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Managerial vision bias and cooperative governance

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  • Deng, Wendong
  • Hendrikse, George

Abstract

Member and professional CEOs of cooperatives differ regarding their managerial vision toward upstream and downstream projects. We show that the managerial vision bias will cause inefficiency in the project implementation. Cooperatives with member CEOs are extremely upstream-focused because of the cascaded negative vision bias toward the downstream projects. When the downstream activities become more important, cooperatives need to replace the member CEOs by professional CEOs. However, a cooperative with a professional CEO may still be less efficient than an IOF (investor owned firm) if the member-dominated Board of Directors’ negative bias toward the downstream projects is too large. To solve this problem, the cooperative must include outside directors in the board to ease the negative bias of the Board of Directors toward the downstream projects.

Suggested Citation

  • Deng, Wendong & Hendrikse, George, 2014. "Managerial vision bias and cooperative governance," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182924, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:182924
    DOI: 10.22004/ag.econ.182924
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    Cited by:

    1. Wei, A. & Hendrikse, G.W.J., 2022. "Cognition and Incentives in Cooperatives," ERIM Report Series Research in Management ERS-2022-007-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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    Keywords

    Institutional and Behavioral Economics;

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