Fair Trade Organizations and Social Enterprise: Social Innovation through Hybrid Organization Models

Citation

Dufays, F. (2013), "Fair Trade Organizations and Social Enterprise: Social Innovation through Hybrid Organization Models", Social Enterprise Journal, Vol. 9 No. 1, pp. 123-124. https://doi.org/10.1108/SEJ-06-2013-0024

Fair Trade (FT) has received increasing attention from scholars in a broad range of fields, among others ethics, economics, and political sciences, on various aspects: concept, producers, consumers, etc. However, FT intermediaries in the North (Fair Trade Social Enterprises or FTSEs) have been somewhat neglected. With this book derived from his doctoral thesis, Huybrechts intends to fill this gap from an organizational studies perspective and to explore the diversity of FTSEs' organizational models.

First, FT is interpreted as a hybrid notion composed of economic, social and political dimensions. This hybridity of goals calls for specific organizational models, as it is highlighted by four related concepts (cooperative movement, social economy, solidarity economy, and social entrepreneurship/social enterprise). Bearing this in mind, Huybrechts studies FTSEs' organizational diversity, based on documentary analyses and interviews of 57 FTSEs in four European regions: Belgium, France (Rhône‐Alpes), the UK (England), and Italy (Rome), as well as in‐depth case studies. A taxonomy is then proposed, comprising five rather homogeneous categories: individual ventures, entrepreneurial businesses, volunteer‐based FTSEs, multi‐stakeholder cooperatives, and group structures.

In the second part, the author aims to explain the reasons behind the acknowledged organizational diversity using sociological and economic “new institutional” approaches. From an economic new institutionalism point of view, it is argued that the production of different types of goods by FTSEs induces organizational diversity. Indeed, FTSEs adopt the organizational form that minimizes their transaction costs, i.e. costs of market contracting and costs of ownership, depending on the particular good they produce. The sociological analysis reveals that normative trends in the field of FT, as well as coercive and mimetic pressures at the local level explain much of organizational diversity of FTSEs both between and within the four countries included in the study. Nevertheless, a general tendency toward a stronger business orientation in the organizational models is observed.

Finally, through more strategic lenses, Huybrechts addresses the question of how organizational diversity is experienced and created by organizational actors within FTSEs. Case studies are used to show how FTSEs can act as “institutional entrepreneurs”, which are able to influence their environment and promote their own organizational model to gain legitimacy and access to critical resources. In this dynamic framework, organizational models are seen as “institutional bricolage”, which allows explaining the organizational diversity in terms of different strategies adopted by each FTSE with regard to its own environment. Based on this perspective, the author investigates the opportunities and threats of each organizational model and provides recommendations to FT entrepreneurs.

The plurality of theoretical approaches is doubtless a strength of this book. The author presents them in a very pedagogic way, making it easy to understand for the reader, especially thanks to the comparison of them provided in the fifth chapter. Each perspective is fully exploited through a rigorous analysis of the FT sector, using different methodologies, and contributes to the overarching proposition of Huybrechts. One may perhaps regret that economic theory is not more mobilized, as compared to the sociological approach. For instance, referring to Ostrom's work would probably have resulted in interesting insights.

Overall, the richness of this book makes it an essential reading for a variety of audiences. To the readers interested in FT issues and to practitioners, Huybrechts provides an overview of the organizational diversity of intermediaries in the North, which are important actors in the value chain but underexplored in research. In addition, FT entrepreneurs will find useful recommendations as to how they can manage the relationships with their stakeholders and other FTSEs, as well as how these can turn into opportunities. To those that have an interest in social enterprises, the FT case is particularly representative of how organizations can find themselves at the crossroads of social (and political) and economic goals and how this hybridity forces them to adopt a variety of organizational forms, both for transaction costs and legitimacy reasons. Finally, for organization theorists, Huybrechts' book contributes to the literature on hybrid organizations and organizational bricolage by introducing FTSEs in the field of analysis. Most importantly, it opens a debate in demonstrating the persistence of organizational diversity in this field and calls for an examination of the impact of ideological factors on organizational models.