Multiple rational management and governance in agriculture cooperatives

• Date: 27 April 2020
• Pages: 653-671
• Published date: 27 April 2020
• DOI: https://doi.org/10.1108/CG-08-2019-0245
• Author: Maísa Gomide Teixeira,Silvia Morales de Queiroz Caleman,Jean Carlos da Silva Américo
• Subject Matter: Strategy,Corporate governance

Multiple rational management and

governance in agriculture cooperatives

Maísa Gomide Teixeira, Silvia Morales de Queiroz Caleman and

Jean Carlos da Silva Américo

Abstract

Purpose –This study aims to analyze how multirationalmanagement relates to cooperatives’ corporate

governance.

Design/methodology/approach –A typology of agricultural cooperatives’ potential for multirational

management in relation to corporate governance is proposed. Coordinates based on data from

assembly participation and separation of ownership and control are usedto map cooperatives among

these typologies. Four case studies representing each typology were conducted, allowing analysis of

propositions.

Findings –By mapping the cooperativesfrom Mato Grosso do Sul, a reduced potential for multirational

management is noted. By analyzing the four case studies, coded as Coop 1, 3, 13 and 16, this study

found convergencewith P1,P2 and P3. ‘‘Coop 1’’ shows signs of adoptingexploitation practice. In ‘‘Coop

3,’’ evidence points to avoidance practice and, analyses of ‘‘Coop 13’’ indicates adoption of tolerance

practice. In Coop 16, however, P4 could not be confirmed. Instead of polarizing practices, there is

evidence of avoidance practice. Therefore, a positive relation between corporate governance and

multirationalmanagement can partially be observed.

Originality/value –There are no records of a paper that has explored the relation of governance and

multirational management. Therefore, this research broadens the understanding of how corporate

governance can function in the context of cooperative organizations. As well, insight is given on how

different mechanisms of corporate governance can influence organizations to adopt explicit or

implicit and monorational or multirational methods of dealing with multiple rationalities.

Keywords Multirational management, Corporate governance, Agricultural cooperatives

Paper type Research paper

1. Introduction

Neoclassic economic behavior models have received critiques, which claim attention. This

opens room to more knowledge about how firms obtain higher performance through

decision-making. The literature on multirationality in pluralistic environments proposes

challenges that are consistent with this alternative vein of thought. According to Schedler

and Ru

¨egg-Stu

¨rm (2014), a growing number of organizations rise in the midst of several

societal functional systems among which they need to legitimize themselves relying in

different reference systems. As an implication, these organizations need to house

permanently under the same umbrella relevant groups of actors supporting different

rationales, which raises the complexity of decision processes. For this context, Schedler

and Ru

¨egg-Stu

¨rm (2014, p. 44) propose the concept of multirational management which

stands for the protection of the organization’s capacity for decision-making and actionwhile

dealing with these rationalities.

Our paper addresses this issue with special attention to cooperative organizations.

Cooperative organizationsprovide a context in which, often, multiple rationalitiescan trigger

conflicts that trouble their performance and, therefore, aspects related to multirational

Maı

´sa Gomide Teixeira is

based at the School of

Administration and

Business, Federal

University of Mato Grosso

do Sul, Campo Grande,

Brazil.

Silvia Morales de Queiroz

Caleman and

Jean Carlos da Silva

Ame

´rico are both based at

the School of Management

and Business, Federal

University of Mato Grosso

do Sul, Campo Grande,

Brazil.

Received 6 August 2019

Revised 13 January 2020

18 March 2020

Accepted 29 March 2020

The authors are grateful to the

Coordination for the

Improvement of Higher

Education Personnel (CAPES),

without whom they would not

have the resources to conduct

this research.

DOI 10.1108/CG-08-2019-0245 VOL. 20 NO. 4 2020,pp. 653-671, ©EmeraldPublishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 653

management need to be addressed. This is because of historical aspects of cooperatives,

which may give rise to ideological motivations; the fact that cooperatives in Brazil are prone

to ambiguity in ownership and control; the dual nature expressed even by the Brazilian

cooperative law that characterizes them as “civil societies for economic proposes, but not-

profit organizations”; and by the doctrinal sharing guaranteed by the International

Cooperative Alliance. Conflicts of rationality stands out as an important issue for

cooperatives’ administrationand is a recurrent subject in research (Chase, 2003;Fonte and

Cucco, 2017;Heras-Saizarbitoria, 2014;Ja

¨ger and Beyes, 2010;Taylor, 1994;Teixeira,

Roglio and Marcon, 2017).

It is argued that corporate governance practices relate to multirational management in

cooperatives. Corporate governance is indicated for overcoming agency problems that

arise from the conflicting interests of different parties in the firm (Fama and Jensen, 1983;

Jensen and Meckling, 1976). While thereis consensus about that, because its assumptions

are based solely on economic rationality, some researchers are concerned about the

relation between emotional aspect and decision-making process (Azouzi and Jarboui,

2013) and emotional intelligence leadership competences in corporate governance

(Nwokah and Ahiauzu, 2010). Also, some defend the need to investigate corporate

governance with theoretical approaches based at the level of individual rather than the

organization (Mostovicz et al., 2011). But, there is not, until now, any research that tackles

whether corporate governance relates to the management of multiple rationalities. In our

research, a first step is taken by analyzing how multirational management relates to

cooperatives’ corporategovernance.

A22-matrix typology is proposed for the analysis of the agricultural cooperatives’

potential for multirational management. This typology supported our research on

cooperatives from Mato Grosso do Sul, which were mapped among four quadrants. For

each of these quadrants, a proposition related to multirational management practices is

posed. The results indicate that the majority of the cooperatives have an incipient potential

to multirational management, because they have characteristics related to the quadrants

“cooperatives in legitimacy crisis” and “traditional cooperatives with ceremonial

assemblies.” Furthermore, the results from the field research confirm partially the

propositions.

In the following section, weprovide a review of the relevant theoretical background, whichis

divided into two sections:

1. institutional complexity and its implications for cooperative organizations; and

2. corporate governance and its particularities in agriculture cooperative organizations.

An overview is then provided for the research methods and data analysis techniques

applied in this paper. Moreover, we present the research findings and, as a conclusion,

discuss the significance of these findings while addressing the limitations of our study and

the suggestions for future research.

2. Implications of multiple rationalities for cooperatives

Referring to the psychology of administrative decisions, the limits of rationality are

presented by Simon’s (1947) as a derivation of the inability of the human mind to sustain all

aspects of value, knowledge and behavior that would be relevant to a single decision.

Described in this way, rationality operates within the boundaries of a psychological

environment and therefore refers to human cognition. The position of Schedler and Ru

¨egg-

Stu

¨rm (2014) stresses rationality as a result of continuous processes of interaction between

members of a community of shared meanings,which construct a logic for the interpretation

of group specific situations. The groups’ interpretation results in multiplerationalities. This is

illustrated when Binder (2007, p.551) mentions that “staff, management, funders, and

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