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On the Evolution of Product Portfolio Coherence of Cooperatives versus Corporations: An Agent-Based Analysis of the Single Origin Constraint

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  • Hendrikse, G.W.J.
  • Smit, R.

Abstract

Agent-based methodology is adopted to analyze the relationship between governance structure and the evolution of product portfolio. A corporation and a cooperative are distinguished by the single origin constraint. The single origin constraint entails that the product requiring the inputs of the members of a cooperative will never be divested. It is es-tablished that a concentric diversification strategy results in randomly distributed clusters of related products of the product portfolio of corporations, while the single origin constraint of a cooperative is responsible for pulling all prod-ucts together in one cluster. More general, the centripetal effect of one product with infinite lifetime on portfolio com-position dominates the centrifugal effect of products with finite lifetime, regardless the number of products with finite lifetime.

Suggested Citation

  • Hendrikse, G.W.J. & Smit, R., 2007. "On the Evolution of Product Portfolio Coherence of Cooperatives versus Corporations: An Agent-Based Analysis of the Single Origin Constraint," ERIM Report Series Research in Management ERS-2007-055-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:10505
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    Cited by:

    1. Feng, Li & Hendrikse, George W.J., 2008. "On the Nature of a Cooperative: A System of Attributes Perspective," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44398, European Association of Agricultural Economists.
    2. George Hendrikse & Li Feng, 2013. "Interfirm cooperatives," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 26, Edward Elgar Publishing.
    3. Feng, L. & Hendrikse, G.W.J., 2007. "On the Nature of a Cooperative: A System of Attributes Perspective," ERIM Report Series Research in Management ERS-2007-093-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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    More about this item

    Keywords

    Concentric diversification; agent-based analysis; cooperatives; product lifetime;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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