United States
Department of
Agriculture
Rural Business–
Cooperative
Service
RBS Research
Report 185
Cooperative
Conversion and
Restructuring In Theory
and Practice
Abstract
This report is intended to develop the outlines of a sociological theory of cooperatives.
This objective is accomplished by: 1) critiquing neoclassical economic analyses of
cooperative conversions, (restructuring, acquisition, or sale of agricultural cooperatives
such that an investment-oriented firm is created in its place), 2) examining historical
data on cooperative restructuring generally and conversions as a subset of this data
and 3) developing a theoretical approach to a sociology of cooperatives, that is induc-
tive and retains cooperative tensions (e.g. democracy versus economy, local versus
global).
Keywords: Cooperatives, sociological theory and conversions
Cooperative Conversion and Restructuring in Theory and Practice
Patrick Mooney, Ph.D.
Thomas W. Gray, Ph.D.
Department of Sociology
Cooperative Resource and Management Division
University of Kentucky
Rural Business-Cooperative Service
Lexington, Kentucky
U.S. Department of Agriculture
Washington, DC
Research Report 185
January 2002
Price: Domestic: $5
Foreign: $5.50
Acknowledgments
The authors thank Bruce Reynolds and Edmond DeGaiffier for their
insightful comments.
Preface
Ideally, theory development and practical development continuously inform one anoth-
er, each providing feedback so each can progress and deepen. Most cooperative theo-
ry development has occurred in the area of neoclassical economics. While a powerful
mechanism of analysis for generic investment firms, the approach is deductive and
non-historical. It also tends to analytically homogenize goals and objectives.
Cooperatives are complex organizations that emerge out of historical circumstances
with complex economic and sociological goals. This report demonstrates the narrow-
ness of a neoclassical analysis, by examining the cooperative conversion phenome-
non. It then develops a sociological approach to coope