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Managerial vision bias and cooperative governance

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  • Wendong Deng
  • George W. J. Hendrikse

Abstract

What causes firms to behave the way they do when they face different investment opportunities? We argue that both people and processes are behind the decision-making of project implementation. Member and professional CEOs of cooperatives differ regarding their managerial vision towards upstream and downstream projects. Cooperatives with member CEOs are upstream focused and it is reflected by the cascading effect of negative vision bias towards downstream projects. When downstream activities become more important, cooperatives need to replace the member CEOs with professional CEOs. However, a cooperative with a professional CEO may still be in a disadvantageous position if the member-dominated Board of Directors' negative bias towards downstream projects is too strong, which may result in an investor owned firm being the efficient governance structure.

Suggested Citation

  • Wendong Deng & George W. J. Hendrikse, 2015. "Managerial vision bias and cooperative governance," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(5), pages 797-828.
    • Handle: RePEc:oup:erevae:v:42:y:2015:i:5:p:797-828.
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    File URL: http://hdl.handle.net/10.1093/erae/jbv017
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    Citations

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    Cited by:

    1. François Bareille & Florence Bonnet-Beaugrand & Sabine Duvaleix-Tréguer, 2017. "Objectives’alignment between membersand agricultural cooperatives," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 98(1-2), pages 75-91.
    2. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    3. Jasper GRASHUIS & Michael COOK, 2018. "An Examination Of New Generation Cooperatives In The Upper Midwest: Successes, Failures, And Limitations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 623-644, December.
    4. Harleman, Max & Weber, Jeremy G., 2017. "Natural resource ownership, financial gains, and governance: The case of unconventional gas development in the UK and the US," Energy Policy, Elsevier, vol. 111(C), pages 281-296.
    5. Jasper Grashuis, 2018. "Joint ownership by farmers and investors in the agri-food industry: an exploratory study of the limited cooperative association," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-14, December.
    6. Brown, A. & Fishenden, Jerry & Thompson, M. & Venters, Will, 2017. "Appraising the impact and role of platform models and Government as a Platform (GaaP) in UK Government public service reform: towards a Platform Assessment Framework (PAF)," LSE Research Online Documents on Economics 73864, London School of Economics and Political Science, LSE Library.
    7. Cadot, Julien & Féral, Arnaud, 2022. "Good Co-ops, Bad Co-ops : Financing Cooperatives in Asymmetric Information," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322550, Agricultural and Applied Economics Association.
    8. Claude Ménard, 2018. "Organization and governance in the agrifood sector: How can we capture their variety?," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 142-160, December.
    9. Cadot, Julien & Féral, Arnaud, 2023. "Cooperative Finance: Signaling Risk with Investment and Retained Earnings," 2023 Annual Meeting, July 23-25, Washington D.C. 335976, Agricultural and Applied Economics Association.
    10. Papaefthymiou, G. & Dragoon, Ken, 2016. "Towards 100% renewable energy systems: Uncapping power system flexibility," Energy Policy, Elsevier, vol. 92(C), pages 69-82.
    11. Maria Daskalaki, 2021. "The subversive potential of witchcraft: A reflection on Federici's Self‐reproducing movements," Gender, Work and Organization, Wiley Blackwell, vol. 28(4), pages 1643-1660, July.

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