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Concept of “community” for improved market chain development: An alternative approach

Les Brown1, Margaret Cruickshank2, Christine King2 and Bruce McGrath2

1Department of Marketing, University of Southern Queensland, Toowoomba Q 4350
2
Queensland Department o f Primary Industries - Toowoomba

Paper

This paper explores the concept of building “community” as an alternate means of developing relationships and positional power in market chain development. Basically, we find a variety of the concepts within the community development (CD) field useful, if not essential in effective market chain development within many rural industries. Previously, hard systems approaches to market chain development have been the norm, however this has often proved to have only sectoral impact while not developing the necessary market chain ethos. Below are some commonly (and not so commonly) known concepts within CD, which we explore within the context of developing effective market chains. The four key concepts from CD that are focused upon are: Community Building, Collective Empowerment, Community Networking and Community as a System. Four key questions are used to demonstrate each of these: (i) What is the concept? (ii) Why is this concept useful in market chain development? (iii) Why is this approach different to what has been done in the past? and (iv) How can it be implemented?

Introduction

This paper presents the view that the supply chain (i.e producers to consumers) represents a "community" which can act collectively to achieve shared and mutually beneficial goals, and therefore it is reasonable to apply concepts of community (collective) processes to supply chains. This has not generally been considered in the past. The idea of ‘community as a system’ is introduced i.e. systems, supply chains and communities are comprised of components, relations and flows, all which are mutually (but not equally) interactive. Problems with creating communities of supply chains is that they extend over cultural divides and each actor (function) in the chain is embedded in a different set of socio-economic-cultural conditions. This leads to a need to explore the differences so that tensions created by the relative cultural positions of the different sites can be mitigated.

It is also suggested that at another level of the supply chain (i.e production) producers, represent a community because they have a shared goal and common culture. They are better to act collectively to create a “region” from which desired product quality is created and maintained and therefore marketable. If producers act collectively they will increase their counter-veiling power in supply negotiations with processors, retailers, transporters etc. In this case it is also reasonable to apply concepts of community (collective) processes to supply chains. In many instances concepts of community are not adequately related to the market/supply chain, but implicitly remain at the production system level. By introducing processes of community development at the supply chain level, a sense of community will ensure that trust is developed within the chain leading to better business outcomes.

This paper therefore, aims to explore the notion that community should exist within a market supply chain to ensure that the complexity of business functions that occur are characterised by good relationships which ease the pressures of multiple tasks over space and time. In this paper the four key questions explored explain how community can be developed in a market chain.

Background

In distinguishing between Individualistic approaches to community development (CD) and Co-operative models of community development it has been suggested that the aggregate result of individual decisions is that the economy of a small community will be unable to sustain itself. Examples to illustrate this, suggest that:

Although learning from outside a community may be fairly strong, it will lack the interdependencies and linkages that would transform this outside income into additional income and jobs. The solution to this problem does not lie particularly in attempts to find additional export markets or to attract additional firms with an export orientation. These methods only promote more of what was already present in abundance – a focus on individual action as a method of generating development. Individual action is unlikely to solve the problem, since it was individual action that was responsible for the problem in the first place. Fairbairn et al., (1991).

One of the implications of the individual empowerment model is that, although Australian Government programs based on such a model are intended to promote the development of manufacturing, handicrafts and new export products they are unlikely to assist local communities in their development. Similarly, programs that provide loan guarantees or offer tax or building concessions to businesses are also unlikely to work. While it would seem that programs that improve firm profitability would be necessary for firms to consider locating in smaller communities, the problem with these programs is that they create competition among communities thus leading to a win lose situation that extension staff must overcome.

Freebairn and King (2001) stress the need for a shift from individual empowerment programs to collective empowerment programs, suggesting that in Queensland, government approaches have tended to focus on the former. This is apparent with products such as Best Practice, Building Rural Leaders and Future Profit which all primarily strive to develop individual rather than community/industry capacity. Although extremely successful in empowering individuals, they have done little for what Rubin and Rubin (2001) term “Collective Empowerment” except for the benefits associated with the product intervention mechanism being a group environment. More recently there has been a focus on empowerment of the whole community with products such as Community Engagement (eg. DNR Extension Strategy) and Community Capacity Building (eg. Cavaye, 2000). These have tended to have emerged from projects focusing on resource management where long term sustainability and the necessity for catchment based approaches has influenced a collective principle.

