Cooperative firms are owned and run by their employees, who receive a fair share of the profit. I'm looking at any existing literature on the performance of such firms. Any suggestions? Thank you.
Not exactly on performance as in 'financial performance', but a sympathetic critique that examines some of the issues encountered by a major British cooperative: Paranque, B., & Willmott, H. (2014). Cooperatives—saviours or gravediggers of capitalism? Critical performativity and the John Lewis Partnership. Organization, 21(5), 604-625. doi:10.1177/1350508414537622
presently i am working on HR Practices in cooperatives so if you help regarding that i can help you.
* Mallikarjuna N.L(2014) “ Human Resource Development in Co-operatives: A Theoretical Understanding”, IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Vol 16, Issue 11.Ver. I (Nov. 2014), PP 01-05
*Nair T. Govindankutty,(l990) "Professional Management and Cooperatives", State Co-operative Union, Trivandrum, Paper presented at the Fourth Kerala Co-operative Congress, Kozhikode from 26 to 28 May, pp. 3-4.
Centrality measures (member centrality, patronage centrality, and domain centrality) as provided by Shah (1995) provides a good conceptual framework for assessing cooperative firm's performance.
Ref:
Shah, T. (1995) Making Farmers’ Cooperatives Work: Design, Governance and Management, New Delhi: Sage
One source of material is the website of the International Cooperative Alliance (http://ica.coop) which has links into various research areas. You will also find links to past ICA Research Conferences, as I am sure performance is a topic that has come up. Interesting material has also been produced by Mondragon, the large and successful Basque co-op. You can also find case studies on the website http://www.scottish-enterprise.com/microsites/co-operative-development-scotland (Co-operative Development Scotland, a Scottish government agency). Also have a look at http://www.co-oppundit.org - behind the rhetoric there are again links to possible practitioner materials. My own area is financial co-operatives & mutuals - with particular reference to Central Europe - but when I have a chance I will look back through some of my materials to get some more information for you.
The following and some citations included there may be helpful. I think that Cook's papers are of great value from an economics point of view
Kontolaimou, A. and K. Tsekouras. (2010). "Are the cooperatives the weakest link in European Banking? A non-parametric metafrontier Approach". Journal of Banking and Finance, 34, 1946-1957.
There is a vast amount of research dating back to 1950 on CAB international abstracts, especially in the World Agricultural Economics and Rural Sociology section. Worth getting a printout. The general conclusion is that rich commercial farmers employing professional managers do very well out of them. Poor, badly educated farmers not - they are often ripped off by corrupt or inefficient committees. And totally at the mercy of professional managers. And where there is a political content, results are particularly bad.
Cramer, C., D, J., Oya, C., & Sender, J. (2015). Fairtrade cooperatives in Ethiopia and Uganda: uncensored. Review of African Political Economy (http://dx.doi.org/10.1080/03056244.2014.976192). shows that Fairtrade cooperatives have all the corruptions and inefficiencies that this research shows we should expect.
With regard to the US, you may want to investigate ESOP (Employee Stock Ownership Programs). In the late 80's early 90's they were the rage with Owner/Managers of industrial distribution whom sought to transition out of their businesses - the perception within the market / employees as buyers - ESOPs provided substantial operational control and tax benefits to the Owner/s, while obtaining a significant premium for the business.
The Industrial Distribution program at Texas A&M would be an excellent resource to engage on this.
cooperative farming is quite common in India. you can also find literature on the success of cooperative firm in India. the brand 'AMUL' is good example of success of cooperative firm.
These papers about the comparative analysis of workers’ cooperatives vs. capitalist firms may be of interest to you (from the oldest to the most recent ones) :
Ben-ner, A. 1988. 'The life cycle of worker-owned firms in market economies.' Journal of Economic Behavior & Organization, 10:3, 287-313.
Ben-Ner, A. 1988. 'Comparative empirical observations on worker-owned and capitalist firms.' International Journal of Industrial Organization, 6:1, 7-31.
Pérotin, V. 2006. 'Entry, exit, and the business cycle: Are cooperatives different?' Journal of Comparative Economics, 34:2, 295-316.
Burdín, G. & Dean, A. 2009. 'New evidence on wages and employment in worker cooperatives compared with capitalist firms.' Journal of Comparative Economics, 37:4, 517-33.
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With regard to the performance of financial cooperatives during crises, there is a report of the International Labour Office, which can be found following this link:
You may find some views on differential productive perfroemance of cooperative banks at a European level in:
Kontolaimou, A. and K. Tsekouras. (2010). "Are the cooperatives the weakest link in European Banking? A non-parametric metafrontier Approach". Journal of Banking and Finance, 34, 1946-1957.
