Relational governance � an examination of the apple sector in Albania

Abstract

This study provides an in-depth analysis of the value chain governance in the fruit sector in Albania. Particular attention was paid to the nature of relations between agricultural producers and marketing channel chosen by them, distinguishing between big wholesalers, local collectors and exporters, longer-term relations, commitment and trust, and contracting along the value chain. Given the absence of, or weak, contract enforcement and the clear evidence of embeddedness in dyadic relationships in this chain, we focused our analysis on sustained relationships, contracting and personal bonds as a determinant factor to improve business relationship quality. This paper is based on a structured survey targeting 182 orchard farmers in two leading fruit production regions in Albania, namely Korca and Peshkopia. The survey showed a weak prevalence of verbal contracts in embedded relationships. The percentage of contracts between farmers and local collectors is slightly higher compared to wholesalers. This evidence is much stronger when we investigate the incidence of contracts in stable relationships (i.e. selling to the same buyer). We also find that mature relationships generate higher sustainability-a result which does not come as a surprise, although the coordination between farmers and other actors downstream is only at early stages. The main implications which arise from our analysis are relevant for agribusinesses, farmers and policy makers.

Contract Farming towards Social Business: A New Paradigm

“…In organisational structure, the new form of business called social business emerged after the Noble Prize laureate Professor Younus's social business concept. Although Professor Younus's Grameen Bank concept has taken 30 years to obtain recognition and appreciation worldwide, the Grameen model has strongly inspired many sectors by promoting and proposing the idea of entrepreneurialism rather than charity to counter different social issues, such as poverty [41]. Philosophically, Professor Younus's social business concept is based on two fundamental motives of human beings: selflessness and selfishness.…”

“…Social business is different from non-profit organisations as investors are allowed to take their investment back. However, there is no distribution of dividends and profit must be reinvested in the business [41][42][43][44]. Social businesses are based on seven principles.…”

“…Social businesses are based on seven principles. These seven principles are: objectivity, sustainability, no dividend, reinvestment of profit, gender-sensitivity and environmentally conscious, fair payment, and conducive environment and joy [41,42]. The term "social business" is used for all types of organisations, ranging from non-governmental organisations (NGOs) with income-generating activities to socially responsible businesses that abide by the double or triple-bottom-line concept [42].…”

“…The said challenges in contract farming can be countered by social business. Social business focuses not only on the economic aspect but also includes the social and environmental aspects [41][42][43][44]. The social business paradigm aims to support the poor by empowering them.…”

Distribution Intensity and Marketing Utility Perception of Consumers of FMCG Products in Lagos State, Nigeria: Moderating Effect of Channel Multiplicity

“…The theory was also built on the foundation that it can help to check the act of opportunism where certain services are to be outsourced by ensuring necessary search and agreement is put in place to guide behaviours. Gerdoci, Skreli, and Imami (2015) anchored their study on relational governance among farmers and buyers in the apple sector in Albania on transaction cost economics theory to minimise acts of opportunism.…”