Fairphone: Organising for Sustained Social Impact

Abstract

With no previous experience in the mobile phone industry, Bas van Abel, an industrial designer based in Amsterdam, started Fairphone as an NGO [non-governmental organisation] awareness campaign in March 2010. He hoped that by inviting the public to design collaboratively a prototype of a “fair” smartphone, the campaign would raise the Dutch public’s awareness of the link between mobile phones and minerals mined in the context of a bitter civil conflict in the Democratic Republic of Congo (DRC). Van Abel did not intend to produce a functional, commercial smartphone; his goal was simply to raise public awareness.

However, by January 2013, through a series of serendipitous events, interaction with industry actors, and encouragement from sections of the Dutch public, the awareness campaign had morphed into the social enterprise Fairphone. With co-founder Miquel Ballester, van Abel wanted Fairphone to produce “a seriously cool phone putting social values first.” Within six months of the company’s founding, Fairphone attracted a large following in the media and among socially-conscious consumers across Europe. In mid-2013, these customers fully financed the production of 25,000 smartphones (priced at €325 apiece) through a crowdfunding initiative—a remarkable token of trust in a start-up that had never produced a smartphone.

Van Abel and the Fairphone staff, consisting largely of “creatives” and “story-tellers,” had to learn very quickly how to produce a high-quality smartphone—a complex product—in a competitive industry while keeping their promise to improve the social welfare of underrepresented mine and factory workers along the mobile phone industry’s supply chain. After experiencing myriad quality problems while manufacturing the phone, van Abel and the Fairphone staff successfully delivered the first batch of “fair” smartphones to customers by Christmas 2013. In February 2014, after all smartphones had been delivered to customers, van Abel felt that it was time to take stock and plan for the company’s future. In order to fulfil its two-fold mission, Fairphone had to scale up production to become a “real” company. How should Fairphone reach a larger audience with its message and product? How should the organisation be designed in order to achieve this mission?

AuthorsOnajomo Akemu and Gail Whiteman
InstitutionRotterdam School of Management, Erasmus University, Netherlands
Competition Year2015
PlaceFirst Prize
TrackSocial Entrepreneurship
Key WordsSocial entrepreneurship, conflict minerals, mobile phone industry, Congo, activism, organisational structure
CoursesEntrepreneurship, business & society, CSR
Target AudienceMBA, executives, masters
Purchase InformationYou can purchase the case at the Case Centre here.
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posted June 24, 2015

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From Sweatshops to Sustainability: Wal-Mart’s Journey in Bangladesh

Abstract

Walmart the largest company in the world by revenues as of 2014, operated on the philosophy of providing its consumers products at the lowest possible price. To achieve this, it procured goods from various parts of the world. The clothes were mostly procured from Bangladesh. Walmart and other global retailers were attracted to Bangladesh due to cheap labor and low production costs. They usually outsourced their production to some of the factories in the country. At that time they ensured that the producer and the factory complied with laws and have other facilities in place for workers, pertaining to timings, leave, overtime, etc.

But not all the production was carried out in these factories. Due to tough deadlines set by the retailers, the factories usually outsourced a part of their work to subcontractors, who, in turn, subcontracted to small Tier 3 factories. These factories located in dingy by lanes of the industrial areas in and around Dhaka, capital of Bangladesh, did not have basic facilities for the workers, and lacked safety measures.

The Readymade garment industry in Bangladesh witnessed several accidents, but these did not draw the attention of the administration or the global retailers. But two accidents, one in 2012 (factory fire at Tazreen) and the other in 2013 (collapse of Rana Plaza building, which housed several factories), that killed more than 1200 workers, and left several more injured and handicapped, brought the attention of the global community to the prevailing working conditions in the Bangladesh sweatshops. At the same time, global retailers like Walmart which sourced from these places came under severe criticism.

Walmart, which boasted of being a responsible company, took several initiatives to reduce its impact on environment and also source goods ethically. When it came to Bangladesh, though there was evidence that clothes were being made for Walmart at the factories where the accidents occurred, it refused to take any responsibility, stating that the subcontracts were given without its knowledge.

