NGOs and CSR: What are the Strategies to Become Critical Stakeholders?

This paper aims to explore the condition under which the action of non-governmental organizations (NGOs) can embody a “third way” to move corporations to embrace social responsibilities, beyond the public regulation and voluntary corporate social responsibility (CSR). In the past years, the advocacy NGOs have been showing a growing interest in business in their attempt to improve the environmental and social context, by influencing the level of CSR. However, in the perspective of the stakeholder theory (and particularly, in an instrumental orientation), are NGOs capable of being critical stakeholders? Even if they have legitimacy and urgency, NGOs often do not have the power to directly influence the firm’s financial and competitive performance. This paper first examines the strategies typically used by NGOs to achieve more power by acting through another stakeholder and threatening to withhold his/her resources. Subsequently, we examine the strategies related to the two traditional stakeholder-targets: the government and the consumers, and explain why both have often demonstrated to be too weak. In the third part, the emerging influencing strategies are analyzed, in which the NGOs attempt to involve two other stakeholders-allies, the shareholders and the executives, in their battle. In the last part, we consider the effectiveness of the NGOs’ strategies by identifying three strategic resources: funds, legitimacy, and information, and the novel competences needed to engage with shareholders, executives, and others NGOs.