Talk to someone in the Centre for Mutuals in Oxford? Ruth Yeoman for example. Also google David Erdal, and read his lovely book on worker ownership.There's a recent summary of the literature in this book - Martin Parker et al (eds) (2014) Companion to Alternative Organization. Routledge. All the best, M
There is a huge literature on the performance of cooperatives. You may want to look up Virginie Perotin: https://www.researchgate.net/profile/Virginie_Perotin
One of her most recent papers is:
Worker Cooperatives: Good, Sustainable Jobs in the Community
Virginie Pérotin
University of Leeds - Leeds University Business School (LUBS)
May 20, 2014, Journal of Entrepreneurial and Organizational Diversity, Vol. 2, No. 2 (2013), 34-47
The broader implications of your question have intrigued me for some time. Primarily in the context of whether cooperation could be a viable alternative to free market competition. I have some special experiences with these issues. I have an MBA from the Harvard Business School which has probably done more than anyplace else to refine and elevate the practices of capitalism. I wonder if cooperation might be more commonly practiced if it received that same amount of study and attention
I have been directly involved with cooperative organizations all my life. As a member, member worker, and board member of several retail food cooperatives; board member of a large cooperative food wholesaler; and as a legal and management advisor to several cooperatives, primarily in the food sector.
By the way, in the US, we distinguish among worker-owned and run collectives, producer cooperatives (e.g., in the dairy industry), and customer/member-owned and professionally run cooperatives. They exist at both the retail and wholesale levels.
I wish that I had data or articles on the performance of cooperative entities to share with you.
I did my PhD on the Australian Workers Co-operatives, I focused on "Organisational Management" "Human Resource Management" and "Performance Management" I found that for the case of Australia the concepts were used politically to test change to the adversarial employee Employer Relations that existed at the time. The Federal Government wanted to introduce and influence mutual relations with less legalism of the processes. Secondly, I found that the politic-cultural system matters and it needs to be well navigated. Thirdly I found that people confuse the political philosophies of "communism" or "Socialism" with the co-operative means of production are claimed without deep thinking of what is happening. Fourly, most of the organisations started and managed under the the concept failed because of the in-congruent agendas of the funding agencies and those doing the work and un-favorable social climate, the ideas were good but being planted in a non-receptive climate. Please feel to obtain my PhD Thesis from La Trobe University, Australia and read it. It has good learn-able material of case studies from Australia.
I´m studying the history of popular banks (caisses popularies) in my country, Uruguay. In this case, there is a strange phenomenon linked to cooperativism, I write to ask for advise about it.
This popular banks were born as cooperatives but after many years (30 or 40 of life), they began to switch into commercial banks. The questions are two: is that something usual (successful cooperatives becoming normal commercial companies) after a period of time? are cooperatives more "resilient" than other companies?
I wish my paper is helpful (see below). Regarding your first question, we identify analogous phenomenon, with respect to the productive performance of coperative banks, in the European Banking system.
Kontolaimou, A. and K. Tsekouras. (2010). "Are the cooperatives the weakest link in European Banking? A non-parametric metafrontier Approach". Journal of Banking and Finance, 34, 1946-1957.
Regarding your second question it would be helpful to define "resilience" clearly. Maybe a survival model could be useful
I think that your primary assumption should be corrected as follow:"Cooperative enterprises are established and owned and run by their members." Remember that the consumers cooperative of Rochdale, not the original one, but the one of today, the members are not the employees of this cooperative. You are too simplistic in your opening statement, I assume.
Members are not receiving faire share of any profit since profit doesn't exist in a cooperative, a real one, and a cooperative, any, is established and created by the members to have out their participation the highest possible return and at the same time in order to get that, to decrease to minimum possible the total expenditure of the cooperative.
The idea that a cooperative manager is measured by the amount of profit s/he generates to the cooperative is a false one. A successful manger of a cooperative is the one who terminates the financial year with zero surplus, and by so doing the pockets of members are filling up with more revenue. And this is the reason why they have established their cooperative.
There is a special journal Annals and Public and Cooperative Economics. Its older title was "Annals of Public and Cooperative Economy". It is covered by SCOPUS for 1925 --1942, and since 1948 to present. You can find a lot in that journal on your topic.
You are talking of a very rare thing, a firm run by its workers.
More common and very successful are farmers' cooperatives, owned and run by farmers to market their product. The research over the years shows that they can be very efficient when the farmers are educated and have large farms. They are sometimes efficient with small farmers if they can find an honest and efficient manager. They have a high failure rate if there is a political purpose. There is an enormous literature on this in agricultural markets.
There is a publication from 2012 "The Co-operative Model in Practice - International Perspectives" which may be useful. As a contributor I have a pdf copy of the book. I have also carried out work in Slovenia & Portugal on tourism co-operatives in rural/peripheral locations; tourism co-ops can either bring together small tourism business owners or act as credit co-ops.
Co-operative Development Scotland is a source of information as they assist employee-owned start-ups
Also a useful policy group is "Common Weal" which has looked at employee-owned co-operatives. The problems with workers co-ops which have been identified for Scottish Railways and for Scottish Water (both state-companies) is how you fit in the consumer voice. If you look at a mutual life assurer (Royal London being the prime example) they get round this by making employees members as well as investors
When the Communist rule in Albania broke down, I visited ex-cooperaives. The members who had been forced to join split them up. They pulled down the buildings and divided the bricks between the ex-members.
Lithuania, again, split them.
But there was a logic in having large, well financed farms, so in some Eastern Europe countries they effectively became capitalist farms owned by the ex-members.
In the Third World, virtually all ex-pat advisers started out with a political and emotional liking for cooperatives, which usually vanishes after two or three years.