Governing Value Creation in a Sustainability Collaboration: A Case Study in the Apparel Industry

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Governing collaborative value creation
in the context of grand challenges: A case study of a
cross-sectoral collaboration in the textile industry
Lori DiVito*
Amsterdam School of International Business
Amsterdam University of Applied Sciences
l.e.d.divito@hva.nl
Jakomijn van Wijk
Amsterdam School of International Business
Amsterdam University of Applied Sciences
and
Maastricht School of Management
Email: j.j.van.wijk@hva.nl
Ingrid Wakkee
Centre for Applied Research in Economics and Management
Amsterdam University of Applied Sciences
i.a.m.wakkee@hva.nl
Accepted for publication in Business & Society
special issue on Collaborative Cross-Sector Business Models for Sustainability
April 2020
Guest editors:
Esben Rahbek Gjerdrum Pedersen, Florian Lüdeke-Freund, Irene Henriques, M. May Seitanidi
*corresponding author

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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 novel 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 co-evolve 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 to 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 policy makers who fund collaborative organizations
and practitioners who manage or participate in them.
Keywords: cross sector collaboration, governance, business models for sustainability,
collaborative value creation, textile industry

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Cross-sector collaborations (CSC) have emerged as novel organizational forms to address
grand challenges that cannot be solved by individual organizations (Clarke & Crane, 2018;
Ferraro, Etzion & Gehmann, 2015). By bringing together private, public and non-profit
organizations (Austin, 2000) with each having different knowledge bases, resources and
capabilities, CSCs enhance information exchange, knowledge sharing and learning
opportunities necessary for innovations for sustainability (Joyce & Paquin, 2016; Van Tulder
et al, 2016). However, such actor heterogeneity also produces tensions in CSCs (Das & Teng,
2001; Dyer, Singh & Hesterley, 2018), particularly among companies that compete in the
market (DiVito & Sharma, 2016).
While organizational scholars have shown that governance is needed to manage,
navigate and balance these tensions (Provan & Kenis, 2008), we have scant understanding of
how governance affects the collaborative potential to create value and facilitate value capture
(Pedersen & Netter, 2015; Govindan et al, 2016). The interplay between governance and value
creation and capture is relevant to understand the durability of CSCs for sustainability as
participating organizations are unlikely to continue their contribution when value creation and
capture are limited (Le Ber & Branzei, 2010a; 2010b). When collaborative networks dissolve
or dysfunction, the collective value that has been created and accrued over time may be lost.
This is problematic given that transitions towards sustainability may take decades and require
durable organizational forms to provide ongoing support. Put differently, CSCs need viable
business models, systems of value creation and capture, to survive (Chesbrough &
Rosenbloom, 2002; Schaltegger, Lüdeke-Freund & Hansen, 2012). However, insights on
business modelling of collaborative organizations are limited. Extant studies on business
modeling have focused on individual companies (Osterwalder & Pigneur, 2010), albeit some
studies have alluded to the notion of collaborative business modeling (Dahan et al, 2010;
Rohrbeck, Konnertz & Knab, 2013).

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The aim of this study is to explore how governance mechanisms in CSCs for
sustainability affect value creation and capture by examining the evolving collaborative action
in a CSC in the textile industry (henceforth TEXALL). Drawing on rich, qualitative data
covering a two-year period, from TEXALL’s inception to the end of the project’s funding, we
uncover how interactions between heterogeneous actors were governed and how this affected
value creation and capture. We distinguish between collaborative value – created from the
combined resources and cooperation of participants in the collaboration (Austin & Seitanidi,
2012a, 2012b; Dyer et al, 2018), private value – created and captured in the interests of the
stakeholders of the firm (Teece, 2010), and social value – benefits captured by society in
general either from private or collaborative value creation (McWilliams & Siegel, 2011).
Our study is relevant to CSC scholarship in two ways. First, we present a nuanced and
dynamic understanding of the governance of collaborations by identifying three governance
mechanisms that emerged from managing tensions among heterogeneous actors and that
evolved as the level of action shifted among actors. Second, by adopting a business model
perspective in studying the unfolding of TEXALL, we heed scholarly calls to better understand
the outcomes and impacts of CSCs (Van Tulder et al, 2016). Our study suggests that governing
collaborative tensions is significant for how participants create and capture value at different
levels (i.e. individual, collective and societal) and at different stages of CSC evolution.
Our study is also relevant for business models for sustainability literature by theorizing
value creation and capture systems of collaborative rather than individual organizations. It
provides a fresh perspective on CSCs by adopting a business modeling for sustainability lens,
introducing a process model that visualizes the relationship between governance and value
creation and capture by the various actors within and outside the CSC.

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Theoretical framework
Cross-sector Collaboration for Sustainability
Cross-sector collaborations (also called multi-stakeholder initiatives, partnerships or alliances)
are novel inter-organizational forms (Koschmann, Kuhn & Pfarrer, 2012) that increasingly
address social and environmental grand challenges (Ferraro, Etzion & Gehman, 2015) or
wicked problems (Rittel & Weber, 1973) – problems characterized by knowledge uncertainty,
dynamic complexity and value conflict (Dentoni, Bitzer & Schouten, 2018). CSCs involve
multiple and diverse actors from private, public and civil society organizations (Bryson, Crosby
& Stone, 2015). Prior work on CSCs provides insights into the conditions, processes and
structures of CSCs that encourage shared norms and rules to establish legitimacy but also
shows that tensions and conflicts arise in CSCs (Ansell & Gash, 2008; Bryson, Crosby & Stone,
2006; Human & Provan, 2000; Provan & Kenis, 2008). CSCs are complex, dynamic
organizations that can be mandated by governments, launched with funding schemes (Stone,
Crosby, and Bryson, 2013), or created by non-governmental organizations (Cairns & Harris,
2011). They require management, coordination and control, and although it is assumed that
they are launched and governed with purposeful design, the literature suggests that structure,
governance and accountability mechanisms co-evolve with the collaboration (Clarke & Fuller,
2010).
To this end, we recognize in the literature on CSCs that there is a distinction between
“collaborative governance” and the “governance of collaborations” (Bryson et al, 2015; Crane,
2017). The former, referred to as “big g” by Crane (2010: 17), brings government and non-
government actors together and is focused on governing societies. The latter, “small g” (ibid),
focuses on the structures and processes of managing CSCs to make decisions and achieve
outcomes. This study addresses “small g” CSCs and adheres to the definition put forth by
Vangen and colleagues (Vangen, Hayes & Cornforth, 2015: 1244):

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“The governance of a collaborative entity entails the design and use of a structure
and processes that enable actors to direct, coordinate and allocate resources for
the collaboration as a whole and to account for its activities.”
The complexity of governing CSCs lies not only in the constant change occurring in
the external environment but also in each participating organization, as they may have very
different frames of reference and interests that impede action and continuity (Bryson et al,
2015; Kletsie, Ansari & Volberda, 2018). Therefore, management and governance of
collaborative outcomes is continuously shifting (Clarke & Fuller, 2010) and accountability of
whom is responsible and for what can be especially ambiguous in a collaborative setting
(Koliba, Mills, & Zia, 2011; Romzek, LeRoux, & Blackmar, 2012).
The literature is causally ambiguous about governance mechanisms and tensions in
CSCs. On the one hand, the literature points to the mode of governance as a cause of tensions
(Provan & Kennis, 2008) and on the other, it points to governance as mechanisms to direct
action and balance inherent tensions (Das & Teng, 2001; Dyer et al, 2018, Van Hille et al,
2019). Provan and Kenis (2008) propose different governance structures that result in three
network-level tensions: efficiency vs inclusiveness, internal vs external legitimacy and
flexibility vs stability. On an organizational level, Dyer and colleagues (2018) suggest two
fundamental tensions that affect performance: cooperation vs competition and value creation
vs value appropriation (or capture). Due to the diversity of actors, it is likely that in CSCs a
variety of tensions on different levels is at play. These may include tensions about knowledge
transparency and protection, socio-political views, resource allocation, engagement and
competition.
Governance mechanisms in CSCs need to encourage collective agency by navigating
tensions and conflicts while at the same time crafting the potential and space for achieving
outcomes that create and capture value. Unlike corporations or other forms of equity