The answer to the problem of community development lies not in promoting more individual action or in enticing outside businesses, but in encouraging the community to take action as a group and to find solutions from within. Fairbairn et al., (1991)

Similar concerns about the transformation from ‘colonial’ aspects of top-down initiatives to the desire to tackle, head on, the wretched conditions which confront under-resourced people. Findings from an analysis of development approaches over time and in a variety of countries showed that:

…for the empowered communities in corrupt or vulnerable situations, self-help and grass-roots development appeared to be the only way forward. Clarke (2000)

This paper addresses the concept of empowerment of communities within a dynamic business environment, the driver for change, in this instance, is food safety and its impact on agribusiness supply chains. Product integrity is the goal. The mechanism is Identity Preservation (IP) and the process is the development of market chain communities. The concept of building “community” and collective capacity in market chains is applied to this context. The design and implementation of processes to achieve community, leads to (a) the empowerment of individuals, (b) the strengthening of relationships and (c) desired outcomes such as product integrity. The authors, explored four key concepts from CD that focused on: Community Building, Collective Empowerment, Community Networking and Community as a System in the context of Australian agribusiness market chains. Firstly, we discuss community building.

Community building

Community building involves the creation of a ‘sense of community’ which recognises that a single effort is unlikely to solve a complicated set of interdependent problems. The idea is to strengthen local networks and a feeling of mutual obligation. The key to this concept is the building of relationships in the community between people with similar issues and concerns Kelly (1995). Kelly introduces the concept of an 0-1-3 to describe the process of network forming in community building where the community worker acts as a facilitator who promotes relationships between people with common problems and issues in the community. This 0-1-3 is a useful concept for extension agents and others in their role to facilitate learning networks pertaining to resource management. Here, the extension agent can engage people across organisational hierarchies to form networks to deal with commonly shared wider system issues.

Why is it useful?

Developing, building and retaining relationships is the single most important element in group and chain development. It is not the only ingredient in maintaining commitment but it is the most important. There is no template for building relationships and the strategies and methods used depend on a whole lot of things. These include demographics, cultures, mores, educational levels achieved, intelligence levels, personalities and the emotional state of the people involved. The successful practitioner has to be skilled at recognising all of these, (and sometimes a lot more) because they determine the strategies and methods needed to develop relationships both within groups, and at the one-to-one stage. If the whole process of working with individuals right through to the group development stage isn’t done properly then the group will not have sufficient ownership and empowerment and the needed level of commitment will not eventuate. Also, if emotional issues aren’t addressed then good results will not occur. The FIDO (feelings, information, decisions, objectives) principle is alive and well (Dick, 1994). If just information is given, in order for decisions to be made to reach certain objectives without "feelings" being explored, in-action often occurs.

Why is it different to what we have done in the past?

One of the dominant strategies of government in the past has been to “call a meeting". Initiations of developmental projects and activities have tended to start with agency staff rather than the community themselves. The difference here is starting with the individuals within a community and then moving to a community collective. The practitioner acts as a facilitator rather than an agenda setter.

People are seeking more informal, temporary and social ways of participating in their community. The difference in the first instance is that the agenda is set, but in the second the agenda evolves. There is also no informal discussion with these people before these meetings happen. The old idea was that the primary producer was a "stand alone" in the world, the "rugged man on the frontier". A more useful approach that sees relationships as a basis for action, acknowledges the fact that relationships exist between primary producers and the community. This stepped process has been applied by one of the authors in developing horizontal marketing groups that have later engaged successfully in market chain activities.

How do we implement it?

The steps in this process include:

1. An initial assessment at the individual level: general background, culture, business sense, general aspirations and emotional level.

2. Begin to develop a relationship using some of the techniques mentioned below.

3. Establish what they value.

4. Determine the level of lifestyle issues

5. Ascertain some common ground and issues relevant to different individuals to see if there is a basis for developing groups or alliances.

6. See if some groups could be formed or if there is some possibility for some informal alliances.

7. Bring the individual groups together and work towards some planning with common goals, issues, vision and possible opportunities for the group.

8. Determine the skills of the individual within the groups especially in such areas as business, marketing, leadership and management.

Techniques used include:

  • Personal incidents
  • Anecdotes, personal and third party
  • Similar situations
  • Using models
  • Inviting successful people to address group meetings and discussions
  • Questions and answers.

It should be noted that group objectives change over time and the reasons for individuals to be in groups changes over time and circumstances.

