Alliances and Networks: Creating Success in the UK Fair Trade Market

Abstract

Data from a longitudinal study into the key management success factors the fair trade industry, provides insights into the essential nature of inter-organisational alliances and networks in creating the profitable and growing fair trade market in the UK.Drawing on three case studies and extensive industry interviews, we provide an interpretive perspective on the organisational relationships and business networks, and the way in which these have engendered success for UK fair trade companies. Three types of benefit are derived from the networks, Competitive Developments through virtual integration the organisations remain flexible and small whilst projecting size to the market, Intellectual Developments through the sharing of intellectual capital with a diverse network of organisations in many fields, and Ideological Developments through an Ideological Network of like minded individuals the companies can protect themselves from the assimilation of the original purpose of fair trade, to help the developing world. However, relative success at leveraging these benefits is influenced by three managerial factors, Partner Choice, Partner Use and Partner Management. Key WordsFair trade Commercialisation Alliances and networks Ideology IntroductionThe fair trade movement sprang from a desire to encourage community development in some of the most deprived areas of the world (Brown, 1993). Fair trade is achieved through the "application, monitoring and enforcement of a fair trade supply agreement 3 and code of conduct typically verified by an independent social auditing system" (Crane and Matten, 2004: p.333). Despite its public perception of being almost like a charity (Mintel, 2004), many fair trade organisations are, in-fact, profit seeking organisations (Davies and Crane, 2003, Moore, 2004). Similarly brands are now aimed at targeting mainstream customer groups and compete head-to-head for shelf space with major retail brands (Low and Davenport, 2006;Moore, 2004; Nichols and Opal, 2005;Wilkinson, 2007). Therefore despite distribution of profits (and supply chains) differing from many businesses within their markets the processes of marketing, sales and logistics are, in principle, identical to other small, social entrepreneurial start up companies (see Mair, Robinson and Hockerts, 2006;Davies, 2007). This paper investigates the importance of inter-organisational alliances and networks in creating the profitable and growing fair trade market in the UK. Drawing on three case studies, data from longitudinal participant observation, interviews and secondary sources provide an interpretive perspective on the organisational relationships and business networks. Focusing on the benefits that accrue from networked partnerships, not the structure of these partnerships, the contribution of this paper is to bring the importance of these networks to the fore in future fair trade discussions. This research uncovers that alliances and inter-company networks have been purposefully embedded in the fair trade industry since it...

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