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  • 2018
  • Working Paper
  • HBS Working Paper Series

Hot or Not? What Makes Product Categories Attractive to Fair Trade and Eco-labeling Organizations

By: Kristin Sippl
  • Format:Print
  • | Language:English
  • | Pages:23
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Abstract

This paper probes extant theory on product diversification in the empirical realm of fair trade and eco-labeling organizations (i.e., certification organizations). While much is known about diversification in for-profit firms, less is known about the more complex choices faced by hybrid organizations that balance social and economic objectives and curate symbolic, values-based portfolios. By process-tracing original interview data from three leading certification organizations, the paper finds that certification organizations prefer to diversify into product categories with three features: high levels of fit with the organization’s current clients, campaigns, and strategies; appealing market features, defined as highly integrated, predictable, low-risk supply chains and non-luxury status; and skillful activists who deploy discourse and resources strategically. Organizational fit and market features often drive decisions, but a product lacking these can still become certified if the product activist is skillful enough. The data did not fully support hypotheses on the primacy of exogenous opportunity structures and consumer values in diversification decisions. The findings contribute to the broader literatures on institutional entrepreneurship, market categories, and social movements. They also help activists and managers appraising this business and policy tool understand its potential and limits, guiding certification’s trajectory towards the markets it’s best suited to serve.

Keywords

Hybrid Organizations; Fair Trade; Eco-labeling; Goods and Commodities; Diversification; Strategy

Citation

Sippl, Kristin. "Hot or Not? What Makes Product Categories Attractive to Fair Trade and Eco-labeling Organizations." Harvard Business School Working Paper, No. 19-023, September 2018. (Work in Progress.)
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    Southern Responses to Fair Trade Gold: Cooperation, Competition, Supplementation

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    Golden Opportunity? Voluntary Sustainability Standards for Artisanal Mining and the United Nations Sustainable Development Goals

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More from the Author
  • Southern Responses to Fair Trade Gold: Cooperation, Competition, Supplementation By: Kristin Sippl
  • Golden Opportunity? Voluntary Sustainability Standards for Artisanal Mining and the United Nations Sustainable Development Goals By: Kristin Sippl
  • Conceptions of Ethics in the Cannabis Industry: The Case of Boston, MA By: Kristin Sippl
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