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partnerships or alliances, CSCs typically do not have formal mechanisms of governance, such
as a board of directors, to control and hold them accountable and responsible for creating,
delivering and capturing value. They are often loosely formed meta-organizations of diverse
stakeholder organizations (Berkowitz & Bor, 2018; Gulati, Puranam & Tushman, 2012;
Valente & Oliver, 2018) and as such they often lack legal status or ownership. However,
governance structures and processes are necessary to achieve desired outcomes of value
creation and capture. Through governance mechanisms, managers or leaders make decisions
about how available resources are directed, coordinated and allocated towards desired
outcomes.
To date, there is scant literature that explores the relationship between the co-evolution
of governance of CSCs and outcomes. To aid our understanding of collaborative outcomes in
terms of value creation and capture, we draw on insights from the literature on business models
for sustainability.
Business Models for Sustainability
Two perspectives dominate the business model literature. The first focuses on how firms make
money or how value is created, delivered and captured (Dahan et al., 2010; Teece, 2010). The
second is more focused on how companies are organized (Amit & Zott, 2012). Both
perspectives are characterized by an emphasis on practical applications, for example, the
Business Model Canvas (Osterwalder & Pigneur, 2010, Joyce & Paquin, 2016) and business
model typologies (Wirtz, Schilke & Ullrich, 2010; Dijkman et al, 2015) while theoretical
underpinnings are less developed. Other studies focus on business model innovations (Trimi
& Berbegal-Mirabent, 2012; Le Pennec & Raufflet, 2018), suggesting that the dynamic
building blocks of value creation, delivery and capture adapt to developments in the external
environment (Chesbrough, 2010; Foss & Saebi, 2017).

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Recent studies on business models and business model innovations have increasingly
addressed business models for sustainability and, relatedly, business model innovation for
sustainability (Bocken et al, 2017; Pedersen, Gwozdz & Hvass, 2018; Tauscher & Abdelkader,
2018). Business modeling tools have been expanded to integrate elements of sustainability into
the value system (Bocken et al, 2013; Geissdoerfer, Vladimirova & Evans, 2018) and to include
institutional stakeholders (Bocken et al, 2014; Joyce & Paquin, 2016). Business modeling for
sustainability has been described as a model that “creates competitive advantage through
superior customer value and contributes to a sustainable development of the company and
society” (Lüdeke-Freund, 2010: 21). According to Schaltegger and colleagues such business
models support “. . . voluntary activities which solve or moderate social and/or environmental
problems. By doing so, it creates positive business effects” (2012: 112). There is consensus
that mutual reinforcement between social and/or environmental value with economic value
creation is essential in such business models (Lüdeke-Freund et al., 2016).
Furthermore, the literature recognizes that value is not created in isolation but rather by
organizations working together through partnerships and agreements (Bocken et al, 2014).
Collaborative forms of business modeling are particularly pertinent in a sustainability context
(Schaltegger et al, 2012; Schaltegger, Beckmann & Hockerts, 2018). Two studies stand out
regarding collaborative business models for sustainability. In the study by Rohrbeck, Konnertz
and Knab (2013), a collaborative business modeling approach was tested with eight firms in
the energy sector and found to be a powerful tool to identify economic and social value, to
define value creation and capture systems and to plan in markets of uncertainty. However, the
study detailed a strategic exercise that was not implemented as a collaborative partnership and
does not shed light on how such partnerships are governed. A study by Dahan and colleagues
(2010) conceptualizes cross-sector partnerships as enablers of business model innovation. They
argue that in the context of developing economies partnerships with NGOs provide valuable

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complementary resources, products, knowledge and services that contribute to the business
model value system, particularly to value creation as opposed to value capture.
Currently, business model innovation for sustainability remains understudied (Boons
& Lüdeke-Freund, 2013; Schaltegger, Hansen, & Lüdeke-Freund, 2016) and gaps remain not
only in understanding the interdependencies between firms and their collaborative partners but
also in understanding CSCs, as organizational forms of multiple actors, that create
collaborative value that is captured on private (firm) and public (social) levels.
This co-evolution of governance and value creation and capture in purposefully
launched CSCs is understudied in the literature (Dagnino, Levanti & Destri, 2016; Provan &
Lemaire, 2012). Therefore, our study asked: How do governance mechanisms evolve and affect
value creation and capture in CSCs for sustainability?
Method
We conducted a longitudinal, participatory study of a single case with two embedded cases
(Balogun & Johnson 2004; Yin, 2003). Our approach draws on elements of ethnography and
of participatory action research (Jay, 2013; Lüscher & Lewis, 2008). We view cross-sectoral
collaborations as novel inter-organizational forms consisting of multiple actors that socially
construct and negotiate a common space to pursue collective goals and interests. This is an
evolving, unfolding process (Langley et al. 2013; Tsoukas & Chia 2002) which is well suited
to qualitative methods that allow for close observations of the phenomenon and foster “new
ways of seeing” (Bansal, Smith & Vaara, 2018: 1189). As engaged scholars, we deepened our
understanding of complex problems and evaluated the “veracity of existing theories” in the
situational context (Aguiñaga et al, 2018; Crane et al, 2017: 15). All participants in the case

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study played a role in the creation of relevant and useful knowledge for theory and practice
(Van de Ven, 2007).
Empirical case
Our case is a textile manufacturing alliance (TEXALL) that was initiated from existing ties
that the lead author has with two non-governmental organizations (NGOs) specialized in
sustainability in the textiles industry. These NGOs approached their own connections and
clients in the textile industry and inquired whether they were interested in collaborating to
address sustainability issues. The NGOs became the facilitators of the embedded cases, each
facilitating one of the embedded cases. TEXALL started in 2016 with 19 organizations (Table
1) including NGOs, municipal government agencies, an industry association and 12 large and
small firms (most of which were competitor firms). As TEXALL evolved, the NGOs continued
to search for and recruit members through their everyday interactions with various textile and
apparel companies. By 2018, the TEXALL membership grew to 52 members connected
vertically and horizontally in the textile value chain. There were different types of membership,
namely brands (e.g. designers, retailers), suppliers (e.g. mills, chemical firms) and affiliates
(e.g. associations, NGOs). Only brand members had decision-making voting rights.
Insert Table 1
The shared aim of TEXALL members was to improve sustainability in textile
production by reducing hazardous chemicals and water consumption. There were two working
groups (our embedded cases). Members self-selected to participate in one or both working
groups, but participation changed over time. One working group focused on creating post-
consumer recycled fabric (henceforth Recycling) with different percentages of recycled yarn
in the fabrics (see Vignette 1). The goal of Recycling was to increase the volume of post-
consumer recycled denim produced by collaborating on fabric development and thereby

Governance mechanisms and collaborative value creation
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decrease the unit cost per meter. Post-consumer recycled fabric ultimately saves water
consumption because it eliminates the need to grow virgin cotton. It also reduces and reuses
textile waste, encouraging a more circular production process. The NGO that was specialized
in transitioning industries to circular processes (henceforth CIRC) facilitated Recycling.
The goal of the other working group was to reduce the use of hazardous chemicals in
the finishing processes of garments (henceforth Finishing). These processes are highly variable
and involve chemicals and washing for bleached and distressed effects (see Vignette 2). The
finishing processes are essentially the secret sauce of design and the steps are commonly
referred to as wash recipes. Given the variability in finishing processes, the Finishing group
aimed to first measure finishing processes and then create a collective benchmark. Another
NGO that advised textile and apparel companies on chemical management (henceforth CHEM)
facilitated Finishing.
Furthermore, there was an independent project manager (henceforth PM) for the whole
of TEXALL providing coordination support to both CIRC and CHEM and the respective
working groups. The PM liaised with all TEXALL members, the two NGOs and the
researchers. The two NGOs and the PM comprised what Paquin and Howard-Grenville (2013)
refer to as the “orchestrators” of TEXALL.
Researcher Roles and Reflexivity
The lead author, supported by two research assistants, actively participated in the TEXALL
processes that were studied, providing unique access to the unfolding of TEXALL in real-time.
As previous empirical studies point out (Jay, 2013; Lüscher & Lewis, 2008), researchers’
interpretations of events inevitably affect the interpretations and actions of the participants and,
therefore, participatory researchers must rigorously account for their perspectives through
reflection of their actions. Meetings between the researchers and orchestrators were recorded

