Collective decision making

What about the cost of collective decision making?

Can you share some papers to look at the benefits of collective decision making? Thank you.

According to all knowledge and experience that we have accumulated over the last centuries, cooperative initiatives work best when they are organized bottom-up. Central decision-making might work but only in the short run. Of course, collective decision making is not without costs, which are part of organizational costs. Hansmann argues that when market contracting costs are higher than collective decision making costs, then collective decision making is chosen. Empirical literature suggests that this is what happens in the real world.

Hansmann (1996), The Ownership of Enterprise is a classic. You could also read papers from this special issue: https://www.wageningenacademic.com/toc/jcns/16/1, and from the more recent volume of Sustainability that I co-edited with Prof. Valentinov: http://www.mdpi.com/journal/sustainability/special_issues/cooperative_longevity.

Sorry I saw your answers until now. I'm going to read your suggestion and comment if needed.

When I say centralize decision-making I mean the conformation of a formal organisation, therefore, decision and managements is left to directors and manager. When I say collective decision-making, I mean the whole group making decisions. I didn't put it clear from the beginning I guess.

Does it make sense?

I would like to know more why you mentioned centralized decision-making work on the short run. What should I understand by centralized decision-making?

Dear Santiago,

what you call centralised decision-making I would call governance. As a member-owner of a cooperative, which decisions you delegate to the BoD, the management and so on, determines your governance model. This is rather long discussion that we cannot make over RG. However, from what I have seen over the years while working with agricultural cooperatives in several countries is that at the end there is a limit to what an member-owner can delegate to professionals. Goal setting, monitoring, overall strategy, and a few other key decisions) are better not delegated to non-owners. I am currently working with some colleagues on a paper (part of which I presented at this year's ICA research conference at Wageningen, the Netherlands) that addresses the question of what cooperative members should/not delegate to professionals. I hope this answers, at least partially, your question.

Kind regards,

Constantine Iliopoulos

While the ideal form may be collective decision making, practically, it is smaller group that decides. The core values are therefore, as mentioned by Constantine in hiss comments, Governance (of taking decisions in the best interest of the group) and transparency. These ensure that the organisation operates in the best interest of the members.