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The Demutualization of a Cooperative - Swedish Meats

  • Lind, Lena W.
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    This study gives a theoretical explanation to why the slaughter cooperative Swedish Meats demutualized in 2007. The hypothesis is that the problems related to the vaguely defined property rights of the cooperative raised the members’ agency costs to an extent that these costs exceeded the members’ perceived benefits from trading with the cooperative. To test this hypothesis, interviews with key stakeholders in the former Swedish Meats were conducted. The findings indicate that the problems of vaguely defined property rights made it impossible for the members to improve the cooperative’s profitability. Due to poor member governance, urgent long-term investments, for instance in marketing and product development, were not undertaken. Additionally, the persistently low profitability caused members to leave the cooperative, whereby economies of scale in the production could not be attained.

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    File URL: http://purl.umn.edu/114382
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    Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114382.

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    Date of creation: 2011
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    Handle: RePEc:ags:eaae11:114382
    Contact details of provider: Web page: http://www.eaae.org
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    1. Nilsson, Jerker & Kihlen, Anna & Norell, Lennart, 2009. "Are Traditional Cooperatives an Endangered species? About Shrinking Satisfaction, Involvement and Trust," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 12(4).
    2. Michael E. Sykuta & Michael L. Cook, 2001. "A New Institutional Economics Approach to Contracts and Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1273-1279.
    3. Nilsson, Jerker, 1997. "Inertia in Cooperative Remodeling," Journal of Cooperatives, NCERA-210, vol. 12.
    4. Nilsson, Jerker, 2001. "Organisational principles for co-operative firms," Scandinavian Journal of Management, Elsevier, vol. 17(3), pages 329-356, September.
    5. Abigail M. Hind, 1999. "Co-operative Life Cycle and Goals," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 536-548.
    6. Abigail M. Hind, 1997. "The Changing Values of the Cooperative and Its Business Focus," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1077-1082.
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