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and debriefing notes were drafted after each meeting. The recordings were transcribed and used
as reflexive data to triangulate insights against other data collected from observations and
interviews. The second and third authors became involved in the data-analysis stage. As
outsiders, they prompted additional researcher reflexivity, questioning interpretations and
probing for alternative explanations.
Data Collection
Our primary sources of data include semi-structured in-depth interviews, observations of
quarterly meetings, participation in events (and reflections thereof) and archival documentation
(Table 2). Our data collection period is two years, from TEXALL’s inception in 2016 to the
end of the initial funding period in 2018 when the governance of TEXALL changed as there
was no funding for orchestration. However, TEXALL members continue to meet and data
collection is ongoing.
Insert Table 2
In-depth interviews. We held baseline interviews with all brand members (the company
representatives who participated in TEXALL) before they joined TEXALL activities. These
representatives had various functions, such as corporate social responsibility managers,
product managers, buyers or designers. For the smaller brands, we also interviewed the
founders. Thereafter, we conducted periodic interviews with brand members once a year. When
possible the respondents were the same respondents as in the baseline interview, and if there
were multiple representatives from a brand member, the interview was done as a group.
However, the participants of TEXALL fluctuated over time, with increased representation from
brand members or decreased representation due to job changes or organizational changes
(including bankruptcy). In total, we conducted 41 semi-structured in-depth interviews with

Governance mechanisms and collaborative value creation
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brand members. Additionally, we conducted semi-structured interviews with the orchestrators
and informal interviews with supplier members.
We used an interview protocol that we adjusted as the project proceeded. For example,
the baseline interview protocol included questions about sustainability vision, strategy and
experience with other sustainability collaborations as well as probed for their perceptions about
tensions in CSCs and their ability to implement organizational changes from decisions that
arose from collaborations. Follow up interviews focused primarily on their experiences in
TEXALL, what they found challenging in this particular collaboration, what value they derived
from it and if they implemented change in their organization, thus probing for the enablers and
barriers of change. For the interviews with the suppliers, we used the baseline interview
protocol and additionally probed for motivations to join TEXALL and the added value the
supplier brought to the group. All semi-structured interviews were recorded and transcribed.
We also held informal conversations with suppliers at the Amsterdam denim trade show in
2017 about how they experienced participating in TEXALL with their competitors.
Observation and participation. The researchers observed ten TEXALL plenary
meetings and attended two TEXALL events, capturing data through field notes and recordings.
At the end of each meeting, we collected structured written feedback on the working groups’
progress and meeting effectiveness. The researchers also met with the orchestrators before and
after meetings and debriefed these meetings. The debriefings were recorded and transcribed.
Documentation. Over time we collected archival documentation, primarily emails but
also presentations, reports and meeting documentation. This data provided an historical trail of
evidence and was used for triangulation.

Governance mechanisms and collaborative value creation
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Data Analysis
Our abductive approach (Dubois & Gadde 2002) involved iterating between the empirical
world and theoretical models. Additionally, our engaged participation in the empirical setting
allowed us to test our theoretical presumptions, which in turn shaped our subsequent empirical
observations. This systematic and iterative process was essential for making sense of our rich
data and forced us to reconsider explanations of observed phenomena and data with each
iteration, leading to the best possible explanation.
We coded interview transcripts, field notes and email documentation in Atlas.ti
according to a coding template. As we progressed, we refined the coding template to reflect
discovered themes and insights from our fieldwork and data (Strauss & Corbin, 1997). This
resulted in detailed codes on the member organizations (e.g. competitive positioning,
sustainability vision, experience in collaboration, resource prioritization), on tensions (e.g.
competitive vs cooperative actions, knowledge protection vs sharing, social vs economic logic)
and on orchestration (e.g. managing conflicts, member entries and exits, accountability).
We began our analysis approximately one year into the project. We interpreted our data
using various analytical techniques including the temporal sequencing of events (Figure 1) and
narrative summaries of the working groups (consolidated into Vignettes 1 and 2). This aided a
detailed understanding of the interrelation between events and the context of how and when
actors were involved (Langley & Abdallah, 2011; Van de Ven & Poole, 2005). We conducted
analyses in parallel and our interpretation of them influenced subsequent data collection and
analysis.
Insert Figure 1
Through comparative analysis of the working groups, we began to see how the
members perceived value, how tensions and events affected value (e.g. member entrance and
exit) and how governance mechanisms were created to orchestrate value creation and capture

Governance mechanisms and collaborative value creation
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in the changing dynamics of an evolving CSC for sustainability. We identified first order
concepts, second order themes and explanatory constructs (Gioia, Corley & Hamilton, 2013).
In the second stage of theme identification, we observed the emergence of three opposing
tensions in the two working groups – knowledge sharing vs protection, alignment of private vs
collective interests and competition vs cooperation – confirming the literature on tensions (see
Appendix A). At this point of our analysis, we also recognized the emergence of three
governance mechanisms – safeguarding, bundling and connecting – that were used to manage
tensions and became aware of the different levels of value creation and capture. This led us to
use four explanatory constructs –tensions, governance mechanisms, collaborative value
creation and private and social value capture – to analyze how governance processes shape
value creation and capture in CSCs (see Figure 2). In the final stage, we engaged in theorizing
the interplay between these explanatory constructs and developed a process model of governing
tensions for value creation and capture in CSCs for sustainability.
Insert Figure 2
Findings
Governance Mechanisms to Manage Tensions
We observed the use of three prevalent governance mechanisms – safeguarding, bundling and
connecting – to manage three prevalent tensions of knowledge sharing, interest alignment and
competitive behavior. We explain each governance mechanism and the associated tensions in
turn. Appendix B provides supporting evidence.
Safeguarding. Safeguarding refers to governance processes that orchestrators engaged
in to protect the membership of TEXALL. It manifested in two ways: first in terms of protecting
proprietary information of the individual member organizations and second in terms of
gatekeeping or guarding the collective interests of the collaboration. It was used to alleviate
tensions surrounding knowledge sharing and alignment of interests.

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The safeguarding of proprietary information was more apparent in Finishing. The basis
of knowledge in finishing processes is the wash recipe and the brand members repeatedly
communicated the propriety nature of this knowledge and their reluctance to share it with other
brands, as indicated by a member:
“You maintain your profitable competitive edge by being unique and having specific washes
that no one else has or treatments no one else has. That is your USP [unique selling point]. If
you're asked to share the information that [exposes] these USPs then obviously you're going
to start becoming nervous.” (B-NED)
In Finishing, the tensions were high and impeded progress. To avoid the need to gather
information on specific recipes, CHEM pushed the group towards a common goal of measuring
the environmental impacts of generic finishing techniques and towards setting a collective
benchmark for, or even a ban, on certain hazardous chemicals, as summarized in the following
quotation:
“… it would be very interesting to set a collective goal, for this group or for the industry …
let's say, they commit to phase out certain processes or replace [them] with other processes
over a certain time period. Or, they commit to reducing the environmental impact in their
supply chain … we have always this discussion about potassium permanganate, we could
have a collective approach on that ...” (CHEM)
CHEM was committed to a collective approach and, in the first two meetings, tried
different approaches to unite the group towards this collective action. CHEM proposed
focusing on generic techniques but that created no added value as information about these
techniques was already readily available. As for setting a collective benchmark, brand members
remained silent and showed resistance. CHEM was forced to change its approach and
abandoned the goal of a collective benchmark in favor of more privately-oriented activities,
namely one-on-one consultations with finishing experts, called “Dr. Visits” (see Vignette 2).
CHEM suggested focusing on the never-out-of-stock (NOS) styles of each brand, effectively
changing the focus from generic technical processes to specific recipe of garments. This change
of focus had more perceived added value to the brands but, to accomplish this CHEM needed

