Cooperative Business Model Research Articles

Co-operative Wineries in Italy and Spain in the Second Half of the Twentieth Century: Success or Failure of the Co-operative Business Model?

The evolution of the co-operative wine sector in traditional wine-producing countries in southern Europe, such as France, Italy, Spain, and Portugal, presents similar historical features in the first half of the twentieth century. However, the analysis of their current state shows that Spanish co-operatives are smaller in size than their French and Italian counterparts. Additionally, the analysis shows that Italian (and French) co-operatives have adopted a more modern business model. The main target of this work is to establish the reasons behind the differences between the Spanish and the more successful Italian co-operative wine sectors. This is carried out through comparative analysis and the examination of the development of both sectors. For this, the framework of the co-operative business life cycle is used.

Co-operatives in a Post-Growth Era: Creating Co-operative Economics

Co-operatives in a Post-Growth Era: Creating Co-operative Economics. Edited by Sonja Novkovic & Tom Webb. Zed Books/Fernwood Publishing: London, UK/Halifax, NS, 2014. 312 pp. ISBN 9781783600779.Co-operatives in a Post-Growth Era features a collection of articles that call for a new economy where the "growthat-any-cost" doctrine of neoclassical economics is replaced with co-operation for the sake of all people and our planet. The book is an outcome of the Imagine 2012: International Conference on Co-operative Economics that took place in October 2012 in Quebec City, Canada, one of the events marking the UN's International Year of Cooperatives. The editors of the book, Sonja Novkovic1 and Tom Webb,2 are pioneers and leading figures in the field of co-operative economics both in Canada and internationally.In their introduction to the book, Novkovic and Webb distinguish co-operative enterprises from investor-owned businesses based on four key elements: (1) the purpose of the business (meeting the needs of communities and people versus maximizing return-on-investment); (2) values (co-operation, solidarity, reciprocity, and trust versus greed and competition); (3) principles (common ownership and collective decision-making versus centralized ownership and decision-making); and (4) founding ethics centred on fairness or social justice (genuine concern for human well-being and ecological sustainability versus economic return at the expense of all else). Accordingly, and fuelled by the four key elements identified above, they set out to answer the following question: is there a cooperative advantage in addressing the ill-doings of the neoclassical economic doctrine at the macro level and in doing business at the micro level? The book's 14 chapters, presented in two parts, are brought together with the goal of answering this question. Part 1 is entitled "What is the New Economy and Why Do We Need It?" and Part 2, "Co-operatives and the New Economy." Each part comprises seven concise and well-researched chapters, written by some of the world's leading scholars on co-operative economics.Part 1's chapters aim at debunking neoclassical perspectives on the economy in order to make the case for a new, "post-growth economy." Contributors, in turn, argue that neoclassical attitudes to wealth (Manfred Max Neef, William Rees, Peter Victor, John Fullerton) and prosperity (Neva Goodwin, Richard Wilkinson & Kate Pickett) uphold the "growth-at-any-cost" economic doctrine, which has not only resulted in financial and economic crises on a global scale, but also in converging ecological, social, and humanitarian crises for the first time in human history. As a solution, contributors to Part 1 advocate for the transition of the global economy into a post-growth era, where the unceasing pursuit of short-term economic benefits is subdued to the well-being of human beings and the planet.Part 2 focuses exclusively on the co-operative business model and its potential role in spearheading a transition toward a new economy that could address the converging crises caused by the growth-at-any-cost doctrine of neoclassical economics. Part 2 includes both theoretical and empirical work dedicated to exploring the co-operative advantage in five main areas: economic productivity (Morris Altman, Vera Zamagni, Stephan Smith & Jonathan Rothbaum, Claudia Sanchez-Bajo), resilience during times of economic turmoil (Sanchez-Bajo, Altman, Smith & Rothbaum), enhancing human health and well-being (David Erdal), reclaiming the commons (Barbara Allen), and cultivating a paradigm shift that is necessary for a transition toward a post-growth economy (Stefano Zamagni).Based on the arguments from Part 2, Novkovic and Webb conclude that the four key elements of the co-operative business model provide co-operatives the edge to succeed in a highly competitive market and the tools to lead the economic and ideological shift necessary for addressing the greatest converging crises in human history. …