Some of the experts said that it was the government’s responsibility to ensure minimum wages, good working conditions and safety for their citizens. The garment industry of Bangladesh helped the economy and contributed to the GDP growth in the country. It also provided employment to scores of unemployed women and empowered them, in a male dominated society.

The case talks about the garment industry in Bangladesh, the role of global retailers in the development of the industry, its impact on the economy, and the roles and responsibilities of global corporations like Walmart in a developing economy like Bangladesh. It also discusses the challenges organizations face in balancing demand for sustainability with consumers demand for low cost and high quality, and shareholders demands for higher profits.

AuthorsSurojit Mahato and Indu Perepu
InstitutionIBS Hyderabad, IFHE University, India
Competition Year2015
PlaceRunner up
TrackCorporate Sustainability
Key WordsCSR, multinational corporations, ethical procurement, sweatshops
CoursesCorporate Sustainability, Corporate Sustainability, International Management Strategy
Target AudienceMBA, Undergrads, Executives
Purchase InformationYou will be able to purchase the case at the Case Centre shortly.
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posted June 24, 2015

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Apple and Conflict Minerals: Ethical Sourcing for Sustainability

Abstract

The success of Apple Inc.’s products like the iPhone and the iPad made the company rely on manufacturers in Asia to produce its products at a lower cost. Since these manufacturers were not too particular about checking the origins of the minerals they used, Apple had to face accusations by activists that it was using conflict minerals in its products. These conflict minerals led to the abuse of human rights in the strife torn parts of the world. Extraction and sale of conflict minerals like tin, tungsten, and tantalum extracted from illegal mines in the Democratic Republic of Congo (Congo) and surrounding countries funded armed militia who fought against the government and violated the human rights of people living in the conflict prone areas.

Apple had taken various initiatives to tackle the challenge of conflict minerals since it started facing the heat from some activist groups in 2010. Despite all the efforts made by Apple, the company faced an uphill task. The problem for Apple was compounded by the fact that the supply chain for such minerals was opaque and it was not so easy to determine which refiners and smelters around the world were financially fueling violence in the war-torn regions. There was also the possibility that such minerals could slip into its supply chain through indirect routes.

Going forward, the question before Apple was what more could the company do to ensure that all its products were free from conflict minerals. How could it ensure that the procurement of minerals through its supply chain did not profit armed groups in producer countries? How could it assure stakeholders that their products did not contain any primary commodities that were linked to the funding of conflicts? How could it ensure all these, while also seeing to it that the action taken by the company does not have an adverse effect on the livelihoods of people who work in and around artisanal mines and their communities?

AuthorsDebapratim Purkayastha and Adapa Srinivasa Rao
InstitutionIBS Hyderabad, IFHE University, India
Competition Year2015
PlaceSecond Prize
TrackCorporate Sustainability
Key WordsConflict minerals, Human rights, Consumer electronics industry, Sustainability, Sustainable supply chain, Ethical Supply chain, Ethical sourcing, Supply chain transparency, Supply chain risk mitigation, Supply chain mapping, Supply chain audit and reporting, Stakeholder management, Stakeholder tension, Systems approach
CoursesCorporate Sustainability, Business Ethics, Corporate Social Responsibility, Supply Chain Management
Target AudienceMBA
Purchase InformationYou can purchase the case at the Case Centre.
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posted June 24, 2015

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Un-dress

Sustainable and fashionable? UnDress shows that this goes together very well. In workshops and presentations, HSG students can inform about modern ecofashion. Moreover, there is an exhibition and a fashion show with students and professors, where everyone can gain inspiration for sustainable and fashionable looks and trends.
This annual event is organized in cooperation with the Marketing Club at the University of St. Gallen.

Click here to read more.

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posted February 18, 2015

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Fashion (Supply Chain) Learning Circle Updates

The Fashion/Supply Chain Learning Circle 

Fair fashion, sustainable shirts and organic underpants – that is what we want. But what changes need to be pushed on in order to achieve a more sustainable product? What steps within the fashion supply chain are concerned? And in what ways can oikos impact on this transformation towards more sustainability?

Through a co-operation of oikos Maastricht and oikos Reutlingen this Learning Circle was brought to life, to answer those questions. We started of with a research for current models of the fashion supply chain in order to be able to identify the most important stakeholders and/or multipliers. Additionally traditional and new challenges of the fashion industry were defined. To this theoretical basis sustainable fashion expert Enrico Rima added years of experience in the business how changes can effectively be brought forward.

