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Are Cooperatives Hybrid Organizations? An Alternative Viewpoint

  • Valentinov, Vladislav
  • Fritzsch, Jana

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.

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Article provided by Hebrew University, Center for Agricultural Economic Research in its journal Journal of Rural Cooperation.

Volume (Year): 35 (2007)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:ags:jlorco:58688
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  1. Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. 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).
  4. 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).
  5. Claude Ménard, 2004. "The Economics of Hybrid Organizations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 345-, September.
  6. 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.
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