Abstract

The aim of this study is to understand how governance mechanisms in cross-sector collaborations (CSCs) for sustainability affect value creation and capture and subsequently the survival of this organizational form. Drawing on a longitudinal, participatory, single-case study of collaborative action in the textile industry, we identify three governance mechanisms—safeguarding, bundling and connecting—that coevolve with the rising and waning of collaborative tensions and the shifting levels of action in the CSC we studied. These mechanisms aided value creation and helped facilitate private value capture. We integrate these insights into a process model that visualizes the interplay between governance mechanisms of tensions and systems of value creation and capture in CSCs for sustainability. Our study contributes to the cross-sector collaboration literature by providing a dynamic and nuanced understanding of how governance mechanisms influence outcomes in CSCs for sustainability. We also add to the business model for sustainability literature by theorizing the value creation and capture system of collaborative rather than individual organizations. Our findings have important implications for policymakers who fund collaborative organizations and practitioners who manage or participate in them.