Cultural Relativism in Fair Trade – an Exploratory Study on Trade Relationship Between Small Producers in Brazil and Their Market Interfaces in Switzerland
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Cultural Relativism in Fair Trade – an Exploratory Study on Trade Relationship Between Small Producers in Brazil and Their Market Interfaces in Switzerland DISSERTATION of the University of St.Gallen, School of Management, Economics, Law, Social Sciences and International Affairs to obtain the title of Doctor of Philosophy in Organizational Studies and Cultural Theory submitted by Maria Angélica Miranda Rotondaro from Brazil Approved on the application of Prof. Dr. Yvette Sánchez and Prof. Dr. Thomas Dyllick Dissertation no. 4059 Difo-Druck GmbH, Bamberg 2012 The University of St.Gallen, School of Management, Economics, Law, Social Sciences and International Affairs hereby consents to the printing of the present dissertation, without hereby expressing any opinion on the views of herein expressed. St. Gallen, May 29, 2012 The President: Prof. Dr. Thomas Bieger To the small agricultural producers who, despite the odds, look for alternative trade options with a strong entrepreneurial mind-set. i Foreword and Acknowledgements The decision to focus on the intercultural aspects of the commercial relationship between individuals from nearly opposite socio-economic contexts, in a sort of development system which aims to promote a better value distribution along the chain from producer to consumer, came from my previous experience in managing brands in different countries and cultures. It was also motivated by an innate curiosity about Fair Trade and how the relationships indeed take place in daily life, rather than the consolidated messages communicated by the FLO label stuck on the bananas, tea boxes, coffee packages, and other products available on the shelves of large retail chains in Europe. My own experience as a Brazilian expatriate in Switzerland allowed me to undertake the process of adjusting behaviors to a new cultural environment and to go through a self-questioning process about national identity. Different people have been very supportive during my developing this study. I am deeply indebted and thankful to Prof. Dr. Yvette Sánchez for her ideas, recommendations and holistic supervision, as one goes through a lot in life during the long years required for developing a doctoral thesis. To Prof. Dr. Thomas Dyllick, I want to express my sincere appreciation for the insights about this dissertation’s implications and the guidance for the methodological session. My special thanks to my life-partner Luiz Fernando Turatti for the many detailed reviews and valuable discussion sessions. To my parents, my sister and brother who gave me the ‘ regua e compasso ’ (ruler and compass). I deeply value the main contacts in the cooperatives and buyers’ organizations for their trust, and greatly appreciate their openness and availability. ii I also owe my gratitude to Max Leuzinger, my mentor when it comes to what a fairer trade system should stand for, and the provocative discussions which led to redefining this research topic during a visit to a cooperative in Brazil in early 2009. Moreover, I would like to express my appreciation to Nísia Werneck and Fernanda Belizário for the insights about this dissertation’s conclusions from a South American point of view. And to Beat Gruenninger for the sounding board about Fair Trade in Brazil and for setting up the contact for access to interviews. I am equally thankful to Prof. Dr. Juergen Bruecker, for his support and trust in my work as the HSG Sao Paulo hub representative. To Prof. Dr. Urs Jäger for the methodological sounding board during a research project in Peru. To Prof. Dr. Peter Ulrich for his advice to look for a more flexible type of job so I could develop and finish my research. Furthermore, I would like to thank my colleagues from the Swiss-Brazilian Chamber of Commerce for their backing, to Marianne Rouiller who first took me to the University of St.Gallen and her ongoing support since then, and to Ann Puntch for her patience during the reviews of English and text consistency. I would like to acknowledge that the conclusions express my own points of view and are solely my responsibility. São Paulo, May 2012 Angélica Rotondaro. iii Abstract This study deals with the intercultural dialogue in the trade relations between smallholder agricultural cooperatives in Brazil and their respective buyers in Switzerland, both of whom operate within a Fair Trade system. An exploratory research of qualitative nature, with an interpretative multiple case-study method was applied and three commercial relationships were selected. One of the main conclusions concerns the high influence of the constructs of fairness represented in the messages communicated to consumers – which are translated into the certification criteria – turning it into a self-fulfilling prophecy. Producer groups’ profiles, roles and “management models” are designed by the market and certification agencies, based on their expectations about socio-environmental issues from a predominately