Dimensions of Member Heterogeneity in Cooperatives and Their Impact on Organization – A Literature Review

Abstract

Member heterogeneity is often seen as a disadvantage of cooperatives.Though, a comprehensive understanding of member heterogeneity, its dimensions and impacts on member interests, organizations and their performance is still missing. The following literature review is intended to summarize the existing literature on member heterogeneity with a focus on agricultural cooperatives in order to provide further areas of research. Different dimensions of heterogeneity are identified and ways of measuring their impact on cooperative organization are proposed.

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

“…However, farmer cooperatives must beware of possible internal inefficiencies in case of organizational growth. Large farmer cooperatives may have poor social capital and face strong member heterogeneity [13,81], which may facilitate collective action problems [24,25]. Thus, paradoxically, strategic adaptation to spur survival may place farmer cooperatives on an accelerated path toward exit if further adaptation to both internal and external developments is unsuccessful.…”

“…The first three problems form an equity problem, and the latter two an agency problem. Each of the problems is caused by heterogeneous member attitudes and objectives, which are manifested by differences in various characteristics such as farm size, risk attitude, wealth, experience, political affiliation, and others [13]. Driven by organizational growth, member heterogeneity may cause degeneration if farmer cooperatives do not adapt successfully [25].…”

“…Also, the segmentation of critical food consumers necessitates a strong market orientation [10], but most farmer cooperatives have an inherent upstream bias [11,12]. Moreover, many farmer cooperatives see increasing heterogeneity in member attitudes and objectives [13,14].…”

A Review of the Empirical Literature on Farmer Cooperatives: Performance, Ownership and Governance, Finance, and Member Attitude

“…). Yet organizational growth is linked to increased heterogeneity in member attitudes and objectives (Hakelius and Hansson ), which relates negatively to various attributes and characteristics of the cooperative (Höhler and Kühl ). Meanwhile, farmer cooperatives also face numerous external developments which impact their survival and longevity, including consumer segmentation, price volatility, and policy change (Grashuis, forthcoming).…”

“…With increased competition at every stage of the agri-food value chain (Adjemian et al 2016), the capital constraint facilitates consolidation to allow net asset investments in scale and scope economies (Briggeman et al 2016). Yet organizational growth is linked to increased heterogeneity in member attitudes and objectives (Hakelius and Hansson 2016), which relates negatively to various attributes and characteristics of the cooperative (Höhler and Kühl 2017). Meanwhile, farmer cooperatives also face numerous external developments which impact their survival and longevity, including consumer segmentation, price volatility, and policy change (Grashuis, forthcoming).…”