George Hendrikse

Ownership Structure in Agrifood Chains: The Marketing Cooperative

Globalization, technological developments, and consumer concerns press farmers and food producers to enhance product innovation and to seek more efficient production and distribution structures. These changes in agrifood markets shift the relative importance of the investments by different chain partners. It may therefore be necessary to change the allocation of ownership of essential assets to induce agents to make those investments that generate the chain optimum. This article analyzes the impact of ownership structure on investments in a three-tier supply chain from an incomplete contracting perspective. Circumstances are determined in which a marketing cooperative is the unique first-best ownership structure.

Gemeinschaft and Gesellschaft in Cooperatives

A cooperative business consists of a cooperative society and a cooperative business firm. The society of members intends to control the business in such a way as to focus the business operations on its interests. The two organizational units tend, however, to follow different behavioral logics. Borrowing some core concepts from classical sociology, Gemeinschaft norms rule ruling within the membership, while Gesellschaft norms dominate the business firms. Thereby it may be difficult to accomplish alignment between the membership organization and the business organization in order to be competitive. This paper addresses the difficulties of following the different logics by exploring Gemeinschaft and Gesellschaft within agricultural cooperatives with a focus on the membership logics.

Uncertainties and Governance Structure in Incentives Provision for Product Quality

This paper compares the product quality provision of cooperatives and investor owned firms (IOFs) by highlighting the impacts of uncertainties in agricultural production and marketing, and farmers’ risk aversion. In a principal-agent model, we show that the linear contract can shift the risk of market uncertainty from farmers to processors, and pooling can share the risk of production uncertainty among cooperative members. Complete pooling places the cooperative at a disadvantage relative to the IOF in a quality-differentiated market due to the loss of free-riding dominating the gain of risk-sharing. Product quality of cooperatives decreases when the membership size increases. Cooperatives can overcome this disadvantage by partial pooling. Product quality of cooperatives will be equivalent to that of IOFs when an optimal income rights structure with partial pooling is adopted.

THE DUTCH BANKING CHIPCARD GAME: UNDERSTANDING A BATTLE BETWEEN TWO STANDARDS

Abstract The banks in the Dutch chipcard market initially agreed on one chipcard system. One system is attractive for companies as well as consumers. Companies, banks, and retailers prevent costs of duplication, while consumers enjoy the benefits of a widespread acceptance of one card and do not face uncertainty regarding the chipcard standard. Two standards could harm the development of the chipcard market. However, Postbank withdrew from the initial agreement and introduced its own chipcard system in December 1995. This has resulted in a costly battle between the two banking chipcard standards, duplication costs for retailers, the introduction of a gateway technology in order to establish compatibility for users, and low market acceptance of chipcards. In March 2001, after a struggle of more than five years, the banks decided to return to one chipcard. The rationality of Postbank’s decision to withdraw, despite the prospect that everybody may be worse off, will be analyzed from the perspective of game theory and the theory regarding standards battles.

Allocation of decision rights in fruit and vegetable contracts in China

This paper empirically examines the determinants of the allocation of decision rights in the context of fruit and vegetable contracting. A multiple case study is used to investigate twelve fruit and vegetable contracts in order to test five hypotheses regarding the decision rights allocated to the farmer growers and to the downstream agricultural firms. The main conclusion is that under contract farming, many decision rights are shifted from farmers to firms. Quality, reputation, monopsony-oligopsony power and specific investments by firms positively influence the number of decision rights allocated to agribusiness firms under contract farming, whereas specific investments by farmers have no effect on the allocation of decision rights.

Strategy and Governance of Networks

The book emphasizes research in economics and management of networks as an interdisciplinary field by offering new theoretical perspectives and presenting new empirical results on strategic and governance structure issues in cooperatives, franchising networks, alliances, joint ventures and venture capital relations.

A note on partial vertical integration

A simple model is constructed to show how partial vertical integration may emerge as an equilibrium market structure in a world characterized by rationing, differences in the reservation prices of buyers, and in the risk attitudes of buyers and sellers. The buyers with the high reservation prices turn out to be vertically integrated.

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.

Preface: On network governance

(2009). Preface. International Studies of Management & Organization: Vol. 39, No. 4, pp. 3-7.The present publication contains a selection of new papers in computational linguistics. We have reason to believe that it gives a good view on recent research at its best in our domain with a good spread over subfields and geographical areas. Whether the reader is a participant of this years Coling, one of those only too many who wanted to participate but for one reason or another could not do so or a member of the important category of those who so far did not consider computational linguistics a concern of theirs but who might in the future be originators or recipients of essential contributions, we hope he will find the reading inspiring.

Introducing ‘Economics and Management of Franchising Networks’

The increasing economic significance of networks has fuelled rapid growth in research at the intersection of economic and management disciplines (Brickley et al. 2002; Hendrikse 2003). The first international conference on Economics and Management of Networks (EMNET) took place at the Center for Business Studies, University of Vienna, from June 26 to June 28, 2003..EMNET-conferences should serve in promoting communication and awareness among researchers in economics and management and should provide a forum to present current research and to discuss issues of common interest, such as relevant developments in organizational economics and management. The content of future conferences will include all forms of networks, such as franchising, joint ventures, virtual organizations, strategic alliances, cooperatives, clusters, venture capital relations and other forms of hybrids.