xt7t4b2x557t https://exploreuk.uky.edu/dips/xt7t4b2x557t/data/mets.xml   Kentucky Agricultural Experiment Station.  journals kaes_circulars_004_565 English Lexington : The Service, 1913-1958. Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Circular (Kentucky Agricultural Experiment Station) n. 565 text Circular (Kentucky Agricultural Experiment Station) n. 565  2014 true xt7t4b2x557t section xt7t4b2x557t 3]·atOl`S   H     n   C      
  Supply Purchasmg
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 PREFACE
Q This report is designed primarily for use by managers, boards of
directors, and other personnel within the “management” of farm
supply purchasing cooperatives. It attempts to bring to the attention
of these key decision—makers some important facts and questions of
policy which may be facing these organizations.
Farm supply purchasing cooperatives have made significant im-
provements in their operation in the past, and their accomplishments
have been important. However, if a report such as this is to be useful ` _
to their “management,” it must focus attention on possible future
improvements and unsolved problems, that is, on situations where some
evaluation of alternative policies may be needed.
When we draw attention to such situations we do not imply that
they are necessarily “bad” or that improvements have not been at-
tempted or made. The determination of desirable policy is the job of
, the board of directors, the managers, and other personnel within
cooperatives. It involves many factors beyond the scope of information
collected in the study. The situations described, questions raised, and
alternatives suggested in this report may appear unduly critical if the
purpose and the intended audience are not kept clearly in mind.
I Our intent is to be constructive and to help Kentucky cooperatives
carry on their important work with increasing efectiveness. To do
this, we believe we must call attention to those perplexing unanswered
questions which appear important to their future as cooperatives.
The report is based primarily on information supplied by managers
of local retail cooperatives. In some cases these managers may not
have possessed complete information on various points, particularly on
. activities in which personnel of a regional association participated.
Information supplied by managers has been checked, as far as possible,
Y with that supplied by personnel of the regional associations. Through- _
out the report we have attempted to call attention to the source of our
information and its possible weaknesses.
Finally, the data were collected in 1955. Many changes have
l occurred since that time, and we regret it was not possible to compile
e the report at an earlier date. However, in most cases this will not
seriously impair its usefulness. Comparing an existing situation in a
particular cooperative with the general situation described by the
data will establish whether the questions raised by the data are
pertinent to the situation existing presently in that cooperative. How-
· 3

 ever, at various places we have attempted to recognize the likelihood
that changes have occurred and to incorporate more up-to-date data C
supplied by personnel of the two regional associations serving these H
local units. l
The authors are grateful to all the managers of the 40 farm supply
cooperatives who willingly gave their time in answering many ques-
tions and providing information from their files and records. The
personnel of Valley Counties of Kentucky Cooperative and Southern
States Cooperative have provided many items of information and other »
services too numerous to mention. Without such cooperation the study
could not have been made. _
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 elihood
te data
i thm How Kentucky Farm Supply Purchasing
Supply Cooperatives Are Controlled
y ques-
S. The By ELDON D. SMITH and WENDELL C. BINKLEY
Jutheru
d other INTRODUCTION
e study . .
A cooperative can be no better than its management. Management
involves a vast number of decisions by members, by their elected
1 representatives (the board of directors), and by the paid employees ·
S of the association. Therefore, an understanding of cooperative prob-
lems involves, among other things, the following factors: (1) under-
standing some of the ways decisions are made by the various parts
of the management team; (2) understanding who makes individual
types of decisions; (3) understanding how the members of the man-
agement team relate themselves to each other in making management
decisions; (4) understanding the overall structure of powers and
responsibilities in the organization; and (5) understanding the legal
and social forces that impinge upon management.
This study is based on a rather comprehensive survey of some
selected phases of these management processes. It was conducted in
1955 and covered 40 of approximately 48 retail farm supply coopera-
tives in the state.
The study attempts to do three things: (1) to make an inventory
» of existing organizational structures and management practices; (2)
to focus attention on important questions relating to the management
of local farm supply purchasing cooperatives; and (3) to analyze the
possible consequences of existing practices to the types of cooperatives
represented in the survey.
· Farm Supply Purchasing Cooperatives Today and Yesterday '
Of the 48 local farm supply purchasing cooperatives in Kentucky
in 1955, S4 operated under the provisions of a management contract
with Southern States Cooperative, Richmond, Virginia. Southern
States is a regional manufacturing and distribution cooperative. Four
additional local retail farm supply cooperatives which operated on a
full-time basis were aililiated with the Valley Counties of Kentucky
Cooperative, a small federation of independent cooperatives. Through
franchise arrangements, these four also handled materials supplied by
the Southern States Cooperative. Of the two other cooperatives
5

