دانلود مقاله ISI انگلیسی شماره 16988
عنوان فارسی مقاله

ساختار سازمانی، توزیع مجدد: تعاون، شرکت های متعلق به سرمایه گذار و هزینه های تأمین تجهیزات

کد مقاله سال انتشار مقاله انگلیسی ترجمه فارسی تعداد کلمات
16988 2009 22 صفحه PDF سفارش دهید محاسبه نشده
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عنوان انگلیسی
Organizational structure, redistribution and the endogeneity of cost: Cooperatives, investor-owned firms and the cost of procurement
منبع

Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)

Journal : Journal of Economic Behavior & Organization, Volume 72, Issue 1, October 2009, Pages 322–343

کلمات کلیدی
اطلاعات نامتقارن - تعاون - شرکت های متعلق به سرمایه گذار - توزیع مجدد - رانت جویی
پیش نمایش مقاله
پیش نمایش مقاله ساختار سازمانی، توزیع مجدد: تعاون، شرکت های متعلق به سرمایه گذار و هزینه های تأمین تجهیزات

چکیده انگلیسی

As an organizational type, cooperatives are in general not the dominant form of enterprise. Nevertheless, cooperatives and cooperative-like organizations do play important roles in a number of sectors, suggesting that in some circumstances they are more efficient than other business forms. This paper explores the importance of membership goals on the relative efficiency of the cooperative form of organization. The cooperative cost (and hence production efficiency) advantage is directly linked to the goal alignment between the cooperative and its members, and is influenced by the extent of income redistribution between members and the degree of rent seeking that takes place in the organization. When there is no aversion to income inequality, the members produce at their first best levels. However, as aversion to inequality rises, the production profile of the members converges to the production profile generated when the members face an IOF. Regarding rent seeking, if the more (less) efficient members are able to get their profits valued more, total output is increased (decreased). As a consequence, consumers may benefit from the lobbying that occurs inside a cooperative where the powerful members are the most efficient agents.

مقدمه انگلیسی

As an organizational type, cooperatives are in general not a dominant form of enterprise. Nevertheless, cooperatives and cooperative-like organizations play important roles in a number of sectors. Professional employee partnerships in areas such as law and accounting have long been important and farmer-owned cooperatives play a substantial role in a number of agricultural sectors in most developed countries. In countries such as the United States and Canada, consumer-owned utilities supply services such as power and telephone, credit unions provide financial services to a significant portion of the population, and mutuals provide a large portion of life and other forms of insurance. Businesses also have formed cooperatives to supply them with credit card services (e.g., VISA) or important inputs (e.g., Dairy Queen).1 Hansmann (1996) argues that cooperatives emerge when the costs of contracting with a firm’s suppliers or customers exceed the costs of these suppliers/customers owning the firm.2 Included among the costs of contracting are market power and asymmetric information. The costs of ownership include the agency costs of controlling management and the cost of collective decision making;3 of these various costs, Hansmann identifies the cost of collective decision making as particularly important in explaining the pattern of cooperative ownership that is found in different parts of the economy. He argues that cooperatives only emerge as a viable organizational alternative when the cost of collective decision making is low. An important factor in determining the cost of collective decision making is the degree of homogeneity in the goals possessed by different members. As the degree of goal congruence falls, the costs of collective decision making rise and the cooperative form is less likely to possess an advantage over other organizational forms and particularly one in which the investors are the owner. Hart and Moore (1996) reach a similar conclusion, arguing that outside ownership by investors becomes relatively more efficient when the variation in membership becomes more skewed (or, more precisely, when the median member is different from the average member). The purpose of this paper is to explore formally the importance of membership goals on the relative efficiency of the cooperative form of organization. The explicit comparison point for this examination is the investor-owned firm (IOF). More specifically, the paper models the situation where a processor buys an input from a group of agents (e.g., farmers), processes it, and sells the resulting product to downstream consumers. Regardless of whether the processor is an IOF or a cooperative, the processor must procure the product from each farmer while ensuring that each farmer participates and chooses the contract designed for him/her. It is assumed that an information asymmetry exists between the processor and the agents—the agents know their individual productivity while the processor does not. For the IOF processor, the goal is to extract the maximum surplus from both farmers and consumers. For the cooperative processor, the goal is different. The farmers, who own the cooperative, are interested in maximizing the returns from each of their own operations plus their share of the profits generated by the cooperative. If the cooperative processor acts to maximize this objective, then the resulting alignment of objectives between the processor and the agents results in the cooperative being a potentially more efficient organizational form.4 The pricing decisions of the cooperative are not straightforward, however, since the terms of the contracts effectively redistribute rents among the farmers. The returns that the farmers earn on their own operations, as well as their share of the cooperative’s profits, depend on the contract offered to each of the agents. The need to redistribute income among the members, and hence the need for specific types of contracts, arises for a number of reasons. Voting procedures (see, for instance, Zusman, 1982 and Hart and Moore, 1996 and Albæk and Schultz, 1997) and internal rent seeking (see, for instance, Banerjee et al., 2001, Cook, 1995 and Bourgeon and Chambers, 1999 and Zusman and Rausser, 1994) are two important sources. Redistribution also occurs if individuals in the group care about relative income and are free to choose the group to which they belong—maintaining membership under such conditions requires redistribution so that the distribution of payments is less dispersed than the corresponding distribution of productivities (Frank, 1984). Regardless of the cause, the analysis in this paper shows that redistribution activities affect the efficiency of the cooperative organization. Within the contracting structure outlined above, the IOF faces information costs because its objective is not the same as the objective of the agents with which it is contracting. The cooperative emerges as a potentially more efficient organizational form because of the greater alignment in objectives; this greater goal alignment means that the cooperative can avoid the informational costs that an IOF incurs as it extracts rents from its suppliers. However, this goal alignment becomes less and less perfect when the cooperative uses its procurement policies to redistribute income. Specifically, the paper shows that the procurement costs of the cooperative rise when the redistribution activities are based on an implied objective of the cooperative that is not congruent with that of the average member. In the extreme case where the income is redistributed to the member with the lowest income à la Rawls, the cooperative’s costs approach those of the IOF. This redistribution affects other groups in the economy. Compared to the IOF, the cooperative always produces more output, thus providing a benefit to consumers. Cooperative output is also greater, the greater is the redistribution of benefits towards the most efficient cooperative members. Thus, consumers have a preference for the type of organizational structure present in the market, with a secondary factor being how decisions are made within that organization. The results of this paper shed further light on the importance of the costs associated with collective decision making. The paper shows that cooperatives do have some potential advantages, particularly in situations where information asymmetry is important. However, given that the members of the cooperative are not homogeneous, the cooperative form of ownership implies the need for mechanisms for collective decision making by the members, mechanisms that almost inevitably end up having re-distributional implications. Not only are these mechanisms costly in and of themselves (see Hansmann, 1996 for a discussion of this point), they also give rise to greater procurement costs. Both of these factors can be expected to make the cooperative organizational form less efficient and less likely to emerge as an alternative to the IOF. In addition to developing new insights into the relationship between organizational structure and costs, the paper also departs from usual assumptions made in the literature on incentives. A standard result in the incentive literature is that the most efficient agent will always be enticed to produce at the first-best level. As this paper demonstrates, this conclusion hinges on the assumption that either the principal’s objective is linear with respect to aggregate production or that the revenue generated from the output of individual agents can be aggregated in an additive way. When these conditions do not hold, as is reasonably the case for many market situations (e.g., when a firm’s output influences price), it can be shown that the most efficient agent will overproduce compared to the first-best level. The resulting production/effort pattern across agents in turn affects the distribution of informational rents among the agents. The paper is structured as follows. The next section presents the general structure of the model. This section is followed by an examination of the procurement decision of an IOF and then a cooperative. After a comparison of the pricing decisions by these two organizations, and the resulting output and welfare levels, the paper concludes with some observations on how the analysis can be extended to capture other informational problems (e.g., moral hazard) and to examine oligopolistic market structures.

