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Communication and Innovation in Cooperatives

Author

Listed:
  • Xiao Peng

    (Erasmus University
    Department of Organization and Personnel Management)

  • George Hendrikse

    (Erasmus University)

  • Wendong Deng

    (Erasmus University)

Abstract

Cooperatives differ in their intensity of horizontal and vertical communications, their innovation policies, and their centralization of decision-making power. We aim to establish relationships between these communication, innovation, and decision-making aspects of cooperatives, and to identify the circumstances when a particular configuration adds most value. Horizontal and vertical communications are analyzed in a decentralized and centralized cooperative. Horizontal communication (HC) is characterized as the exchange of information between farmers in the society of members. It is associated with process innovation. Vertical communication (VC) is the exchange of information between a member and the CEO of the cooperative enterprise. It is associated with product innovation. The CEO decides regarding the deliveries of the member and the level of vertical communication in the centralized cooperative, while these decisions are taken by the members in the decentralized cooperative. We establish that the decentralized cooperative is efficient at an intermediate level of the VC cost coefficient and when the HC cost coefficient is above a certain level, while the centralized cooperative is efficient in the other cases.

Suggested Citation

  • Xiao Peng & George Hendrikse & Wendong Deng, 2018. "Communication and Innovation in Cooperatives," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(4), pages 1184-1209, December.
    • Handle: RePEc:spr:jknowl:v:9:y:2018:i:4:d:10.1007_s13132-016-0401-9
    DOI: 10.1007/s13132-016-0401-9
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