TOPIC 4–STAGE 5–MESO
Managerial decision-making in cooperative firms is profoundly influenced by the organizational and structural context in which it is embedded. In particular, innovation strategies remain a highly challenging and complex process for the food processing industry to manage (Sarkar and Costa, 2008). In addition, we have to consider for agricultural cooperatives the particularities of their property and government systems, and the simultaneity of roles of the partners as owners, suppliers, customers, employees, managers and beneficiaries (Nilsson, 1996).
Agricultural cooperatives have traditionally shown a production orientation as well as a strong local and short-term orientation. These facts have been seen as a constraint to their growth (Royer and Bhuyan, 1995). However, recent changes in demand (e.g., more variety, convenience, quality, availability throughout the year, positive environmental impact) require producers to make greater efforts in the field of product development, quality control and marketing, thus abandoning the production approach in favour of a market-oriented approach.
Nevertheless, the small average size of cooperatives, the level of risk aversion in cooperatives’ strategic choices, the heterogeneity within memberships and their limited access to equity capital, result in cautiousness as concerns choice of strategies and also constrain innovation capabilities in cooperatives (Maietta and Sena, 2010). Furthermore, the food industry is a traditional sector characterized by low research intensity and incremental innovations (Capitanio et al., 2009). So agrifood cooperatives have particular preferences in their innovation decisions, given their static nature, limited resources, government of their decisions, communion with the Mediterranean diet and demand conservatism conditions. These considerations considerably difficult the attempts of cooperatives for pursuing profitability and efficiency in the short term and their adaptation and variation in the long term.
Thus this work develops a theoretical review of literature about different challenges and determinants affecting food innovations of agricultural cooperatives.
Capitanio, F., Coppola, A., Pascucci, S. (2009). Indications for drivers of innovation in food sector. British Food Journal, 111(8), 820-838.
Maietta O.W., Sena, V. (2010). Financial constraints and technical efficiency: Some empirical evidence for Italian producers’ cooperatives. Annals of Public and Cooperative Economics, 81(1), 21–38.
Nilsson, J. (1996). The nature of cooperative values and principles. Transaction cost theoretical explanations. Annals of Cooperative Economics, 67, 633-653.
Royer, J.S., Bhuyan, S. (1995). Forward integration by farmer cooperatives: Comparative incentives and impacts. Journal of Cooperatives, 10, 33-48.
Sarkar, S., Costa, A.I. (2008). Dynamics of open innovation in food industry. Trends in Food Science & Technology, 19(11), 574-580.