Collective empowerment

The idea of creating collective empowerment is slightly different from that of individual empowerment. Collective empowerment comes about as people learn that they share a responsibility for one another and by doing so help create social capital, a resource for future community actions Rubin and Rubin (2001). It is different to individual empowerment where individuals who feel they can succeed are empowered.

In market chain development this can be referred to the development of “Non-equity Alliances”. The concept of a non-equity alliance refers to an alliance in which the participants, are bound by commitment to the alliance based on the perceived value in the alliance (there needs to be an exchange of value) from other than a short-term transactional viewpoint (compare: co-operatives, critical mass). The focus on the value in such alliances is seen to derive from future activities by the alliance participants. Furthermore, unlike vertical or horizontal integration in which ownership (through equity) is the cohesive factor between participants in the supply chain, the bond in non-equity alliances is based on ‘actor links, activity links and resource links’ (Hakansson & Snehota, 1995).

In the context of communities in supply chains, individual producers, through building networks with other producers, are able to form non-equity alliances that may give them greater power within a supply chain without resort to capital investment. This enables the preservation of such communities rather than the elimination of many producers through integration via ownership. Essential components of non-equity alliances are "trust and commitment" amongst participants in such networks, because without these and in the absence of ownership through equity (financial investment) then the alliance will become unsustainable.

Why is it useful?

Non-equity alliance is an enabling process where by individuals can pool resources to gain critical mass, which gives the ability to compete with larger rivals. "We don't have to forgo our individuality, but we do give something away, we have to confirm to group norms." The focus is on developing processes that support the empowerment of individual market chain stakeholders while the process design and consequent implementation contributes to the development of a market chain community. The community building process within a market chain has its desired goal, product integrity. This is illustrated in Figure 1. These processes include quality systems, collective branding and product interiority meetings market standards. By bringing in community the transactions become personalised rather purely transaction/cost based.

Figure I., models the way the three sub-systems intersect to synergise the intangible, ‘product integrity’. These sub-systems are:

  • market chain (total of all strategies, activities and outcomes in the whole chain system, see Table 1),
  • assurance (all supporting activities both hard and soft that contributes to the intangible assurance, see Table 1),
  • market chain co-ordination (higher level conceptual aspects that describe chain co-ordination, see Table 1).

The point of intersection is the outcome ‘product integrity’, which is a function of the synergy of the system which draws on the concept of continuous improvement and innovation (CI&I). There are basically two major strategies for change and innovation (Stace & Dunphy, 1994):

  • Continuous improvement and innovation (CI&I) and,
  • Radical organisational transformation and restructuring. Cruickshank et al. (2001)

Figure 1. A diagrammatic representation the components of IP

Source - developed for this paper from the literature.

Why is it different to what we have done in the past?

Vertical integration through control of transaction costs along supply chains by internalisation [ownership] has traditionally been seen as the most appropriate model for profit maximisation. The result was that in many supply chains, particularly in the rural sector, primary producers, operating at the individual farm enterprise level lacked the critical mass necessary to achieve any market power when compared to processors and retailers who tended to dominate supply chains. "Previously we (producers) were told, get big or get out. Now days we integrate horizontally and also vertically in a chain relationship". The aim is to work with a common framework. The work is essentially reversed where producers were played off against each other. The new approach involves, taking away the dyiadtic transactions (eg. cattle buyer to individual producer) and create network alliances.

How do we implement it?

Community bonds that constitute community are activated be establishing linkages between people, groups and organisations. An increase in community social capital emerges as social networks link individuals to each other and to organisations and from networks that link organisations to one another (Rubin and Rubin, 2001). Comprehensive community building is about coordinating this process of expanding social capital in ways that change “thinking and practice among all the actors involved in addressing poverty … creating new, more resilient relationships among them”.

In the case with market chain development it involves linking the vertical with the horizontal, and to go a step further: establishing a market chain that is not a hierarchical model, but a system. It is also about drawing out common issues and highlighting the benefits of being in the groups. A main purpose is changing information flows and changing power relationships. The facilitator is not an expert or a knowledge broker, but a catalyst and change agent. Those in the group gain self-understanding of their value in the system.

