Scandals often delegitimize firms, making them less desirable as collaboration partners due to the risk of negative spillovers. The prevailing literature assumes that scandal-stricken firms are typically avoided, leading to partnership dissolution, or preventing new partnerships with such firms. This article problematizes this assumption by theorizing about the positive effects—i.e., the bright side—of scandal experience on a firm’s capability development and its potential as a partner. From a capability perspective, we argue that scandal experience equips firms with organizational change, relational, and scandal issue-specific sustainability capabilities. These capabilities enhance a firm’s propensity to create value and reduce its propensity for partner opportunism. Accepting that crisis response determines crisis outcomes and the future risk of negative spillovers, we establish effective crisis response and organizational learning as necessary conditions in our theorizing. This article contributes to the literature by providing a theoretical framework that opens new avenues of research on partner selection and performance, particularly in sustainability-oriented partnerships.
