This article explores the extent to which consumers consider ethics in luxury goods consumption. In particular, it explores whether there is a significant difference between consumers’ propensity to consider ethics in luxury versus commodity purchase and whether consumers are ready to purchase ethical-luxury. Prior research in ethical consumption focuses on low value, commoditized product categories such as food, cosmetics and high street apparel. It is debatable if consumers follow similar ethical consumption patterns in luxury purchases. Findings indicate that consumers’ propensity (...) to consider ethics is significantly lower in luxury purchases when compared to commoditized purchases and explores some of the potential reasons for this reduced propensity to identify or act upon ethical issues in luxury consumption. (shrink)

Research on fair trade has flourished over the past decade as fair trade food products have gained popularity amongst consumers in many developed economies. This study examines the effects of recessionary economic conditions on fair trade consumers’ purchasing behaviour. An online survey was administered to 306 fair trade consumers from Canada, the United Kingdom and the United States of America. The results reveal a discrepancy among fair trade consumers as only consumers that purchase fair trade on an occasional basis adhered (...) to established consumer behaviour norms, i.e. decreasing their purchases of fair trade products and becoming significantly more price aware. Respondents who actively consume fair trade generally remained loyal to their purchase. While some active consumers altered their purchasing behaviour, this phenomenon was not common amongst this group as no statistically significant changes were observed. Differences were also noted among the three countries as the Canadian and US fair trade consumers significantly decreased their consumption of fair trade as a result of the recession, whereas the UK consumers did not. In addition to the research results, theoretical and managerial implications will be discussed along with future research directions. (shrink)

Fair Trade companies have pulled off an astonishing tour de force. Despite their relatively small size and lack of resources, they have managed to achieve considerable commercial success and, in so doing, have put the fair trade issue firmly onto industry agendas. We analyse the critical role played by social capital in this success and demonstrate the importance of values as an exploitable competitive asset. Our research raises some uncomfortable questions about whether fair trade has 'sold out' to the mainstream (...) and whether these companies have any independent future or whether their ultimate success lies in the impact they have had on day-to-day trading behaviour. (shrink)

In recent years, researchers have observed the process of mainstreaming Fair Trade and the emergence of alternative sustainability standards in the coffee industry. The underlying market dynamics that have contributed to these developments are, however, under-researched. Insight into these dynamics is important to understand how markets can develop to favor sustainability. This study examines the major developments in the market for certified coffee in the Netherlands. It finds that, in the creation of a market for sustainable coffee, decisions that significantly (...) influence market creation are made in the lead companies (retailers and coffee roasters). These decisions are made possible by the availability of multiple systems of sustainability standards and by the existence of a small segment of loyal Fair Trade customers that ensured that sustainability remained an issue on the coffee market in the years before the market creation took-off. Fair Trade did not become the new rule in this process, but it became the benchmark against which companies could compare themselves and the basis upon which they built in adopting or developing new standards that would be more feasible in their business models. (shrink)

The growing availability and consumption of Fairtrade products is recognised as one of the most widespread ethically inspired market developments, and as an example of activist-driven change within the wider marketing system. The Fairtrade Towns movement, now operating in over 1700 towns and cities globally, represents a comparatively recent extension of Fairtrade marketing driven by local activists seeking to promote positive change in production and consumption systems. This paper briefly explores the conventional framing of the role that ethically related activism (...) plays in the operation of markets and in influencing market participants. It then presents key insights gathered from a grounded theory exploration of Fairtrade Towns as activist-driven marketing systems, revealing the atypical nature of the activism involved. The findings demonstrate how local activists leverage their social networks to exert pressure and generate support to promote ethical consumption. The study suggests that Fairtrade Towns offer a new role for activists as Fairtrade itself becomes more mainstream, and considers the role they are fulfilling as ‘informal’ local marketers. The marketing dynamics revealed represent a complex and distinctive form of relational activism that seeks to build Fairtrade markets and highlight their positive benefits, with potential lessons for other local ethical market-building efforts in future. (shrink)

