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Chain Quality Management In Co-Operatives

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  • Hanf, Jon Henrich
  • Pieniadz, Agata
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    Abstract

    This paper investigates the relationship between the chosen quality strategy and the vertical co-ordination mechanism of a focal company by using new institutional economics, as well as strategic management approaches. The theoretical findings are tested using evidence from 19 of the largest Polish dairy cooperatives, surveyed in spring 2006. The results show that all co-ops recognise the changing market requirements and are treating food quality as more than plain food safety and the ability to continuously reproduce an ex ante defined set of attributes. However, compared to investor-owned dairies, co-ops are disadvantaged in quality-based competition due to their lower flexibility and access to financial and qualified human resources. To overcome this intense competition, co-ops modify their production profile, which leads to market segmentation. Moreover, the choice of quality strategy is an economic activity, guided by the co-op's profit expectations within the selected market. The chosen quality strategy determines the design of the vertical co-ordination mechanism. Thus, the higher the requirements for the final product, the further quality management systems go beyond a firm's boundaries, and the higher is the intensity of the relationships between the intermediary stages in the dairy chain.

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    Bibliographic Info

    Paper provided by German Association of Agricultural Economists (GEWISOLA) in its series 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 with number 7604.

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    Date of creation: 2007
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    Handle: RePEc:ags:gewi07:7604

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    Related research

    Keywords: Network theory; Relationship management; Quality management; Cooperatives; Poland; Institutional and Behavioral Economics;

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    1. George Hendrikse & Jos Bijman, 2002. "Ownership Structure in Agrifood Chains: The Marketing Cooperative," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 104-119.
    2. Jon H. Hanf & Rainer Kühl, 2005. "Branding and its consequences for German agribusiness," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 177-189.
    3. Briscoe, Robert & Ward, Michael, 2006. "In Small Both Beautiful and Competitive? A Case Study of Irish Dairy Cooperatives," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 34(2).
    4. Antle, John M., 2001. "Economic analysis of food safety," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 19, pages 1083-1136 Elsevier.
    5. Michael Boehlje, 1999. "Structural Changes in the Agricultural Industries: How Do We Measure, Analyze and Understand Them?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1028-1041.
    6. Fulponi, Linda, 2006. "Private voluntary standards in the food system: The perspective of major food retailers in OECD countries," Food Policy, Elsevier, vol. 31(1), pages 1-13, February.
    7. Kostas Karantininis & Angelo Zago, 2001. "Endogenous Membership in Mixed Duopsonies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1266-1272.
    8. Henson, Spencer & Reardon, Thomas, 2005. "Private agri-food standards: Implications for food policy and the agri-food system," Food Policy, Elsevier, vol. 30(3), pages 241-253, June.
    9. Harvey S. James & Michael E. Sykuta, 2005. "Property Right and Organizational Characteristics of Producer-owned Firms and Organizational Trust," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(4), pages 545-580, December.
    10. Hanf, Jon Henrich & Pieniadz, Agata, 2006. "Quality Management in Strategic Networks - Is there any Relevance in the Polish Dairy Sector?," 99th Seminar, February 8-10, 2006, Bonn, Germany 7770, European Association of Agricultural Economists.
    11. Laurian J. Unnevehr & Jay Y. Miller & Miguel I. G�mez, 1999. "Ensuring Food Safety and Quality in Farm-Level Production: Emerging Lessons from the Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1096-1101.
    12. Murray Fulton & Konstantinos Giannakas, 2001. "Organizational Commitment in a Mixed Oligopoly: Agricultural Cooperatives and Investor-Owned Firms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1258-1265.
    13. Trygve Ugland & Frode Veggeland, 2006. "Experiments in Food Safety Policy Integration in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 44, pages 607-624, 09.
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