Organizational Change and Vested Interests

The nature of organizational change and the value of headquarters is analyzed in a dynamic bargaining model. Organizational change can be either imposed, or voluntary and immediate, or voluntary and delayed. Headquarters derives it value from preventing surplus reducing endogenous commitments.dynamic bargaining game;headquarters;organizational change

Organizational Change and Vested Interest

The nature of organizational change and the value of headquarters is derived from a model with costs of delay, vested interests and costs of organizational change.The value of headquarters is derived from imposed organizational change. It is viewed as an institution which is able to prevent surplus reducing endogenous commitment.Imposed organizational change is predicted in circumstances where the desired change is not urgent, the loss of accepting lower offers than in the past is above a certain level, and the costs of imposed change are lower than the costs of delay.Delay occurs and change will be voluntary in these circumstances when the situation is not perceived as urgent and costs of imposed change are high.Voluntary organizational change occurs immediately when the desired change is perceived to be urgent.Case studies are presented along these lines of thought.organizational change

Governance of Chains and Networks: A Research Agenda

Governance concerns the organisation of transactions. Four research themes regarding the governance of chains and networks are identified: decision rights, income rights, alignment, and cognition.chains;cognition;networks;incentives;coordination

Screening, competition and (de)centralization

Competition;Organizational Structure;Decentralization;Centralization;organization and management

Ownership Structure in Agrifood Chains

This article analyses the impact of ownership structure on investments in a three-party supply chain from an incomplete contracting perspective. Circumstances are determined in which a marketing cooperative is the unique first-best ownership structure.chains;incomplete contracts;marketing cooperatives

Plural Form in Franchising: An Incomplete Contracting Approach

Plural form franchising is modeled from an incomplete contracting perspective. Complete franchising is the unique, efficient governance structure only when the plural form externality is limited and the costs of investment are low for both franchisees. Governance structure choice is irrelevant when the costs of investment are high for all franchisees, because no franchisee will invest. Finally, a plural form governance structure is the unique, efficient equilibrium in all other cases because the power allocated to independent franchisees makes them confident that they will be able to recoup their investments. Not locational or other differences between units are necessary for the emergence of plural form franchising, but positive externalities being specific for the plural form.Franchising;Incomplete Contracting;Plural Form

Marketing Cooperatives and Financial Structure

The relationship between the financial structure of a marketing cooperative (MC) and the requirement of the domination of control by the members is analysed from a transaction costs perspective. A MC receives less favorable terms on outside equity than a conventional firm because the decision power regarding new investments is not allocated to the providers of these funds. This is a serious threat to the survival of a MC in a market where efficient investments are characterized by an increasing level of asset specificity at the processing stage of production. A MC is predicted to be an efficient organizational form when the level of asset specificity at the processing stage of production is at a low or immediate level compared to the level of asset specificity at the farming stage of production.finance;transaction costs economics;marketing cooperative

Marketing co-operatives

Marketing co-operatives (MCs) are analysed from an incomplete contracting perspective. The requirement of the domination of control by the members of a MC is a threat to the survival of a MC in markets where the level of asset specificity at the processing stage of production is increasing. However, a MC may remain an efficient governance structure when the increasing level of asset specificity is compensated for by a sufficient increase in the extent of product differentiation.incomplete contracts;marketing cooperatives

On the Emergence of Growers' Associations

Cooperatives in agricultural and horticultural markets have faced problems in responding to the increasing differentiation in demand as well as supply. One response is the emergence of growers' associations. They are not vertically integrated forward into a processor/retailer stage of production like cooperatives. This gives processors/retailers the freedom to invest in the direction they most like, given the increasing differentiation in demand. Growers' associations face on the supply side a trade off between self-selection and countervailing power regarding the increasing differentiation in supply. Heterogeneous growers' associations frustrate high quality growers due to the policy of uniform treatment of members, but they are strong in terms of countervailing power of the growers collectively. The opposite holds for homogeneous growers' associations.self-selection;Growers' association;incomplete contracting;market power

On The Future of Co-operatives

Two extensions are formulated of the analysis of the allocation ofdecision rights in Hendrikse and Veerman (2001). First, the incompletecontracts in their article can be viewed as simple long-termcontracts, i.e. it is not allowed to make the allocation of authoritycontingent on the circumstances. Contingent long-term contracts arenow considered. Second, another aspect of decision rights is thefrequency of meetings between the owners and managers of enterprises.This aspect will be addressed from a long-term contract perspective aswell as a loss aversion perspective.contingent control rights;frequency of board meetings