Case Study

Redefining value creation in value chains: The social side of sustainability

12 pages
September 2014
Reference: IMD-7-1583

Although most cases on the sustainability of supply chains focus on environmental impacts, this case assesses the role of producers and the social impact of value chains by focusing on the argan oil sector. As scientific processes proved the significant health and beauty benefits of argan oil in the 1990s, demand stirred in European and North American Markets. Dr. Zoubida Charrouf founded the first argan oil cooperative in 1996 to provide jobs to the under-privileged female producers in rural Moroccan areas. While cooperatives paid three-times more than their private competitors, women still earned a fractional share of the final retail value of the oil they worked tirelessly to produce. The question addressed in this case is: how can producers gain a greater percentage of value in the argan oil sector? Is ethical labeling, such as Fair Trade, the solution? Alternatively, could the value chain be transformed more significantly by increasing the role of certain actors (such as producers) while eliminating some actors altogether? By investigating the current value chain of argan oil cooperatives, readers are called upon to contrast the value provided by actors with their economic costs to determine a more sustainable value chain.

Learning Objective

1) Focus on the “social” side of sustainable value chains, which is often neglected due to the assessment of environmental impacts through ecological footprint calculations. 2) Highlight the shortcomings of Fair Trade and other conscious labels in competitive industries with a high amount of socially-conscious propaganda. 3) Encourage managers to become more innovative in their strategies to alter value chains by eliminating middlemen and changing business models. 4) Incorporate Internet-based strategies and other technologies to better communicate sustainable value propositions to customers.

Keywords
Leadership Behavior, Cooperative Company, Corporate Sustainability Management
Settings
Northern Africa, Morocco
Ibn Al-Baytar, Consumer Goods, Cosmetics and Perfumes
2010
Type
Published Sources
Copyright
© 2014
Available Languages
English
Related material
Teaching note
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