The key step in creating collective empowerment is to help people learn that through collective actions they become responsible for each other and the community as a whole. Collective empowerment comes about when people gain the confidence and experience that be helping others they also help themselves. To work, however, participation in community organisations must be seen as effective and people must be able to see the connection between their individual effort and the community outcome. Just showing up at a meeting is not enough; people have to understand that their actions bring about desired results. Rubin and Rubin (2001:95)

Community networking

The networking process is described as the process resulting from the conscious efforts of certain social actors to build relationships with each other in order to enhance sustainable development Engel (1995: 126). Networks and networking increasingly are seen as mechanisms for articulating complex distributed decision-making (King, 2000). Some claim, that potentially they are complementary to money markets and possibly more suited than either regulation or market mechanisms in solving problems in critical non-monetised areas (such as the management of ecological services) (Jiggins and Rling, 1998).

Why is it useful?

Political economists demonstrated theoretically in the 19th century that market exchange in conditions of initial social and resource inequality lead inevitably to economic accumulation at the higher levels of hierarchy. In resource management for example, sustainability would seem to require a mechanism for holding a minimum stock of ecological assets in their physical context rather than abstracted through economic markets and circulated as products. A reed bed performs its ecological service in checking water flow and cleaning water by virtue of where it is, not as a resource traded on the stock exchange. Network formation and management seem to be one way in which we can seek to preserve these collective goods and services through concerted actions mediated through social rather than economic markets (King, 2000).

A network approach assumes that individual experience, behaviour and outcomes depend more on where people are located in various networks than it does on who they are as unique individuals. This rests on the idea that networks both impose constraints that limit options and provide resources that enable individuals to act in certain ways. Johnson (1995: 1989)

Why is it different to what we have done in the past?

Networking reinforces the interpersonal linkages between people, recognising the common experiences and causes of people, rather than their differences. In the past, individual producers within a community were often treated, if not encouraged, to be individualistic, fixed and competitive. A networking approach, however, recognises the benefits of being cooperative. Networks can be expanded or shrunk faster and more readily than fixed institutions, they can have (with modern communication technology) almost costless inclusive membership at varying spatial scales and across hierarchical levels (King, 2000). Network management is described as the facilitation of the network process itself including the care for network communication infrastructure, network operating procedures, the monitoring of network resources, activities and outputs, and the coordination with other organisations and networks(Engel, 1995).

How do we implement it?

There are three criteria suggested for understanding the reasons for the success and failure of network intervention, O’Connor et al (1998). These include (i) the types of relationships, (ii) the structure of networks (ie. linkages) and (iii) the dynamics of exchange in networks. These criteria can then be evaluated against some type of indicator (eg. critical success factors, learning, working toward vision). The success or failure of networking, its functioning and characteristics, and the exact form and shape the actual networks take, may be evaluated against the mission its constituting actors have in mind for it (Engel, 1995).

A shared purpose, vision and/or mission in network formation and management is deemed important by many authors (Ellinor and Gerard, 1998; Engel, 1995; O’Connor, 1995; Senge, 1990). Creating a shared meaning tends to provide ownership and commitment, demote self-interest, provide focus and improve participants' contribution in the development process. Building a shared vision is the first step in transcending the internal politics and game playing inherent in many traditional organisations according to Senge (1990). The challenge for the network facilitator, is to ensure: that everyone in the network is clear about the purpose; the expectations of others in the network; and any changes that occur as a result of the network process (eg. changing perceptions of issues and purpose, collective resources, etc.). The key to success is to foster a continually transparent network process.

A concern is that networking can lead to the development of an unofficial elite, which can effectively control social and political processes, Ife (1995. He suggests that there are two important principles that should be followed to ensure that this does not happen. The first principle is to keep the network open and include a variety of different people who do not necessarily network with each other. The second is to involve grass roots community members in the network as well as encourage them to establish their own networks as a form of empowerment.

There is also a concern where centrally located (particularly urban based) members of the network have better access to communication technology. The more centrally people are located at the flow of communication, the more power they are likely to have as a result, Johnson (1996). For this reason, facilitators of networks can encourage and support less centrally located members (eg. farmers, extension agents and other rural community members) to establish their own networks and become more involved in already existing networks. It should not come as a surprise if many of these less centrally located members are already involved in a variety of social networks. One of the key factors in successful networks is that decentralisation of functions and autonomy of members is emphasised continuously, Engel (1995).

Community as a system

The basic principles for learning can be equated to the eight principles characteristic of ecosystems: interdependency, sustainability, ecological cycles, energy flows, partnership, flexibility, diversity and co-evolution (Capra, 1997). In a CD context, the growth and survival of the community can also be expected to promote the growth and survival of its constituent parts. People and businesses in a community will do well when the environment they are part of does well. As might be expected, this has some parallels in ecology, where individual species cannot be understood in isolation, but only as integral and interrelated parts of a larger system.

