Heterogeneity of stakeholders as an obstacle to the development of agricultural cooperatives in Russia

Abstract

The paper presents a new approach to the explanation of the failure of cooperative model in the post-Soviet agriculture. This approach is based on the stakeholder theory: thus, performing all functions of heterogeneous stakeholders on the regular basis may be too resource-intensive, and cooperative members may not have enough competencies for such tasks. First, the study supplements the existing research by providing a new explanation for the non-attractiveness of the cooperative business organization for Russian farmers. Second, the paper presents a link between the stakeholder theory of cooperatives and the theory of cooperative organization as developed by Ivan Emelianoff (1995) in his groundbreaking work Economic Theory of Cooperation. Third, the study proves in a new way the hybrid nature of cooperatives. The author focuses on agricultural cooperatives; however, the conclusions are valid for cooperative organizations in other industries. The paper starts with a short note on methodology - a description of stakeholder theory as applied to the study of cooperative organizations and a study of the hybrid nature of cooperatives; then follows a review of main research directions in the study of the failure of the cooperative movement in Russian agriculture, a section on the contradictions between the stakeholder theory of cooperatives and the farmers' interests of farmers, and a section on the possible ways for resolving these contradictions. New forms of business organization should emerge as a compromise between an ideal firm and an ideal cooperative. These new forms would help farmers to benefit from cooperation instead of formal participation in it.