Sacred alliance or pact with the devil? How and why social enterprises collaborate with mainstream businesses in the fair trade sector*

Abstract

This paper uses institutional theory to highlight different patterns of cross-sector collaboration from the perspective of social enterprises. Specifically, it explores how and why social enterprises interact with mainstream businesses and to what extent their collaboration patterns reflect a vision of how their social mission should be implemented and institutionalized. The empirical analysis is derived from a qualitative study of ‘fair trade’ – a hybrid model created by social enterprises and using market mechanisms to support small-scale producers in developing countries and to advocate for changes in international trading practices. The findings highlight three strategies used by fair trade social enterprises to manage their interactions with mainstream businesses: sector solidarity, selective engagement, and active appropriation. This paper suggests that each strategy is motivated by a different vision of how best to articulate the social mission of fair trade via specific types of collaborations. It also notes how each vision has a distinct pattern of institutionalization at the field level. This paper adds to the emergent literatures on social enterprise and social entrepreneurship, fair trade, cross-sector collaboration and hybrid organizing.     

The Dynamics of Fair Trade as a Mixed-form Market

This article analyses the Fair Trade sector as a “mixed-form market,” i.e., a market in which different types of players (in this case, nonprofit, co-operative and for-profit organizations) coexist and compete. The purposes of this article are (1) to understand the factors that have led Fair Trade to become a mixed-form market and (2) to propose some trails to understand the market dynamics that result from the interactions between the different types of players. We start by defining briefly Fair Trade, its different dimensions (including the “fair” quality of the products) and its organizational landscape, focusing on the distinction between the pioneer “Alternative Trading Organizations” and the second-mover companies. Then, we recall the theoretical emergence factors for each type of organization (nonprofit, co-operative and for-profit) and apply these emergence factors to the context of Fair Trade. This analysis allows us to capture the specificities of each type of operator with regard to Fair Trade and, thus, to have a better understanding of the dynamics in the sector. Such dynamics includes competition, but also conflict and partnership. Our analysis includes elements on ethical imitation, consumers’ behaviors, effects on welfare and the role of the government.     

Why do firms save cash from cash flows? Evidence from firm‐level estimation of cash–cash flow sensitivities

We construct firm‐level estimates for the cash flow sensitivity of cash (CCFS) by modelling heterogeneous slopes in reduced‐form cash equations. This approach allows identifying firms with a high, low or even negative savings propensity. We find that high CCFS firms have higher income variation, suggesting cash buffering is triggered by income shocks. High CCFS firms do not suffer from financing constraints measured by a wide selection of indicators. Our results suggest that the CCFS is not an adequate indicator to capture financing constraints. Rather, a higher CCFS indicates smoothing of income fluctuations by installing a cash buffer that successfully prevents future income shortfall.     

Entrepreneurial education and learning at universities: exploring multilevel contingencies

Abstract

Despite the worldwide increase in entrepreneurship education offered at universities, there is an ongoing debate whether and under which conditions this type of education contributes to students’ entrepreneurial learning. Building on human capital theory, we hypothesize that the exposure to various entrepreneurship education initiatives has an inverted U-shaped relationship with entrepreneurial learning outcomes. We also argue that this relationship is moderated by the entrepreneurial experience of the students, the teaching pedagogy applied in entrepreneurial initiatives offered at the university and the prevalence of opportunity-driven entrepreneurship in the country. A multi-level analysis on a cross-country sample of 87,918 students resulting from GUESSS (‘Global University Entrepreneurial Spirit Students’ Survey’) strongly confirms our hypotheses, and allows us to discuss implications for researchers, educators and policy makers with respect to the nature of entrepreneurial learning, the design of entrepreneurial education programs, as well as the contextual conditions that impact entrepreneurial learning outcomes.     

Fair Trade Organizations in Belgium: Unity in Diversity?

This article analyzes the dual process occurring in the field of Fair Trade organizations (FTOs) in Belgium. On the one hand, there has been a gradual diversification of the organizational landscape over time from pioneering volunteer-based non-profit organizations to a broader array including cooperatives, group structures, businesses and individual entrepreneurs exclusively devoted to FT. On the other hand, a process of networking is currently taking place among the various types of FTOs in the context of the creation of a Belgian Fair Trade Federation (BFTF). Drawing on neo-institutional theory, including institutional entrepreneurship, this article examines how and why these two processes have taken place. A qualitative field study in the Belgian FT sector, including interviews with 15 FTOs, offers rich empirical material which illustrates the diverse patterns of these organizations. Based on the observed combinations of different variables among Belgian FTOs, a taxonomy reflecting diverse means of conceiving and organizing FT activity is suggested. The different categories of FTOs and the evolution of these categories over time seem linked to the broader institutional evolutions of FT at the international as well as at the Belgian level. Finally, several factors are reviewed to explain why the diversity among Belgian FTOs has not been an obstacle to their collaboration.     

The Influence of Interorganizational Collaboration on Logic Conciliation and Tensions Within Hybrid Organizations: Insights from Social Enterprise–Corporate Collaborations

Advertising is a booming activity both in the physical realm and on the Internet. Online advertising is growing and is subject to legal standards, although some self-imposed ethical standards for the industry are needed. This has been called self-regulation. This article examines the important role that self-regulation (in the form of ethical standards) can play in addressing advertising that uses degrading and discriminatory images of women that compromise their dignity. Sexist advertising is a reification of women—stereotypes and sexist social models—that do not convey a realistic image of a woman’s abilities and potential. This article analyzes specific decisions on the subject issued by the Jury of the Spanish Association for the Self-Regulation of Commercial Communication. The Jury’s decisions are based on a code of ethics. The technical expertise and impartiality manifested in its decisions have produced a high degree of credibility and confidence in the organization.