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Communication and Innovation in Cooperatives

Xiao Peng (), George Hendrikse () and Wendong Deng ()
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Xiao Peng: Erasmus University
George Hendrikse: Erasmus University
Wendong Deng: Erasmus University

Journal of the Knowledge Economy, 2018, vol. 9, issue 4, 1184-1209

Abstract: Abstract Cooperatives differ in their intensity of horizontal and vertical communications, their innovation policies, and their centralization of decision-making power. We aim to establish relationships between these communication, innovation, and decision-making aspects of cooperatives, and to identify the circumstances when a particular configuration adds most value. Horizontal and vertical communications are analyzed in a decentralized and centralized cooperative. Horizontal communication (HC) is characterized as the exchange of information between farmers in the society of members. It is associated with process innovation. Vertical communication (VC) is the exchange of information between a member and the CEO of the cooperative enterprise. It is associated with product innovation. The CEO decides regarding the deliveries of the member and the level of vertical communication in the centralized cooperative, while these decisions are taken by the members in the decentralized cooperative. We establish that the decentralized cooperative is efficient at an intermediate level of the VC cost coefficient and when the HC cost coefficient is above a certain level, while the centralized cooperative is efficient in the other cases.

Keywords: Agricultural cooperatives; Communication; Innovation; Decentralization (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:spr:jknowl:v:9:y:2018:i:4:d:10.1007_s13132-016-0401-9