Within the Fashion Learning Cirlce we aim at creating an action kit for each of our participants’ chapters to reach stakeholders and accelerate change. Whether or not there have been projects in your chapter before, we will look for new ways and get inspired.

The FutureLab 2014

The oikos FutureLab is the biggest event in the annual oikos calendar which gathers representatives from the entire oikos community. It provides a 2-day platform for 120 participants to inspire, discover and develop joint perspectives on the future of sustainability in management and economics. It leverages our global network of student members, alumni, advisors, faculty and partners for action. It offers a “laboratory” to design initiatives, engage the oikos community in pursuing them and fuel our journey towards higher impact.

For more information click here.

What are Learning Circles?

A Learning Circle is a highly interactive, participatory structure for organizing group work within a subject area. The goal is to build, share and express knowledge through a process of open dialogue and deep reflection. Within each Learning Circle people with a common interest gain experience, knowledge and establish networks in their chosen subject area. The Learning Circle structure gives the oikos community the opportunity to map the landscape of a specific topic, get in touch with external inspirational experts and systematically spread the knowledge in our network. In 2014, seven Learning Circles were initiated: Leadership, Finance, Entrepreneurship, Energy, Economics, Fashion/Supply Chain and Management.

Learn about other Learning Circles here.

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posted October 14, 2014

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IKEA and the ‘Better Cotton Initiative’

Abstract

The purpose of this case study is to discuss the relation between management and sustainability, paying specific attention to the issue of supply chain and innovation. IKEA, the world’s leading furniture retailer, has a long history of managing environmental and social issues. The company has developed internal procedures to assess the sustainability impact of new products (the IKEA Sustainability Product Scorecard) and has implemented a code of conduct to deal with social responsibility among suppliers (IWAY). The issue of cotton has emerged as a new challenge. To address this challenge, IKEA must adopt an innovative approach that goes directly to the source: the farmers. Through its partnership with a leading environmental NGO (the WWF), IKEA developed a pilot project aimed at influencing farmers in Pakistan and India to change the way they cultivate cotton. The initial results motivated the company to extend its pilot initiative with the goal of mainstreaming Better Cotton as a new market commodity. The development of a new strategy is required.

This case is part of the oikos Free Case Collection. Instructors can request the teaching note at freecase@oikos-international.org

Authors: Stefano Pogutz
Institution: Università Bocconi
Competition Year2014
Place2nd
TrackCorporate Sustainability
Key WordsCorporate sustainability, supply chain management, cotton industry
Coursesstrategic management, supply chain management, corporate sustainability, CSR
Target AudienceMBAs. Graduate, Executive
Purchase InformationThis case is part of the oikos free case collection. Download a free online copy below. If you are a faculty member and you are interested in teaching this case, you can request a free teaching note by sending us an email to freecase@oikosinternational.org
DownloadFree Online Copy
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posted June 26, 2014

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oikos Case Quarterly: Fairtrade Issue 13, March 2014

As of today, fairtrade products can be found in almost any grocery store. Both, sales volume and variety of products available keep increasing at a fast pace. Much has been discussed about the certification instruments and the concept behind the fairtrade movement. However, cases discussing the business models of fairtrade initiatives are rare. We hereby present two cases to help explore the challenges fairtrade organizations face in their operations. We are convinced they will proof as an excellent tool for students to better understand some of the key aspects characterizing the fairtrade movement.

Table of contents:

→ Foreword

→ Eva Collins, Kate Kearins, Helen Tregida and Steve Bowden (Waikato University and Auckland University of Technology, New Zealand) – All Good Bananas:  Selling the FairTrade Message

→ Scott Marshall, Darrell Brown, Bex Sakarias, Min Cai (Portland State University) – Madécasse: Competing with a 4x Fairtrade Business Model

→ Forthcoming case teaching events and other new

→ How to subscribe

Download the issue.

We hope that you will enjoy reading this issue. Please feel free to forward it to colleagues who are interested in teaching sustainability with cases. If you would like to share your experience in teaching sustainability with cases, we would be very happy to hear from you! Also if you have any feedback on the content of this issue and suggestions for the next issue, send us an email to case@oikosinternational.org.

