University Assignment: Fairphone Ethical Smartphone Case Study Report

This report provides a comprehensive analysis of the Fairphone case study, examining the entrepreneurial traits and characteristics of its founders, Peter van der Mark and Bas van Abel. It delves into the challenges faced by Fairphone as a social enterprise within the competitive mobile phone industry, focusing on ethical sourcing, fair labor practices, and the complexities of scaling up operations. The report highlights the importance of innovation, risk-taking, and ethical conduct in entrepreneurship, while also acknowledging the boundaries and difficulties encountered in the pursuit of sustainable and responsible business practices. Furthermore, the report discusses the competitive landscape and the need for adaptability in the face of environmental changes and market dynamics. The report concludes by emphasizing the significance of the Fairphone's commitment to ethical manufacturing and its impact on the future of the smartphone industry.

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Entrepreneurship
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Executive Summary
The aim of this report was to understand the importance of entrepreneur and entrepreneurship
through analysing the case study of ‘Fariphone’. This report discussed about the entrepreneur
traits and characteristics for knowing what kind of risks and challenges they go through with
such kind of positivity they acquires. It is good to be a social entrepreneurship by falling fair
trade without any performing of unethical activities which is one of the qualities and ideas of
entrepreneur. It is essential to be creative and innovative while establishing a new business
and being prepared about changes in the environment to maintain the perspective of reaching
towards the success overall along with gaining profitability in the marketplace among high
number of competitors to achieve a competitive advantage as well.

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Contents
Introduction................................................................................................................................3
Analysis......................................................................................................................................3
Major Boundaries or Challenges in Social Entrepreneurship....................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
In today’s competitive business world, people prefer to take risks by establishing new
business as an entrepreneur. An individual introducing new business by bearing risks and
plans to enjoy rewards is defined as an entrepreneur. One can be termed as innovators as well
where they source new ideas, procedures, and goods and services by playing an essential role
in economy across the globe (Schoon & Duckworth, 2012). Entrepreneurs use their skills and
take necessary initiatives for anticipating needs and new ideas within the market. If
successful, entrepreneurs after taking risk for once in creating their start-ups can be rewarded
with continuous growth opportunities, fame and profits; however, those who fail after take
this step suffers from losses and become less dominant in the markets. Hence, this setting
activity to start a business and taking risks financially for earning profits is termed as
entrepreneurship (Nelson, 2012). The aim of this report is to analyse the article “Fairphone,
the Ethical Cell Phone, Wants to Change the Future of Smartphones” published by Jen
Tombs in 2018 for identifying the traits and characteristics of an entrepreneur. These traits
and characteristics are based on the Fairphone’s entrepreneurs as specified in the case. This
report will also outline the major boundaries or challenges faced in social entrepreneurship by
considering the establishment of Fairphone.
Analysis
Peter van der Mark and Bas van Abel are the two entrepreneurs who started the business of
smartphone start-up and named the campaign ‘Fairphone’. In mobile phone industry, there
are changing dynamics and high competition to maintain the stability in the marketplace
(Suresh & Ramraj, 2012). But, based on Mark and Abel entrepreneur traits and
characteristics, they still made their positive position in the market. Both entrepreneurs were
ready to take risks and face challenges due to their specific traits and characteristics as per the
case of Fariphone where they focused on accomplishing goals and gaining profitability across
the globe. Entrepreneurs bring innovation in the economy based on their new products and
services; here it is smartphones that drives towards development and progress. Both the
entrepreneurs had ‘passion’ to make a product even when they did not have any expertise
while doing and assumed prototype as a concept device (Espiritu-Olmos & Sastre-Castillo,
2015). The step take was not functional but they still accepted the exhibition where another
trait was defines as ‘risk-takers’. They took the step of being ‘innovative’ which is one of the

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characteristics of entrepreneurs as they established a campaign ‘Fairphone’ to tell people
about their relationship, supply chain and mining material related to their product.
Entrepreneurs work ‘ethically’ by make sure of not harming people and to meet the
expectations of customers for their better experiences and outcomes (Salamzadeh, et al.,
2014). They had the ‘confidence’ that no matter what, they will never let their morale down
and will deal with situations as leaders without any idea of what will be the further results.
These qualities of entrepreneurs having high skills and knowledge helped them in leading the
business and made the campaign successful as their new ideas and products and services
(Caliendo, et al., 2014). It was essential to them for maintaining sustainability while
concerning the increase of climate in the environment that might affect the position of the
company in other countries. Both entrepreneurs really worked hard without thinking that they
will succeed or not in such a competitive industry of mobile phones with competitors such as
Apple, Samsung, Blackberry, Nokia and others (Kraaijenbrink, 2019). This shows another
characteristic of their ‘competitive spirit’ in the marketplace with such high pressure to hope
for attain a competitive advantage with large market share one day in the future. It is essential
for every entrepreneur to be prepared for the change due to dynamics in the environment.
This makes it easier for them to look towards the future without any stress of bearing risks.
Occurrence of any failure, it requires entrepreneurs to be resilient for moving towards
achieving the success by being committed and work on their goals while maintaining the
progress and transparency (Fairlie & Holleran, 2012).
Major Boundaries or Challenges in Social Entrepreneurship
Social entrepreneurship is one that attracts growth of talent amounts, attention and money
along with increase in popularity certainly based on what a social entrepreneur is and does. In
terms of economic conditions, social entrepreneurship is dependent in some countries where
entrepreneurs can face the challenges of working conditions, conveying business ideas,
financing, maintaining quality, hiring staff, competitive forces, government policies, and
acquiring technology (Baporikar, 2015). In terms of social entrepreneurship, Fairphone is
going to be one of them that use recycled and eco-friendly products and make sure that phone
production is free from exploitation as it is in every steps of manufacturing chain. Fairphone
pays fairer wages to its factory workers along with mining raw materials while using local
organisations benefiting the community and employing safer conditions. In social
entrepreneurship, Fairphone set some organisational boundaries by securing its resources

