Fair Trade Practices, Social Innovation and Social Impact: A Case of Mahaguthi Craft with A Conscience

Abstract

This study presents the case of Mahaguthi Craft with a Conscience founded in 1984, a non-profit-distributing social enterprise that helps the marginalized small producers and generate employment. The main aim of this study is to evaluate fair trade practices, social innovation and social impact. This study is based on the primary data. This study analyzes data in the three different stages. First, evaluate the practices of fair trade by reviewing the existing documents, such as, self-declaration report of Mahaguthi and external social audit by World Fair Trade Organization (WFTO). That had been validated by an interview with the chief executive officer (CEO) of Mahaguthi Craft. Interview includes to evaluate social innovations and social impact Secondly, a structured survey questionnaire has been used to examine the social impact to beneficiaries, mainly, Mahaguthi employees. Results revels that Mahaguthi has been following ten principles of Fair Trade practices very effectively. Product innovation, supply chain management innovation, technology innovation, new business model and business ecosystem innovations are key points to Mahaguthi for positive change of social welfare of marginal group of peoples. Additionally, this study finds the major five components for measuring their impact to Mahaguthi staffs, such as, economic, self-confidence, organizational goal, social and leadership impact. Fair trade practices are the first stage of social innovation and positive impact to society. This case study may be the best example to practitioners and academia for operating social enterprise for social change through generation of employment.