نتیجه گیری انگلیسی

As Zusman (1982), Hansmann (1996), Hart and Moore (1996) and Albæk and Schultz (1997) have pointed out, the decision making process in a cooperative can have important efficiency effects on the organization. Moreover, the degree and nature of members’ goals are likely to have important efficiency effects. The purpose of this paper was to explore formally the importance of membership goals on the relative efficiency of the cooperative form of organization. The starting point for the analysis was the observation that the cooperative can be expected to have lower contracting or procurement costs than an investor-owned firm (IOF) when its goals and those of the members are in perfect alignment. If the manager is required to redistribute income among the members to maximize some non-utilitarian welfare function, then the co-op’s cost advantage diminishes. In the extreme case where the manager acts in a Rawlsian fashion to maximize the profits of the least well-off member, the cost advantage completely disappears and the output profile of the co-op matches that of the IOF. Otherwise, the cooperative is more efficient than the IOF because the equity-efficiency trade-off calls for less productive distortion than the rent extraction-efficiency trade-off faced by the IOF. Since the co-op generally overproduces relative to the IOF, consumers will typically prefer to purchase from a co-op rather than an IOF. As well, because the output of the co-op depends on the nature of the rent seeking and lobbying that occurs among its members, consumers also have a preference for the nature of this rent seeking. Specifically, consumers will prefer to purchase from a co-op in which the most efficient agents wield the political power. More generally, consumers may not be adverse to agency costs within a cooperative, providing these are the result of successful rent seeking by the most efficient agents. In addition to providing some insights into the importance of goal alignment on the costs of an organization, the paper also shows that the manner in which the output of the agents enters the principal’s objective function can have important results for the nature of the contract between the principal and the agent. Specifically, when the assumption that either the principal’s objective is linear with respect to aggregate production or that the revenue generated from the output of individual agents can be aggregated in an additive way is relaxed, the standard result that the most efficient agent always operates at the first-best level no longer holds. More specifically, it is found that there is “efficiency somewhere in the middle” rather than the usual “efficiency at the top”. The model in this paper serves as an important starting point for additional analyses of cooperative and IOF behavior. Consideration of relational specific assets is important, since as Hendrikse and Veerman (2001) and Sykuta and Cook (2001) argue, the (agricultural) cooperative is more likely to be efficient than an IOF when relationship specific investments by the members are relatively more important than those by the processor. Also of importance is the internal organizational structure of the cooperative and the IOF. This paper has considered a case where the members have provided an organizational centre with the authority to direct their actions via contract prices. Following Hendrikse (2005), Aghion and Tirole (1997) and Baker et al. (1999), it is important to determine the conditions under which the adoption of this sort of structure is advantageous to a cooperative and to an IOF. Finally, to isolate the impact of redistribution activities in a cooperative on its procurement costs and hence efficiency, the paper deliberately did not consider any interaction between the cooperative and the IOF; each were assumed to operate solely on their own. However, in most markets a mixed oligopoly in which cooperatives and IOFs compete is common. This competition between the cooperative and the IOF for markets and members has important implications for the ability of each organizational form to survive. As Albæk and Schultz (1998) demonstrate, the cooperative’s ability to commit credibly to higher output levels can provide it with an advantage over an IOF, while Rey and Tirole (2000) show that an IOF’s strategic choices can destabilize a cooperative, making it less likely to succeed over time. A topic for future research is to examine the implications of membership goals in a cooperative on its ability to compete effectively with an IOF in a mixed duopoly.

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