The AERU Value Chain Compass

Incentives

As the name suggests, a value chain involves a series of linkages between the producers at one end of the chain and the final consumers at the other end of the chain. Thus, the process of delivering the product from producers to consumers involves several transactions or steps. The strength of a value chain depends on the incentives for participation at each step, which can be reinforced by:

• Legal contracts setting out rewards and obligations.

• Investment in reputation associated with the chain’s collective values.

• Negotiations based on agreed norms of fairness.