Financial sustainability of Tanzanian saving and credit cooperatives

Purpose– The purpose of this paper is to discuss the financial sustainability of Tanzanian saving and credit cooperatives (SACCOs).Design/methodology/approach– The data set used in this study comes from SACCOs’ audited financial reports for the year 2011. The performance was estimated using return on asset (ROA) and financial sustainability was estimated using the ratio of total expenses to total revenue. Linear regression was used to investigate the determinants of financial sustainability.Findings– The results show that, about 61 per cent of the sample SACCOs is operationally sustainable and 51 per cent of the total sample is both operationally and financially sustainable. The average sustainability score was 127 per cent. On average, the results for profitability (measured by ROA) is higher than some of the results reported for standard microfinance in the region and globally. In terms of sustainability the result forecasts a promising future for financial cooperative business model as an alternative form of financing the poor.Research limitations/implications– Only SACCOs with audited financial statements were included in the study, thus the conclusion is limited to SACCOs with similar characteristics. Future work might consider extending the analysis to include SACCOs with non-audited financial statements.Practical implications– Based on the sample SACCOs can under good management can be used as a sustainable social conduit for financial access and social economic development among the poor in Tanzania.Originality/value– This study contributes in two ways. First, it contributes towards the scanty empirical literature on the performance of SACCOs in developing countries and in Tanzania in particular. Second, it provides provocative evidence which appears to contradict earlier and more pessimistic accounts and it challenges the ontology about extending member-based microfinance.

Integrated Decision Making in Electric Vehicle and Charging Station Location Network Design

A major barrier in consumer adoption of electric vehicles (EVs) is “range anxiety,” the concern that the vehicle will run out of power at an inopportune time. Range anxiety is caused by the current relatively low electric-only operational range and sparse public charging station (CS) infrastructure. Range anxiety may be significantly mitigated if EV manufacturers and CS operators work in partnership using a cooperative business model to balance EV performance and CS coverage. This model is in contrast to a sequential decision-making model where manufacturers bring new EVs to the market first and CS operators decide on CS deployment given EV specifications and market demand. This paper proposes an integrated decision-making framework to assess profitability of a cooperative business model using a multidisciplinary optimization model that combines marketing, engineering, and operations considerations. This model is demonstrated in a case study involving battery EV design and direct current (DC) fast-CS location network in Southeast Michigan. The expected benefits can motive both government and private enterprise actions.

The Experience of Wisconsin's Wine Distribution Co-operatives

An examination of how small-scale, artisanal wine producers in Wisconsin are using the co-operative business model to meet state liquor control mandates; compete with wine industry distributors; differentiate their varietal and generic wines from publicized industry products; and, promote state viticulture districts, family farm businesses, local food (or LOHAS – Lifestyle of Health and Sustainability) branded merchandize, Wisconsin Wine Trail opportunities and agri-tourism.

An Evaluation Of The Co-Operative Business Model Within The Context Of The Global Reporting Initiative

Sustainability reporting, renowned as an instrument for businesses to communicate how they function more efficiently and responsibly within the social and physical environment, while simultaneously remaining profitable, has evolved in an up-and-coming trend by businesses. In addition, this leads to integrated reporting, which implies that a business strategy, performance, risk and sustainability are inseparable from one another. The International Year of Co-operatives (2012), with the theme Co-operative Enterprises Build a Better World, recognises that co-operatives, in their range of forms, support the fullest participation in the social and economic development of people. Co-operatives also have the remarkable opportunity to grow everywhere for the reason that modern society needs their role and initiatives.This article considers to what extent the GRI guidelines, as a reporting framework, are feasible or applicable to co-operatives as a business model. The selected agricultural co-operative (Agri-Com) is used in the form of a case study, where the GRIs Sustainability Reporting Guidelines are applied to its activities. This study found that the co-operative business model performed admirably well under these guidelines and suggests that the co-operative business model is very relevant in the modern business environment.

The Co-operative Movement in Britain: From Crisis to “Renaissance,” 1950–2010

Between 1950 and 2010, the British co-operative movement faced a series of commercial, structural, and corporate governance crises. Having pioneered many of the features of modern large-scale retailing since its origins in the mid-nineteenth century, from the 1950s the Co-operative Wholesale Society (CWS) and the retail cooperative societies it served experienced plummeting market share, continued internecine rivalries, and increasing marginalization. In the early twenty-first century, however, co-operatives improved their market share and experienced a “Renaissance” in commercial fortunes despite continued fierce competition in food retailing. As yet there has been little exploration of the nature of this turnaround and the ways in which the once-foundering co-operative business model was re-engineered.Drawing on new research into the CWS (renamed The Co-operative Group in 2001), this article provides a historical analysis of the movement’s decline and revival. As the article details, from the 1950s significant efforts were made to reform CWS and the movement as a whole. However, co-operatives were slow to adapt to the changing business environment, hampered by dysfunctional organizational dynamics that constrained structural change and limited efforts to compete with private retail multiples. Following an unsuccessful takeover bid for CWS in 1997, co-operative opinion coalesced around the need for change. In the final section, the authors analyze the factors underpinning the “Renaissance,” focusing on both organizational innovations and the reassertion of core values and principles on which co-operation had been built. This provides a fascinating illustration of how a business can respond effectively to internal and external challenges, yet retain its fundamental character.