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posted March 27, 2014

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Madécasse: Competing with a 4x Fairtrade Business Model

Case Abstract

Brett Beach and Tim McCollum, co-founders of Madécasse, spent two years as Peace Corps volunteers in Madagascar. During that time, they fell in love with the country and its people. Recognizing the need of the Malagasy for stable jobs and fair wages and the connection between poverty and environmental destruction, Brett and Tim discussed possibilities for a social enterprise in the country.

Madagascar presents a beautiful yet challenging place to operate a business. It has a wide range of flora and fauna, approximately 70% of which are found nowhere else on Earth and it produces coffee, vanilla, sugar, cotton, pepper, cinnamon, chili, cloves and high quality cocoa. However, it is also one of the least developed countries in the world. Seventy percent of the population is rural and 90% live on less than $2 a day.

Madécasse, with its headquarters in Brooklyn, New York, partners with farmer cooperatives and a chocolate factory in Madagascar to make single-origin, tree-to-bar chocolates for sale in high-end groceries and chocolate boutiques internationally. The Madécasse model maximizes the amount of value added to the final product in Madagascar. It includes strong relationships with the cocoa farmers, partnership with a chocolate factory, sourcing ingredients and packaging from around Madagascar, and exporting the final, fully packaged products. It is through this holistic approach that Brett and Tim created a business model that offers more than four times the social and economic benefit to Madagascar when compared to the standard FairTrade model.

Madécasse competes with other specialty brands and numerous conventional brands. In order to catch consumers’ attention, the founders obtained “Fair For Life” and Organic certifications. However, Madécasse is not unique in differentiating based on single origin, certified specialty chocolate. Survival depends on Madécasse’s ability to leverage its “4 X” impact.

The case study asks students to look thoroughly at the value chain in Madagascar, understand Madécasse’s operations and the local impacts, and the methods used to communicate to final consumers. Students are challenged with fully comprehending the value proposition of Madécasse and how it can be aligned with and communicated to current and emerging customer needs.

Authors: Scott Marshall, Darrell Brown, Bex Sakarias, Min Cai
Institution: Portland State University, USA
Competition Year2013
Place1st place
TrackSocial Entrepreneurship
Key WordsSocial Enterprise, Social Impact, Chocolate, Marketing, Operations Management, Madagascar
CoursesMarketing, Operations Management, Supply Chain Management, Social Entrepreneurship, International Business
Target AudienceAdvanced Undergraduate Business Students and Graduate Business Students
Permission RightsCopies of this case are available from Portland State University Library
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posted June 30, 2013

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“Protecting Our Oceans”: Sustainability at Holland America Lines

Case Abstract

This is a case about the threats to the world’s oceans seen through the lens of the $30 billion per year cruise line industry. There is a focus on Holland America Lines (HAL) as a sustainability leader in the industry. HAL has implemented a number of beyond compliance and efficiency initiatives and is ISO 14001 certified. The cruise line industry, and the maritime industry in general, have significant impacts on the oceans through their emissions, discharges and shore practices. These impacts are not necessarily the primary stresses on our oceans, so the case provides a broad perspective on the threats to the oceans and the associated regulatory environment.

The case explores Holland America’s initiatives relating to discharges to water, hazardous waste, supply chain issues, social sustainability issues and emissions to air. Emissions to air, including CO2, SOX and NOX and Particulate Matter (PM) are a particularly difficult issue for the 350 cruise ships and 50,000 merchant ships plying the oceans. Holland America Lines primary strategy for reducing their emissions to air was to increase fuel efficiency. Both the ship’s propulsion and all on-board equipment rely on the ships engines. Their fuel conservation initiatives were very successful. HAL committed to reduce its fuel use (on a per passenger berth – per nautical mile traveled basis), and thus it’s associated carbon emission intensity, by 20% between 2005 and 2015. They achieved this goal by 2011.

