Title: When the going gets tough: alliance formation as a strategic response to SRI negative screens

Authors: Laurie Ingraham, John Usher

Addresses: International Institute for Resource Industries and Sustainability Studies (IRIS), Haskayne School of Business, University of Calgary, 2500 University Dr. NW, Calgary, Alberta T2N 1N4, Canada. ' Faculty of Management, University of Lethbridge, 4401, University Dr., W Lethbridge, AB T1K 3M4, Canada

Abstract: How should firms respond strategically when their whole industry is negatively screened by Socially Responsible Investment (SRI) funds due to the nature of its products (e.g., tobacco, alcohol, weapons) or its processes (e.g., biotechnology, nuclear power, mining, forestry)? We argue that an industry|s exclusion from SRI funds due to negative screening should provide an incentive for firms to strategically manage the social responsibility aspects of their industry. Moreover, due to problems associated with free riding, we believe this incentive will likely result in the formation of multiple firm, intra-industry collaborative alliances engaged in social action and legitimation on behalf of the industry, rather than single firm efforts. We explore this argument by searching for evidence of such alliances within a sample of SRI negatively screened industries.

Keywords: strategic alliances; sustainable strategic management; socially responsible investments; SRI funds; negative screening; performance sustainability; ethical management socially responsible management; public interest; shareholders; ethics; alliance formation.

DOI: 10.1504/IJSSM.2009.026281

International Journal of Sustainable Strategic Management, 2009 Vol.1 No.3, pp.242 - 257

Published online: 05 Jun 2009 *

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