FORMACIÓN DEL CERTIFICADO DE PROFESIONALIDAD 1 DESARROLLO MODULAR

Global value chain analysis [GVC] examines the relationship between supply chain governance and market development. Within GVC there are two different understandings of governance. At the micro level GVC highlights the different ‘modes’ of governance, which are used at the level of the individual trading relationship [Humphrey and Schmitz, 2000].

139 At the macro level GVC analysis has explored ‘dominant typologies’ of governance, which have an impact in shaping the organisational arrangements across the entire supply chain [Gereffi, 1994]. It is at this macro level, where GVC analysis offers the greatest insight through its focus on the location of power, and how the influence of power within one segment can determine the organisation of the entire supply chain. Indeed, as noted by Bair [2008], the GVC framework was built on macro level foundations, and therefore, it is most powerful as a tool for analysis when exploring processes within the of the broader value chain.

Gereffi¹⁵⁹, the pioneer of GVC analysis defines governance as ‘the authority and power relationships that determine how financial, material and human resources are allocated and flow within the chain’ [Gereffi, 1994, p 97]. As such, the governance structures that exist within a chain are not the result of the efficiency rationale of individual actors, but rather they reflect the organisational arrangements of the chain’s dominant actors.

Gereffi’s insight has influenced the framework developed in this study through its understanding of how economic actors use power to set the ‘parameters under which others in the chain must operate’ [Humphrey and Schmitz, 2002]. Crucially the GVC’s focus on the power of external buyers allows us to expand our analysis of market development beyond the boundaries of the national institutional environment, by acknowledging the impact of global corporations in shaping the development trajectory of African commodity markets.

Indeed, whilst the Cocobod is currently considered the dominant form of governance within the Ghanaian market, the potential for change must also be considered. Changes in the political, technological and economic landscape of the supply chain promote the emergence of new organisational capacities, market opportunities and economic incentives, all of which may influence changes in governance. As such, governance is considered a contested terrain. In order to understand the capacity of a governance structure to compete and legitimise itself overtime, it is necessary to examine its ability to

159 Gereffi and Korzeniewicz [1994] ‘Commodity Chains and Global Capitalism’ is widely recognised as introducing the approach of Global Commodity Chain analysis which has since developed into Global Value Chain analysis.

140 adapt to such changes and satisfy the demands of the stakeholders within the chain. In light of this, the potential impact of recent investments by powerful multinational processors on governance in the Ghanaian supply chain will be explored within the analysis.

As noted in chapter three, the ability to maintain vertical coordination between independent units of the chain is considered one of the key measures of an effective governance structure. Mighell and Jones [1963], acknowledged as pioneers in this area, through their study of vertical coordination in agriculture, define coordinative mechanisms as ‘the set of institutions and arrangements that are used to accomplish harmonisation of adjacent stages of a commodity system’ [p1]. Therefore, the degree of harmonisation between actors in the market is a reflection of the coordination achieved by the governance structure in place. Mighell and Jones [1963] find that different methods of vertical coordination are adopted based on the need to reduce risk, uncertainty, and cost, improve market position, gain bargaining power and obtain financing.

In recent years, vertical coordination has gained increased importance as a function of governance within the supply chain [Gereffi, 1999a, Daviron and Gibbon 2002]. In cases where liberalisation has reduced the government’s coordinative role within commodity supply chains, it has been necessary to develop alternative methods of vertical coordination [Daviron and Gibbon, 2002]. Resultantly, there are now a number of alternative forms of vertical coordination practiced within the cocoa supply chain. To some extent these modern forms of coordination may be considered as competition for the traditional form of coordination adopted in the Ghanaian market.

In this light, GVC analysis offers insight into emergent and often competing methods of vertical coordination, particularly in the realm of quality control [Ponte 2002, Ponte and Gibbon 2005]. Quality is traditionally one of the key aspects defining the governance structure used within a supply chain. Indeed, as observed in chapter four, quality has been a highly contentious issue in the cocoa chain in recent years with new systems of supply chain governance appearing to define the level of quality produced within West African

141 markets. The emergence of new definitions and modes of arbitration in quality have raised important questions about the government’s traditional role in this area [Daviron and Gibbon 2002]. In this light, Fold [2002] suggests that there may be some tension between the Cocobod’s traditional role in quality control and the emergent forms discussed in the GVC. As such, the relationship between the governance objectives of cocoa buyers and the quality produced within Ghana will play an important role in our understanding of governance along the Ghanaian supply chain.