Fair Trade and Corporate Value Chain System

The assignment discusses the social movement of fair trade, established by groups promoting ethical trading practices. It highlights various logics and institutions that individuals gain from and apply to different business circumstances. The major objective is to emphasize the necessity of a value chain system for implementing fair trade in corporate businesses, preventing exploitation, and fraudulent activities.

MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Fair trade.....................................................................................................................................1
Process of value creation, protection and appropriation.............................................................1
Stages of value system................................................................................................................2
Advantages and disadvantages of fair trade................................................................................3
TASK 2............................................................................................................................................4
1. Institutional logics...................................................................................................................4
2) Real life examples...................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
In the modern world of business it has become essential for the firm to take properly
manage all the activities and values attached with the business of the firm. Since the increasing
competition have changed the ways of doing business it has also changed the rules as well as
interest of the associated people (Kerzner, 2013). Fair trade is almost the major heading of all the
firms is just remained at the surface level. Companies are unable to distribute the profits across
the value system. On the other hand institutional logic in the area of global sustainability have
taken new shape. Companies have stuck between market logic and logic of religion. This report
highlights the explanation of value system. Apart from this it illustrates two kinds of institutional
logics and the ways in which they both are interacting.
TASK 1
Fair trade
This term is consider as a social movement whose main objective is to support producers
in order to uplift nation for implementing positive trading circumstances as well as focussing on
promoting sustainable farming. After attending number of conferences it has been identified that
in UK fair trade is diminishing day by day which will influence the manufacturer and farmers are
not getting actual price of their products. As a member of fair trade it is essential to encourage
traders to charge higher prices to exporters for enhancing social and environmental standards.
Mainly, team of fair trade is focussing on specific items or goods which was generally
transferred from developing nations to developed countries but also used in local marketplace
such as; Brazil, India and Bangladesh. Along with this, team of this department also trying to
encourage sustainable development by providing appropriate trading situations, preventing right
or interest of marginalized producers as well as labours in developing nations.
Process of value creation, protection and appropriation
Value creation:- According to this term an individual get aware about value of products
to customer and suppliers. It means value creation is an effective process which is seen as critical
component in which it convert organization and consumer schemes into particular statements of
what worth is to be transferred to clients (Hamm and et. al., 2011). Along with this at what rate it
will be delivered to suppliers of an association. Thus, this process started from beginning and
end after transformation of products accomplished.
1

Value protection:- It also known as a annuity and capital prevention in which return of
policy holder is fully secured and protect up to 100%. Thus an individual may protect their value
fully after buying guaranteed income which was introduced in almost April 2006 . In fact there
are several number of offerer are available which were providing this value protection schemes
in order to prevent value of an individual. Hence, it has been understood that major objective of
this term is to offer maximum return of any unpaid income in the case of death.
Value appropriation:- It is a dual process in which initially an association competes
against their competitors in order to create and prevent appropriation streams which is inter-
organizational value appropriation (Goodwin and Wright, 2014). Secondly, shareholders,
employees and other shareholders are going to compete to seek the value that has been retained
in an enterprise.
Stages of value system
Value chain is a cluster of business activities in an organization that is operating in a
particular industry for delivering specific goods or services at marketplace. However, this
concept is comes from business management which was initially declared by Michael Porter in
around 1985. In fact, this tool is also useful and appropriate while decision making process by
providing necessary information or data. Therefore, it has been analysed that there are several
number of stages are available in value chain which is followed by corporate world while
designing their products. Hence, appropriate stages is mentioned as follows:-
First stage: (Raw materials):- Initially an enterprise need to gathered necessary materials for
designing impressive products by considering taste or preferences of entire association.
Basically it concerns with procurement of items which are stored in inventory or warehouses. In
this stage, materials are accumulated on bulk shipping which is mainly supported by
international transportation.
Second stage: (Manufacturing and assembling):- In this stage an organization is going to
design impressive items or goods for storing products in their warehouses in order to sale for
generating maximum revenue. Mainly output of this phase is commonly stored in inventory for
delivering products to different customers.
Third stage: (Distribution):- According to this phase an enterprise need to distribute final
goods to the customers. It means its time for transferring products at national and international
2

