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Focus on Fairtrade: Propositions for Integrating Fairtrade and Supply Chain Management Research

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Abstract

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.

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Notes

  1. Journal of Business Ethics was not included among the journals in the keyword search, as the search focused on examining how FT has been studied within the realm of SCM research and theory: therefore only the journals considered main outlets for and focused on SCM studies were chosen for this review.

  2. Environmental uncertainty here does not relate mainly/only to the natural environment (although it can create uncertainties for a supply chain), but to the complete operating environment, which contains all other operators in the chain and their environmental context including, e.g. technology, legislation and market forces.

  3. Innovative products (such as fashion items and many technology products), in comparison, have short product life cycles, high margins, high product varieties and high risks of stock-outs and end-of-season markdowns (Fisher 1997). These products require market-responsive supply chains that focus on market mediation—balancing large supply and demand mismatches. For further details on the two product and supply chain types, we refer the reader to Fisher (1997).

Abbreviations

ATO:

Alternative trading organization

CSR:

Corporate social responsibility

FLO:

Fairtrade Labelling Organization

FT:

Fairtrade

FTO:

Fairtrade Organization

JIT:

Just-in-time

NGO:

Non-governmental organization

SCM:

Supply chain management

WFTO:

World Fair Trade Organization

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Acknowledgments

We would like thank the Associate Editor Dr. Adam Lindgreen and the anonymous reviewer, whose suggestions have greatly improved this article.

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Authors and Affiliations

  1. Aalto University School of Business, Runeberginkatu 22-24, 00100, Helsinki, Finland

    Katri Karjalainen

  2. University of Liverpool Management School, Chatham Building, Chatham Street, Liverpool, L69 7ZH, UK

    Claire Moxham

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Correspondence to Katri Karjalainen.

Appendix 1

Appendix 1

Journals included in the keyword search

International Journal of Logistics Management

International Journal of Logistics: Research and Applications

International Journal of Operations & Production Management

International Journal of Physical Distribution and Logistics Management

International Journal of Production Economics

International Journal of Production Research

International Journal of Quality and Reliability Management

Journal of Business Logistics

Journal of Operations Management

Journal of Purchasing and Supply Management

Journal of Service Research, Journal of Service Management

Manufacturing & Service Operations Management

Production and Inventory Management

Production and Operations Management

Production Planning and Control

Supply Chain Management: International Journal

The Journal of Supply Chain Management

Total Quality Management and Business Excellence

Keywords used in the search

ATO

sugar

VBO

tea

banana*

wine

cocoa

‘Alternative trading organization’

coffee

‘co-operative’

craft*

‘European Fair Trade Association’

EFTA

‘Fair trad*’

Fairtrade

‘Fair trade’

FLO

‘Fairtrade Labelling Organization’

flower*

‘International Fair Trade Association’

fruit

‘Local communit*’

gold

‘premium price’

honey

‘social premium’

IFAT

‘sports ball*’

juice*

‘Value-based organization’

rice

 

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Karjalainen, K., Moxham, C. Focus on Fairtrade: Propositions for Integrating Fairtrade and Supply Chain Management Research. J Bus Ethics 116, 267–282 (2013). https://doi.org/10.1007/s10551-012-1469-1

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  • DOI: https://doi.org/10.1007/s10551-012-1469-1

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