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6

 covered ir1 the survey, one was afliliated with Southern States Coopera-
tive through a franchise arrangement, and the other was affiliated
with the Indiana Farm Bureau Cooperative Association. Only two of
the unsurveyed cooperatives had no direct affiliation with any regional
cooperative. In addition to the 48 specialized retail farm supply
cooperatives, some other types of cooperatives handled small amounts
of fertilizers and other farm supplies. '
In this study, data are analyzed for the 34 Southern States retail
farm supply cooperatives and for 6 independent farm supply coopera-
tives. While this is not a complete census, it represents substantially
all of the business volume done by local retail units. as well as the
memberships in local retail farm supply cooperatives. The four _
specialized petroleum cooperatives are not included because some
problems and relationships are unique to them. The study is focused
I on general farm supply purchasing cooperatives at the retail level.
Numara
or co-ops
so
ss
5° 7 % % V  ‘ 7
45 V 7 % / / / ‘ /
ss.
30 % % % % % % % % 4
25 r%% %%%%%%%
V % / / / z z / / / z
i° ’//////////
·= %%%///%///%
% / / / / / / /  » /
 //////////
0 me '4v '4a he ‘so YQTR ‘sz 'sa 's4 'ss ss
E Fig. 2.— Number of farm supply purchasing cooperatives in Kentucky, by years.
of K.€.%:12a %;;r:s;;’ .%:;*.r":;;srE..;2;?;;€.i.%’;. ‘§$a:;;‘*..:2;.‘::‘ cia. E€a*:ui:: "“"‘““’ -
The 40 cooperatives surveyed handled about $9,440,000 worth of
supplies in the 1954-55 season. Crude computations indicate this was
. about 75 percent of all supplies handled by general farm supply
; retail cooperatives and marketing cooperatives in Kentucky} These
40 cooperatives represent about 84 percent of the memberships in
lEstimates are based on (1) survey data, (2) data supplied by Southern
States Cooperative, and (3) data from the Farmer Cooperative Service, USDA.
The figures above do not include approximately $7,000,000 business done 1n
Kentucky by private (retail) dealer agencies of Southern States Cooperative.
7

 retail farm supply cooperatives in Kentucky? (See Fig. 1 for location
19.
of cooperatives, cooperative affiliates, and facilities.) Cm
These cooperatives W€I'€, in ITlOSt CEISCS, 1`€l3.t1VGly yO1.lI1g OI`g&lT1lZ&-  
tions. Of the 40 included in the survey, 36 were organized after 1944; th]
only one was organized prior to 1940. During the post World War II 19
years, the number of farm supply cooperatives increased from 21 in in
Mu.i.1oNs or . ‘ S i“‘
DOLLARS NET VOLUME N
I
20 y _ V
4 4 4 4 4 .
4 4 4 4 —
r / 4 / / ‘
·¤ 4 4 4 4 4 -
4 4 4 4 4 4 ·
4 4 4 4 4 4 i
4 4 4 4 4 4 E
4 4 4 4 4 4 ~
. / / / 4 / / =
no 4 4 4 4 4 4
4 4 4 4 4 4 E
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t , 4 4 4 4 / 4 4 ·
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» 4 4 4 4 4 4 4 4  
5 4 4 4 4 4 4 4 4 4 ·
4 4 4 4 4 4 4 4 4 T
  4 4 4 4 4 4 4 4 4 ‘
4 4 4 4 4 4 4 4 4 4 ·
4 4 4 4 é 4 4 4 4 4 .
4 4 4 / / 4 / / /
O  
l945-4646-47 4'[—48 48-49 49-50 50-5I 5l‘52 52-53 55-5454-55 55-55
YEAR
Fig. 3.— Dollar volume of business by farm supply purchasing cooperatives in Ken- Fig
V tucky, by years.1 tuc
W hSor;ce: Statistics of Farmers Marketing Farm Supply and Service Cooperatives, U.S.D-Aa K
ls lllxircliiides all cooperative farm supply purchases at the first level. Sales by Southern bi:
States Coopreative to private dealer agents are included. S“l’
* 2 In computations, no allowance is made for membership in marketing or other
cooperatives which may engage in incidental purchases of farm supplies. Farmers i all
who purchase farm supplies from private dealer agencies of Southern States C0- ng
operative receive wholesale patronage refunds directly from Southern States C<>· ch
operative in the form of stock and/or other equity in the regional cooperative, `
tll€l`€l)y bCCO1]lll’1g I1'l€I`I`1lD€I`S. Tll€SC IflC1Tll)(·)l`Sl1lpS Elppéilf lil lil]€ statistics pI`OVld€d  
by Farmer Cooperative Service, USDA, but are not included here as memberslrlp _
in retail farm supply cooperatives, although they do constitute approximately 10
percent of all Kentucky membership in purchasing cooperatives, wholesale and ma
retail. . in
8

