Hostname: page-component-586b7cd67f-vdxz6 Total loading time: 0 Render date: 2024-11-20T14:22:19.309Z Has data issue: false hasContentIssue false
  • English
  • Français

The Effectiveness of Market-Based Social Governance Schemes: The Case of Fair Trade Coffee

Published online by Cambridge University Press:  23 January 2015

Douglas A. Schuler  and
Petra Christmann
Get access Rights & Permissions [Opens in a new window]

Abstract:

Market-based social governance schemes that establish standards of conduct for producers and traders in international supply chains aim to reduce the negative socio-environmental effects of globalization. While studies have examined how characteristics of social governance schemes promote socially responsible producer behavior, it has not yet been examined how these same characteristics affect consumer behavior. This is a crucial omission, because without consumer demand for socially produced products, the reach of the social benefits is likely to be limited. We develop a comprehensive model that links two characteristics of market-based social governance schemes—(1) stringency and enforcement of requirements, and (2) promotion—to two conditions required for governance schemes to generate significant social benefits: (1) socially responsible behavior of participating firms; and (2) consumer demand for socially produced products which, in turn, expands products produced according to social governance schemes, and thus, the quantity of social benefits. We discuss market-based social governance schemes in the context of fair trade coffee.

Type
Special Section Accountability in a Global Economy: The Emergence of International Accountability Standards to Advance Corporate Social Responsibility
Information
Business Ethics Quarterly , Volume 21 , Issue 1 , January 2011 , pp. 133 - 156
Copyright
Copyright © Society for Business Ethics 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Alter Eco. 2008. Alter Eco fair trade study: A survey of existing and potential fair trade consumers. October.Google Scholar
As Green as It Gets. 2010. Our position on fair trade. http://www.asgreenasitgets.org/index.php?option=com_content&view=article&id=223:our-position-on-fair-trade&catid=48:coffee&Itemid=139.Google Scholar
Auger, P., Burke, P., Devinney, T. M., & Louviere, J. J. 2003. What will consumers pay for social product features? Journal of Business Ethics, 42: 281–304.CrossRefGoogle Scholar
Bacon, C. M. 2008. Confronting the coffee crisis: Can fair trade, organic, and specialty coffees reduce the vulnerability of small-scale farmers in northern Nicaragua? In Bacon, C. M., Méndez, V. E., Gliessman, S. R., Goodman, D., & Fox, J. A. (Eds.), Confronting the coffee crisis: Fair trade, sustainable livelihoods and ecosystems in Mexico and Central America. Cambridge, Mass.: MIT Press. 155–78.CrossRefGoogle Scholar
Bacon, C. M., Méndez, V. E., & Fox, J. A. 2008. Cultivating sustainable coffee: Persistent paradoxes. In Bacon, C. M., Méndez, V. E., Gliessman, S. R., Goodman, D., & Fox, J. A. (Eds.), Confronting the coffee crisis: Fair trade, sustainable livelihoods and ecosystems in Mexico and Central America. Cambridge, Mass.: MIT Press. 337–72.CrossRefGoogle Scholar
Bartra, A. 2002. Economic, social and environmental virtues of certified coffee: The case of the Coordinadora Estatal de Productores de Café de Oaxaca. (English summary). Working Paper. Mexico City: Instituto Maya.Google Scholar
Bird, K., & Hughes, D. R. 1997. Ethical consumerism: The case of “fairly-traded” coffee. Business Ethics: A European Review, 6: 159–67.CrossRefGoogle Scholar
Boiral, O. 2003. ISO 9000: Outside the iron cage. Organization Science, 14: 720–37.CrossRefGoogle Scholar
Boiral, O. 2003. 2007. Corporate greening through ISO 14001: A rational myth? Organization Science, 18: 127–46.CrossRefGoogle Scholar
Carrigan, M., & Attalla, A. 2001. The myth of the ethical consumer: do ethics matter in purchase behaviour? The Journal of Consumer Marketing, 18: 560–77.CrossRefGoogle Scholar
Chatzidakis, A., Hibbert, S., & Smith, A. P. 2007. Why people don’t take their concerns about fair trade to the supermarket: The role of neutralization. Journal of Business Ethics, 74: 89–100.CrossRefGoogle Scholar
Chen, S. & Chaiken, S. 1999. The heuristic-systematic model in its broader context. In Chaiken, S., & Trope, Y. (Eds.), Dual process theories in social psychology. New York: Guilford Press: 73–96.Google Scholar
Christmann, P., & Taylor, G. 2001. Globalization and the environment: Determinants of firm self-regulation in China. Journal of International Business Studies, 32: 663–80.CrossRefGoogle Scholar
Christmann, P., & Taylor, G. 2006. Firm self-regulation through international certifiable standards: Determinants of symbolic versus substantive implementation. Journal of International Business Studies, 37: 863–78.CrossRefGoogle Scholar