Eurocentric perspective. The results of this study will contribute to an increased self-evaluation of buyers and producers about their different business models, and on the influence of the role-play discourse and built-up stereotypes that permeate this alternative trade system. Resumo Este estudo envolve o diálogo intercultural na relação comercial entre cooperativas agrícolas de pequenos produtores do Brasil e seus respectivos compradores na Suíça, ambos operando dentro do sistema de Comércio Justo. Uma pesquisa exploratória de natureza qualitativa, utilizando-se do método de múltiplos estudos de caso foi aplicada e três relacionamentos comerciais foram selecionados. Dentre as principais conclusões está a elevada influência dos constructos de justiça representados nas mensagens aos consumidores – que são traduzidas nos critérios de certificação – tornando-se assim uma profecia auto- realizável. Deste modo, o perfil, papel e “modelos de gestão” desses grupos de produtores são formatados pelo mercado e agências certificadoras de acordo com suas expectativas sobre questões sócio-ambientais, dentro de uma perspectiva predominantemente Eurocêntrica. Os resultados desse estudo contribuem para uma melhor auto-avaliação de compradores e produtores sobre os seus diferentes modelos de negócios, e a conscientização da influência do discurso encenado e dos estereótipos que permeiam este sistema de comércio alternativo. iv v Table of Contents Foreword and Acknowledgements i Abstract iii List of Figures ix List of Tables x Acronyms xi Part I – Introduction 1 1.1 Research Topic Justification 4 1.2 Research Question 7 1.3 Methodology 8 Part II – Theoretical background 11 2. The Fair Trade Movement – Back to the Origins 12 2.1 Distribution Chain in a Fair Trade System 20 2.2 Challenges Facing Fair Trade as an Alternative Socio-Economic Movement 21 2.2.1 Credibility and Transparency 24 2.2.2 The Fair Trade Minimum Price in a Global Food Supply Crisis 29 2.2.3 The Governance of Fair Trade Certification Definitions 30 2.2.4 Promoting a South-South Trade 32 2.3 Fair Trade in Brazil 34 2.3.1 Fair Trade for the domestic market 38 2.3.2 Fair Trade for Export 41 3. Intercultural Dialogue 42 3.1 Communication Patterns 49 3.1.1 Collectivist and Individualist Decision Making 49 3.1.2 Direct and Indirect Communication (High and Low Context) 54 3.2 Time Management 55 3.3 Image Studies in the Intercultural Dialogue 60 vi 3.4 Brazil Hetero-Image 69 3.4.1 Indigenous People & The Tropical Paradise 69 3.4.2 The Foreigner in the Brazilian Imaginary & When Yes Means No. 77 3.5 Switzerland Hetero-Image 78 3.5.1 Being Neutral 81 3.5.2 Overly punctual 84 3.5.3 Banks and Wealth 85 3.5.4 Orderly society 85 3.5.5 Stereotypes Germany – Switzerland 87 4. Fair Trade Image Constructs 89 4.1 The “Fairness” Construct 91 4.2 The Geography of Fair Trade – the North-South Construct 98 4.3 For Whose Benefit – the Marginalized Producer Construct 104 4.4 The Fair Trade Minimum Price Construct 108 4.5 A system of interconnected image constructs 111 Part III - Empirical Section and Case Study Analysis 118 5. Empirical Session 118 5.1 Methodology 118 5.2 Method Limitations 119 5.3 Case selection criteria 120 5.3.1 Selected trade partners for the case studies 121 5.3.2 Rationale behind the selected countries 122 5.4 Data Collection 124 5.5 Line of Analysis for each Individual Case Study 127 5.6 Case study structure 131 5.7 Cross-case Analysis 132 6. CooperCaju and Claro Fair Trade 133 6.1 The cashew nut cooperative - CooperCaju 133 6.1.1 Business Model 135 vii 6.1.2 Price Definition 136 6.1.3 Local Context and Self-Image 138 6.1.4 Collaboration Networks 143 6.1.5 Expected Challenges 144 6.2 Claro Fair Trade 145 6.2.1 Pre-assessment – Claro’s communicated fair trade messages to consumers 146 6.3 The Image of the Other (general) 147 6.4 The Image of the Other in the way of doing business 149 6.4.1 Communication 151 6.4.2 Trustworthy Relationship (and its different understandings) 154 6.4.3 Time Management 156 6.5 Conclusions 157 7. Gebana Switzerland and Gebana Brasil 161 7.1 Business Model 162 7.1.1 Price Definition 164 7.1.2 Local Context and Self-Image 165 7.1.3 Collaboration Networks 169 7.1.4 Expected Challenges 170 7.1.5 Pre-assessment – Gebana’s communicated fair trade messages to consumers 170 7.2 The Image of the Other (general) 171 7.3 The Image of the Other in the way of doing business 173 7.3.1 Communication and Trustworthiness 176 7.3.2 Future Orientation 178 7.3.3 Concern about Product Quality 179 7.4 Conclusions 179 8. Coagrosol and Rivella’s Michel FT Orange Juice 181 8.1 The cooperative Coagrosol 181 8.1.1 Business Model 183 8.1.2 Price definition 184 viii 8.1.3 Local Context and Self-Image 185 8.1.4 Collaboration Networks 187 8.1.5 Expected Challenges 187 8.2 Rivella AG and the product brand Michel 188 8.2.1 The trading company Fruitag 190 8.2.2 Pre-assessment – Michel’s communicated fair trade messages to consumers 191 8.3 The Image of the Other (general) 193 8.4 The Image of the Other in the way of doing business 194 8.4.1 Time Management 197 8.4.2 Future Orientation 198 8.4.3 Trustworthiness 198 8.5 Conclusions 199 9.