1. The Life Cycle Framework Macro – Meso – Micro – Micro/Micro View
Michael L. Cook
University of Missouri

2. The Journey A Very Brief Overview of Micro Life Cycle Some Basics
A Brief Overview of Micro Cycle (Introduction of Ownership Costs)
Evolution of the Framework
Finally – An Overview of the Micro Life Cycle
A Brief Summary of the Life Cycle Framework

3. A Very Brief Overview
The Micro Life Cycle Framework

4. FOB Health
Health of Cooperative
Time

5. FOB Health How do you measure cooperative health?
How do you measure performance?
Is there a difference?

6. FOB Lifecycle

7. FOB Lifecycle
Health of Cooperative
Time

8. FOB Lifecycle Health of Cooperative Time
Phase 1 = Economic Justification
Health of Cooperative
Time

9. FOB Lifecycle
Why formed?

10. Phase 1: Economic Justification
Market failure?
Scale economics?
Social capital?
Multiple rent extraction?

11. FOB Lifecycle Health of Cooperative Time
Phase 2 = Organizational Design
Health of Cooperative
Time

12. Phase 2: Organizational Design
Who can be a member?
Who/how is risk capital acquired?
Who has residual claim rights?
Who has residual control rights?
Sanctions - Enforcement

13. FOB Lifecycle Health of Cooperative Time
Phase 3 = Growth–Glory–Heterogeneity
Health of Cooperative
Time

14. Phase 3: Growth—Glory—Heterogeneity
Over time do we observe:
Disproportionate equity allocations?
Patron drift?
Patron-membership growth?

15. Phase 3: Growth—Glory—Heterogeneity Cont.
Substitution temptation?
Diversification exacerbating differences?
Cross subsidization?

16. FOB Lifecycle Health of Cooperative Time
Phase 4 = Recognition and Introspection
Health of Cooperative
Time

17. Phase 4: Recognition and Introspection
Factions?
Apathy?
Crisis?
Identification?
Introspection?

18. FOB Lifecycle Health of Cooperative Tinker Reinvent Spawn Exit Time
Phase 5 = Choice
Health of Cooperative
Time
Spawn

19. Phase 5: Choices
Tinker?
Reinvent?
Spawn?
Exit?

20. Iterative Life Cycle Hypothesis
Health of Cooperative
Time

21. Some Basics

22. Concepts of Interest Framework Diagnosis Path Dependency
Transformation
Collective Goods
Anti Commons

23. Ostrom’s Classification of Collective Goods
Samuelson’s Classification (1954)
Musgrave’s Classification (1959)
One Person’s Consumption Subtracts from Total Available to Others
One Person’s Consumption Does Not Subtract from Total Available to Others
(Jointness of Consumption)
Exclusion is Feasible
Private Goods
Club Goods
(toll goods)
Exclusion in Not Feasible
Common Pool Resources
Public Goods
Ostrom, Elinor (2003) ‘How Types of Goods and Property Rights Jointly Affect Collective Action’, Journal of Theoretical Politics 15(3):

24. Important Differences / Similarities
Starting vs. Maintaining
Marketing vs. Supply vs. Service
Multipurpose vs. Single Purpose
Spatial (Local – Regional – National)
Patron Controlled (PCB)
Farmer Owned Business (FOB)
Producer Owned Business (POB)
Cooperative (Patron Owned and Controlled)

25. Framework
Extension of the Farm?
A Separate Firm?

26. Cooperative Health Financial
Non-Cooperative Financial, but H.H. Financial
Leaders Perception
Community
Social Capital

27. Cooperative Health (Recent Survey)
Financial
Return on Equity
Return on Investment minus Member Opportunity Cost of Capital
Return on Assets
Non-Financial (Reduced from Industry)
Competitive Position in Industry
Overall Profitability (cooperative to member)
Member Satisfaction
Ability to Achieve Vision
Overall Performance

28. Graduate Institute of Cooperative Leadership (GICL) A Collaborative Research / Outreach Experience

29. Life Cycle Typology Macro Meso Micro Micro/Micro Micro/Micro Micro
Links
Human Dimension
Organizational Dimension
Enabling Environment

30. Life Cycle Typology Macro Meso All famer owned business
Macro Forces – Political, Social, Institutional
To Inform Implications of Institutional Change
Inform Policy
Meso
Group of Farmer Owned Entities (Type or Industry)
Shared Characteristics of Interest
To Inform Comparable Sample (Evolution, Functions, Structure, Policy Reactions)
Detect Generalizable Threats
Analyze Integrated System

31. Life Cycle Typology Micro Micro/Micro Single Entity
Constitutional – Governance
Operational – Strategy
Detect Heterogeneity – Vaguely Defined “Property” Rights
Detect Ownership Cost Evasion
Inform Policy
Micro/Micro
Individual Member (Household)
Demographics / Patron Characteristics
Organization Related Preferences
Detect Loyalty and Leadership Attributes Related to Collective Action
Inform Policies