Creating Effective Alliances Farmer Cooperatives Conference Creating Effective Alliances St. Louis, MO December 14, 2002 Brian M. Henehan, Sr. Extension Associate & Bruce Anderson, Assoc. Professor Department of Applied Economics and Management Cornell University

Cornell Cooperative Enterprise Program Long standing relations with Ag. Cooperatives in region and U.S. Teach undergraduate course on cooperative enterprise Conduct applied research Deliver extension and outreach program Coordinate with the NE Cooperative Council, (NECC)

OBJECTIVES Review Critical Factors in Developing Alliances and Joint Ventures Highlight Ingredients for Success Stimulate Discussion

ECONOMICS OF “TRUST” High Level of Confidence and Trust in Leaders & Management: Integrity, Avoid Conflicts of Interest Clear, Shared Vision, Common Culture Group Access to Appropriate Information: Strategies, Financials Transparency: Clear, Easily Understood Pricing and Cost Allocation

ECONOMICS OF TRUST High Degree of Probability That: The Venture Will Be Able to Deliver Expected Results Meet Mutual Goals A Business Philosophy That: Focuses on Generating Earnings Emphasizes Sound Marketing Plan

UNDERSTAND RISKS Marketing Financial Reputational Organizational

SOLID DECISION MAKING STRUCTURE Shared Control: Players Can Exert Necessary Influence Clearly Defined Management System Well Developed Goals & Decision “Rules”: Outline Measurable and Attainable Goals Rules Are Fairly Applied Ability to Change Course or Exit

Creating Successful Alliances and Joint Venures Farmer Cooperatives 2002 Creating Successful Alliances and Joint Venures