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

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.

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