The Strength of Loose Couplings – The UN Global Compact as a Multistakeholder Initiative

Multistakeholder initiatives such as the UN Global Compact organize their participants in specific ways. Most importantly, they have to bridge global (universal) principles and local (contextualized) implementation practices. Some initiatives have responded to this need by creating a nested network structure – that is, local networks that are embedded into a wider global “network of networks.” The UN Global Compact, for instance, has more than 100 local networks, which are connected through regional hubs, the Annual Local Network Forum, and interactions with the Global Compact Office. Stakeholder dialogue and collective action are emerging both within and among such networks.

Addressing complex global development problems (e.g., access to water) requires systemic change. Such change can only occur if initiatives like the UN Global Compact organize their participants in ways that sufficient scale can be achieved. Scale depends not only on the willingness of individual participants to implement sustainable business practices, but also on a sound organizational framework enabling collective action and connecting participants within and among local networks. Such a framework needs to reconcile two competing demands: (1) the ability to locally adapt universal principles within local networks (i.e., flexibility) and (2) the ability to constantly coordinate activities across local networks (i.e., stability).

To analyze how multistakeholder initiatives reconcile flexibility and stability, we have to look at the strength of couplings between participating organizations. In principle, participants can be coupled tightly or loosely. Research shows that four factors influence whether couplings between participants are tight or loose.

• Loose couplings exist if there is a low frequency of interaction between participants. If participants interact on an irregular basis, and hence affect each other occasionally rather than constantly, a loose coupling is likely to be found.
  
• Loose couplings can also be caused by indirect relationships between participants. For instance, if two organizations do not communicate directly, but only via a third party, their relationship becomes loosely, rather than tightly, coupled.
• Loose couplings occur when a high degree of causal indeterminacy exists. High causal indeterminacy means that participants disagree about how their environment functions or should function. As a consequence, the coordination of activities becomes difficult, which, in turn, causes looser couplings.
• Loose couplings are also caused by the existence of non-immediate effects. Non-immediate effects create a lag between a stimulus by one participant (e.g., an attempt to communicate) and the response by another participant.

Many would see the existence of loose couplings as a problem, mostly because it makes multistakeholder initiatives harder to govern (at least when viewed from a distance). Research, however, has shown that looser couplings strengthen the ability of initiatives such as the UN Global Compact to create systemic change. In fact, it is the coexistence of loose and tight couplings between participants that balances the need to adapt universal principles to local contexts and the need to coordinate activities across local contexts.

This raises a critical question: How can tight and loose couplings coexist within multistakeholder initiatives? While it is plausible that either tight or loose couplings exist in a given system, their coexistence requires further explanation. The nested network structure of multistakeholder initiatives (see above) plays an important role in this context. This nested network structure allows for the interplay of tight and loose couplings. While tighter couplings prevail between participants within local networks, looser couplings exist among participants from different local networks.

We can illustrate this by discussing how the four factors that influence the strength of couplings impact the organization of participants in multistakeholder initiatives. As local networks engage participants in collective action and partnerships, the frequency of interaction among participants is relatively high (causing tighter couplings). Local networks also allow different stakeholder groups to interact directly (causing tighter couplings), while interactions among different local networks usually depend on advocates (causing looser couplings). Participants from a single local network are also more likely to agree on how their environment functions (e.g., because they share a common set of values). This enables a better coordination of actions and, hence, tighter couplings. Finally, interactions within local networks often produce more immediate results (causing tighter couplings) because participating organizations work on both design and implementation of the underlying activities.

The coexistence of tight couplings (within local networks) and loose couplings (among local networks) creates three important effects for initiatives like the UN Global Compact. First, since local networks are only loosely coupled to other networks, it is possible to seal off problems in single networks without creating negative spillover effects to other parts of the overall initiative. In other words, the coexistence of tight and loose couplings safeguards the stability of multistakeholder initiatives. The resulting stability is a precondition for balancing the quantity of participants and the quality of their engagement – a key priority of the UN Global Compact. Participant growth requires an organizational environment that allows for local participant clusters to expand and connect their activities while, at the same time, retaining a high degree of autonomy.

Second, the interplay of tight and loose couplings allows for a more effective management of the link between global principles and local practices. Looser couplings among networks provide participants on the ground with implementation authority and enable them to adapt universal principles to local needs. Such localized adaptations help to stimulate systemic change, as global problems are translated into local solutions, and solutions themselves can be connected across countries and regions. This creates participant ownership and allows for managing a global portfolio of issues in a localized way.

Finally, the coexistence of loose and tight couplings also impacts the way multistakeholder initiatives legitimize themselves in local environments. Legitimacy is achieved when such initiatives are framed as appropriate and desirable within a given system of norms and values. Loose couplings provide local networks with the necessary autonomy to have decentralized stakeholder dialogues that help to explore what norms and values are relevant in “their” local context. Once local networks have understood what counts as appropriate behavior in their respective environment, they can develop activities that are perceived as necessary and legitimate by relevant stakeholders (e.g., producing guidance on water sustainability in regions where this is a particular concern).

The coexistence of looser and tighter couplings in initiatives like the UN Global Compact is important for initiating collective action in times of rising environmental complexity. On the one hand, loose couplings preserve diversity in responding to environmental stimuli (as more options can be potentially activated). On the other hand, tight couplings ensure that this diversity results in impactful collective action on the ground. Despite conventional wisdom that tighter couplings create better and more durable governance arrangements (because outcomes are supposedly easier to control), the arguments presented here show that it is necessary to appreciate “the strength of loose couplings.”