TITLE

When greening Goliaths meet emerging Davids: The evolving rationales of sustainability-oriented alliances

ABSTRACT

Established firms have increasingly formed alliances with green start-ups – newly started ventures dedicated to environmental innovation. This study explores the rationale for this type of alliances. Specifically, we investigate the role of traditional alliance rationales, grounded in transaction cost economics (TCE) and the resource-based view of the firm (RBV), in parallel to rationales specific to sustainability activities. The latter refers, in particular, to the use of alliances as a means to legitimacy-seeking ambitions. Through a longitudinal study set in the context of food waste reduction alliances, we empirically explore the rationales of such alliances in the formation, development, and outcome stage. Our findings indicate that legitimacy-seeking rationales prevails in the formation and outcome stage. Further analysis suggests that such benefits are achieved through fundamentally different, stage-specific mechanisms. As alliances evolve, we demonstrate how other rationales, i.e. capability-building and new revenue creation, shape the development of the alliances. This study contributes to the literature of sustainability-oriented alliances by demonstrating how alliances with green start-ups play important roles for established firms’ transformation towards more sustainable business practices.