Governance mechanisms and collaborative value creation
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to reconcile tensions surrounding knowledge sharing and established processes of safeguarding
recipes. The quotation below is illustrative:
“[I] was already worried that [the information requested] was quite detailed and the secret sauce
is difficult to share ... It helps if you guarantee that these recipes do not reach other brands and
laundries. Can you do that?” (email from B-NIK to CHEM)
The need to safeguard proprietary information in Finishing contrasted with Recycling,
where they aimed to develop a collective fabric (see Vignette 1). In Recycling, tensions around
knowledge sharing were less prominent. CIRC and brand members emphasized that knowledge
about fabrics is easily shared and that the same fabrics are often used by many brands:
“… there are less secrets involved … ‘cause the fabrics are just [there] for everyone to buy …”
(CIRC)
“… general generic information, like fabric suppliers … there's nothing to hide …” (B-SUJ)
Nonetheless, for one brand member (B-TSG) developing a fabric with competitors went
too far and the tension of competition could not be mediated for this member. They exited from
Recycling and eventually from TEXALL.
Safeguarding was also used in the form of gatekeeping, which protected the interests of
the collective. Gatekeeping manifested in screening new members (or outsiders) to assess
strategic fit with TEXALL’s goals and membership. Gatekeeping was most apparent in the
Recycling working group because fabric mills and suppliers were keen to become members of
TEXALL to access potential customers and engage in business development. The orchestrators
carefully assessed potential new brand and supplier members as to the benefits new members
could provide to the group and if they would aid the collaborative value creation:
… we decided against adding new suppliers to the upcoming meeting. We do not want the group
to be too large for this specific session so as not to hinder the sharing of knowledge (sometimes
sensitive information). Weaving mills are already well represented in this session. (email from
PM to supplier, April 2017)
Bundling. Bundling comprises processes of aggregating information and knowledge from
diverse sources for redistribution and as such transforms detailed, specific knowledge from

Governance mechanisms and collaborative value creation
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individual organizations to generalized knowledge that is useful for collective decision making.
It is related to safeguarding in that the information that is bundled may be proprietary and need
protection. In TEXALL, due to bundling processes, the orchestrators developed a broad
overview and deep knowledge of TEXALL members’ needs, similarities and differences.
Bundling reinforced anonymity and allowed orchestrators to mitigate tensions of knowledge
sharing and interest alignment.
In Recycling, we observed the early emergence of bundling to align private and collective
interests. After the kick off meeting, and before consensus was reached on the approach to
developing collective fabrics, CIRC designed and administered a survey to gather information
about brand members’ current use of recycled fabrics in their collections, the best-selling
styles, the material composition of those styles (e.g. cotton, polyester, stretch), their suppliers
(e.g. weaving mills) and their ambition in using recycled fabrics. As the debate over the
approach – collective development of recycled yarn or recycled fabric – ensued, the bundled
information proved useful in steering the group towards a decision. In the January 2017
meeting, CIRC made an informed argument based on the aim of the group and the aggregated
information and persuaded members to develop a collective fabric; an excerpt from our field
notes underlines this.
• CIRC went through advantages and disadvantages of doing either yarn or fabric.
• Yarn means you can develop a fabric of your own but only large brands can develop
their own fabric.
• Based on questionnaire [the criteria of] cost, quality, less supply chain complexity [are
important] — CIRC said focusing on fabric meets criteria better.
• They held a vote, which was quick and concluded that they will take the fabric approach
even though there were 3 opposing votes.
(Researcher field notes, January 2017)
CIRC continued to mitigate the tensions around interest alignment by continuously
bundling and aggregating information for collective fabric development. They subdivided the
working group into smaller groups based on their assessment of members’ requirements for

Governance mechanisms and collaborative value creation
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10%, 20% or 25% post-consumer recycled content in fabric. They arranged a panel discussion
with fabric mills and yarn spinners in the April 2017 meeting. Through the aggregation of
specific knowledge from individual brand members, CIRC increased the brand members’
collective bargaining power with the fabric mill suppliers. However, as TEXALL brand
members were competitors, there were limitations around the amount of information that could
be usefully bundled on a collective level. Increasingly, tensions of competition surfaced,
especially around anti-trust concerns, and CIRC experienced more resistance from the
members. Collective purchasing of fabric posed consequences that had not been previously
considered. For example, TEXALL was not a legal entity and no individual TEXALL member
was willing to assume responsibility for a legal transaction (e.g. purchasing) for the group.
Consequently, CIRC shifted from collective to more private activities by matching the
individual brands to fabric mills based on the deep knowledge they had gathered about each
members’ fabric specifications.
By bundling detailed knowledge over time, CIRC not only aggregated information into
more generalized knowledge that was used for collective decision making, but also customized
knowledge flows between TEXALL brands and supplier members. The email excerpt below
shows how bundling resulted in detailed and deep knowledge about a member:
… the fabric might be suitable for [B-NIK], as they are still using some rigid fabrics and are looking
for a more basic pure indigo blue colour. weight: 13 OZ, / construction: 3/1 and an open-end vintage
look. The only thing is, [they are] looking for a higher percentage of [post-consumer recycling
content] (25+%). (email from PM to supplier, May 2017)
Bundling also emerged as a necessary governance mechanism to align interests in
Finishing. In the kick off meeting, CHEM realized that they needed to scope the activities of
the working group more clearly, as nearly every part of the production can affect finishing
processes, from the weight of the yarn or fabric to the intensity of the dyeing process to the
water properties of different production countries.

Governance mechanisms and collaborative value creation
20
In the January 2017 meeting, CHEM first attempted to identify priorities by having
brand members rank certain technical processes. Brand members, however, lacked the
technical expertise and were confused about what they needed to do. This confusion lead to
disagreement and debates about the approach. Our field notes illustrate the lack of expertise
and general confusion among brand members:
• CHEM asked members to vote on 5 most used dyeing, and 10 most used finishing
techniques: some were hesitant to vote.
• Questions around some of the dyeing (not finishing) techniques; what the differences
were, was not obvious to the brands.
• Differences within the group: someone asked if data gathering was generic or per brand
since fabrics differ.
(Researcher field notes, January 2017)
CHEM struggled in the first few meetings to bundle the necessary specific information
to align interests on a collective level. The shift in focus to specific recipes of brands’ never-
out-of-stock styles (garments) resolved the tensions around alignment, because collectively
they did not need to align interests, but it also created more tension around knowledge sharing
given the proprietary nature of washing recipes. To aid systematic information gathering of
recipes, the orchestrators created a standardized recipe template that the brand members used
to gather the information from their laundry suppliers. The brands shared the recipes with the
orchestrators who safeguarded the information rather than aggregating and sharing it with other
members.
Connecting. Connecting refers to matching member organizations according to their
needs or requests with others and connecting or representing the collaboration to outsiders;
connecting, however, was not the sole responsibility of the orchestrators. Individual TEXALL
members also acted as conduits to connecting the membership to others, for example in
recruiting or referring new members. But these referrals filtered through the orchestrators who
then applied safeguarding routines previously discussed. More fundamental to the progress of
the collaborative activities, the orchestrators connected TEXALL members with experts and