DEFINING COOPERATIVE BUSINESS MODELS FOR INTERORGANIZATIONAL COOPERATION

Usage of software platforms alongside the business transformation potential of information and communication technology enables cooperation between different companies in both open and networked environments. This is possible when multiple actors cooperate in the delivery of services; each one contributes its own resources, and there is an underlying attractive business model for all of the players involved. This research paper investigates the definition process of a cooperative business model, which involves partners from different countries with different levels of technology, different markets, and different statutory regulations. The aim of this paper is to contribute to both theory and practice by introducing an approach for a cooperative business model definition that can be used in instances where there are conflicting requirements of partners who are willing to cooperate. In the case which is analyzed in this paper, the premature identification of the exploitation alternative scenarios among partners, the adoption of a perspective based on customers’ needs by the means of the business episode concept, and the usage of the business model ontology for the description of the structure of the cooperative business model, have helped the different partners to successfully converge to a common and agreed solution. To cite this document: Alessio Maria Braccini, Paolo Spagnoletti, and Alessandro D’Atri, Defining cooperative business models for interorganizational cooperation, International Journal of Electronic Commerce Studies, Vol.3, No.2, pp. 229-249, 2012. Permanent link to this document: http://dx.doi.org/10.7903/ijecs.1093

Collective strength and mutual aid: Financial provisions for members of co-operative societies in Britain

Notably one of the principles most prominently associated with Rochdale Co-operation is the system of paying dividend, a rate of return based on purchases rather than capital holding. This article argues that the dividend, though important, was only one aspect of financial assistance co-operative retail societies offered their members. By focusing on the period of the 1920s–40s, it explores how collective strength and mutual aid provided by societies extended to financial support during periods of economic crisis and industrial action. Credit in times of need was especially important for members of societies affected by trade depression, industrial crisis and unemployment during the interwar years. The article also argues that membership could give access to much wider support than is typically associated with the retail aspect of co-operative societies. For example, societies assisted individual members, or the families of members, during periods of illness and death. The article highlights how, as trading organisations, the spirit of mutual help within co-operative retail societies incorporated an element of collective expenditure. In addition to providing support for hospitals located in the communities in which they traded, societies also offered financial aid to nationally recognised charities. In this way financial assistance and support provided through the co-operative business model was not solely focused on extending the purchasing power of individual consumers.

Introduction

Click to increase image sizeClick to decrease image size Notes 1. For work on some of these failures, see Schewidy, ‘The Decline and Fall of Konsum Austria’; Brazda, ‘The Consumer Co-operatives in Germany’; and Muller, ‘Consumer Co-operatives in Great Britain’. 2. Fukuyama, The End of History. 3. A useful summary of the criticisms of co-operation offered during the 1980s and 1990s can be found in Furlough and Strikwerda, ‘Economics, Consumer Culture and Gender’. 4. Grott, ‘Why Co-ops Die’. 5. Cuevas and Fischer, Cooperative Financial Institutions. 6. Full text available at http://www.ilo.org/ilolex/cgi-lex/convde.pl?R193. 7. Birchall and Ketilson, The Resilience of the Co-operative Business Model. 8. See http://ec.europa.eu/europeaid/who/partners/civil-society/structured-dialogue_en.htm. 9. Furlough and Strikwerda, Consumers Against Capitalism?; Webster et al., The Hidden Alternative; Battilani and Schröter, A Special Kind of Business; Hilson, ‘The Nordic Consumer Co-operative Movement’; Friberg, The Workings of Co-operation; Ekberg, ‘Consumer Co-operation and the Transformation of Modern Food Retailing; Hilson, ‘The Consumer Co-operative Movement in Trans-national Perspective’. 10. See, for example, Purvis, ‘Stocking the Store’; Alexander, ‘Format Development and Retail Change’; Shaw and Alexander, ‘British Co-operative Societies as Retail Innovation’. 11. See Bonner, British Co-operation, 48–9. 12. Molina and Walton, ‘An Alternative Co-operative Tradition’. 13. Rodríguez Ranz et al., El Movimiento Cooperativo en Euskadi1884–1936. 14. Carbery, Consumers in Politics. 15. Molina and Walton, ‘An Alternative Co-operative Tradition’, 240–6. 16. Gide, Consumers’ Co-operatives Societies, 3. 17. Backstrom, Christian Socialism and Co-operation in Victorian England. 18. Gide, Consumers’ Co-operative Societies, 232–6. 19. On dairying co-operatives in Denmark in the late nineteenth century, see Henriksen and O’Rourke, ‘Incentives, Technology and the Shift to Year Long Dairying’. For a good example of a service co-operative was the urban planning CAIRE co-operative of post-war Italy (Reggio Emilia), see Maccaferri, ‘“A Co-operative of Intellectuals”’. For an example of a successful co-operative in the field of promoting working class home ownership see Samy, ‘Extending Home Ownership before the First World War’, 184–8. 20. Chaddad and Cook ‘Understanding New Cooperative Models’. 21. Kalmi, ‘The Disappearance of Co-operatives from Economics Textbooks’. 22. Chandler, Scale and Scope, 259–61. 23. Gurney, Co-operative Culture and the Politics of Consumption in England,1870–1930; Gurney, ‘The Battle of the Consumer in Postwar Britain’; and compare Johnson, Saving and Spending, ch. 5.

