1 Department of Political Science, Aarhus BSS, Aarhus University2 Institute of Business and Technology, Faculty of Social Sciences, Aarhus University, Aarhus University3 Department of Political Science, Aarhus BSS, Aarhus University
Why Members (do not) Monitor their Cooperatives
It is often observed that members have little interest in monitoring their cooperatives. One explanation is that the members are free-riders, hoping that others will perform the task. Another explanation is that the weak member interest is a consequence of members having trust in the leadership. These competing explanations refer to the theory of collective action and the social capital paradigm, respectively, and may be linked to the classical Gesellschaft and Gemeinschaft concepts. Hence, one may expect free-rider behavior when conditions of Gesellschaft exist and trustful behavior when Gemeinschaft conditions rule. These propositions get support from five studies of members’ readership of their cooperatives’ annual reports. In large and heterogeneous memberships there is free-riding behavior, which explains the members’ low interest in governing their cooperatives. To a limited extent a membership may have a subset of members who trusts the leadership so they do not read the annual reports.
Journal of Rural Cooperation, 2011, Vol 39, Issue 2, p. 131-150