Editorial

8 pages, 209 KiB

Open AccessEditorial

Cooperative Longevity: Why Are So Many Cooperatives So Successful?

by Constantine Iliopoulos and Vladislav Valentinov

Sustainability 2018, 10(10), 3449; https://doi.org/10.3390/su10103449 - 27 Sep 2018

Cited by 31 | Viewed by 4276

Despite popular misconceptions, cooperatives present a very successful organizational form worldwide. A recent study found that in the U.S., for example, 134 agricultural cooperatives celebrated their 100th anniversary in 2014. This observation on cooperative longevity is not matched by a corresponding research effort [...] Read more.

Despite popular misconceptions, cooperatives present a very successful organizational form worldwide. A recent study found that in the U.S., for example, 134 agricultural cooperatives celebrated their 100th anniversary in 2014. This observation on cooperative longevity is not matched by a corresponding research effort on what makes cooperatives so successful. Most of the extant research seems to focus on intra-cooperative problems that posit significant challenges to cooperatives. This special issue of Sustainability bridges the considerable gap between scholarly work and reality. By focusing on what makes cooperatives so successful for such a long period of time, this issue sheds light on key aspects of cooperative longevity. Bridging social capital, fundamental solutions to excessive heterogeneity-induced high ownership costs, tinkering, cooperative genius, and superior capacity to adapt to shocks and changes are among the factors identified to explain extended cooperative longevity. The insights thereby gained are useful to students of cooperatives, practitioners, and policy makers. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

Research

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15 pages, 253 KiB

Open AccessArticle

Exploring the Sustainability of the Cooperative Model in Dairy: The Case of the Netherlands

by Jos Bijman

Sustainability 2018, 10(7), 2498; https://doi.org/10.3390/su10072498 - 17 Jul 2018

Cited by 25 | Viewed by 7644

Abstract

Dairy cooperatives have existed in the Netherlands for more than 130 years. They hold a joint market share of more than 80% since the 1950s. This suggests that cooperatives are durable organizations in the dairy industry of the Netherlands. However, the number of [...] Read more.

Dairy cooperatives have existed in the Netherlands for more than 130 years. They hold a joint market share of more than 80% since the 1950s. This suggests that cooperatives are durable organizations in the dairy industry of the Netherlands. However, the number of dairy cooperatives has declined tremendously, with only five processing cooperatives left in 2015. The paper explores the paradox of high cooperative market share over a long period of time with a steady decline in the number of cooperatives. This historical account of the Dutch dairy industry distinguishes four periods of cooperative evolution. Classical theoretical explanations for the existence of cooperatives, such as bargaining power and transaction costs economics, can explain the rise of dairy cooperatives. However, they cannot sufficiently explain the long term success of the cooperative model in the Dutch dairy industry. Additional explanations can be found in institutional theory, including the impact of an enabling institutional environment. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

24 pages, 1831 KiB

Open AccessArticle

Size of Membership and Survival Patterns of Producers’ Organizations in Agriculture—Social Aspects Based on Evidence from Poland

by Aleksandra Chlebicka and Michał Pietrzak

Sustainability 2018, 10(7), 2293; https://doi.org/10.3390/su10072293 - 03 Jul 2018

Cited by 18 | Viewed by 4126

Abstract

Agricultural producer organizations are considered to be an efficient way for farmers to build up bargaining power, thereby increasing farmers’ incomes. While making a contribution to the research on the longevity of cooperatives, we tried to identify some regularities concerning the survival of [...] Read more.

Agricultural producer organizations are considered to be an efficient way for farmers to build up bargaining power, thereby increasing farmers’ incomes. While making a contribution to the research on the longevity of cooperatives, we tried to identify some regularities concerning the survival of these entities in the specific context of transition economies. In this paper, we look more closely at potential relationships between the development of producers’ organizations (POs) and the size of their membership. Then, we link the size of the membership with the concept of social capital. For our purposes, it is necessary to depart from using a general concept of social capital and to differentiate between bonding and bridging social capital. Our results, based on two unique datasets from Poland, clearly showed that relatively larger POs have higher rates of survival. This, in turn, is correlated with the stock and the type of social capital. The main contribution of the study is in identifying the relevance of the size of the membership of newly-established POs to their survival. The findings are followed by policy recommendations that may be useful in the context of promoting farmers’ cooperation in recognizing the low stock of social capital, specifically bridging social capital. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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15 pages, 899 KiB

Open AccessArticle

Cooperative Longevity and Sustainable Development in a Family Farming System

by Cynthia Giagnocavo, Emilio Galdeano-Gómez and Juan Carlos Pérez-Mesa

Sustainability 2018, 10(7), 2198; https://doi.org/10.3390/su10072198 - 27 Jun 2018

Cited by 25 | Viewed by 7669

Abstract

This paper focuses on small holding, family farming in Southeast Spain where agricultural economic activity is predominantly organized around cooperative business models. A variety of diverse studies on the Almería agricultural and credit cooperative sector and the exploration of social-economic and eco-social indicators, [...] Read more.