marketplace in order to gain maximum benefits or income by satisfying the need of consumers.
Thus at the end commodities are transferred to desired consumers as per their choice or
requirement.
These above stages is required to follow while designing products or services for
domestic as well as foreign clients because these above phases are going to cover all the
necessary terms or condition. Along with this consider essential factors which plays a major role
while exporting or importing of any products.
Value chain systems is very essential for entire corporate world which were trading their
business with foreign companies because it helps them in minimizing chances of mistakes and
supports in making effective decision (Duffy, 2013). Additionally, aids in delivering goods in a
defined time period according to customer choice. In simple terms value chain is a three step
process which covers below mentioned steps:-
 Activity analysis:- Initially, an association need to transfer goods or services to final user.
 Value analysis:- Its time for add extra value to the product which is transferred to
consumers.
 Evaluation and planning:- At last its time for final assessment in which worth of
changes has been measured.
Issues in value chain system:- After analysing above information it has been analysed
that it is not easy to follow above steps of value chain systems because it consist of all the
complicated factors which have direct impact on success of an association. Hence, due to long
process various number of issues or barriers are emerges in this component that is highlighted as
follows:-
 Environmental problems is a major obstacles which is faced by enterprise while
performing value chain activities.
 Social issues such as changes in consumer trends or choice.
 Technical problem while designing products and at the time of transferring of goods or
services across international borders (Camm and et. al., 2010).
Advantages and disadvantages of fair trade
Fair trade is a social campaigning which is designed by particular teams or groups whose
main objective is to prevent overall corporate world or industries from exploitation and
3

dangerous effects of rivalries. Thus it has been understood that fair trade is a very advantageous
for overall society which is highlighted as follows:-
 Promote sustainable development which is beneficial for companies as well as customers.
 Try to remove exploitative and fraudulent activities from society by preventing buyers
and sellers.
 Create a environment free from any discrimination, problems, issues etc.
 Maximization of profits.
At the end it has been identified that number of scholars are highlighting their opinions or
views in reference to fair trade for understanding this term in better sense. Along with this it also
useful in creating a surrounding free from any discrimination or exploitation.
TASK 2
1. Institutional logics
It is considers to be as the concept present in sociological theory and organisational
studies. It highlights on the ways broader belief systems shapes the actors behaviour as well as
the cognition. Many researchers have given many kinds of definitions to this concept. Friedland
and alford described this as the Both supraorganisational patterns of activity by which a person
and firm produces and reproduces their material subsistence and organise time and space. He
also found that there are various major institutions which are guided through distinct institutional
logic. These are namely bureaucratic state, capitalist market, democracy, Christianity and
nuclear family (Burke, 2013). On the broader scale it is defined in terms of six institutional
orders namely profession, corporation, state, religion, family, market. It is essential for studying
logics in consensus and conflicts, logic hybridisation etc. It also addresses confusion generated
by conflating institutional sectors with ideology and means of firm like bureaucracy. In order to
understand this it can be seen that in America institutional logics of Christianity leaves the other
religion which can be dominant in other parts of the world.
New kind of institutionalism have started to develop the institutional logics concept by testing it
empirically. One variant focuses on how logics can emphasize on attention of major decision
makers on a particular set of problems and solutions which leads to logic consistent decisions.
4

Many research have depicted the importance of dominant logics and shift from one logic to
another.
Institutional logics in the field of sustainability has a very different kind of impact. Since the
company have to think about the theory multiple and competing logics at macro levels of
analysis. Since there is a need of changes in the activities for long term growth of the firm. There
are many kinds of resources that are present within the firm which has to be managed in the form
that long term sustainability can be ensured. There had been a gradual shift in the ways
companies are using resources irrespective of what is going to happen in future. Ways of doing
business had overburdened the resources available on earth. The pressure that is put on the
economical and social well being has changed the whole system of earth. In order to maintain the
food chain supply institutional logics have been put on stake. There had been new challenges to
sustainable production. Challenging the dominant logic can be a difficult in terms of sustainable
management (Armstrong and Taylor, 2014). Market logic states that the firm needs to apply the
approaches within the firm that is suitable according to the market in which it is operating. It also
suggest that the changes must be made from time to time according to the requirement of firm in
the market. On the other hand logics of religion suggest that an individual cannot effectively
continue with natural theology. Organisations embody multiple institutional logics which they lie
at the vacant sites of divergent fields.
a) value and practices that govern each logic
There are several kinds of institutional logics that is present within the organisation.
Some of the value and practices that governs this logic are:
 Value that is learned within the family is one of the most important thing that governs the
logics present inside the firm. As the family values reflects on practices that he follows
within an organisation and hence influencing the ways in which an individual is
performing within an organisation.
 Values that is learned within a community also shapes the ways in which organisation
performs especially in terms of how they manages there resources.
 Practices such as Corporate social governance is one of the major factor that impacts on
the logic present within the firm.
 Practices that is performed by the organisation related to managing resources is also
shapes the logics prevalent within an firm.
5