Conroy, M. E. 2007. Branded! How the certification revolution is transforming global corporations. Gabriola Island, B.C.: New Society Publishers.Google Scholar
Counter Culture Coffee. 2010. http://www.counterculturecoffee.com/direct-trade-faq.Google Scholar
Crane, A. 2001. Unpacking the ethical product. Journal of Business Ethics, 30: 361–73.CrossRefGoogle Scholar
Creyer, E. H., & Ross, W. T. 1997. The influence of firm behavior on purchase intention: do consumers really care about business ethics? Journal of Consumer Marketing, 14: 421–32.CrossRefGoogle Scholar
DeCarlo, J. 2007. Fair trade. Oxford: Oneworld Publications.Google Scholar
De Pelsmacker, P., Driesen, L., & Rayp, G. 2005. Do consumers care about ethics? Willingness to pay for fair-trade coffee. The Journal of Consumer Affairs, 39: 363–85.CrossRefGoogle Scholar
Dollar, D., & Kraay, A. 2004. Trade, growth, and poverty. The Economic Journal, 114 (453): F22–F49.CrossRefGoogle Scholar
Fair Trade Federation. 2008. Interim fair trade trends report. July.Google Scholar
Fairtrade Foundation. 2009. Annual report 2008–2009. http://www.fairtrade.org.uk/annual_review/default.aspx.Google Scholar
Fairtrade Labelling Organisations International. 2007. Generic fairtrade standards for small farmers’ organizations. Current version: 17.12.2007. Bonn: Fairtrade Labeling Organizations International.Google Scholar
Fairtrade Labelling Organisations International. 2010. http://www.fairtrade.net.Google Scholar
Falkner, R. 2003. Private environmental governance and international relations: Exploring the links. Global Environmental Politics. 3: 72–87.CrossRefGoogle Scholar
FLO-Cert. 2010. http://www.flo-cert.net/.Google Scholar
Folkes, V. S., & Kamins, M. A., 1999. Effects of information about firms’ ethical and unethical actions on consumers’ attitudes. Journal of Consumer Psychology, 8: 243–59.CrossRefGoogle Scholar
Fridell, M., Hudson, I., & Hudson, M. 2008. With friends like these: The corporate response to fair trade coffee. Review of Radical Economics, 40: 8–34.Google Scholar
Gotlieb, J. B., Schlacter, J. L., & St. Louis, R. D. 1992. Consumer decision making: A model of the effects of involvement, source credibility, and location on the size of the price difference required to induce consumers to change suppliers. Psychology & Marketing, 9: 191–206.CrossRefGoogle Scholar
Hemphill, T. A. 2004. Monitoring global corporate citizenship: Industry self-regulation at a crossroad. The Journal of Corporate Citizenship, 14: 81–95.CrossRefGoogle Scholar
Hira, A., & Ferrie, J. 2006. Fair trade: Three key challenges for reaching the mainstream. Journal of Business Ethics, 63: 107–18.CrossRefGoogle Scholar
Hsieh, N. 2006. Voluntary codes of conduct for multinational corporations: Coordinating duties and rescue and justice. Business Ethics Quarterly, 16: 119–35.CrossRefGoogle Scholar
Hutchens, A. 2009. Changing Big Business: The Globalisation of the Fair Trade Movement. Northampton, Mass.: Edward Elgar.CrossRefGoogle Scholar
Intelligentsia Coffee. 2010. http://www.intelligentsiacoffee.com/about/direct-trade.Google Scholar
Kalafatis, S. P., Pollard, M., East, R., & Tsogas, M. H. 1999. Green marketing and Ajzen’s theory of planned behavior: A cross-market examination. Journal of Consumer Marketing, 16: 441–60.CrossRefGoogle Scholar
Keohane, R. 2003. Global governance and accountability. In Held, D. & Koenig-Archibugi, M. (Eds.), Taming globalization: Frontiers of governance, 130–59. Cambridge: Polity.Google Scholar
Kolk, A., & van Tulder, R. 2002. Child labor and multinational conduct: A comparison of international business and stakeholder codes. Journal of Business Ethics, 36: 291–301.CrossRefGoogle Scholar
Low, W., & Davenport, E. 2005. Has the medium (roast) become the message? The ethics of marketing fair trade in the mainstream. International Marketing Review, 22: 494–511.CrossRefGoogle Scholar
Low, W., & Davenport, E. 2006. Mainstreaming fair trade: Adoption, assimilation, appropriation. Journal of Strategic Marketing, 14: 315–27.CrossRefGoogle Scholar
McWilliams, A., & Siegel, D. 2001. Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26: 117–27.CrossRefGoogle Scholar
Micheletti, M., & Stolle, D. 2007. Mobilizing consumers to take responsibility for global social justice. Annals of the American Academy of Political and Social Science, 611(1): 157–75.CrossRefGoogle Scholar
Moberg, M. 2005. Fair trade and eastern Caribbean banana farmers: Rhetoric and reality in the anti-globalization movement. Human Organization, 64: 4–15.CrossRefGoogle Scholar
Moore, G. 2004. The fair trade movement: Parameters, issues and future research. Journal of Business Ethics, 53: 73–86.CrossRefGoogle Scholar
