This study with the title "Topstructure and strategic management in large agricultural cooperatives" examines the means by which members control the management processes of large cooperatives. It pays special attention to the respective roles of boards of directors, supervisory boards and members' assemblies.
This subject is of special importance at a time when the management of cooperatives is becoming increasingly complex. Cooperatives today are growing in size, their operations are becoming more diversified, they are having to pay more attention to marketforces, and their personnel are demanding more voice in management. Such complexity means that management is becoming more professionalised.
The study has two objectives:
1. to describe how the "topstructure" of cooperatives operate, and
2. to suggest what types of management alternatives might be feasible and desirable.
The sample is fourteen large agricultural cooperatives in the Netherlands. Data were collected via open-ended interviews, written questionnaires, and study of formal rules and regulations. Ninetysix interviews were held with an average duration of 1,5 hours. The interviews dealt with the strategic management process and with the behaviour of boards of directors, supervisory boards and members' assemblies. Notes were taken during each interview and a report on each interview was checked by the interviewee for completeness and accuracy.
In this study cooperatives are analysed as combinations of individual members, cooperative associations and their business enterprises.
Chapter 3 presents a conceptual framework within which decision-making in the cooperative can be analysed. An important feature of this framework is the distinction between decision-making processes and their results, on the one hand, and the conditions which influence these processes, on the other. Particular attention is given to strategic management as an area in which to investigate decision-making processes. The concept of ,level of perfection" is described. The idea of a "level of perfection" depends on the (external and internal) situation of the organisation and the policies which it adopts.
Chapter 4 begins with a more detailed analysis of organisational structures with particular attention to the legal conditions which define the organisations as cooperatives. Considerable variation is found in the roles played by different management bodies. A typology is developed of three different roles for boards of directors, seven for supervisory boards and five for members' assemblies. These actual roles are compared with the provisions in the formal bye-laws.
Chapter 5 describes and classifies strategic management processes in the fourteen cooperatives. Large differences exist. The "level of perfection" of such processes range from very low (15 on a scale of 100) to quite high
(80). The hypothesis is
explored that special characteristics of small- and medium-sized organisations require special approaches to strategic management. The "levels of perfection" of some of these approaches are discussed. "Strategic parameters" in large organisations may require a need for higher "levels of perfection". Special attention is given to the potential contribution of boards of directors to strategic management.
Chapter 6 contains an inventory of different structures and roles available to boards of directors, supervisory boards and members' assemblies. A survey of relevent literature concludes that one might expect a "level of perfection" for strategic management in the range 50-80. But, as noted above, most scores for the sampled organisations were lower.
And finally, analysis is made of the fit between the three different boards of directors roles and potential "levels of perfection". Requirements for improved performance are set down. These requirements are discussed in view of the structural alternatives available to boards of directors. The conclusion is reached, that the role and structure of supervisory boards and members' assemblies are less dependent on the strategic management process, though their
performance may be better when that proces has a higher "level of perfection". It is also concluded that role and structure of supervisory boards and boards of directors are related.
One particular reform which could improve performance is to bring formal regulations more into accord with desired practice. The gap is now often wide.
Chapter 7 - the conclusion - places this study in theoretical perspective. Special emphasis is given to its prescriptive and policy-oriented nature.