USDA
=5‘--c-
United States
Department of
Agriculture
Rural Business-
Cooperative
Service
RBS Research
Report 155
Decision-Making in
Cooperatives with
Diverse Member
Interests
Agricultural producers establish and support a cooperative when it provides benefits
they would not obtain by individual actions. Cooperatives are distinguished from other
types of organized ventures in that owners are the primary users of services, who ben-
efit in proportion to use.
Members of a cooperative typically have diverse economic interests. These may
encompass size, type and location of farm enterprises, and length of membership.
Maintaining cohesiveness for building incentives to cooperate is becoming more com-
plex as more variations in production practices and technology become available, new
forms of business relationships are developed, and as consumer preferences continue
to become more diverse and demanding.
The objectives of this research are: first, examine the role of member consensus and
policy consistency in a cooperative; second, examine member consensus and policy in
a strategic framework of competition, where competitors offer individualized terms to
selective producers that are difficult for cooperatives to match; and third, develop a
game theory analysis for situations where cooperatives need to attract large-scale pro-
ducers.
Keywords: cooperatives, cooperate, members, consensus, decision-making, diverse
interests, conflict, strategy, strategic decisions, game theory, long-range planning.
Decision-Making in Cooperatives With Diverse Member Interests
Rural Business-Cooperative Service
RBS Research Report 155
Bruce J. Reynolds
Strategic Management and Planning - Cooperative Services
April 1997
Price: Domestic $4.50; foreign $5.00
Contents
Introduction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Diverse Agricultural Producers .......................................... 3
Membership Consensus in a Business ................................... 4
Con