Member Heterogeneity in Agricultural Cooperatives: A Systems-Theoretic Perspective

Abstract

All over the globe, cooperatives are plagued by pervasive member heterogeneity problems that are induced by the radical and dynamic changes in the business environment. Most current solutions to these problems emphasize strengthening member loyalty and commitment. Yet, many of these solutions are symptomatic rather than fundamental. Searching for fundamental solutions, this paper draws on the Luhmannian system-environment paradigm. Bringing this paradigm to bear on the cooperative scholarship, the paper views cooperatives as operationally closed systems maintaining a precarious relationship to their outer environment, which includes cooperative members. In view of their operational closure, cooperatives tend to overstrain the carrying capacity of their environment by being active in the areas marked by a limited extent of the true commonness of member interests. This overstraining results in a host of problems associated with member heterogeneity. The fundamental solutions following from the system-environment paradigm require the adjustment of cooperative boundaries and goals in light of the evolving range of the true common interests of members. In terms of methodology, we review the extant literature, synthesize the main elements of the system-environment approach and conduct a meta-analysis of case studies and other empirical research to highlight our theoretical arguments.

Agricultural cooperatives remaining competitive in a globalised food system: At what cost to members, the cooperative movement and food sustainability?

“…In the case of supply cooperatives, farmers' relationship with their AC fits more that of a consumer or buyer in a purchasing group. These findings are in line with those of from economic studies of ACs, which have found these cooperative organisations are developing similar managerial hierarchies to that of private companies (Iliopoulos and Valentinov, 2018), and losing social capital as a result (Nilsson et al, 2012).…”

Social Capital and Financial Capital in Chinese Cooperatives

“…When researchers write about membership heterogeneity, there are different interpretations. On the one hand, such heterogeneity may imply problems such as costs of decision-making, postponement of urgent decisions, or favourable treatment of a specific group of members [40]. On the other hand, membership heterogeneity may be positive, if two or more member categories have supplementary attributes and if the member categories have sufficiently strong social relations to acknowledge that they are interdependent [41].…”

What Are the Conflicting Tensions in an Italian Cooperative and How Do Members Manage Them? Business Goals’, Integrated Management, and Reduction of Waste within a Fruit and Vegetables Supply Chain

“…In particular, agricultural cooperatives represent an answer to the global challenges that have seen farmers as victims of the market in agreements [48]. Indeed, cooperative theory advocates the preeminence of specific stakeholders, such as members and an organizational board, and thus the investigation of the dynamics of conflicts [49]. Therefore, cooperatives in agricultural areas have increasingly involved stakeholders as key actors.…”