Premium Essay

Miss Em

In: Business and Management

Submitted By somedayillbefree
Words 1807
Pages 8
INTRO 100 words

In support of fair trade organisations operating in developing countries to sustain individuals and communities Utting (2009) reports that the value is appropriated throughout the product chain to the end user benefiting business and society. The capital gains to human (individuals), social (communities and end users), physical (infrastructure, land and homes) and financial capital are analysed throughout the article to reveal the benefits of fair trade operation.

The human capital benefits are better management efficiency, job creation and better skills developed. This creates knowledge for individuals in the supplier industry in developing countries. The fair trade industry provides the social capital with knowledge to better the communities in developing countries by providing knowledge to the community in how to invest and cope in poor economic times. Furthermore benefits are also made evident from this in consumer countries by the stimulation of economic profit and job creation.

The physical capital of fair trade organisations highlights the advantage of providing tools for infrastructure development and improvement to land and homes of suppliers. To improve the social conditions in supplier countries access to loans through fair trade organisations and funds for the community is available. In addition, skills on how to diversify business for suppliers are demonstrated, improving societies conditions and business profits.

The positive financial effects of fair trade are discussed by Utting (2009), reveals that fair trade organisations have the ability to contribute wealth to many stakeholders. The product suppliers and their communities are identified by Mitchell, Agle & Wood (2007) as demanding or discretionary stakeholders, as they have urgency or legitimacy of any stakeholder however; they lack the power to change the market…...

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