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such as capital, demonstrating entrepreneurial intentionality, and engagement in exchange
across different countries. These aspects characterised the emergence of the company through
issue framing, distressed contextual conditions and distributed agency (Akemu, et al., 2016).
Moreover, there are companies sourcing cobalt for cell phone batteries mind by children as
an essential material from the DRC “Democratic Republic of Congo” (Tombs, 2018).
However, Fairphone is not exempted from this practice; the company source its cobalt from
mines in the DRC, though uses small-scale mines so that they can maintain some progress
and transparency. Thus, this was one of the challenges Fairphone faced in terms of being
social entrepreneurship.
Another challenge Fairphone faced while making its products manufactured in China by
using Hi-P, a Singapore company was their not so better conditions where employees have to
work above 60 hours consistently in a week without any one day week off (Monique, 2016).
This practice in terms of being a social entrepreneurship was not from fair trade and it
requires Fariphone to take steps for improvisation to be committed with their vision of ethical
manufacturing.
Third challenges faced by Fairphone in terms of being social entrepreneurship it its huge
success where Fairphone feels small and remote being the European company in relation to
Asian and American consumers. The journey of the company scaling up its business has been
challenging while working with reliable six-month forecasts and launched Fairphone 2 where
increase in demand suddenly did not match the stock situation for the company (Bas, 2016).
Conclusion
Based on the above observations, Fairphone is leading due to its entrepreneurs’ best traits and
characteristics. The company took an initial step of being a social entrepreneurship where
Fairphone went through facing various challenges to maintain ethics while changing
environment for future success of their smartphones, and had some boundaries which an
organisation cannot breach. Fairphone dealt with various conflicts due to competitors in the
market but both Mark and Abel made sure to deliver best practices and customer experience
through their passion, creativity, discipline, determination and other traits. In
entrepreneurship, it is essential for every entrepreneur to take risks initially for achieving
growth, success and profitability overall.

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References
Akemu, O., Whiteman, G. & Kennedy, S., 2016. Social Enterprise Emergence from Social
Movement Activism: The Fairphone Case. Journal of Management Studies, 53(5), pp. 846-
877.
Baporikar, N., 2015. Boundaries and Challenges for Social Entrepreneurship. In:
Incorporating Business Models and Strategies into Social Entrepreneurship. Pennsylvania:
IGI Global, pp. 1-20.
Bas, 2016. Scaling up our social enterprise – challenges and achievements. [Online]
Available at: https://www.fairphone.com/en/2016/12/22/scaling-up-our-social-enterprise-
challenges-and-more-widely-available/
[Accessed 11 April 2020].
Caliendo, M., Fossen, F. & Kritikos, A. S., 2014. Personality characteristics and the decisions
to become and stay self-employed. Small Business Economics, 42(4), pp. 787-814.
Espiritu-Olmos, R. & Sastre-Castillo, M. A., 2015. Personality traits versus work values:
Comparing psychological theories on entrepreneurial intention. Journal of Business
Research, 68(7), pp. 1595-1598.
Fairlie, R. W. & Holleran, W., 2012. Entrepreneurship training, risk aversion and other
personality traits: Evidence from a random experiment. Journal of Economic Psychology,
33(2), pp. 366-378.
Kraaijenbrink, J., 2019. How Fairphone Beats Apple, Samsung And The Rest With The
'World's Most Sustainable' Phone. [Online]
Available at: https://www.forbes.com/sites/jeroenkraaijenbrink/2019/08/28/how-fairphone-
beats-apple-samsung-and-the-rest-with-the-worlds-most-sustainable-phone/#4f8b50cd735a
[Accessed 11 April 2020].
Monique, 2016. Progress and challenges to improving working conditions with our
Fairphone 2 manufacturer. [Online]
Available at: https://www.fairphone.com/en/2016/08/18/progress-challenges-improving-
working-conditions-fairphone-2-manufacturer/
[Accessed 11 April 2020].

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Nelson, B., 2012. The Real Definition Of Entrepreneur---And Why It Matters. [Online]
Available at: https://www.forbes.com/sites/brettnelson/2012/06/05/the-real-definition-of-
entrepreneur-and-why-it-matters/#2ea264754456
[Accessed 11 April 2020].
Salamzadeh, A., Farjadian, A. A., Amirabadi, M. & Modarresi, M., 2014. Entrepreneurial
characteristics: insights from undergraduate students in Iran. International Journal of
Entrepreneurship and Small Business, 21(2), pp. 165-182.
Schoon, I. & Duckworth, K., 2012. Who becomes an entrepreneur? Early life experiences as
predictors of entrepreneurship. Developmental psychology, 48(6), p. 1719.
Suresh, J. & Ramraj, R., 2012. Entrepreneurial ecosystem: Case study on the influence of
environmental factors on entrepreneurial success. European Journal of Business and
Management, 4(16), pp. 95-101.
Tombs, J., 2018. Fairphone, the Ethical Cell Phone, Wants to Change the Future of
Smartphones. [Online]
Available at: https://studybreaks.com/tvfilm/is-fairphone-changing-the-future-of-
smartphones/
[Accessed 11 April 2020].