North American Bison Cooperative and North Dakota Natural Beef LLC: Governance of a Contractual Alliance

Abstract

In 2005, North American Bison Cooperative formed a contractual alliance with North Dakota Natural Beef, LLC. The alliance was formed in order to enable the cooperative to enhance returns from its physical and managerial assets by entering the natural beef market. This case describes the resources shared by the cooperative and LLC, how the alliance was governed, the risk of opportunism by the CEO and associated trust building and control mechanisms, and the benefits cooperative members received. Although the two companies operate under different business principles, cooperative members exercise indirect control over the resources they contribute to the venture.Agribusiness, Livestock Production/Industries,