The changing paradigm of fair trade social entrepreneurship in the United States

Abstract

Purpose

The purpose of this paper is to examine why social entrepreneurs in the USA choose to operate an entirely fair trade business and the factors that affect fair trade social entrepreneurship. Fair trade seeks to benefit producers in developing countries by providing a market for their goods in developed countries. Fair trade enables all parties in the supply chain to make living wages and/or a profit.

Design/methodology/approach

Using a qualitative multiple case study approach of social entrepreneurs in 35 US fair trade companies, the authors develop a model and nine propositions to explain the findings.

Findings

The authors identify three primary motivational factors (ethical belief, religious faith, and business values), four contributory factors that strengthen fair trade engagement (family member involvement, the trend toward for profit status, industry professionalism, and consumer education), and three negative factors that work to discourage involvement (loss of identity, lack of industry consensus, and the shortage of retailers). The authors conclude by using the findings to consider the future of US fair trade social entrepreneurship.

Research limitations/implications

The authors recognize limitations due to the sample size.

Practical implications

The authors believe that fair trade is worthy of further study and increased awareness.

Social implications

Increased awareness of fair trade may lead to better consumer buying decisions.

Originality/value

The authors contribute to the development of theory in the study of fair trade, which has rarely been studied in the context of US social entrepreneurs.

Citation

Cater, J.J., Beal, B.D. and Collins, L.A. (2016), "The changing paradigm of fair trade social entrepreneurship in the United States", Management Decision, Vol. 54 No. 7, pp. 1732-1756. https://doi.org/10.1108/MD-01-2016-0029