Essays on co-operatives’ idiosyncrasies: structure, performance, and membership

Theo Benos

Research output: Thesisinternal PhD, WU

Abstract

The idiosyncratic member-owned, principles-driven, and people-centered business model of co-operatives (co-ops) has persistently been adept at combining a social mission with economic goals, creating superior value for its member-users and benefiting society at large. Currently, co-ops occupy a strong socio-economic position globally (e.g., three million co-ops with a billion members and 100 million employees), and are treated by policymakers as vehicles for sustainable development. Still, while academic studies and policy reports on co-op issues abound, some co-op idiosyncrasies remain obscured or under-researched. Firstly, few studies have examined the relationship between co-op organizational attributes and features of mainstream businesses (e.g., market-oriented strategies). Secondly, extant research has neglected to accurately address the idiosyncratic nature of co-ops when investigating their performance, typically adopting a single-objective angle (e.g., profit-maximization) and omitting the social-membership standpoint (e.g., member benefits). Thirdly, the social component of membership has attracted limited attention in general. These knowledge gaps persist because co-ops have been overlooked by research in mainstream business disciplines (e.g., management, marketing). In this dissertation, we aim to illuminate such co-op idiosyncrasies and confront them with business features ingrained in conventional or other organizational forms (e.g., social enterprises). In so doing, we advocate a dual outlook, deliberating upon co-ops’ capacity and proclivity to attend to (often contradictory) business and social demands.

In Chapter 2, we aim to examine the influence of idiomorphic co-op organizational attributes on co-op performance and on mainstream strategic attributes (market and brand orientation), as well as the influence of the latter on co-op performance. Motivated by a policy change, we develop an empirically grounded classification of traditional versus restructured co-op organizational attributes and argue that the restructured ones positively influence both market orientation and performance. We empirically test the attribute-performance relationships with agribusiness co-ops in two studies (Study 2 replicates Study 1 over time at a smaller scale). We exhibit that strategic attributes have a larger impact on performance than organizational attributes, although part of the latter (e.g., exit barriers, differentiated pricing) exert some influence on market orientation. We conclude that greater emphasis should be placed on customer-focused strategies like market and brand orientation, while reforms of organizational structure should be primarily geared toward stimulating member commitment in the long run.

In Chapter 3, we aim to deliver a comprehensive dashboard for co-op performance assessment that reflects co-op specificities, accounting for multiple performance objectives and harmonizing business–social aspects. We concentrate on the agricultural domain, but we consider all sectors, in three phases. In phase 1, we consolidate empirical research on co-op performance metrics and create a preliminary framework, in which we detail five sub-categories. In phase 2, we employ a Delphi study with co-op experts to test the framework. As a result, we narrow it down to a workable bundle of three sub-categories. The first sub-category (i.e., BFA – Business Financial Appraisal) reflects the business aspects; the second (i.e., SMA – Subjective Membership Appraisal) conveys the social-membership viewpoint; and the third (i.e., OMA - Objective Membership Appraisal) solidifies the first two. In phase 3, we review comparable research efforts for an organizational form (i.e., social enterprises) that also blends business with social components and faces similar business–social challenges. This inquiry prompts a reinforcement of the social perspective with social value measurement elements beyond the co-op boundaries. The dashboard we eventually deliver serves as a “currency matrix” (a “medium of knowledge exchange” or common benchmark) for future empirical studies.

In Chapter 4a, we aim to explore a core co-op threat (i.e., member-customer ostracism) relating to co-ops’ social environment, and develop a diagnostic tool. We adopt a member-customer perspective, conceptualize co-op ostracism, and argue that it elicits negative outcomes, regardless of the source (e.g., members, employees). Following a meticulous seven-step process and using different types of co-ops, we develop a reliable and valid diagnostic tool. We also find that co-op ostracism is fairly common in co-op life, hurting member-customers and the co-op alike. In Chapter 4b, we aim to delve into the toxic effects of co-op ostracism. We adopt a relationship marketing perspective and develop a conceptual model to empirically assess its’ influence on critical relational exchange and membership outcomes. Across three different co-op samples and domains (i.e., agribusiness, retail banking, consumer), we find support for our premise that co-op ostracism acts as a “relationship poison” for both member-customers and the co-op, despite the presence of other relationship-building (i.e., trust) or relationship-destroying accounts (i.e., social undermining). Still, we develop an “antidote” (a coping strategy) to buffer ostracism’s deleterious effects and empirically test it in an extra study with co-op members. Indeed, we show that coupling entitativity with cognitive capital attenuates ostracism’s impact.

Overall, this dissertation builds on rich settings, collection procedures, data, and analysis methods, and sheds light on co-op idiosyncrasies that, together with mainstream business features, shelter unique co-op assets and condition co-ops’ sustainability. This dissertation will hopefully aid co-op leaders in making informed decisions about organizational and strategic attributes, documenting co-ops’ socio-economic impact consistently, and fending off a core social threat to the central co-op element, the membership.

Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Wageningen University
Supervisors/Advisors
  • Pennings, Joost, Promotor
  • Kalogeras, Nikos, Co-promotor
  • de Ruyter, Ko, Co-promotor, External person
Award date11 Sep 2019
Place of PublicationWageningen
Publisher
Print ISBNs9789463439381
DOIs
Publication statusPublished - 2019

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