Abstract
It is argued that cooperatives allow for the increased use of more informal methods of control than those found in non-cooperative organizations. The extent to which these informal controls can be utilized may depend on the strength of shareholder bonding, the determinants of which are, inter alia, peer group pressure and altruism. Peculiar cooperative organizational arrangements might be associated with differential agency costs, however formal recognition of the role of altruism in economic behaviour provides a direct alternative to agency theory.
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