Why is this concept useful?

Systems are defined as the interactions and lessons from managing the interactions between the relevant combination of parts (sub-systems) that make up the complex whole (the system) (Checkland and Scholes, 1990). Because a pattern can be identified between relationships, hard and soft in a system, systems mapping is useful for tracking eg products through a chain, monitoring (finding faults/weaknesses) and useful for identifying points of leverage for change/improvement. Hard systems are items like computer aided tracing systems. While soft systems involve people and needs to acknowledge that people have different perceptions of the world and therefore presents a critical variable.

Why is it different to what we've done in the past?

Things have been done on an ad hoc basis previously, no relationships developed with farmers, no horizontal alliance or vertical chain relationship, no chain systems of any description put in place, either hard and/or soft. In ecological models, the organisms that are able to survive best are those that find a niche where they can benefit themselves and the environment in which they live at the same time. It is this mutual benefit that gives ecological systems their flexibility and durability, without centralised planning. This in turn leads to the situation where growth, diversity, and complexity bring more rather than less stability. This is in sharp contrast to the much more individualistic survival of the fittest notion, according which organisms that survive must be the ones that eliminate others. What nature actually tells us is to find a productive niche that supports the total community.

What is required in community development is for individuals in a community to realise that they are part of a larger environment and that their individual actions have an effect on others within the community. One way of doing this is to develop co-operative methods of behaviour. Fairbairn et al., (1991:59)

How do we implement it?

King (2000) illustrates how relationships and interactions can be facilitated among people to achieve an effective learning system (or community). Effective interactions and relationships among actors are dependent upon open communication and dialogue, distribution of shared knowledge, and trust. It seems important to value different knowledge and different approaches and to negotiate roles, responsibilities and actions. A safe environment and a commitment by the actors to try things out and actively participate are also required. Other qualities include the recognition of group and individual learning, recognition of the benefits of group learning, the ability for actors to be critical, and an understanding between actors that they have different perceptions of reality.

To ensure effective relationships among different systems, King (2000) also illustrates that the qualities required between these systems (eg. community groups) included interdependency, intentional sharing of inquiry process and learning, negotiation of time and resource allocation, and recognition of the importance of those systemic properties as necessary for a learning system. She shows how different actors move freely in and out of different inquiry processes and act upon and move across learning boundaries (enhancing the dialectic process). Informal and formal networks emerge among the actors and allow for continuous learning, and for meaningful knowledge and information flows.

To aid this process, the system can be mapped, either existing or the preferred design, identify the points requiring change, improvement etc, identify the alliances required (equity or non equity) put in place the processes and practices to achieve systems improvement or development.

The value of "systems mapping" in the general and "case study context" includes:

  • Identification of critical elements in a system
  • Identification of sub-systems in a larger system
  • Identification of leverage that elements or sub-systems have within the whole
  • Allows choices about points of leverage and where effort or budget should expended
  • Identifies opportunities for re-focus or changed focus at either strategic or operational level
  • Provides an opportunity for different views to be presented
  • Provides "big picture" analysis
  • Re-confirms critical elements in a systems

Communities of practice are distinct from the formal units or work groups of the organisation (Dunphy and Griffiths, 1998). They are more flexible and fluid, and shift as the issues facing the organisation change. They cut across regular organisational boundaries, linking individuals any where in the organisation and at any level on the basis of shared interest.

Conclusions

This paper introduces four key concepts that are useful in facilitating co-operative community empowerment. It is suggested that these are not only necessary for effective market chain development, but are a major development process for the long-term sustainability of rural communities in Australia. While this may be problematic because of the individualistic nature of producers, the driver of ensuring food safety for consumers will necessitate change for all parties. The design and implementation processes for community building, collective empowerment, community networking and community as systems, leads to desired outcomes such as product integrity which is the preferred gaol that will overcome perceptional barriers to a the lack of market chain development ethos presently existing in Australian agribusiness.

In the context of market chain development, relationships and alliances between stakeholders are based on high-level trust rather than equity based alliances. Consumer concerns about food safety is an international phenomenon. Therefore, it is critical that Australia food producers and manufacturers develop and maintain high levels of product integrity throughout food supply chains. This context provides an opportunity for agribusiness from either a regional or a product basis to be pro-activate rather than reactivate to consumer driven concerns.

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