In the literature, Fair Trade (FT) goods are usually associated with other products differentiated by process attributes such as organic food, genetically modified (GM) food or child labour-free clothing. All of these products are regarded as credence goods. This classification refers to the simplified definition of credence goods, which describes product attributes which consumers cannot evaluate, even after having consumed the good. Focusing on the characteristics of FT goods, this article proposes a reassessment of the link between FT goods and (...) credence properties as defined by Darby and Kami. We first demonstrate that (1) the usual classification masks important particularities of FT goods compared to other goods with process attributes and (2) the full definition of credence goods may even provide a better description of the quality of FT goods. However - and this is our second theoretical contribution - the lack of consensus among experts concerning FT standards and their level of efficiency encourage us to consider FT goods as indeterminate goods as defined by Lupton. This result leads us to suggest a new typology of product attributes summarized in an innovative diagram. It sheds light on how competition between the different FT approaches works and why the FT market is still confined to a niche, if not threatened with collapse. We mainly illustrate our theoretical analysis with observations relating to the French FT market and institutions. (shrink)

Driven by increased consumer interest and stakeholder pressure, the number of Fairtrade (FT) products has been steadily increasing. The mainstreaming of FT means that the products are now facing stiff competition within the generic product categories in which they operate. While consumers may pressure organizations for ethical conduct, they are less willing to pay premium prices for fairly traded products. For FT to continue to grow, more efficient operating models are required to offset the premium prices paid to producers to (...) ensure competitiveness in the market. One such improvement approach may be the management of FT supply chains. To investigate the feasibility of this approach, this article systematically combines literature on FT with key supply chain management (SCM) constructs and theories. We discuss existing SCM paradigms in the context of FT and demonstrate aspects where the efficiency of FT chains needs to be improved to ensure their viability. We present propositions that demonstrate the key limitations of the FT model from the point of view of SCM theory and practice and suggest the potential changes needed in the management of FT supply chains. The article provides a timely first attempt to systematically combine FT with SCM constructs, thus establishing a basis for the further development of FT chains and for the improvement of the operating efficiency within them. (shrink)

Increasingly, companies implement social and environmental standards as instruments towards corporate social responsibility in supply chains. This is based on the assumption that such standards increase legitimacy among stakeholders. Yet, a wide variety of standards with different requirement levels exist and companies might tend to introduce the ones with low exigencies, using them as a legitimacy front. This strategy jeopardizes the reputation of social and environmental standards among stakeholders and their long-term trust in these instruments of CSR, meaning that all (...) expenses for their implementation are of no avail for the companies. Therefore, this paper highlights which criteria are important for the selection, implementation and improvement in order to achieve a company's aim, but also to strengthen the legitimacy of social and environmental standards. This research is based on conceptual thought and some existing empirical research, comparing four different social and environmental standards, revealing weaknesses and strengths. It exposes the basic conditions for the success of such standards among stakeholders and identifies the need for more empirical data. (shrink)

This paper explores an empirical puzzle, namely, how inter-organizational relationships can be sustained between organizations that draw upon distinctive—and potentially conflicting—institutional logics under conditions of power asymmetry. This research analyses cases of these relationships and suggests some key conditions underlying them. Examining relationships between ‘Fair Trade’ organizations and corporate retailers, a series of contingent factors behind the dynamic persistence of such relationships are proposed, namely: the presence of pre-existing ‘hybrid logics’; the use of boundary-spanning discourses; joint tolerance of conflict; and (...) co-creation of common rules. These four elements are supported by a fifth mediating factor, i.e. the presence and use of a Fair Trade certification system in the collaboration. The latter appears as a central vehicle facilitating cross-logic relationships—it can be seen as a ‘boundary object’ embodying a series of narratives and discourses that are open to multiple interpretations corresponding to the dominant institutional logics of each partner organization. (shrink)

