Risks of organizational growth to cooperatives’ identity

Abstract

The evolution of the agricultural sector in France motivated agricultural cooperatives to boost the creation of business groups that combine affiliates, which add value to production, and traditional cooperatives, in charge of the production process. The new structure merges shareholding governance and associative governance in a hybrid model. The two methods exist at the core of affiliates and the traditional structure, respectively. This article outlines the consequences of the hybrid governance model on cooperatives’ identity by analyzing the case studies of five French cooperative groups. The analysis reveals an identity crisis within the cooperatives after adopting a hybrid model. This crisis is characterized by three adverse effects on the relationship between the cooperative and its associates: complexity, distance, and confusion. The consequences of the hybrid governance model for agricultural cooperatives are mainly control and incentive mechanisms and weakened cooperative values and principles.