HCL Care: harnessing the out of warranty ICT service market

Subject area Marketing strategy, Decision making, After sales servicing. Study level/applicability As part of a core marketing course; at post graduate level; marketing strategy courses where competition and co-operation business models are explored. Case overview The case focuses on HCL Care, which had the service competence and reach, but no marketing set up for attracting customers to its ICT products service facilities. The case explores the decision choices faced by the company in deciding its market strategy. The main challenge was the out of warranty offer planned by HCL Care. It was aimed at providing a one stop solution for consumers who owned various ICT devices of different brands that could not be serviced at one point. There was no specific validation of whether this proposed, more convenient and comprehensive offer was compelling enough for the consumer to switch from the service offered by the original equipment manufacturer or from the plethora of low priced offers from independent service providers in the Indian marketplace. Expected learning outcomes These include: how to organize the different types of market and company information available to segment the market and selecting the target market; developing a positioning platform and developing the market strategy; and choosing between competition versus cooperative business models. Supplementary materials Teaching notes are available. Consult the librarian for access.

The path to Project Darwin: The evolution of the AMP's organisational structure

Demutualisation became a global trend amongst financial sector firms in the last two decades of the twentieth century. Changes to the organisational foundations of mutual firms represented a shift in operational cultures and have often been viewed as an end point or demise of the co-operative business model. It is the intention of this article to investigate the extent to which this was the case within a major mutual institution, the Australian Mutual Provident, Australia's oldest and largest mutual insurer. The article's key argument is that the concept of mutuality is organic, and that within this organisation it evolved as the structure of the firm became more sophisticated as it developed from a supplier of life insurance products into a sophisticated financial services provider, which ultimately generated internal pressures to demutualise.

Special Issue on Off-Site Construction

Special Issue on Off-Site Construction

The role of cooperative business models for the success of smallholder coffee certification in Nicaragua: A comparison of conventional, organic and Organic-Fairtrade certified cooperatives

AbstractSupported by policy-makers and non-governmental organizations (NGOs), coffee farmer organizations obtain organic and Fairtrade certifications to upgrade their coffee and, thus, increase returns to their members. Whether this and other upgrading strategies fit into the business model of the cooperative and lead to success are often not considered. This research aims to identify similarities and differences between conventional and certified cooperatives and the resultant impact on farmers' incomes. We analyze the business models, upgrading strategies, and strengths, weaknesses, opportunities and threats (SWOT) of seven conventional, organic and Organic-Fairtrade certified coffee cooperatives and link these to members' coffee gross margins. We use data from over 100 in-depth qualitative interviews and a household survey of 327 cooperative members in northern Nicaragua. Results indicate that cooperatives often apply the same upgrading strategies despite very different business models and SWOT. There are also many commonalities of SWOT among cooperatives but no clear-cut differences between conventional, organic and Organic-Fairtrade certified cooperatives. The qualitative comparison of coffee gross margins among the cooperatives shows no clear income effect from participating in certified coffee production and certified cooperatives. It indicates, rather, dependence of gross margins on yield levels, the business model and upgrading strategies of the cooperatives. Upgrading through certification seems only successful with a suitable business model and other upgrading strategies. Policies should focus on (i) increasing as well as stabilizing coffee yields, and (ii) on the institutional framework of cooperatives by offering strategic support, credit access, external auditing of cooperatives and the establishment of a functional national coffee institute.