This paper focuses on small holding, family farming in Southeast Spain where agricultural economic activity is predominantly organized around cooperative business models. A variety of diverse studies on the Almería agricultural and credit cooperative sector and the exploration of social-economic and eco-social indicators, in addition to economic-market indicators are presented. Each correspond to a cooperative “logic” that spans theoretical perspectives from the dominant economic-market model, new institutionalism, and an eco-social approach, echoing theories on collective coordination governance, and the avoidance of the “tragedy of the commons”. The latter is of particular importance given environmental challenges and scarce resources for agricultural activity. The cooperatives in Almería have increasingly relied on collective collaboration and coordination in order to meet social-economic and social-ecological challenges, transforming their role from that founded on a market dominant logic to that of cooperation as a coordination mechanism based on the mutual benefit of the community and environment. In turn, their ability to meet a wide range of needs and challenges of members and the community leads to their longevity. Cooperatives are able to act as both a market and non-market coordination mechanism, balancing the economic, social, and environmental dimensions, such that neither market nor non-market logics are dominant or exclusive. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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31 pages, 6765 KiB

Open AccessArticle

A Predictive Analytics Understanding of Cooperative Membership Heterogeneity and Sustainability

by Matthew Elliott, Lisa Elliott and Evert Van der Sluis

Sustainability 2018, 10(6), 2048; https://doi.org/10.3390/su10062048 - 16 Jun 2018

Cited by 14 | Viewed by 3923

Abstract

Recent advances in cooperative theory have focused on membership heterogeneity as being a significant challenge for cooperative sustainability. We use predictive analytics to forecast U.S. farmer cooperative sustainability at an aggregate level and include multiple dimensions of membership heterogeneity. We report the importance [...] Read more.

Recent advances in cooperative theory have focused on membership heterogeneity as being a significant challenge for cooperative sustainability. We use predictive analytics to forecast U.S. farmer cooperative sustainability at an aggregate level and include multiple dimensions of membership heterogeneity. We report the importance and shape of the effect of membership heterogeneity when predicting and forecasting cooperative sustainability in the near-term. We also report forecasts of cooperative sustainability given expected changes to membership heterogeneity. The data this study used are from the United States Department of Agriculture (USDA)-Economic Research Service (ERS) Agricultural Resource Management Survey (ARMS) joined with USDA-Rural Development cooperative financial data at the state level. Membership heterogeneity was found to be less relevant than other variables included in the model for predicting cooperative business volume and number of cooperatives headquartered per state, and an estimate of cooperative sustainability. Membership heterogeneity effects were mostly offsetting given expected changes to member heterogeneity, and/or were offset due to changes to other macro factors. Consequently, we conclude membership heterogeneity may affect the number of cooperatives and extent consistent with theoretical literature at a micro level; however, we also expect a similar level of sustainability of cooperatives at an aggregate level in the near-term despite changes to membership heterogeneity. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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20 pages, 723 KiB

Open AccessArticle

A Life Cycle Explanation of Cooperative Longevity

by Michael L. Cook

Sustainability 2018, 10(5), 1586; https://doi.org/10.3390/su10051586 - 16 May 2018

Cited by 83 | Viewed by 12127

Abstract

A micro analytical, interdisciplinary informed framework is presented to postulate why and how some cooperatives endure for long periods of time. This five-phase framework was developed through an extended research process employing inductive and deductive approaches. The paper concludes that cooperative longevity is [...] Read more.

A micro analytical, interdisciplinary informed framework is presented to postulate why and how some cooperatives endure for long periods of time. This five-phase framework was developed through an extended research process employing inductive and deductive approaches. The paper concludes that cooperative longevity is associated with multiple factors, primarily among them, ability to adapt and ameliorate frictions and subgroup factions. This adaptability leads to multi “life cycles”. Cooperative multi life cycle regeneration is facilitated by a learned and embedded process called “cooperative genius”. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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22 pages, 1014 KiB

Open AccessArticle

Member Heterogeneity in Agricultural Cooperatives: A Systems-Theoretic Perspective

by Constantine Iliopoulos and Vladislav Valentinov

Sustainability 2018, 10(4), 1271; https://doi.org/10.3390/su10041271 - 20 Apr 2018

Cited by 32 | Viewed by 5406

Abstract

All over the globe, cooperatives are plagued by pervasive member heterogeneity problems that are induced by the radical and dynamic changes in the business environment. Most current solutions to these problems emphasize strengthening member loyalty and commitment. Yet, many of these solutions are [...] Read more.

