LAUSR

Businesses and NGOs are collaborating more frequently to address social issues with commercial solutions, yet not all collaborations work well. We wanted to know why some collaborations struggle where others succeed. We studied five projects in India in which businesses bought goods and services from NGOs that employed disadvantaged people. Two of these five projects met the expectations of both parties, whereas the other three did not. By drawing on the paradox literature, we argue that the project’s success indicates that the business and NGO engaged the commercial-social paradox. We found that in the projects that worked well, the two parties held fluid categories, i.e. they saw differences between business and NGO as contextual and aimed to find creative workarounds to emergent problems. In the projects that did not work well, businesses and NGOs imposed categorical imperatives, i.e. they saw sharp differences that they intensified by imposing standardized and familiar solutions on their partner. We contribute to the literature on paradox to show how cognition and action create generative or limited outcomes. We also weigh in on the ontological foundations of paradox, arguing that actors that assume that paradoxes are a social construction are more likely to engage paradoxes than actors that assume paradoxes are a social reality.