Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study

Abstract

The cooperative organizational form is by nature a sustainable one, which has proved to be resilient in the face of crises and a solid lever in addressing present-day societal challenges. Still, little is known about its socio-economic impact. Also, despite the plethora of studies on cooperative performance, research remains inconclusive about how to best measure it. In fact, scholarly work has largely favored the use of appraisal tools reflecting those of investor-owned firms (IOFs), having undermined the dual idiosyncratic nature of the cooperative organizational form, which is manifest in the business and social-membership objectives. The goal of this article is to fill these gaps by delivering a comprehensive dashboard for cooperative performance assessment that harmonizes business–social aspects and catalogs the basic components for future attempts. To reach this goal, we used an extensive review of empirical research in cooperative performance (phase 1) and a Delphi study with 14 experts (phase 2). In addition, we reviewed comparable research efforts for a business form (social enterprises) that combines business with social goals and faces similar challenges (phase 3). This inquiry was particularly insightful for the social perspective and the overlooked role of cooperatives as a socially-embedded organizational form that hardly documents its societal impact and outreach.

Returns to Debt and Equity in Farm Producer Organizations

“…Most studies in the empirical literature use common financial ratios (Benos et al. , Grashuis and Su ), such as return on equity or return on assets, but FPOs do not necessarily pursue profit maximization or some similar objective (Soboh et al. ).…”

“…The performance of FPOs is an ambiguous concept (Soboh et al 2009, Benos et al 2018. Depending on the conceptualization of the FPO as an extension of the farm or an independent firm, there may exist multiple objectives with certain parameters and constraints which do not allow a static or dynamic solution.…”

“…Traditional institutions in the financial sector may have limited understanding of FPOs (Lerman and Parliament 1993). Specifically, lenders may not appreciate the redeemable nature of equity, nor the fact ownership and control is in the hands of patrons who may have joint objectives which do not necessarily conform to profit maximization (Soboh et al 2009, Benos et al 2018. In addition, lenders may perceive too much risk or uncertainty in the agricultural sector, which in recent history has been characterized by increased volatility in commodity prices.…”

“…, Benos et al. ). In addition, lenders may perceive too much risk or uncertainty in the agricultural sector, which in recent history has been characterized by increased volatility in commodity prices.…”

Spatial Competition in the Iowa Corn Market: Informing the Pricing Behavior of Corporate and Cooperative Grain Merchants

“…The consideration of ownership structures is important as cooperatives and non-cooperatives have different objectives. While the stereotypical firm is a profit maximizer, most cooperatives have mixed and competing objectives with many parameters and constraints [17,18]. Notably, cooperatives are often formed in times of imperfect competition to force non-cooperatives to stay or become honest [1].…”