On the Nature of a Cooperative: A System of Attributes Perspective
01 Jan 2008-ERIM report series research in management Erasmus Research Institute of Management (Physica-Verlag HD)-pp 13-26
TL;DR: In this paper, the authors argue that a cooperative is a firm in itself, with many input suppliers as owners, and that the behavioral differences between a cooperative and an investor owned firm have to be addressed by highlighting the unique aspects of the stakeholder owning the enterprise.
Abstract: In the 1950s and 1960s there was a debate about the nature of an agricultural cooperative: the cooperative as extension of the farm, the cooperative as vertical integration or the cooperative as a firm. We revisit this debate with various concepts from the theory of the firm that have been formulated since 1990. Two concepts shed light on this debate: the enterprise as a system of attributes and the delineation of a governance structure in terms of ownership rights, control rights and income rights. We argue that viewing the cooperative as a system of attributes integrates these three views. It emphasizes that a cooperative is a firm in itself, with many input suppliers as owners. The feature of many input suppliers as owners implies that the behavioral differences between a cooperative and an investor owned firm have to be addressed by highlighting the unique aspects of the stakeholder owning the enterprise.
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11 Apr 2007
TL;DR: In this article, the authors provide theoretical insights and empirical evidence on the emergence of different types and degrees of entrepreneurial innovativeness, and they suggest that entrepreneurial innovation depends both on individual factors and on the environment in which the individual lives.
Abstract: textThe study provides theoretical insights and empirical evidence on the emergence of different types and degrees of entrepreneurial innovativeness. The results suggest that entrepreneurial innovativeness depends both on individual factors and on the environment in which the individual lives. In particular, high educational attainment and a high degree of self-confidence are significantly associated with entrepreneurial innovativeness at the individual level. Furthermore, entrepreneurs in highly developed countries are more likely to engage in innovative rather than purely imitative activities. The results also show that product, process, and variety innovations have at least to some extent different antecedents.
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Abstract: This paper develops a strategic perspective for business to contribute to the innovation of societal systems. Sustainability issues at the level of societal sectors cannot be addressed by single organizations but need to be thought of as systemic challenges in which business, government and civil society each play different roles. Sustainability involves structural changes over longer periods of time, and requires co-evolutionary changes in technology, economy, culture and organizational forms. We propose that the transition management framework offers a fruitful way to analyze such co-evolutionary processes of social transformation and subsequently develop strategies to influence and accelerate such processes. We present the case of two firms working in this new context of transition management in The Netherlands. From these cases we conceptualize a more general approach for business to redefine and reframe the societal context in which it is operating and develop novel business strategies.
198 citations
01 Nov 2012
TL;DR: In order to foster the competitiveness of the food supply chain, the European Commission is committed to promote and facilitate the restructuring and consolidation of the agricultural sector by encouraging the creation of voluntary agricultural producer organisations.
Abstract: In order to foster the competitiveness of the food supply chain, the European Commission is committed to promote and facilitate the restructuring and consolidation of the agricultural sector by encouraging the creation of voluntary agricultural producer organisations. To support the policy making process DG Agriculture and Rural Development has launched a large study, “Support for Farmers’ Cooperatives (SFC)”, that will provide insights on successful cooperatives and producer organisations as well as on effective support measures for these organisations. These insights can be used by farmers themselves, in setting up and strengthening their collective organisation, and by the European Commission in its effort to encourage the creation of agricultural producer organisations in the EU.
Within the framework of the SFC project this country report on the evolution of agricultural cooperatives in Sweden has been written. Data collection for this report has been done in the summer of 2011.
In addition to this report, the project has delivered 26 other country reports, 8 sector reports, 33 case studies, 6 EU synthesis reports, a report on cluster analysis, a study on the development of agricultural cooperatives in other OECD countries, and a final report.
The Country Report Sweden is one of the country reports that have been coordinated by Perttu Pyykkonen, Pellervo Economic Research PTT. The following figure shows the five regional coordinators of the “Support for Farmers’ Cooperatives” project.
88 citations
TL;DR: In this paper, the authors adopt the view that true hybrid structures exhibit multiple dimensions and true hybrids are marketlike on some of these dimensions while hierarchy-like on others, and thus should be viewed as a true hybrid rather than as an intermediate form.
Abstract: What is a cooperative? Is it a form of vertical integration, an independent organization or an intermediate form of governance between the market and the hierarchy? This paper contributes to the economic theory of the cooperative organization by examining it from a comparative economic perspective. Departing from Williamson's one-dimensional continuum of governance structures, the paper adopts the view that governance structures exhibit multiple dimensions and true hybrids are market-like on some of these dimensions while hierarchy-like on others. I show that the cooperative blends market-like attributes with hierarchy-like mechanisms and thus should be viewed as a true hybrid rather than as an intermediate form. The paper concludes with a discussion about the usefulness of this approach and potential avenues for future research.
65 citations
Cites background from "On the Nature of a Cooperative: A S..."
...…(e.g., Phillips 1953), a vertical integration of a horizontal association of producers (e.g., Sexton 1984), a firm (e.g., Helmberger and Hoos 1962, Feng and Hendrikse 2007), an intermediate form between markets and hierarchies (e.g., Bonus 1986, Schaffer 1987, Iliopoulos 2003, Ménard 2004) or an…...
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TL;DR: In this paper, the authors propose a framework that combines transaction cost and relational contracts models to capture the variety of solutions to organize economic activities and characterize some representative forms, including cooperatives and plural forms.
