Business cooperatives: when does sharing become a drawback?

Abstract

Purpose

Cooperatives are relatively understudied compared with investor-owned companies, yet their economic impact makes them important to consider. This study is to focus on business cooperatives that gather firms or entrepreneurs that share the same social and economic motivations and need to ally to grow. The positive and negative consequences of membership on the members’ business models are detailed. Insights to address and prevent the detrimental influences of membership on members’ business model are provided.

Design/methodology/approach

This conceptual study relies on several business cases to suggest that cooperative membership comes with positive and detrimental consequences for the three dimensions of members’ business models: their organization, resources and competences and value propositions (i.e. members’ offers).

Findings

Because organization, resources and competences, and value propositions are affected by membership in a cooperative, business members’ control over their own business models may diminish. This can offer positive consequences but may also be too constraining and harmful in the long term.

Research limitations/implications

Only scant research has investigated the influence of cooperatives on members’ business models. Further studies could help firms and entrepreneurs maximize the advantages of their membership in cooperatives while limiting the detrimental consequences over time.

Practical implications

If they are aware of the potential drawbacks of business cooperative membership, members can implement proactive efforts to avoid losing control of their business models.

Originality/value

Prior literature mainly concentrates on how cooperatives work and develop. No prior study seems to have investigated the consequences of cooperatives’ membership on members’ business models.

Citation

Roux, B. and Plé, L. (2017), "Business cooperatives: when does sharing become a drawback?", Journal of Business Strategy, Vol. 38 No. 4, pp. 11-20. https://doi.org/10.1108/JBS-04-2016-0037