Technical assistance: A determinant of cooperative member loyalty

Abstract

Cooperative organizations face problems with the opportunistic behavior of their members, such as the "free-rider problem". To mitigate this problem, cooperative governance systems develop strategies that aim to maximize the economic gains of cooperative members through investments in technical assistance programs. The purpose of our research is to verify if the participation in the technical assistance program increases the probability of loyalty of dairy cooperative members. To this end, we developed an econometric model with logistic regression, using secondary data extracted from the Programa Gerencial Leite. The program is developed by the cooperative system of the State of Rio Grande do Sul in Brazil and comprises 24 cooperatives. The collected data are longitudinal and include the commercial milk transactions carried out between cooperative members and cooperatives during the years 2014 to 2018, totaling 10,548 cooperative members and 28,765 observations collected and analyzed during this period. Our results indicate that participation in the technical assistance program offered by the cooperative governance increases the probability of loyalty of dairy farmers.

Sustainability Indicators: Information Asymmetry Mitigators between Cooperative Organizations and Their Primary Stakeholders

“…They do not move from one location to another, though they could, despite it happening often with private organizations. The closure of the activities of a cooperative organization occurs only due to the sustainability lack established by poor management or the lack of members' participation [20].…”

“…By establishing disclosure policies to reduce information asymmetry, cooperative organizations can minimize adverse selection and moral hazard possibilities [1,2]. Otherwise, stakeholders may choose between the following: not working with the cooperative and reducing the likelihood of adverse selection for the delivery and services of the product provided; or to continue working with the cooperative and run the risk of not having their interests met, being at the manager's mercy, with moral hazard [1,2,20,62].…”

“…By disclosing sustainability information, cooperatives increase transparency, increasing reliability, reputation, and legitimacy and enabling strengthening the relationship between cooperatives' management and members [20]. They can also allow benchmarking concerning competitors, signal competitiveness, motivate employees, and support information by encouraging its cooperative culture [21,22].…”

Culture: A Pillar of Organizational Sustainability

“…Organizations can minimize the adverse selection and moral hazard possibilities by establishing disclosure policies to reduce information asymmetry. Otherwise, stakeholders can choose between not working with the organization and reducing the adverse selection possibility for commercialization transactions, services provision, and other negotiations or remain working with the organization and run the risk of not having their interests met, being at the manager's mercy, with moral hazard [1,2,24,59].…”

“…By disclosing sustainability information, organizations increase transparency, increasing the organization's management reliability, reputation, and legitimacy, strengthening the relationship between management, customers, and employees [19,24]. They can also allow benchmarking against competitors, signal competitiveness, motivate employees, and support information encouraging organizational culture [25,26].…”