Conscious Capitalism and Fair Trade
According to Papavasiliou (2010), fair trade is a certification system that ensures that specific standards are met in the supply and production of products. It also focuses on creating equitable and sustainable trade relationships. Conscious capitalism is a business philosophy that states that businesses should serve all their stakeholders, including the environment. Fairtrade supports the philosophy and practices of conscious capitalism in different ways. To begin with, it helps in eliminating poverty through adequate pay and creating new opportunities, such as access to education, by granting households a source of income. Fairtrade also supports the philosophy and practices of conscious capitalism by addressing customers’ and workers’ grievances to maintain a healthy business environment. For instance, if customers complain about the pricing of a product by stating that a specific product is overpriced, fair trade is implemented to set a reasonable price, thus supporting the practices of conscious capitalism that emphasize honouring stakeholders’ voices.
One of the challenges to implementing fair trade in developing countries is unethical conduct. The high competition in the business environment in developing countries pushes businesses to engage in unethical conduct to create competitive advantage, making it hard for fair trade to guarantee that producers will adhere to fair trade requirements, including minimum pricing. Another challenge is uneven awareness of fair trade practices, thus creating unhealthy competition and promoting unfair business practices. This mainly occurs because the business environment in developing countries includes many foreign companies that are not aware of local business practices. The third challenge is uncertainties about the extent of the contribution of fair trade to development, including restrictions on the type and number of workers affected (Hira & Ferrie, 2006). This mainly occurs because businesses in developing countries feel that trade restrictions should be eliminated to support business growth, contributing to a country’s economic growth.
Hira, A., & Ferrie, J. (2006). Fairtrade: Three key challenges for reaching the mainstream. Journal of Business Ethics, 63(2), 107-118. https://doi.org/10.1007/s10551-005-3041-8
Papavasiliou, F. (2010). Fair money, fair trade. Fair Trade and Social Justice, 202-228. https://doi.org/10.18574/nyu/9780814796207.003.0009
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1-What global marketing opportunities and challenges would you face if the simulation were based on a real-world international situation? Discuss the difference in the experience you would have without the assumptions built into the simulation (e.g., no cultural barriers, language, currency, tariffs, mode of entry challenges).
2-Using the resources describing conscious capitalism and fair trade, how does fair trade support the philosophy and practices of conscious capitalism? What are the challenges to the implementation of fair trade in the developing world?
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