Governance mechanisms and collaborative value creation
21
actors external to the collaboration. The bundling of aggregated information and specific
knowledge of members was essential to the process of connecting. Our data from both working
groups illustrate the influence of the connecting mechanism on collaborative value creation in
significant ways.
In Recycling, we observed connecting to outsiders when fabric mills and yarn spinners
were invited to be part of a panel discussion. The orchestrator selected the mills based on
information from bundling about the brand members existing suppliers as well as additional
suppliers that were leaders in the innovation of post-consumer recycled fabrics. Another
example of connecting in Recycling occurred when CIRC felt they could do more to increase
demand of post-consumer recycled fabrics. They organized an event where the mills could
showcase their post-consumer recycled fabrics, including the fabrics that were developed from
the TEXALL collective fabric specifications. They invited brand managers, product designers,
buyers from organizations beyond the TEXALL membership and the press. In this way, CIRC
connected TEXALL’s activities to other actors in the industry, which increased the potential
buyer bargaining power on an industry level. Evidence shows that the event was a catalyst for
the industry and accelerated the development of post-consumer recycled fabrics, as based on a
quotation from a fabric mill:
“[I was] talking to [B-DUM] and, yeah, there were things already happening in the industry
before [TEXALL]. We were already working on post-consumer recycled fabrics. But
[TEXALL] definitely accelerated that …” (S-STE)
In Finishing, connecting members to external experts occurred for different reasons.
Once the focus on never-out-of-stock styles was settled and the standardized recipe template
was developed, brands were instructed to gather the recipe information from their laundry
suppliers. However, this proved to be more difficult than expected due to a lack of expertise in
finishing processes. Many brands could not probe their laundry suppliers for the information
because they did not know the right questions to ask or they could not verify information they

Governance mechanisms and collaborative value creation
22
gathered because they did not know what was correct. This hindered value creation as it became
impossible to gather the required information from the members and their associated laundry
suppliers.
To remove this barrier, the PM organized a training session in the June 2017 meeting
and invited two experts to speak to the group about garment finishing and sustainable
alternatives. This training paved the path towards the Dr. Visits with experts from chemical
suppliers and equipment manufacturers. Connecting brands to these downstream suppliers was
unusual. For the brands it was educational and gave them insight into the recipes of their
finished garments so that they could discuss and evaluate alternatives with the laundry
suppliers better. For the chemical and equipment suppliers, it was an opportunity to speak to
end customers about their products and increase the demand of their sustainable chemical
products or equipment, ultimately stimulating sales of their products among their direct
customers, the laundry suppliers.
Value Creation and Value Capture
Our data, rather than showing the relation between components of business modeling, suggest
that collaborative value creation and private value capture are intricately linked as a value
system in CSCs for sustainability. When value is captured privately by members, they remain
engaged in the continuous creation of collaborative value. The social value derived from the
collaborative value creation and private value capture system to stakeholders beyond the
boundaries of TEXALL is more difficult to untangle. Yet, we observed that when members
were able to capture the collaborative value privately in their own organizations there was a
spillover effect for social value.
In this section, we present the evidence of value creation – on the collaborative level –
and value capture on three levels – individual and organizational levels (private value capture)

Governance mechanisms and collaborative value creation
23
and industry level (social value). Furthermore, we highlight the barriers to creating and
capturing value in CSCs. Supporting quotations are provided in Appendix C.
Collaborative value creation. We observed that collaborative value creation – value
created from the collective resources of TEXALL member organizations – was the purpose for
working together. This collective process occurred during the TEXALL quarterly meetings or
events. This was especially the case for Recycling where a successful outcome was dependent
on the participation and commitment of many brand members. By contrast, in Finishing the
collaborative value creation remained limited as the brands did not rally together to achieve a
collective outcome, as CHEM noted:
“[Recycling] is a different project [than Finishing] … the way to get success [in Recycling] is to
have a lot of brands buy into it, and really adopt it into their collection. So, … having a lot of brands
together is necessary to make it happen.” (CHEM)
Nonetheless, collaborative value creation occurred in both working groups in terms of
learning and awareness as we observed in several meetings and as the PM illustrated:
“I think the meeting in April [2017] had added value for [Recycling], because we invited all these
suppliers, so yarn suppliers, and denim suppliers. We had a discussion with them, with the brands,
on how to produce recycled denim. So, it became really practical, it was really happening there,
during that meeting. And I think that really worked well for the brands to remain excited, and to
remain participating in the project.”
In Finishing, we observed similar value creation in the June 2017 meeting. However, as
shown in the following quotes the value of the learning was captured differentially among
brand members due to their own experience and knowledge of finishing processes:
The response from the brands differs: [some] were very excited about the meeting, especially the
knowledge sharing! [Some brands] didn't learn anything new, but [are] happy that others [did].
(Email communication between PM and CHEM, July 2017)
“… the meeting at the end of June, when we had [supplier] … speak about garment finishing, gave
a boost for the brands, because they really gained something from it, they learned something, and
when they left the meeting they had some new insight, some new knowledge. I spoke to [brand
member] and he said, ‘I was so enthusiastic about the last meeting, I definitely want to participate,
and be there at the next meeting.’” (PM)
Lastly, in the meeting of February 2018, the orchestrators organized a share-out and
asked brand members to share their stories (e.g. progress, challenges, successes) about adopting

Governance mechanisms and collaborative value creation
24
recycled fabrics from Recycling and more sustainable washes from Finishing. This was highly
inspirational for the brands that were lagging. CHEM summed up the value of the share-out
session:
… motivate the others and show them that it's not only positive stories, everybody has the same
problems, … and sometimes it works, sometimes it does not work, so it's good to continue …
(CHEM)
Our data show that collaborative value is created from primarily a collective process of
knowledge sharing and learning that requires governance mechanisms – safeguarding,
bundling and connecting – by orchestrators. Although these governance mechanisms are
necessary conditions to realize collaborative value creation, they are not sufficient. The
individuals and their respective organizations need to be able to capture this value.
Private value capture. Private value capture occurred on two levels – the individual and
organizational levels – and was captured differentially by TEXALL members. On the
individual level, capturing the collaborative value depended on prior levels of knowledge and
experience. Individually, many brand members’ representatives gained valuable knowledge
about producing recycled fabrics and designing sustainable washes. These individuals can
become ambassadors of change, as CIRC pointed out:
“… I can see that she from [B-PMI], who didn’t really know anything before but is just really
curious and interested, is really starting to take it on almost as a passion of her own, and the same
goes for the girls from [B-EMA, B-OOC] and they’re starting to internalize it and … [to] realize, I
need more knowledge to be able to really make the right decisions here and being really active and
proactive during these sessions … these people become almost like ambassadors and driving forces
behind it …” (CIRC)
Even though the individuals participating in TEXALL activities may have captured
value, they still had to transfer this value to their organizations, and they differed significantly
in their ability to do this. Some organizations showed a high level of readiness to adopt recycled
fabric or more sustainable washes, whereas others resisted. We observed several conditions
that allowed for value capture on an organizational level. First, the individual representatives
held positions that were more directly involved in the purchasing, design or development of

Governance mechanisms and collaborative value creation
25
products (e.g. buyers, product managers). Second, these individuals had regular and sustained
contact with suppliers (e.g. laundries, mills) and were proactive and resilient in solving
problems or removing obstacles that suppliers posed. Lastly, they had autonomy or could
influence the decision making in the organization, which was especially pertinent if the
organization was design or fashion oriented.
Social value. TEXALL also aimed to create value that delivered benefits to the industry
and society. It is difficult to decouple the impact of the collaborative value creation and private
value capture on society. However, our data provide a few examples of how the collaborative
value creation spilled over to the industry level.
First, the need to aggregate data led to two open source tools, a recycled fabric
specification guide and a wash recipe template, creating benefits for brands beyond the
TEXALL membership. Another example is how one of the Turkish suppliers leveraged the
collective power of TEXALL to influence regulatory change on importing used garments for
producing recycled fabric. He explained this in an email:
… there is a ban to import post-consumer garments to Turkey. After our meeting in Amsterdam
[we] started to talk with the Economy Ministry. … On 29 July I will make a presentation about
recycling of the post-consumer goods to All Turkish Textile Exporters (most probably the Minister
will attend as well). I am very sure that I will get the permission. [email from S-SOB to PM, June
2017]
The Turkish government did change the regulation to allow the import of used garments
as raw materials for fabric production for export markets. This regulatory change is highly
relevant as it allows post-consumer recycled fabric production to be scaled up at lower costs.
Finally, there are examples of how the collaborative value spilled over to other industry
actors. This is evidenced by brand members educating their suppliers beyond TEXALL to
become more sustainable and meet their requirements rather than switching suppliers. These