The case also looks at the idea of HAL installing wind turbines on the decks of their ships in order to achieve a small reduction in fuel use through the generation of electricity. Bill Morani, V.P. Safety & Environmental Management Systems, is asked to determine whether HAL should reconsider this idea even though it had initially been assigned a low priority. HAL had a very proactive Fuel Conservation Committee (FCC), and the case describes the workings of the committee. While the wind turbine initiative had a very low priority in the FCC rating system, it provides a perspective on the fuel conservation approach and offers a look at an interesting alternative energy initiative. Furthermore, Bill Morani is in the process of identifying long-term sustainability priorities for HAL, and the case provides sufficient information for students to reach their own conclusions regarding those priorities.

Authors: Murray Silverman
Institution: San Francisco State University, USA
Competition Year2013
Place3rd place
TrackCorporate Sustainability
Key WordsPollution Prevention, Voluntary Initiatives, Regulatory Environment, Ocean Ecology
CoursesSustainability, Business & Society, Strategic Management
Target AudienceMBA (primary) undergraduate (secondary)
Permission RightsPlease contact Murray Silverman for permission rights.
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oikos International

posted June 30, 2013

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Walmart: Love, Earth

Case Abstract

This is the story about the efforts of a social entrepreneur, Assheton Carter, to create a meaningful initiative with Wal-Mart in ethical mining.  His idea:  to somehow secure the supply chain for jewelry in a way that consumers could be certain that every input – from treatment of workers in the mines through to sustainable manufacturing – was executed to the highest ethical standards.  This had never been done before, particularly on the scale according to which Wal-Mart operates:  it is not only the largest retailer of gold jewelry in the world, but maintains an unprecedented control over its suppliers.

At the time that Carter was attempting to sell his idea to Wal-Mart leaders, the company was embarking on a major push to become a highly ethical company that both used sustainable methods and behaved morally.  This was a priority of the CEO, Lee Scott, who claimed that he had had an “epiphany” about the future of Wal-Mart and had promoted a huge array of initiatives in the company.  After years of being the “bad guy” and an object of popular protest for its methods and impact on the US economy, Scott had pledged to turn this impression around.  Statements, committees, and programs proliferated in Wal-Mart.  The case offers many examples of his methods and initiatives.
 

This appeared to be a propitious moment for ideas like Carter’s.  However, Carter had had an extremely difficult time getting the attention of executives at Wal-Mart.  This was not necessarily because the new Wal-Mart was insincere or cynical about its ambitions, but due to the fact that its managers worked up to 60 hours per week, under relentless pressure to deliver.  In other words, the ethical initiatives had to be accomplished in addition to their regular jobs.  They also changed positions so often that Carter was never certain who was currently responsible for jewelry acquisition. Carter spent years attempting to communicate his ideas to the right person within the company, never seeming to get anywhere.
 

It was a time of great frustration.  In the meantime, he was extremely active in a number of other areas, which more than occupied the majority of his time.  But Carter persevered, eventually getting the attention of a dynamic young manager, Dee Breazeale.  Together, they structured the program, taking it through the company and enlisting suppliers to participate.  Though the results were somewhat ambiguous, they created a way that consumers could log on to the internet and look at all of the sources (inputs) into the piece of jewelry they purchased.  The result, however, is not the principal theme of the case, but its plot.
 

As it comes out in the case, Carter’s method is unique.  Rather than concentrate exclusively on promoting a good idea, Carter undertakes to understand the business model of the companies he approaches, i.e. the incentives that managers have, how they see the world, even the vocabulary that they use in their everyday work.  He speaks to them in a way that they can understand immediately and automatically, offering a plan of action that fits with the priorities of the company, yet pushes them to do new things in accordance with his ideas.  This too is controversial and must be extracted in discussion from the plot of the case.
 

Authors: N. Craig Smith, Robert J. Crawford
Institution: INSEAD, France
Competition Year2012
PlaceFinalist
TrackCorporate Sustainability
Key WordsSustainability, Strategic Corporate Social Responsibility, Stakeholder Engagement, NGO Strategy & Tactics, Social Entrepreneurship, Multi-Stakeholder Initiatives, Mining, Retail Jewellery
CoursesStrategic Corporate Social Responsibility, Sustainability, Strategy/Strategic Management, Operations Management/Supply Chains
Target AudienceMBA, eMBA, Executive Education Programmes, Upper Level Undergraduate
Permission RightsCopies of this case are available for purchase at Insead Case Publishing.
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posted June 30, 2012

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