@misc{Koch, type = {Master Thesis}, author = {Koch, Alexander David}, title = {Collective Action Opportunities for Upgrading the Value Chain of Small-scale Wooden Furniture Enterprise in Hawassa, Ethiopia}, url = {http://nbn-resolving.de/urn:nbn:de:hbz:1383-opus4-5346}, school = {Hochschule Rhein-Waal}, pages = {143}, abstract = {Ethiopia is challenged with a widening domestic wood supply gap and concurrent rapid population growth. Along with these developments, the population's growing purchasing power is driving the demand for wooden furniture. The majority of this demand is satisfied by small-scale enterprises. Adding to the domestic wood supply uncertainty, such enterprises are exposed to various challenges, such as infrastructural limitations, unfavourable market conditions, weak government support, or skill gaps, thereby hindering their development and often situating them in a subsistent and poor survival state. A development opportunity comes to light when considering that small-scale wooden furniture enterprises are linked to a critical natural resource base, exposed to growing markets, and mostly consist of individuals with an entrepreneurial vision. If guided effectively, this sector has the potential to drive an economic environment of innovative entrepreneurship, create skilful employment, and disseminate propulsive market signals towards wood suppliers. Collective action is a frequently discussed upgrading option for countering development barriers in the context of emerging economies and therefore, is explored as a potential upgrading mechanism. This study aims to develop a potential institutional model of collective action among small-scale enterprises in Hawassa, Ethiopia. The study follows the general procedure of a value chain analysis and frames the collective action model as a potential value chain upgrading strategy. As the target actor is poorly studied, an explorative and descriptive research approach is applied. In-depth interviews were conducted with 54 wooden furniture enterprises to gain insight into their value chain position and condition, cost structures, network ties, as well as challenges. Then, individual enterprises were asked to envision a desired collective action upgrading scenario. Several key informant interviews were also conducted with direct (internal) and indirect (external) value chain actors to forge a holistic value chain structure as well as to triangulate data. The situation for small-scale furniture enterprises was found to be highly unfavourable. The most substantial issue is the limited access to adequate factors of production, especially regarding the production site, physical capital and financial capital. With markets failing to provide these, enterprises were often observed to engage in social network ties with other furniture enterprise to enable access to resources. In addition, the government's role in supporting these enterprises was found to be weak and poorly organized. Access to support services was observed to be obstructed by ethno-centrism as well as a high labour turnover amongst development agents. Promised trainings and access to factors of production were either rarely fulfilled or qualitatively low. To counter these issues, an institutional collective action in the form of a business association is recommended. On the basis of a literature review, empirical evidence on the status quo of the target enterprises, as well as their perception on upgrading scenarios, the study develops a model association, describing its form, purpose, institutional arrangements as well as the characteristics of participating actors and potential members. It is purposed to facilitate stable network ties and act as a collective voice for improving the condition of small-scale furniture producers. It especially serves to lower transaction costs with authoritative entities, supports the access to improved business development services, such as microfinances or trainings, and advocates for improved market conditions. In the long run, the association will help small-scale enterprises collectively develop into innovative and resource efficient businesses, thereby driving and improving local forest-based markets.}, language = {en} }