Murphey, D. D. 1998. A critique of the central concepts in free-trade theory. The Journal of Social, Political, and Economic Studies, 23: 433–63.Google Scholar
Murray, D. L., & Raynolds, L. T. 2000. Alternative trade in bananas: Obstacles and opportunities for progressive social change in the global economy. Agriculture and Human Values, 17: 65–74.CrossRefGoogle Scholar
Newcastle City Council. 2007. Fair trade survey 2007. Performance and Improvement Unit. Chief Executive’s Office. May.Google Scholar
Organic Consumers Organization. 2008. Starbucks fair trade campaign. http://www.organicconsumers.org/starbucks/index.cfm.Google Scholar
O’Rourke, D. 2003. Outsourcing Regulation: Non-Governmental Systems of Labor Standards and Monitoring, Policy Studies Journal, 31(1): 1–29.CrossRefGoogle Scholar
Oxfam. 2002. Rigged rules and double standards: Trade, globalization, and the fight against poverty. http://www.maketradefair.com/en/index.php?file=03042002121618.htm&cat=3&subcat=2&select=1.Google Scholar
Ozcaglar-Toulouse, N., Shiu, E., & Shaw, D. 2006. In search of fair trade: Ethical consumer decision making in France. International Journal of Consumer Studies, 30: 502–14.CrossRefGoogle Scholar
Pearson, R., & Seyfang, G. 2001. New hope or false dawn? Voluntary codes of conduct, labour regulation and social policy in a globalizing world. Global Social Policy, 1(1): 48–78.CrossRefGoogle Scholar
Petty, R. E., & Cacioppo, J. T. 1979. Issue involvement can increase or decrease persuasion by enhancing message-relevant cognitive responses. Journal of Personality & Social Psychology, 37: 1915–26.CrossRefGoogle Scholar
Petty, R. E., & Cacioppo, J. T. 1990. Involvement and persuasion: Tradition versus integration. Psychological Bulletin, 107: 367–74.CrossRefGoogle Scholar
Petty, R. E., Cacioppo, J. T., & Schumann, D. 1983. Central and peripheral routes to advertising effectiveness: The moderating role of involvement. Journal of Consumer Research, 10: 135–46.CrossRefGoogle Scholar
Petty, R. E., & Wegener, D. T. 1999. The elaboration likelihood model: Current status and controversies. In Chaiken, S. & Trope, Y. (Eds.), Dual-process theories in social pyschology. New York: Guilford Press: 41–72.Google Scholar
Raynolds, L. T., Murray, D., & Taylor, P. L. 2004. Fair trade coffee: Building producer capacity via global networks. Journal of International Development, 16: 1109–21.CrossRefGoogle Scholar
Roberts, J. A. 1996. Will the real socially responsible consumer please step forward? Business Horizons, January–February: 79–83.Google Scholar
Sagafi-nejad, T. 2005. Should global rules have legal teeth? Policing (WHO Framework Convention on Tobacco Control) vs. good citizenship (UN Global Compact) International Journal of Business, 10: 363–82.Google Scholar
Schuler, D. A., & Cording, M. 2006. A corporate social performance: Corporate financial performance behavioral model for the consumer. Academy of Management Review, 31: 540–58.CrossRefGoogle Scholar
Shaw, D., & Shiu, E. 2003. Ethics in consumer choice: A multivariate modeling approach. European Journal of Marketing, 37: 1485–98.CrossRefGoogle Scholar
Strachan, P. A., Sinclair, I., & Lal, D. 2003. Managing ISO14001: Implementation in the UK oil and gas industry. Journal of Corporate Social Responsibility, 10: 50–63.CrossRefGoogle Scholar
Strange, S. 1996. The retreat of the state: The diffusion of power in the world economy. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Taylor, P. L. 2005. In the market but not of it: Fair trade coffee and Forest Stewardship Council Certification as market-based social change. World Development, 33: 129–47.CrossRefGoogle Scholar
Terlaak, A. 2007. Order without law? The role of certified management standards in shaping socially desired firm behaviors. Academy of Management Review, 32,: 968–85.CrossRefGoogle Scholar
Trading Visions. 2009. Global survey on fair-trade. www.tradingvisions.org/content/global-survey-fairtrade. 17 April 2009.Google Scholar
TransFair USA. 2009. Almanac: 2009. http://transfairusa.org/pdfs/Almanac_2009.pdf.Google Scholar
TransFair USA. 2010. Raising fair trade awareness: Ethical consumerism on the rise. Press release. June.Google Scholar
Velasquez, M. 1992. International business morality, and the common good. Business Ethics Quarterly, 2: 27–40.CrossRefGoogle Scholar
Vitell, S. J., & Muncy, J. 1992. Consumer ethics: An empirical investigation of factors influencing ethical judgments of the final consumer. Journal of Business Ethics, 11: 585–97.CrossRefGoogle Scholar
Vogel, D. 2008. Private global business regulation. Annual Review of Political Science, 11: 261–82.CrossRefGoogle Scholar
Waddock, S. 2008. Building a new institutional infrastructure for corporate responsibility. Academy of Management Perspectives, 22(3): 87–108.CrossRefGoogle Scholar