All over the globe, cooperatives are plagued by pervasive member heterogeneity problems that are induced by the radical and dynamic changes in the business environment. Most current solutions to these problems emphasize strengthening member loyalty and commitment. Yet, many of these solutions are symptomatic rather than fundamental. Searching for fundamental solutions, this paper draws on the Luhmannian system-environment paradigm. Bringing this paradigm to bear on the cooperative scholarship, the paper views cooperatives as operationally closed systems maintaining a precarious relationship to their outer environment, which includes cooperative members. In view of their operational closure, cooperatives tend to overstrain the carrying capacity of their environment by being active in the areas marked by a limited extent of the true commonness of member interests. This overstraining results in a host of problems associated with member heterogeneity. The fundamental solutions following from the system-environment paradigm require the adjustment of cooperative boundaries and goals in light of the evolving range of the true common interests of members. In terms of methodology, we review the extant literature, synthesize the main elements of the system-environment approach and conduct a meta-analysis of case studies and other empirical research to highlight our theoretical arguments. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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18 pages, 302 KiB

Open AccessArticle

The Firm as a Common. Non-Divided Ownership, Patrimonial Stability and Longevity of Co-Operative Enterprises

by Ermanno C. Tortia

Sustainability 2018, 10(4), 1023; https://doi.org/10.3390/su10041023 - 30 Mar 2018

Cited by 31 | Viewed by 4499

Abstract

Contemporary literature dealing with the governance and exploitation of common-pool natural resources was initiated by Elinor Ostrom in 1990, and has been growing fast ever since. On the contrary, within the same research stream, the study of the presence and economic role of [...] Read more.

Contemporary literature dealing with the governance and exploitation of common-pool natural resources was initiated by Elinor Ostrom in 1990, and has been growing fast ever since. On the contrary, within the same research stream, the study of the presence and economic role of common resources in entrepreneurial organizations is, to date, under-researched. This work endeavors to fill some theoretical gaps in this research perspective by: (i) spelling out a new-institutionalist framework for the analysis of the accumulation and governance of common capital resources within organizational boundaries; (ii) considering co-operative enterprises as the organizational form that, on the basis of historical record, and of behavioral and institutional characteristics, demonstrated to be most compatible with a substantial role for common and non-divided asset-ownership and with its governance thereof; and (iii) evidencing and explaining the theoretical connection between cooperative longevity and the presence of non-divided asset ownership. The economic forces influencing the optimal level of self-financed common capital resources in co-operatives are enquired. Conclusions to the paper evidence the main reasons why the new approach can better explain than preceding ones the economic sustainability and longevity of cooperative enterprises. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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15 pages, 245 KiB

Open AccessArticle

An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments

by Jasper Grashuis

Sustainability 2018, 10(3), 652; https://doi.org/10.3390/su10030652 - 28 Feb 2018

Cited by 36 | Viewed by 5191

Abstract

Farmer cooperatives have been portrayed in the literature as flawed and complex organizations with ambiguous objectives. However, research on the observed survival of farmer cooperatives in spite of their weaknesses and limitations is scarce, in part because academic attention to cooperative performance has [...] Read more.

Farmer cooperatives have been portrayed in the literature as flawed and complex organizations with ambiguous objectives. However, research on the observed survival of farmer cooperatives in spite of their weaknesses and limitations is scarce, in part because academic attention to cooperative performance has been static and introspective. Using evidence collected from case studies and print media publications, this paper contributes to the literature with a qualitative study of farmer cooperatives which spurred survival and longevity by means of strategic adaptation in response to four current developments in the external environment: industry consolidation, consumer segmentation, price volatility, and policy change. The qualitative study concludes farmer cooperatives in general respond to such developments by means of organizational growth. Common strategies are vertical integration, geographic expansion, and portfolio diversification. While survival and longevity are promoted in theory, strategic adaptation also often facilitates the pursuit of investor-oriented as opposed to user-oriented objectives. In some scenarios, member ownership and control may become burdensome to the business and prompt conversion to another structure if further adaptation to internal and external developments is unsuccessful. More research is therefore needed to explore the dynamic and variable impact of strategy on cooperative survival. Full article

(This article belongs to the Special Issue Cooperative Longevity: Why are So Many Cooperatives So Successful?)

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