We analyse the development of Fair Trade in Italy by examining its principles, structure, performance, dilemmas and potential solutions and identifying its main distinctive features. These lead us to develop a specifically Italian model. Fair Trade in Italy is younger than its more established North European counterparts and more focussed on broad social justice issues in addition to its concern to include marginalized producers. This normative difference has given rise to a social-economy-dominated value chain, although it has generated much lower (...) per capita consumption of Fair Trade products. At the same time, we also observe a relatively higher specialization in handicraft products and educational activities as well as a strong capacity to attract voluntary labour and create social capital. We identify clear trade-offs between social goals and the economic performance of the Italian model: reduced economies of scale, a closer focus on non-economic-value-creating social activities and greater consideration of values such as consumption sobriety and environmental concerns which may conflict with economic performance. We propose solutions which may resolve these dilemmas without abandoning the initial ambition not only to achieve the promotion of market access for marginalized producers in the South, but also to pursue a broader concept of well-being in the North and the South. (shrink)

In 2015, the United Nations Sustainable Development Goals set an ethical imperative: end extreme poverty and hunger by 2030. Microfranchising can contribute to this critical effort by offering nonprofit organizations and businesses an opportunity to rapidly scale entrepreneurship within Base of the Pyramid markets. However, while abundant literature exists on traditional franchising, we know little about how to leverage microfranchising in resource-scarce contexts to alleviate poverty. To address this gap, we report a longitudinal case study of a microfranchise network aimed (...) at providing timely access to quality, affordable agricultural input, and services for millions of small-scale farmers in Bangladesh. Anchored in the BOP and microfranchise literature and drawing on innovation theory as an analytical lens, we provide a detailed account of how CARE—a global humanitarian and development non-governmental organization—developed and managed the network. We found that context played a strong role and that adaptability therefore was key to successfully recruiting and engaging BOP entrepreneurs and other business partners in the network. Moreover, as members joined the network with past ties and established practices, managing these path dependencies had important implications for network performance. Network sustainability in terms of financial and social impact was also a key theme that required careful consideration throughout network development. We combine these empirical findings with extant literature to discuss contributions to the theory and practice of microfranchising and innovation networking in the BOP context. (shrink)

Fair Trade has changed considerably since its early days. In this article, we argue that these changes have led to a depersonalization of ethics, thus raising serious questions about the future of Fair Trade. In particular, the depersonalization of ethics which is seen to accompany the current changes has led to greater variety in the interpretations of Fair Trade. Hiding these divergences behind the labels is increasing the risk that the movement will lose its credibility.

Relations between non-governmental organizations (NGOs) and companies have been the subject of a sharply increasing amount of publications in recent years within academic business journals. In this article, we critically assess this fast-developing body of literature, which we treat as forming a ‘business and society discourse’ on NGO–business relations. Drawing on discourse theory, we examine 199 academic articles in 11 business and society, international business, and management journals. Focusing on the dominant articulations on the NGO–business relationship and key signifiers they (...) rely on, we analyze the problem-settings of articles in order to reveal the statements that are acceptable and appropriate within this field. Our threefold aim is to (1) identify dominant articulations of NGO–business relations in business and society discourse, (2) expose those articulations that are silenced or suppressed by these dominant articulations, and (3) critically assess possible power effects of these discursive dynamics in the field of discursivity. While business and society discourse on NGO–business relations overall remains open to many different articulations, we also find that those articulations that focus on NGO–business partnerships and governance initiatives tend to privilege collaborative and deliberative ways of engaging and marginalize more adversarial subject positions. We call for more recognition of the potentially constructive role that can be played by conflict. (shrink)

Social banks are financial intermediaries paying attention to non-economic (i.e., social, ethical, and environmental) criteria. To investigate the behavior of social banks on the credit market, this paper proposes both theory and empirics. Our theoretical model rationalizes the idea that reciprocity can generate better repayment performances. Based on a unique hand-collected dataset released by a French social bank, our empirical results are twofold. First, we show that the bank charges below-market interest rates for social projects. Second, regardless of their creditworthiness, (...) motivated borrowers respond to advantageous credit terms by significantly lowering their probability of default. We interpret this outcome as the first evidence of reciprocity in the credit market. (shrink)

Fair trade (FT) is of growing interest to those carrying out research into ethical decision making. In this paper, we report findings from a recent survey of FT purchasing among 688 retail shoppers in the United Kingdom. We examined the relationship between individual differences, in terms of gender and age, and three outcome measures: purchasing, word of mouth (WOM) recommendation and social advocacy. Though age appeared to have no significant effects, we found evidence of gender difference in each outcome measure. (...) Females in our sample were more likely to purchase FT goods, to recommend them by WOM, and to advocate FT purchasing to friends and family. We discuss the implications of these findings in terms of the literature on ethical decision making and gender difference. (shrink)