Strategic options associated with cooperative members' equity

PurposeBuilding on the property rights framework, the purpose of this paper is to frame the cooperative business model in terms of strategic options held either by the board or by members. Options that are analyzed include growth and restructuring, dividend allocation, member entry and exit, and member embedded value options.Design/methodology/approachEmpirical estimates of the options' financial value, as well as sensitivity analyses, are presented for a stylized example using historical data and Monte Carlo option‐pricing methods. Attention is paid to the effect of member age, discount rate and business operation size.FindingsResults suggest that the board's growth options can be substantial, while member options generally have small but nontrivial value. Implications for the stability of membership are drawn.Practical implicationsThe financial or economic value of strategic options in agricultural cooperatives can be significant, and decision makers may benefit from accounting for their presence.Originality/valueCooperatives play an important role in agribusiness but have undergone significant changes in the past two decades in terms of organizational and financial structure. This paper contributes to an understanding of the value of control and residual rights associated with the Board and members of cooperatives.

Value Creation through Synergies of Cooperation – The Development of a New Business Model

The construction industry is characterized by highly fragmented processes with many stakeholders and interfaces. Usually initial investment cost is the main decision criterion for awarding a contract without taking the lifecycle costs into consideration. Also in the selection process for subcontractors a fierce price battle is fought. No effort to optimize a building in a sustainable way, seizing synergies through cooperation across trades and stages of the building's life cycle is taking place. Our research focuses on the development of a new cooperative business model for life cycle service provision with the objective of delivering sustainable holistic value maximization according to the concept of eco-efficiency. Through a temporal integration cooperation enables companies to consider the requirements and know-how of later stages of a building's lifecycle, like production and operation, already in the early design stages. Thereby customers' expectations can be met superiorly. Furthermore it becomes possible to create synergies through technical integration by interdisciplinary cooperation and sharing of know-how across trades.

Strategies for accessing volume markets in the beef industry: A review of three cooperative business models

Given the increasing consolidation in the U.S. meat industry, smaller and specialty producers often have difficulty breaking into the market in profitable volumes. This paper examines three cooperative models for specialty beef producers. We offer a realistic examination of the potential for success of each model. Based on this, we identify the key attributes for a new model and offer guidance for future research efforts.

Business Design Modeling for Industrialization in Construction: Cooperative Approach

AbstractCurrently, atomization and fragmented processes are strong constraints to industrializing the construction industry in Switzerland. Therefore, building construction in Switzerland is still characterized by manual production techniques and small-scaled companies. New strategies and concepts are necessary to empower the players to benefit from industrialization concepts in the client’s value creating process. This paper presents a cooperative business model for grasping the opportunity offered by industrialization in construction. This paper also gives readers an interesting insight into the system theory-based structure of the model and shows how to meet challenges such as the complexity of solution-oriented building processes, the uncontrollability of complex systems and the opportunistic behavior of players. This paper helps researchers and practitioners understand how a complex system of cooperating players may behave and what corridors for (inter)action should be established. Even if a complex ...

Vorteile aus dem kreditgenossenschaftlichen Geschäftsmodell bei der Einhaltung von Liquiditätsvorschriften (MaRisk)

Zusammenfassung Nach den Ereignissen der Finanzmarktkrise sind Liquidität und ihre Verankerung im Liquiditätsrisikomanagement in den Mittelpunkt des Interesses der Aufsichtsbehörden gerückt. Die daran anknüpfenden Mindestanforderungen an das Risikomanagement (MaRisk) sind von allen Kreditinstituten in ihrer Neufassung bis zum Jahresende 2011 im Unternehmen zu integrieren. Vorteile bei der Umsetzung der MaRisk im Liquiditätsrisikomanagement der Kreditgenossenschaften ergeben sich aus dem genossenschaftlichen Geschäftsmodell auf der Organisations-, Handlungs- und Finanzierungsebene.

Las cooperativas frente a la crisis

<p>Las cooperativas, con carácter general, son más resistentes a la crisis que otras empresas. Tras unas consideraciones generales acerca de las crisis y su contexto, y un repaso de los elementos característicos de la crisis actual, se aborda el estudio del modelo de empresa cooperativa, su actuación frente a la crisis y su capacidad de crecimiento cara al futuro.<strong><br /></strong></p><p><strong>Recibido</strong>: 10.05.10<br /><strong>Aceptado</strong>: 02.06.10</p>