The Swedish researchers surveyed approximately 1,000 members of an agricultural cooperative. They concluded that two issues have a decisive influence on the confidence and trust of farmer-members in their cooperative.
Decision-making and trust
The first issue concerns the decision-making process (the decision problem). As the number of members grows and becomes more diverse, opportunities for interaction and dialogue between members and cooperative management decrease. This is even more pronounced when business activities are separated from the main cooperative structure. For the cooperative’s leadership and management, it becomes increasingly difficult to understand members’ needs and perceptions of risk. For certain groups of members, this can lead to feelings of not being taken seriously, resulting in a decline in trust in the cooperative’s functioning.
Transparancy and commitement
The second issue concerns follow-up (the follow-up problem). In a large and complex organization, it becomes more difficult for members to see what the leadership and management are doing, and therefore to monitor and evaluate their actions. A consequence is that members often have little or no insight into the long-term strategy, which can reduce loyalty.
Assuming that attitudes ultimately shape behavior, declining trust and loyalty among members will influence their behavior toward the cooperative. However, members’ distrust of how the cooperative operates does not necessarily reduce their commitment -sometimes there is simply no alternative available.
Reducing distance
The lesson from the researchers is that as a cooperative grows and becomes more complex, it is crucial to continually seek ways to reduce the distance between members and the board or management. This can be achieved, for example, by adjusting the organizational structure and governance, and by implementing new tools and mechanisms.
Reference
- K. Hakelius, H. Hansson, 2016. Members attitudes towards cooperatives and their perception of agency problems, in: International Food and Agribusiness Management Review, vol 19, nr 4, p.23 – 36