This paper explores how fair trade social enterprises manage paradoxes in stakeholder-oriented governance models. We use narrative accounts from board members, at governance events and board documents to report an exploratory study of paradoxes in three FTSEs which are partly farmer-owned. Having synthesized the key social enterprise governance literature and framed it alongside the broader paradox theory, we used narratives to explore how tensions are articulated, how they can be applied within an adapted paradox framework, and how governance actors seek (...) to mitigate paradoxes. The paper contributes to current debates in social enterprise scholarship concerning hybridity :455–476, 2010; in Institutional logics in action, Part B, 2012), hybrid organizing :397–441, 2014) and operational tensions :407–442, 2013) by illustrating empirically how the central social/enterprise paradox manifests in FTSEs governance arrangements. We build on the paradox categories proposed by Lüscher and Lewis :221–240, 2008) and adapted in Smith et al. :407–442, 2013) by developing a recursive model of legitimacy-seeking governance processes, conceptualizing how boards seek to mitigate, but not necessarily resolve, paradoxes. (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)

The objective of this article is to examine the different ways that smallholders are brought into Fairtrade certification schemes in the Tanzanian tea industry. We examine the different ownership relations of processing factories and the perceived benefits of these different arrangements. We use descriptive qualitative analysis based on qualitative interviews and focus groups conducted between 2008 and 2010 to identify the significance between factory ownership organization and Fairtrade certification. We find that there is a movement toward innovation in the organizational (...) strategies, which includes new ownership arrangements of processing factories and outgrower contracts that have been associated with certified Fairtrade production. We also suggest that organizational innovation is significant for obtaining scheme success yet perceived benefits of and increased information about Fairtrade production is independent from ownership shares in processing. (shrink)

Managers in ethnic businesses are confronted with ethical dilemmas when taking action based on ethnic ties; and often as a result, they increase the already vulnerable positions of these businesses and their stakeholders. Many of these dilemmas concern the capital that is generated through variations in the use of ethnic stakeholder social ties. The purpose of this paper is to suggest a stakeholder-based model of social capital formation, mediated by various forms of ethnic ties, to explore the duality of ethnicity: (...) it can aid and hinder an ethnic business. Drawing upon the social capital/economic development, stakeholder salience, ethnic businesses literatures, and on social identity theory, we develop a cyclical model of relationships among ethnic business stakeholder attributes and social capital, as mediated by three-way Simmelian bonding and bridging ties, which then, in turn, affects the ethnic stakeholder attributes. We argue that the development of bridging yet strong ties through this cyclical process is relevant for the improvement of the positions of ethnic businesses in terms of both economic success and social responsibility. Specifically, we suggest that, given the duality of ethnicity in business, managers can prioritize stakeholder relationships based upon how these stakeholder ties affect social capital. (shrink)

This paper investigates the difficulties of creating economic, social, and environmental values when operating as a hybrid venture. Drawing on hybrid organizing and sustainable business model research, it explores the implications of alternative forms of business model experimented with by farmer owned, fairtrade social enterprise Cafédirect. Responding to changes and challenges in the market and societal environment, Cafédirect has tried multiple business model innovations to deliver on all three forms of value capture, with differing levels of success. This longitudinal case (...) study, therefore, provides a contribution to our understanding of how business models enact hybrid mission, providing a platform for triple-bottom-line value capture. In doing so, we are able to expand on the normative understandings of integrating hybrid objectives, and the complications of multiple types of value capture. (shrink)

This case study investigates Gram Vikas' innovative social entrepreneurial approach to sustainable rural development through its 'Water and Sanitation Programme'. We explore its key innovation of 100 % inclusion and the process of creating democratic, self-governing management systems. This allows us to demonstrate how a social enterprise tries to realize its vision of "an equitable and sustainable society where people live in peace with dignity", and ultimately, how it contributes to the United Nations Millennium Goals of improving health, empowering women (...) and breaking the vicious circle of poverty. We also discuss the management challenges that the organisation faces in the area of finance, personnel management and scaling up. (shrink)