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The importance of nongovernmental organizations (NGOs) in global governance and value creation: an international business research agenda

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Abstract

The emergence of organized civil society and of nongovernmental organizations (NGOs) as organizational manifestations of broader social movements has dramatically altered the global political–economic landscape. The increasing global reach of NGOs challenges established international business (IB) research, and highlights opportunities for broadening and adapting extant paradigms in the field. In this article, we introduce the concept of NGOs and contrast them with their private-sector (firm) and public-sector (government) counterparts within the context of IB. We discuss factors giving rise to NGOs as important organizational entities that participate in global value creation and governance, and identify limits to their efficacy and viability. We identify important questions raised by incorporating NGOs into our conceptualization of global context, and we challenge three basic tenets of IB theory: the definition and dynamics of an institutional field, the relevance/centrality of a firm–government (i.e., two-sector) bargaining model, and the pre-eminence of the firm as the global organization of interest within the field. We conclude by offering suggested research directions that should serve as catalysts for this new and potentially rich area of future IB research.

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Notes

  1. The United Nations Development Programme (UNDP) defines civil society as ‘a voluntary sector made up of freely and formally associating individuals pursuing non-profit purposes in social movements, religious bodies, women and youth groups, indigenous peoples' organizations, professional associations, unions, and so on.’ http://www.undp.org/cso/about/faq.html

  2. We are grateful to Lorraine Eden, who directed us to consider NGOs as clubs in her discussant comments in the ‘Rise of the Third Force’ panel at the AIB annual meetings in Monterey, California in July 2003.

  3. These include Tiebout (1956), Musgrave (1969), Ostrom and Ostrom (1977), Ostrom (1990), Weimar and Vining (1992), Romer (1993a, 1993b), Ferlie et al. (1996), Kaul (2001), Brinkerhoff and Brinkerhoff (2002), Ramia (2003), Brinkerhoff et al. (2003), and Teegen (2003).

  4. It is important to note here that states willingly cede some control over societies and economies – most notably in the case of economic liberalization and privatization, where market incentives are deemed sufficient to engage private sector actors in efficient resource allocation and value creation that supports overall social welfare. Declining state roles do not necessarily relate to NGO dominance in a particular area (Stromquist, 1998). Likewise, there are limits to the potential reach of NGOs in displacing state or firm actors (Lipschutz, 1992; Arnove and Christina, 1998). Such limits will be discussed in a later section.

  5. There are many services that rate and assess the economic efficiency of charitable organizations, including Philanthropic Research Inc., Guidestar, American Institute of Philanthropy (www.charitywatch.org), and Worth Magazine.

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Acknowledgements

We gratefully acknowledge the useful insights from Editor Arie Lewin and three anonymous reviewers on a previous version of this article. Hildy Teegen received financial support for her participation in the preparation of the article from the Grub Fellowship in International Business at the George Washington University.

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Authors and Affiliations

  1. Department of International Business, School of Business, The George Washington University, Washington, DC, USA

    Hildy Teegen

  2. Department of Management, College of Commerce and Finance, Villanova University, Villanova, PA, USA

    Jonathan P Doh

  3. Department of Strategy and Policy, Boston University, Boston, MA, USA

    Sushil Vachani

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  1. Hildy Teegen
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  2. Jonathan P Doh
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  3. Sushil Vachani
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Correspondence to Hildy Teegen.

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Accepted by Arie Lewin, Editor in Chief, 11 June 2004. This paper has been with the author for two revisions.

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Teegen, H., Doh, J. & Vachani, S. The importance of nongovernmental organizations (NGOs) in global governance and value creation: an international business research agenda. J Int Bus Stud 35, 463–483 (2004). https://doi.org/10.1057/palgrave.jibs.8400112

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