Governance mechanisms and collaborative value creation
26
industry level effects were a main motivation for front-runners to participate in TEXALL. The
quotations below illustrate this.
… I’ve heard [B-NIK] saying many times, that the reason … and motivation to participate, is to be
an example to the other brands, to inspire other brands, and to create alliances … if you could also
approach other big brands … then we can really have a big impact. (PM)
… I think [the frontrunners] … have been around for a long time and … they’ve been [successful]
with their companies … they just want to make it bigger, and … share that vision … to make the
pie bigger and just make their lives easier, because for them, it would be also easier to get access to
all these sustainable fabrics. (CIRC)
Barriers to value creation and capture. Our data also highlight the limitations of
collaborative value creation and private value capture in CSCs. Collaborative value creation is
shaped by governance mechanisms of collective processes; private value capture is outside of
the realm of CSC governance. This implies a lack of control or influence by orchestrators.
Members that were unable to capture value, exited or disengaged and thus no longer
participated in the collaborative value creation. Therefore, it is in the interest of orchestrators
and all collaboration members that private value capture occurs. We observed several barriers
to value creation and capture that are associated with tensions.
One barrier was limited time, which is associated with the tension of aligning collective
and private interests. Several brand members struggled with allocating time to TEXALL, which
made them frustrated and apologetic about their limited contribution. The PM summed up the
effect of limited engagement:
“… they [B-AHC] didn’t participate in any of the meetings anymore, due to time limits … then
they didn’t see the meeting, they don’t experience it. … they lost a connection with [TEXALL],
because they didn’t participate …” (PM)
Another barrier, again associated with the alignment of interests, was limited learning
potential. Some brand members were front-runners in sustainable fashion and had significant
prior knowledge and experience, which made a valued contribution to the collaborative value
creation. However, as individuals and organizations there was limited private value capture for
them. The excerpt below illustrates this point.

Governance mechanisms and collaborative value creation
27
The content of the meeting was for me not useful. To explain the wash process … I make denim
since 20 years, have visited lots of laundries so know how it works. The [S-EAJ] presentation was
interesting, but we do know what they do as we work directly with them. (email from B-NIK to
PM, July 2017)
Lastly, we observed a barrier associated with the tension of competition. Here, brand
members viewed the private value capture as potentially limited, or even value destructive, for
their brand. For example, in Recycling, brand members exited the group because fabric
innovation is a differentiating feature of their brands. Collaborating on fabric development
could potentially threaten their competitive advantage and the learning provided little private
value. The retraction and disengagement of these members had a negative effect on
collaborative value creation. Below is an illustrative quotation of why a brand member decided
to exit:
“… innovation is really important, that's at our core, so if you innovate certain fabrics and that's
where you put your money, in the development of new fabrics, to bring something new to the
consumer then that's the boundary that you have …” (B-TSG)
Towards a process model of value creation and capture in CSCs for sustainability
Drawing on our findings as summarized in Table 3, we develop a process model of value
creation and capture in CSCs for sustainability. It sheds light on the interaction between
tensions and governance mechanisms and the effects of the interaction on the value system in
CSCs on three levels – the collaborative, private and social levels (Figure 3).
Insert Table 3 and Figure 3
The starting point of our model is that CSCs for sustainability inherently involve
collaborative tensions. Our embedded cases of the two working groups revealed that the
intensity of tensions and their temporal patterning may differ across settings. For example,
CSCs mandated by government to develop sustainable solutions may lower the likelihood of
tensions because members – including competitors – have a shared collective and private
interest to prevent governmental interference and regulation in their industry. When CSCs are

Governance mechanisms and collaborative value creation
28
self-initiated, collective interests of members are likely aligned due to the voluntary nature of
collaboration, lowering the likelihood of tensions; however, the CSC may be more vulnerable
to dissolution due to diverging private interests over time. Tensions may also be more prevalent
in CSCs for sustainability that involve incumbents, niche and de novo firms. As shown in our
case, niche players are relevant for their innovative knowledge, while the involvement of
incumbents is needed to scale innovations and achieve industrial transformation. The intensity
of tensions is likely to increase in CSCs where niche players typically focus on long-term
benefits and incumbents on short-term returns (Bansal & DesJardine, 2014). By contrast, in
CSCs with predominantly front-runner companies, the intensity of tensions is likely to be lower
as these companies have the same aspirations, frame of reference and temporal focus, although
they may be highly competitive.
Given that tensions are widespread in CSCs for sustainability, orchestrators of CSCs
should be attentive to managing these tensions. Our embedded cases revealed three governance
mechanisms – safeguarding, bundling, connecting – to balance and manage these tensions.
While prior studies have acknowledged that governance co-evolves with the CSCs (Clarke &
Fuller, 2010), our study suggests that tensions are center stage in this process. The three
governance mechanisms emerged and evolved in different combinations, at different moments
in time and at different levels of action, according to emerging and fading of tensions over
time. For instance, our study suggests that the mechanism of safeguarding becomes particularly
relevant when tensions of knowledge sharing arise, while bundling is critical when tensions of
interest alignment arise.
To explain the outcomes of governing tensions in CSCs for sustainability, our model
suggests that value creation and capture unfold at three levels of action. While the process of
value creation takes place on the collective level and within the boundaries of the collaboration,
value capture occurs on the private level and outside of the boundaries of CSCs. Collaborative

Governance mechanisms and collaborative value creation
29
value creation and private value capture may both lead to social value. Our case showcased
how value creation and capture at these different levels of action are interlinked, reiterating the
notion that business models of CSCs should be viewed as systems of value creation and capture
(Pal & Gander, 2018) rather than as individual components.
Collaborative value creation is the result of collective action (the combination of
members’ resources and knowledge) and is shaped by the governance of tensions. Private value
capture is sequential and dependent on the ability to create collaborative value but is also a
precondition for continuation of the collaborative efforts. When private value capture does not
occur, participants may exit CSCs as shown in our case. As such, our model suggests that the
pooling of member resources and knowledge alone is not sufficient for a system of value
creation and capture. But rather, the continuity of the value system is contingent on the
individual participants’ and their organizations’ ability to capture value privately, for example
by changing business practices, routines and strategies. Without private value capture,
participants become inactive or exit, contributing fewer or no resources to collaborative value
creation.
Comparing the embedded cases as shown in Table 3 suggests that levels of value creation
and capture may differ across CSCs. In Finishing, collaborative value creation was limited as
the orchestrators resorted to a more individual approach to mitigate tensions, but this approach
facilitated high private value capture. By contrast, in Recycling the collaborative value creation
was high as the group collectively drafted requirements for fabrics with recycled denim, but
private value capture was relatively low. Hence, our findings suggest that CSCs may have
distinct patterns of value creation and capture. It should be noted that private value capture is
beyond the purview of the governance of CSCs. Governance mechanisms can steer, monitor
and nudge members to capture the value privately but participating individuals and
organizations may differ in their capability to translate the new knowledge into their

