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Are Cooperatives Hybrid Organizations? An Alternative Viewpoint

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  • Valentinov, Vladislav
  • Fritzsch, Jana

Abstract

This paper questions the designation of cooperatives as hybrids of market and hierarchy on the grounds that cooperatives possess more differences from these governance mechanisms than commonalities with them. It is argued that the definition of a governance mechanism’s hybridity depends on the definition of the governance continuum, with the conventional market-hierarchy continuum failing to accommodate the specificity of the cooperative organization. Utilizing the logic of the property rights theory of the firm, the paper develops an alternative continuum for cooperative, hierarchical, and market organization. These governance mechanisms are shown to exhibit growing difference in the extensiveness of property rights assigned to the involved contractual parties. This continuum does not imply the hybridity of cooperatives; rather, it locates hierarchy between market and cooperative organization. The empirical validity of the new continuum is confirmed by the results of a survey of members of several Ukrainian rural cooperatives.

Suggested Citation

  • Valentinov, Vladislav & Fritzsch, Jana, 2007. "Are Cooperatives Hybrid Organizations? An Alternative Viewpoint," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 35(2), pages 1-16.
    • Handle: RePEc:ags:jlorco:58688
    DOI: 10.22004/ag.econ.58688
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    References listed on IDEAS

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    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Gardner, Bruce L. & Lerman, Zvi, 2006. "Agricultural Cooperative Enterprise in the Transition from Socialist Collective Farming," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 34(1), pages 1-18.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    4. William M. Dugger, 1996. "The Mechanisms of Governance," Journal of Economic Issues, Taylor & Francis Journals, vol. 30(4), pages 1212-1216, December.
    5. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    6. Valentinov, Vladislav, 2005. "The Organizational Nature of Agricultural Cooperatives: A Perspective from the Farm Problem Theory," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 33(2), pages 1-13.
    7. Fabio R. Chaddad & Michael L. Cook, 2004. "Understanding New Cooperative Models: An Ownership–Control Rights Typology," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(3), pages 348-360.
    8. Claude Ménard, 2004. "The Economics of Hybrid Organizations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 345-376, September.
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    Cited by:

    1. Saxe, Annegret, 2013. "Nonprofit Organizations and the Market-Hierarchy-Continuum: A research sketch," ZögU - Zeitschrift für öffentliche und gemeinwirtschaftliche Unternehmen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 36(1), pages 73-80.
    2. Valentinov, Vladislav & Iliopoulos, Constantine, 2012. "Property Rights Problems in Agricultural Cooperatives: A Heterodox Institutionalist Perspective," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(3).
    3. Valentinov, Vladislav & Iliopoulos, Constantine, 2012. "Property Rights Problems in Agricultural Cooperatives: A Heterodox Institutionalist Perspective," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(03), pages 1-9, August.

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