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

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  • Jasper Grashuis

    (Department of Agricultural and Applied Economics, University of Missouri, Columbia, MO 65211, USA)

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 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.

Suggested Citation

  • Jasper Grashuis, 2018. "An Exploratory Study of Cooperative Survival: Strategic Adaptation to External Developments," Sustainability, MDPI, vol. 10(3), pages 1-15, February.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:3:p:652-:d:134062
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    Cited by:

    1. Hyejin Lee & Johan Swinnen & Patrick Van Cayseele, 2021. "Market power and the volatility of markups in the food value chain: the role of Italian cooperatives," Working Papers of LICOS - Centre for Institutions and Economic Performance 674093, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    2. Jasper Grashuis, 2018. "Joint ownership by farmers and investors in the agri-food industry: an exploratory study of the limited cooperative association," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-14, December.
    3. Constantine Iliopoulos & Vladislav Valentinov, 2018. "Cooperative Longevity: Why Are So Many Cooperatives So Successful?," Sustainability, MDPI, vol. 10(10), pages 1-8, September.
    4. Aomar Ibourk & Karim El Aynaoui, 2023. "Agricultural Cooperatives’ Sustainability and the Relevance of Start-Up Support Programs: Evidence from Cooperatives’ Level in Morocco," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    5. Elena Meliá-Martí & Guillermina Tormo-Carbó & Juan Francisco Juliá-Igual, 2020. "Does Gender Diversity Affect Performance in Agri-Food Cooperatives? A Moderated Model," Sustainability, MDPI, vol. 12(16), pages 1-27, August.
    6. Iliopoulos, Constantine & Valentinov, Vladislav, 2018. "Cooperative longevity: Why are so many cooperatives so successful?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10(10), pages 1-8.
    7. Jos BIJMAN & Markus HANISCH, 2020. "Understanding the heterogeneity among agricultural cooperatives," CIRIEC Working Papers 2013, CIRIEC - Université de Liège.
    8. Mozas-Moral, Adoración & Fernández-Uclés, Domingo & Medina-Viruel, Miguel Jesús & Bernal-Jurado, Enrique, 2021. "The role of the SDGs as enhancers of the performance of Spanish wine cooperatives," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    9. Jason R. V. Franken & Michael L. Cook, 2019. "Do Corporate Governance Recommendations Apply to U.S. Agricultural Cooperatives?," Sustainability, MDPI, vol. 11(19), pages 1-16, September.
    10. Castilla-Polo, Francisca & Sánchez-Hernández, M. Isabel, 2022. "International orientation: An antecedent-consequence model in Spanish agri-food cooperatives which are aware of the circular economy," Journal of Business Research, Elsevier, vol. 152(C), pages 231-241.
    11. Bo Wang & Po-Yuan Cheng & Brian Lee & Lih-Chyun Sun & Hung-Hao Chang, 2019. "Does Participation in Agricultural Cooperatives Affect Farm Sustainability? Empirical Evidence from Taiwan," Sustainability, MDPI, vol. 11(18), pages 1-12, September.
    12. Jasper GRASHUIS & Michael COOK, 2018. "An Examination Of New Generation Cooperatives In The Upper Midwest: Successes, Failures, And Limitations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 623-644, December.
    13. Juan Carlos Pérez-Mesa & Laura Piedra-Muñoz & Emilio Galdeano-Gómez & Cynthia Giagnocavo, 2021. "Management Strategies and Collaborative Relationships for Sustainability in the Agrifood Supply Chain," Sustainability, MDPI, vol. 13(2), pages 1-16, January.
    14. repec:lic:licosd:42421 is not listed on IDEAS
    15. Miguel Hernández‐Espallardo & Narciso Arcas‐Lario & Jorge L. Sánchez‐Navarro & Gustavo Marcos‐Matás, 2022. "Curbing members' opportunism in first‐tier and federated agricultural marketing cooperatives," Agribusiness, John Wiley & Sons, Ltd., vol. 38(1), pages 195-219, January.
    16. Jasper Grashuis, 2021. "A price premium for the farmer‐owned label? A choice experiment with milk consumers in the Netherlands," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 749-763, October.

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