Governance mechanisms and collaborative value creation
30
organizational practices and routines. The typical voluntary and dynamic nature of CSCs for
sustainability, where barriers to exit are low and participation and engagement can wane, also
adds to the complexity of governing these processes and results in distinct patterns of value
creation and capture.
When collaborative value creation and private value capture occur, social value may be
created. In TEXALL, this was largely captured by positive spillover benefits to other industry
actors and society; however, our study provided limited insights into the dynamics of social
value. It should be considered a starting point for further research, especially because if the
value of CSCs is limited or captured only on a private level, it raises critical questions regarding
the investment of resources into CSCs for sustainability.
Discussion and conclusion
This study was motivated by the question how governance mechanisms evolve and
affect collaborative value creation and private value capture in CSCs for sustainability to better
understand the survival of this novel organizational form. Drawing on a rich qualitative case
study in the textile industry, we developed a process model that highlights how CSCs for
sustainability become value-creating entities when collaborative tensions inherent to CSCs are
governed in ways that motivate members to actively contribute to the value creation process
and allow them to privately capture this value, which in turn may create spillover effects for
social value.
A primary contribution of our study is its focus on the co-evolution between
collaborative tensions and governance mechanisms that allow CSCs for sustainability to thrive
as an organizational form. While our study confirms the literature that CSCs aimed at
addressing complex problems involve collaborative tensions (Babiak & Thibault, 2009; Alonso
& Andrews, 2019), we extend current insights by identifying three governance mechanisms to
manage these tensions. The governance mechanisms that emerged in our study resonate with

Governance mechanisms and collaborative value creation
31
received literature on network orchestration. For instance, carefully screening and selecting
new entrants (gatekeeping) and actively disseminating information among participants
(bundling) have been reported in Saz-Carranza and Ospina (2010), while actively connecting
participants with others is evident in the work of Paquin and Howard-Grenville (2013) and
Reypens, Lievens and Blazevic (2019). Our study highlights how these governance
mechanisms adapted and changed according to rising or dissipating tensions, as in the Finishing
case, or shifts in collective or private activities as in the Recycling case. Rather than viewing
CSC governance as carefully designed and purposefully planned according to the
characteristics of the collaborative network (Kenis & Provan, 2008), we provide a more
nuanced and dynamic understanding of governance in CSCs for sustainability. Governance
mechanisms manifest from the evolving tensions in the lifecycle of CSCs and, as our process
model suggests, failure to adequately govern these tensions may jeopardize the development
of a value system and thereby the long-term viability of collaborative organizations. As such,
our study calls attention for the pivotal role of CSC orchestrators in this process (Paquin &
Howard-Grenville, 2013). Future research could examine more closely the skills and
capabilities of CSC orchestrators in governing tensions and creating and capturing value. For
instance, we know that it is relevant for orchestrators to foresee and signal tensions and
dilemmas occurring inside and outside the CSC in a timely manner (Paquin & Howard-
Grenville, 2013; Van Hille et al, 2019; Van Wijk et al, 2019). Yet, we do not know how
orchestrators differ in their capabilities to act as “environmental scanners” (Reypens et al.,
2019) and how this affects their orchestration work.
We also speak to the emergent literature that theorizes how issue complexity informs
collaborative action in CSCs (Dentoni et al, 2018; van Tulder & Keen, 2018). The main
premise is that CSCs formed around complex problems are distinctive organizational forms.
We advance this line of reasoning by arguing that CSCs – like other organizational entities –

Governance mechanisms and collaborative value creation
32
require value systems, or business models, to ensure their organizational survival. While CSC
scholars have studied value creation (Austin & Seitanidi, 2012a; Le Pennec and Raufflet, 2018)
and the resources actors capture from participating in CSCs (Clarke & MacDonald, 2019), our
study is among the few to empirically examine the value system of CSCs. Given that outcomes
and impact of CSCs have remained elusive in the CSC literature (van Tulder et al, 2016), we
provide CSC scholars with the conceptual apparatus to better understand outcomes and impact
and begin to explore the governance activities that might contribute most effectively to a
system of value creation and capture. For instance, future research could explore the idea that
CSCs in which the exchange of both positive and negative emotions is encouraged create more
collaborative value compared to CSCs without such emotional exchanges, given the assertion
that critical emotional incidents are necessary to build trust and commitment among CSC
participants (Sloan & Oliver, 2013).
Finally, we make meaningful contributions to the literature on business models for
sustainability (Lüdeke-Freund et al, 2018) by theorizing business models for multi-actor
collaborative arrangements. We untangle the value creation process at different levels of action
and provide an indication of how governance mediates this process. To our knowledge, the
extant literature has not yet examined the concept of business models on purposefully launched
and voluntary collaborations. Our empirical study showed a continuous shifting between
collective and private levels of activity, indicating limitations to the extent to which CSC
orchestrators can facilitate and govern collaborative value creation with a multitude of partners.
This raises relevant questions as to when collective activity is useful and when it should be
discontinued, whether the dissolution of collaborations creates new tensions, such as job
retention, or causes valuable collective knowledge or assets to disappear. However, in the
literature, the question of exit has yet to be addressed. Addressing the question whether CSCs

Governance mechanisms and collaborative value creation
33
are built for purpose or built to last is critical as most CSCs are launched with public funding
to remedy complex problems that have long-term horizons.
To conclude, we conducted a longitudinal, single-case study in the textile industry to
explore governance mechanisms in CSCs for sustainability and their effects on value creation
and capture. We argued that this study has implications for the study of CSCs for sustainability
as well as the study of business modelling for sustainability. Our study also has implications
for practitioners, particularly managers of firms, NGOs or government organizations that
participate in CSCs as orchestrators or as members. Notably, our study brings awareness to the
notion that CSCs need to have business models and it provides guidance to practitioners on
governance processes that actively steer collaborative value creation and private value capture.
Our study is also relevant for policy makers as it encourages them to question whether CSCs
are suitable organizational vehicles for systemic industrial change if the presence and intensity
of tensions between the diverse actors is (likely to be) very high. Viewing CSCs as
organizational entities that assemble resources, design value systems and compete to survive
may generate a fuller understanding of how collaborative value creation and private value
capture develop over time and how this affects social value. Our study is a first step in this
direction.
Acknowledgements
The authors wish to thank the anonymous reviewers and the special issue editors for their
helpful and constructive guidance in the development of this article. Furthermore, we thank
colleagues at the EGOS Colloquium in Edinburgh in 2019 and at Copenhagen Business School
for their insights and critical comments on earlier versions of the manuscript. The authors also
extend their deep gratitude to the participants in this research who so graciously allowed us to
study their process.
Funding

Governance mechanisms and collaborative value creation
34
The authors disclosed receipt of the following financial support for the research, authorship,
and/or publication of this article: This research project received funding from the Netherlands
Organization for Scientific Research. The authors are grateful for the financial support under
the Task Force for Applied Research SME programme (grant number RAAK.MKB04.012).