Abstract: The variety of solutions to organize economic activities is striking, and underexplored. This paper proposes a framework that combines transaction cost and relational contracts models to capture this variety while characterizing some representative forms. The framework distinguishes between organizational structures differing according to the intensity of control exercised over the rights to use resources, and the modalities of governance through which these structures operate. The combination of these two dimensions provides tools for understanding the existence, characteristics, and conditions under which some organizational arrangements tend to prevail. Based on these premises, the paper proposes an analysis that goes beyond the dichotomy between “markets” and “hierarchies.” This framework is inclusive of those hybrids arrangements that play such an important role in the agrifood industry and it explores two modalities that are particularly challenging to standard theories: cooperatives and plural forms. [EconLit citations: D 230; L 0; Q 100].
61 citations
References
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TL;DR: In this paper, a theory of costly contracts is presented, which emphasizes the contractual rights can by of two types: specific rights and residual rights, and when it is costly to list all specific rights over assets, it may be optimal to let one party purchase all residual rights.
Abstract: Our theory of costly contracts emphasizes the contractual rights can by of two types: specific rights and residual rights. When it is costly to list all specific rights over assets in the contract, it may be optimal to let one party purchase all residual rights. Ownership is the purchase of these residual rights. When residual rights are purchased by one party, they are lost by a second party, and this inevitably creates distortions. Firm 1 purchases firm 2 when firm 1's control increases the productivity of its management more than the loss of control decreases the productivity of firm 2's management.
8,850 citations
"On the Nature of a Cooperative: A S..." refers background in this paper
...Incomplete contracting theory addresses decision rights / authority (Grossman and Hart 1986 and Hart and Moore 1990)....
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TL;DR: In this article, the role of imperfect information in a principal-agent relationship subject to moral hazard is considered, and a necessary and sufficient condition for imperfect information to improve on contracts based on the payoff alone is derived.
Abstract: The role of imperfect information in a principal-agent relationship subject to moral hazard is considered. A necessary and sufficient condition for imperfect information to improve on contracts based on the payoff alone is derived, and a characterization of the optimal use of such information is given.
7,964 citations
"On the Nature of a Cooperative: A S..." refers background in this paper
...The working hypothesis is that everything that is known, can and will be incorporated in the design of optimal remuneration contracts without costs (Holmstrom 1979 and 1982)....
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Book•
01 Nov 1994
TL;DR: Williamson as discussed by the authors combines institutional economics with aspects of contract law and organization theory to identify and explicate the key differences that distinguish three generic forms of economic organization-market, hybrid, and hierarchy.
Abstract: Oliver E. Williamson University of California, Berkeley This paper combines institutional economics with aspects of contract law and organization theory to identify and explicate the key differences that distinguish three generic forms of economic organization-market, hybrid, and hierarchy. The analysis shows that the three generic forms are distinguished by different coordinating and control mechanisms and by different abilities to adapt to disturbances. Also, each generic form is supported and defined by a distinctive type of contract law. The costeffective choice of organization form is shown to vary systematically with the attributes of transactions. The paper unifies two hitherto disjunct areas of institutional economics-the institutional environment and the institutions of governance-by treating the institutional environment as a locus of parameters, changes in which parameters bring about shifts in the comparative costs of governance. Changes in property rights, contract law, reputation effects, and uncertainty are investigated.'
6,602 citations
"On the Nature of a Cooperative: A S..." refers background in this paper
...…farm as a system of attributes outside the box demarcating the cooperative, i.e. a farm is a sovereign economic unit.7 Applying the terminology of Williamson (1991), our position can be characterized as a cooperative being a hierarchy.8 Summarizing, we integrate the three positions in the debate…...
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TL;DR: In this article, the authors provide a framework for addressing the question of when transactions should be carried out within a firm and when through the market, by identifying a firm with the assets that its owners control.
Abstract: This paper provides a framework for addressing the question of when transactions should be carried out within a firm and when through the market. Following Grossman and Hart, we identify a firm with the assets that its owners control. We argue that the crucial difference for party 1 between owning a firm (integration) and contracting for a service from another party 2 who owns this firm (nonintegration) is that, under integration, party 1 can selectively fire the workers of the firm (including party 2), whereas under nonintegration he can "fire" (i.e., stop dealing with) only the entire firm: the combination of party 2, the workers, and the firm's assets. We use this idea to study how changes in ownership affect the incentives of employees as well as those of owner-managers. Our framework is broad enough to encompass more general control structures than simple ownership: for example, partnerships and worker and consumer cooperatives all emerge as special cases.
5,057 citations
"On the Nature of a Cooperative: A S..." refers background or methods in this paper
...Second, the well known model by Sexton uses, like the seminal model of Hart and Moore (1990) in the incomplete contracting literature, cooperative game theory in order to address vertical integration....
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...Incomplete contracting theory addresses decision rights / authority (Grossman and Hart 1986 and Hart and Moore 1990)....
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Posted Content•
TL;DR: In this paper, the authors study moral hazard with many agents and focus on two features that are novel in a multiagent setting: free riding and competition, and show that competition among agents (due to relative evaluations) has merit solely as a device to extract information optimally.
Abstract: This article studies moral hazard with many agents. The focus is on two features that are novel in a multiagent setting: free riding and competition. The free-rider problem implies a new role for the principal: administering incentive schemes that do not balance the budget. This new role is essential for controlling incentives and suggests that firms in which ownership and labor are partly separated will have an advantage over partnerships in which output is distributed among agents. A new characterization of informative (hence valuable) monitoring is derived and applied to analyze the value of relative performance evaluation. It is shown that competition among agents (due to relative evaluations) has merit solely as a device to extract information optimally. Competition per se is worthless. The role of aggregate measures in relative performance evaluation is also explored, and the implications for investment rules are discussed.(This abstract was borrowed from another version of this item.)
4,125 citations