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Social alliances are voluntary collaborations between two or more entities with different organizational structures, such as corporations and nonprofit organizations, to tackle environmental and social concerns. The paper researches types of social alliances where companies seek to improve their brand image and reputation, and nonprofits seek to increase their funds(Martínez, 2003). Moreover, companies are concerned about solving social problems and raising awareness in society. The debate is built on the benefits and risks of having social alliances. The paper analyzes the needs and goals of nonprofit organizations and the benefits and risks of such kind of collaboration.
The opportunities and risks inherent in social alliances dictate the need for nonprofits to hedge their bets. The literature part of the study states that companies benefit by having a higher likelihood of brand purchase, improved reputation and brand image, and increased employee satisfaction and loyalty (Martínez, 2003). They also achieve higher levels of awareness, recall advertising campaigns, and learn specific management skills from nonprofits (Martínez, 2003). The nonprofits also obtain benefits by obtaining funding, increasing awareness of their brand and projects, and helping or forcing companies to be socially responsible (Martínez, 2003). Some of the risks based on the literature review on social alliances arise from power imbalance before forming partnerships and lack of partner match during alliance development.
The literature review is regarded as assumptions made by scholars in Anglo-Saxon countries. The research seeks to determine how Spanish nonprofits are hedging the risks associated with social alliances. Findings were that company incurs unethical behavior during the alliance or in the past, losing their independence and fearing that companies may take advantage of them without creating value for their nonprofit partners (Martínez,2 003). Nonprofits use three measures to prevent the most critical perceived risk: they have agreed on a code of conduct, set requirements to accept an alliance and do ethical screening(Martínez,2003). Nonprofits need to hedge their risks as they are disadvantaged when agreeing to have social alliances. I agree with the studys conclusions that they must conduct a thorough background check on the company they want to partner with and forgo temporal benefits that might destroy their brand image.
Reference
Martínez, C. V. (2003). Social alliance for fundraising: How Spanish nonprofits are hedging the Risks. Journal of Business Ethics, 47(3), 209-222.
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