Governance mechanisms and collaborative value creation
35
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Table 1. Overview of TEXALL brand and supplier members1
Code
Type of member
Country
Size of
company
Month/Year
joined TEXALL
Status in
TEXALL
Nr. of
interviews
2
1
CIRC
NGO
Netherlands
Small
Oct 2016
Active
2
2
CHEM
NGO
Netherlands / UK
Small
Oct 2016
Exited Oct 2018
2
3
HDEM
NGO
Netherlands
Small
Oct 2016
Exited Jan 2018
2
4
B-DUM
Brand
Netherlands
Small
Oct 2016
Active
3
5
B-NIK
Brand
Netherlands
Small
Oct 2016
Active
2
6
B-OOC
Brand
Netherlands
Medium
Oct 2016
Active
3
7
B-EMA
Brand
Netherlands
Medium
Oct 2016
Active
3
8
B-SUJ
Brand
Netherlands
Medium
Oct 2016
Active
3
9
B-DUN
Brand
Sweden
Medium
Oct 2016
Active
3
10
B-AHC
Brand
Netherlands
Medium
Jan 2017
Active
2
11
B-YUK
Brand
Netherlands
Small
Oct 2016
Active
3
12
B-TSG
Brand
Netherlands
Medium
Oct 2016
Exited June 2017
2
13
B-PMI
Brand
Netherlands
Small
Oct 2016
Inactive
2
14
B-NED
Brand
Netherlands
Small
Oct 2016
Exited June 2017
2
15
B-PAG
Brand
USA
Large
Jan 2018
Inactive
2
16
B-OSA
Brand
UK
Large
Jan 2018
Active
2
17
B-MEH
Brand
Netherlands
Large
Jan 2018
Active
1
18
B-POT
Brand
UK
Large
Jan 2018
Active
2
19
S-SOB
Supplier - Mill
Turkey
Large
April 2017
Active
2
20
S-CRO
Supplier - Mill
Turkey
Large
April 2017
Active
1
21
S-VAT
Supplier - Mill
Spain
Large
April 2017
Active
0
22
S-LIK
Supplier - Mill
Turkey
Large
April 2017
Active
0
23
S-YOR
Supplier - Mill
Spain
Large
April 2017
Active
1
24
S-LIF
Supplier - Mill
France
Small
April 2017
Active
1
25
S-CER
Supplier - Mill
Spain
Small
April 2017
Active
1
26
S-RMA
Supplier – Mill
Pakistan
Large
Oct 2017
Active
0
27
S-MFA
Supplier – Mill
Pakistan
Large
Oct 2017
Active
1
28
S-ROS
Supplier – Mill
Pakistan
Large
Oct 2017
Active
1
29
S-SNE
Supplier – Mill
Netherlands
Small
Oct 2017
Active
1
30
S-AEJ
Supplier - Technology
Spain
Medium
June 2017
Active
2
31
S-NOT
Supplier - Technology
Italy
Medium
Sept 2017
Active
2
32
S-RAG
Supplier - Chemicals
Italy
Large
Sept 2017
Active
1
33
S-THC
Supplier - Chemicals
Germany
Large
Sept 2017
Active
1
1) Additionally, there are 19 affiliate members including government agencies, trade associations and other suppliers such as garment
(waste) collectors.
2) Not all suppliers were interviewed due to limited participation in TEXALL.

Governance mechanisms and collaborative value creation
43
Table 2. Overview of data sources
Description of materials used
Interviews
Semi-structured baseline interviews (n=21)
Semi-structured follow-up interviews (n=20)
Semi-structured interviews with NGOs (n=7)
Informational interviews supplier members (n=8)
Participation and
Observation
Sparring sessions with CIRC and CHEM (n=8)
Interventions (n=4)
Observation of meetings (n=10)
Observation of Dr. Visit event (n=1)
Observation of Fabric Showcase event (n=1)
Debriefings (n=8)
Documentation
Email communication (>480 pages)
Presentations from meetings
Meeting minutes
Aggregated reports of information from members

Governance mechanisms and collaborative value creation
44
Table 3. Level of tensions experienced, governance mechanisms used, value creation and value capture
by case (working group)
Finishing Recycling
Tensions
Knowledge sharing High Low
Alignment High Moderate
Competition Low Moderate - High
Governance mechanisms
Safeguarding – protecting propriety information High Low
Safeguarding – gatekeeping Low High
Bundling Moderate High
Connecting Moderate High
Collaborative Value Creation Low High
Private Value Capture
Private level High Moderate
Organizational level High High
Social Value
Industry level Low Moderate

Governance mechanisms and collaborative value creation
45
Figure 1. Timeline of TEXALL events from July 2015 to October 2018

Governance mechanisms and collaborative value creation
46
Figure 2. Schematic overview of concepts, themes and aggregated constructs

Governance mechanisms and collaborative value creation
47
Figure 3. Process model of the system of value creation and capture in CSCs for sustainability

Governance mechanisms and collaborative value creation
48
Vignette 1.
Recycling working group – developing collective fabrics. Recycling aimed to increase the volume of post-
consumer recycled fabrics by developing collective fabrics to lower the unit cost per meter. Post-consumer
recycling uses collected textile waste from consumers to spin new yarn. Post-consumer recycling is contrasted to
pre-consumer recycling, which uses the textile scraps or defect textile from the production factories to spin new
yarn. Post-consumer recycling has two main societal benefits: it saves water consumption by reducing the use of
virgin cotton and it reduces waste in landfills by reusing consumer garments. Furthermore, Recycling aimed to
increase the quality of post-consumer recycled fabric by stimulating fabric development.
The brand members were encouraged to develop the recycled fabrics collectively. During the initial kick off
meeting, a debate ensued as to whether development of a collective fabric would provide enough unique
competitive advantage in designing product collections and if collective development on a yarn level would be
better. There were advantages and disadvantages of both options. The yarn approach allowed for unique fabric
development by brands but limited buying volumes. The fabric approach allowed for developing basic fabrics
that brands could source and then apply unique finishing processes, but it required collective agreement on basic
common fabric specifications. Given the criteria that the brand members provided for decision making – lowering
costs, increasing quality and reducing supply chain complexity – they voted to follow the collective fabric
approach.
To continue development, brand members were grouped according to a level of recycled content (10%, 20% and
25%) that best fit with their brand requirements and image. They agreed to specifications like weight, color,
construction of weaving and composition of materials such as the percentage of organic cotton, polyester or
stretch. A panel discussion with nine denim mills and two yarn spinners was organized so that brands and suppliers
could discuss the latest developments and the brand requirements.
Following the panel discussion, four mills decided to pursue developing the fabrics. They followed up with the
brands directly by sending them samples of the fabrics. Brands then reviewed internally if the fabrics met their
design requirements, e.g. look and feel, aesthetics, durability. To date, three TEXALL brand members adopted
the post-consumer recycled fabric in their collections. Several mills have established a growing collection of post-
consumer recycled fabrics, exhibiting them at industry trade fairs and selling them to other brands beyond
TEXALL members.
Recycling group breakout sessions in January 2017 and April 2017 meetings

Governance mechanisms and collaborative value creation
49
Vignette 2.
Chemical finishing group – creating alternative wash recipes. The Finishing group started with a collective
approach to measure finishing processes and to define a collective benchmark that would lead to more sustainable
finishing. However, it became apparent in the first two meetings that the collective approach was not gaining any
traction. Information about generic finishing techniques was already readily available and there were existing
benchmarks for specific processes like indigo dyeing or stonewashing. There was no added value in creating these
generic measurements or benchmarks and brand members were not forthcoming about setting a collective
benchmark.
Confusion about the scope of the Finishing group pursued as debates around the variability of distinct recipes
intensified. The need to navigate and mitigate tensions was high due to the secrecy of wash recipes. For nearly
one year, the group struggled to find a suitable approach. Eventually a collective approach was abandoned and an
individual approach to focus on never-out-of-stock styles (NOS) was adopted. This changed the focus from
generic technical processes to specific wash recipes of garments, which provided clearer benefits to the brand
members and created commitment and engagement to continue. For sustainability and social value, focusing on
NOS styles assumed a production volume that in aggregate could save substantial chemical and water use in
finishing.
To progress, a standardized template for gathering information about wash recipes was created. The brands were
asked to gather wash recipe information for their NOS styles from their laundry suppliers (factories where fabric
is cut, sewn and finished). The brands also received a training about finishing processes, the sustainability impact
of these processes and the alternative methods that were available and more sustainable. CHEM, the PM, and a
washing expert reviewed the recipes, checking for completeness and accuracy. The purpose of gathering
information on recipes of NOS styles was to use it as input for one-to-one conversations (referred to as Dr. Visits)
with experts from chemical and equipment manufacturers (the doctors) that could provide advice to brands (the
patients) on more sustainable recipes. Following the Dr. Visits, the brand members worked directly with their
laundry suppliers to implement the alternative recipes.
Dr. Visits, and the supporting processes around them, became a standardized routine that was replicated. First,
brand members replicated the process for other styles than NOS or for newly designed styles. In this case, the
facilitation of TEXALL orchestrators was no longer necessary. Second, the Dr. Visit process was replicated for
new brand members which was facilitated by TEXALL orchestrators.
Dr. Visits, Finishing working group, September 2017