At the same time as fair trade certified products are capturing an increasing market share, a growing number of scholars and practitioners are raising serious questions about who benefits from certification. Through a critique of north–south narratives, this paper draws on contemporary themes in fair trade scholarship to draw out different ways of thinking about fair trade outside of the dichotomous north–south framing. I argue that, through the creation of fair trade subjects of the “global north” and “global south,” certification (...) has normalized and naturalized dichotomous power relations. The primary concern of this paper is to demonstrate the problems with situating certification and scholarship in the north–south binary and to push examination toward a more nuanced analysis of how certification and development are shaped in-place. This intervention is important for assisting with stepping away from long-standing debates regarding the effectiveness of certification, and additionally in contributing to critical thinking on economic development more broadly. (shrink)

Fair trade (FT) is of growing interest to those carrying out research into ethical decision making. In this paper, we report findings from a recent survey of FT purchasing among 688 retail shoppers in the United Kingdom. We examined the relationship between individual differences, in terms of gender and age, and three outcome measures: purchasing, word of mouth (WOM) recommendation and social advocacy. Though age appeared to have no significant effects, we found evidence of gender difference in each outcome measure. (...) Females in our sample were more likely to purchase FT goods, to recommend them by WOM, and to advocate FT purchasing to friends and family. We discuss the implications of these findings in terms of the literature on ethical decision making and gender difference. (shrink)

This paper explores the implications of a Civil Economy approach to consumer ethics, by addressing the idea that Antonio Genovesi’s (1713–1769) notion of _mutual assistance_ can be understood in terms of _collective intentionality_ or _team reasoning_. I try to give reasons for this idea by a careful examination of Genovesi’s conception of social life and human agency and by reading it through the lens of team reasoning. I argue that this understanding of mutual assistance may imply broad constraints over agents’ (...) choices whenever they conflict with the good of society. Then I explore the implications of a mutual assistance approach to market ethics in a global society, where conflicting views of good and different group affiliations are possible. (shrink)

Although fair trade has grown exponentially in the U.S. in recent years, we do not have a clear understanding of why small U.S. firms choose to participate in it. To answer this question, we use a qualitative case study approach and grounded theory analysis to explore the motivations of 35 small fair trade businesses. We find that shared values and the desire to help others, often triggered by a critical incident, lead social entrepreneurs to found and sustain fair trade businesses. (...) The relationship between shared values and engagement in fair trade and the relationship between altruism and engagement in fair trade are strengthened by four motivating factors: direct relationships with producers, support for social causes, the desire for the preservation of craftsmanship, and the desire to share aesthetic products. These links are strengthened by four facilitating factors : the acquisition of business knowledge, family member involvement in the firm, assistance from faith communities, and assistance from the fair trade community. Additional analysis reveals three types of fair trade social entrepreneurs: “ethics first” entrepreneurs, primarily motivated by human rights and social justice concerns; “faith first” fair traders, motivated primarily by their religious faith; and “business first” businesspeople, motivated by what they perceive to be an opportunity to build a successful business while simultaneously doing “good” and helping others. (shrink)

The certification-based Fair Trade initiative has been steadily growing during the last two decades. While many scholars have analyzed its main characteristics and developments, only a few have assessed it against a concept of justice. And those exceptional cases have only focused on distributive justice, proving unable to grasp the important ethical elements that Fair Trade integrates in its project. In reaction to this, this article intends to critically examine what the Fair Trade movement proposes to be ‘fair’ by resorting (...) to the thought of the French philosopher Emmanuel Lévinas. To accomplish this goal, a new understanding of his conception of justice is presented, one that seeks to overcome the limitations that the two most common interpretations in the literature suffer. The idea of Lévinas’ ‘dialectics of justice’ is used to discuss Fair Trade’s relation of alterity, its appropriation of the notion of ‘face’ and its commitment to and responsibility for marginalized producers and workers. This analysis shows that Fair Trade operates with what could be described as a fetishized understanding of Levinasian ethics that justifies a deeply unjust praxis. (shrink)