes poverty hard to

tackle as solutions regularly exceed the capacity, resources, and

capabilities of any single organization. Literature calls for

multistakeholder collaboration across sector boundaries (Austin

2000a; Waddock 1988). Cross-sector social partnerships (CSSPs)

can be defined as active collaboration between two or three

sectors on mutual social problems (Waddock 1988). The partner-

ship approach points out that public, private, and civil sector

organizations share complementary competences and resources,

which provides fertile ground for cocreating solutions not achiev-

able by anyone sector alone. Literature mostly assumes a “win–

win–win” rationale (Waddell 2000). CSSPs were initiated around

sustainability, governance, and poverty alleviation issues.

Despite great enthusiasm, a number of initiatives failed to meet

expectations. Many CSSPs were put on hold due to procedural

challenges and conflicts between partners (Babiak and Thibault

2009; Bäckstrand 2006; Berger et al. 2004). Heterogeneous par-

ticipants, such as companies and nonprofit organizations,

struggle to work together (Dahan et al. 2010) because divergent

expectations concerning outcomes can cause strong conflict

(Garrette and Karnani 2010). Practitioners become increasingly

frustrated with operational differences, intransparency, and mis-

matched focus (Karamchandani et al. 2011). In the past, litera-

ture has normatively focused on innovation potential (Selsky and

Parker 2010), while collaboration was mostly left as a black

box (Rivera-Santos and Rufín 2010a). Early case study evidence

indicates the tremendous importance of power and trust in

partnerships (Austin & Seitanidi, 2012; Rivera-Santos et al. 2012;

386 BUSINESS AND SOCIETY REVIEW

Stadtler 2011), and literature strongly calls for further investiga-

tion. Quantitative evaluations are virtually nonexistent today, so

our rigorous empirical analysis contributes first insights to close

this gap.

This empirical study opens the black box of collaboration in

CSSPs at the BoP. First, we contribute a novel perspective on

collaboration and identify dominant social exchange patterns at

various partnership stages. Based on these insights, we examine

the impact of conflicting organizational objectives on partnership

performance. We then apply a process-based view (Kolk et al.

2008; Seitanidi and Ryan 2007) which enables us to consider

power and trust issues between participants. We provide empirical

insights by means of structural equation modeling (SEM). Our

data covers 207 interorganizational relationships nested in 85

CSSPs by Austrian, Swiss, and German companies. Findings

outline a gatekeeping trust function in CSSPs, which means we

can deliver missing empirical evidence for earlier conceptual

works. Furthermore, we pinpoint the role of intermediates in

CSSPs and connect to the discussion of social intrapreneurship.

THEORETICAL BACKGROUND

Blurred Partnership Boundaries

Sector roles and responsibilities undergo dramatic changes in

today’s society. Boundaries become increasingly blurred, espe-

cially in developing countries. Private and civil organizations

provide public goods and services nowadays (Warner and Sullivan

2004), which bridge institutional voids (Kolk and van Tulder

2006) and governments’ incapacity to fulfill basic human needs of

millions living in poverty (Valente and Crane 2010). This develop-

ment was speeded up when scholars outlined tremendous market

opportunities for the private sector (Prahalad 2005; Prahalad and

Hammond 2002; Prahalad and Hart 2002). BoP literature argues

that sustainable development and commercial interest can

complement each other (Lodge and Wilson 2006; Wilson and

Wilson 2006). However, engaging in poverty alleviation is entirely

new terrain for most companies. Unconventional partnering

across sector boundaries is crucial in overcoming market barriers.

387VENN AND BERG