Walking a Tightrope: Managerial Response Strategies in <scp>NPO</scp> ‐Business Partnerships That Face a Scandal

ABSTRACT When one of the partners in a non‐profit organization (NPO)–business partnership is involved in a scandal, allied partner managers need to walk on a tightrope to respond to the situation. Knowledge is limited about the factors that influence their response decisions to continue or exit the partnership. Therefore, this research note examines the response strategies of managers in different forms of NPO–business partnerships when their allied partner is involved in a scandal. Using a scenario‐based experiment with graduate students, the findings indicate that managers prefer a constructive (destructive) response to a scandal partner when the invested resources of partners and the density of interaction between partners are high (low). The findings also suggest that managers prefer a constructive response when they have a more deliberate decision‐making style rather than an intuitive one.