 Practices that is used by the management of the firm to manage the time while
performing any activity is always very important aspect related to institutional logics.
 People follows different religions and hence have different kinds of personal practices.
These practices are very very essential for managing the logics within the organisation as
people do not want to get detached from their religious believes hence they many not
align themselves with the institutional logics present within the firm.
1.b Two logics
There are two different logics which have been mentioned in the report. They are stated to
be the one that are required for understanding as how various approaches to global sustainability
are taking place in environment. It is very important to know as how logic of market as well as
logic of religion are interacting with one another in the market. Today they have blended with
one another (Goodwin and Wright, 2014). People as well as organisations are motivated to do
charity for their satisfaction as well as improving their image in market. The concept of CSR as
well as global sustainability are the one that are have become very important in current time.
global warming and environment threat have made countries to sign treaties and force people to
reduce pollution. Today, the logic of religion is being led by logic of market which ensures that
nobody suffers loss and growth is achieved by each and every party.
Logic of religion is blending in the market; earlier people were only spending money on
uses the concepts of religion. Most of their charitable for was based on their religious believe.
This thinking is blending and now people are not focusing on their religion, if they believe in
something or they feel that someone need help and they can do it then they do spend decent
amount of money on them. The concept of CSR is getting popularity and companies are
spending huge sum of charitable work. The market trend has changed and instead of doing better
for society in the name of religion, people are doing it for gaining good image of their business.
This make a positive impact on their goodwill and it also assist them in meeting their CSR
obligation. ''Market logic'' is the prime reason behind the blending of Logic of religion.
2) Real life examples
Real life examples that supports the above argument are as follows:
6

 If the people within Australia follows Christianity they will not give importance to other
religions. This is against the institutional logics.
 If any firm is not working according to the community it can have a long term loss.
 Previously people believed in safeguarding nature on the religious values. In present
times it is mostly market oriented approach like previously trees were understood as the
Gods and hence the sustainability was taken care of in a more proper way.
 Companies are taking care of the CSR responsibilities like they are providing
infrastructure to the community in which they operating. It has safeguarded the logics of
institution (Hamm and et. al., 2011).
 Many a times it has been seen that firms are making efforts to safeguard environment but
that is only at the surface level. They are mainly focusing on their personal growth.
CONCLUSION
From the above report it has been summarised that fair trade is a social movement which
is established by few of groups for encouraging different enterprises towards fair trading system
as well as focussing towards trading in a ethical way. Along with this, it also highlight various
logics which is shown by number of individuals by gaining through various institution and trying
to apply it on different business circumstances. Thus, major objective of this assignment is to
highlight necessity of value chain system in order to implement fair trade in corporate world so
that every corporation will work without doing any exploitation or fraudulent activities. Hence, it
has been understood that numerous of persons have their own perspectives on various topics and
their own way of handling business.
7

REFERENCES
Books and Journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Burke, R., 2013. Project management: planning and control techniques. New Jersey, USA.
Camm, A.J. and et. al., 2010. Guidelines for the management of atrial fibrillation: the Task Force
for the Management of Atrial Fibrillation of the European Society of Cardiology
(ESC). European heart journal, 31(19), pp.2369-429.
Duffy, J.R., 2013. Motor Speech Disorders-E-Book: Substrates, Differential Diagnosis, and
Management. Elsevier Health Sciences.
Goodwin, P. and Wright, G., 2014. Decision Analysis for Management Judgment 5th ed. John
Wiley and sons.
Hamm, C.W. and et. al., 2011. ESC Guidelines for the management of acute coronary syndromes
in patients presenting without persistent ST-segment elevation: The Task Force for the
management of acute coronary syndromes (ACS) in patients presenting without
persistent ST-segment elevation of the European Society of Cardiology
(ESC). European heart journal, 32(23), pp.2999-3054.
Kerzner, H., 2013. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Laudon, K.C. and Laudon, J.P., 2011. Essentials of management information systems. Upper
Saddle River: Pearson.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education India.
Mancia, G. and et. al., 2013. 2013 ESH/ESC guidelines for the management of arterial
hypertension: the Task Force for the Management of Arterial Hypertension of the
European Society of Hypertension (ESH) and of the European Society of Cardiology
(ESC). Blood pressure, 22(4), pp.193-278.
Meredith Belbin, R., 2011. Management teams: Why they succeed or fail. Human Resource
Management International Digest, 19(3).
8