Aspects of the organisation and behaviour of U.K. producer cooperatives

Reflecting the fact that the cooperative sector in the U.K. has experienced record growth over the past fifteen years, this thesis forms an investigation of the organisation and behaviour of producer cooperatives. The theoretical literature surrounding the labour — managed firm is examined and subjected to testing and empirical observation. In this way a fuller understanding of the cooperative sector and of participatory arrangements in general is achieved. The theory and issues underlying this approach are based on Williamson's (1980) notion of hierarchy, the neoclassical literature surrounding perverse supply effects and extensions of that, examining the nature of the cooperative objective function, growth, managerialism and degeneration, and the nature of self— exploitation in an economy dominated by large capital. The empirical contributions are derived from a data set of 78 producer cooperatives collected by the author. In the analysis contained in this thesis it has been possible to question accepted theory, to offer some alternative modelling approaches, largely based on the use of probit analysis and to seek to describe and explain more fully certain aspects of the organisation and behaviour of U.K. cooperatives. In doing so some attempt has been made to extend the analysis beyond the boundaries of pure economics and to consider facets of participation provided in other disciplines. Many different measures have been used in the thesis which indicate that whilst cooperatives, like many small businesses, will face problems surviving in the market place, they nevertheless seem largely successful in pursuing their stated objectives. Many of the 'accepted' negative aspects of the cooperative form of organisation, such as perverse supply — side responses, have been shown to be based on restrictive assumptions about the labour — managed enterprise. Assertions about the existence and survival of cooperatives based on ideas of degeneration and self— exploitation have been shown to be questionable. Perhaps surprising to some, it is shown that management does play an important role in the organisation and behaviour of many cooperatives. For example, the existence of some sort of management structure seems important in those firms with high growth aspirations. Much of the discussion in this thesis suggests that worker involvement can bring about productivity increases. In effect, it is argued that participation can lead to augmentation of the production function. Traditional businesses in general might therefore be advised to consider adopting participation in the workplace. On the other hand cooperatives should also realise that success in conventional terms can often enable them to better pursue their political motivations