The Key Role of Stakeholders on Wine Cooperatives Governance and Performance

Facing market globalization and volatility, farmers find in agricultural cooperatives a secure way to sale their products, especially in wine sector (strong crisis before 2010). In the same time, cooperatives members and... [ view full abstract ]

Facing market globalization and volatility, farmers find in agricultural cooperatives a secure way to sale their products, especially in wine sector (strong crisis before 2010). In the same time, cooperatives members and employees became more and more vertical organization averse and look for collaborative decision making process.

In this context, traditional corporate governance models based on the classical agency theory appear not to be accurate for agricultural cooperatives governance. Considering a multi paradigmatic model with three dimensions (disciplinary, partnership and cognitive governance), we focused on the link between governance and financial corporate performance.

We studied Languedoc-Roussillon wine cooperatives which represent 70% of the output of this huge wine-growing area and we analysed how they overcame their financial difficulties thanks to the involvement of their stakeholders. We used original data, coming from COOPERFIC, a specific decision aid tool designed and managed by Coop de France Languedoc-Roussillon.

The results showed the crucial role of the partnership dimension of cooperative governance via stakeholders’ and especially grape growers’ members involvement (directors role). Top financial performance fitted partnership relations inside wine cooperatives, whereas disciplinary and cognitive governance seemed less relevant. Moreover, the three dimensions of agricultural cooperative governance appeared partially interconnected.

Even if further surveys will be necessary to have additional analysis on governance mechanisms, it can be stressed that, thanks to our work, decision making process can be improved, paving the way for a more efficient governance and management.