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Business Functions and Conflicting Interests in Agricultural Cooperatives

Author

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  • Sandro Sillani

Abstract

This work is based on the hypothesis that members of cooperatives share their business privileges with co-heads (Associations, social groups ). In particular it is shown how some cooperation principles and the Italian norms on cooperatives’ profit division generate a principal-co-head problem not foreseen by the principal agent theory models available in literature.Therefore, using a model derived from the principal agent theory of Baumol for enterprises with diffused shareholdings, conflicting interests that arise from the formulation of the cooperatives’ aims and from profit division are discussed.Finally, throughout the analysis of economic accounts of some cooperatives, the existence of conflicting interests between farmers and co-heads foreseen by the theory are verified and the negative effects of this conflict on the members’ entrepreneurship, on the transparency of balance sheets and on self-financing of firms are highlighted.

Suggested Citation

  • Sandro Sillani, 2003. "Business Functions and Conflicting Interests in Agricultural Cooperatives," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, May.
    • Handle: RePEc:rar:journl:0139
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    More about this item

    Keywords

    Conflict; Cooperatives;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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