 ation A 1946 to 50 in 1951. As of 1955, the number of retail farm supply
_ A cooperatives had decreased to 48, including four part—time operations
lg? p (Fig, 2). Memberships and volume of business continued growing
7 49 throughout the period. From the modest volume of $1,700,000 in the
ar ll 1945-46 season, total cooperative purchases expanded to $20,433,000
21 m in the 1955-56 {iscal years (Fig. 3). In the same period, memberships
5 increased from about 7,100 to 108,700 (Fig. 4).
MEMBERSHIPS
(THOUSANDS)  
. I0O %
  2: V 2 .
as / /
2 2
80 / /
2 2 /
55 22222
A *55 2 2 2 2 2
55 · 2 2 2 2 2
5 2 2 2 2 2 2
~ 50 2 2 2 / 2 / 2
2 2 2 2 2 2 2
45
2 2 2 2 2 2 2
40 *
2 2 2 2 2 2 2
2 2 2 2 2 2 2 2
55 2 2 2 2 2 2 2 2 2
30 .
2 2 2 2 2 2 2 2 2
2 2 2 2 2 2 2 2 2
55 2 2 2 2 2 2 2 2 2
2 2 2 2 2 2 2 2 2
25 2 2 2 2 2 2 2 2 2
I5
2 2 2 2 2 2 2 2 2 2
2 2 2 2 2 2 2 2 2 2
'° 2 2 2 2 2 2 2 2 2 2
·/2122222222
O [A A A 5.2 4 A A A A 4 A
522222222222
56 I945—46 46-47 47-48 48-49 49-50 50-5l 5I-52 52-53 53-54 54-55 55—55
YEAR
an Ken-   Eiljzated memberships in farm supply purchasing c¤¤per¤tives in Ken-
U.S.D.A., Source: Estimated from materials compiled by Dept. of_ Ag. Economics,_University of `
S°““‘"“ ·  ah?-?p?5”€£1rY5irri$‘e °§L"‘¥‘;$§L‘;?. ‘Q§L;.§;§g ‘;L5;‘;i
Or other IUV€StI`I1€I`ltS   l:8.I‘lTl€I‘S l1'1 f3.l'l'1'1 supply COOp€I'2ltlV€S 118.VC also
Farmers attained sizeable proportions. Crude computations indicate that the
M65   _ ¤€t Worth (subscribed capital and retained earnings) of retail pur-
giirrirg, Chasing cooperatives was about $3,872,000 at the end of {iscal year
provided . 1954-55.3
ib ld . —
L15? lll] 3 Actual net worth figures were used for the 40 cooperatives surveyed. Esti-
$319 and lnates \V€I`€ IT]H.d€ for Otl'1€I` COOp€1'Eltl\/CS, Tl]€ Hgllfé (1065 I10t lI`lC1Ud€ lI1V€St1`l'l€HtS
ln Southern States Cooperative by patrons of private dealer agencies in Kentucky.
, 9

 The proportion of all farm supplies which were purchased through Oy
cooperatives is impossible to estimate accurately. However, for selected ge
items of supplies, some general indication is possible based on govern- CO
ment statistics and survey information provided by cooperatives th
(Table 1). Indications are that cooperatives handled approximately tj,
ele
Table l.-— Total Value of Selected Farm Production Supplies Purchased by
Kentucky Farmers and Value of Those Purchased Through Cooperatives
 
Purchased Through Percent Purchased
Total Expenditure Cooperatives? Through
(1954)1 (1954-55 Season)" Cooperatives pC
Feed .......................................... $47,461,8004 $9,048,000 19% ef
Fertilizer .................................... 27,950,000 3,517,000 13% th
Seed, bulbs, plants, and trees .... 12,883,0005 1,901,0006 15% ml
Petroleum products .................... 19,126,800 1,073,000 6%
Other supplies .......................... (not available) 3,995,000 (Not available) ha
Total ............................ $19,534,000 Wl
 
1United States Census of Agriculture, 1954. ml
2This is the value at the "{·irst level." The volume of merchandise sold by franchised Of
private dealer agents of Southern States Cooperative is included. About 100 private dealer
agents were operating in Kentucky in 1955. _ us
1957** Farmer Cooperative Service, Statistics of Farmer Cooperatives, General Report 31, june
Zlncludes hay, grain, salt, and mixed feeds including sales by farmers to other farmers. Su
The cooperatives mainly sell mixed feeds; therefore, the percentage of all mixed feeds handled
by cooperatives is probably higher than this figure.
“Estimated from 1950 data assuming constant proportion between "seed, bulbs, plants, In
and trees" and "feed." Comparable data not available in 1954 census.
° Seeds only. lgy
. . t
19 percent of the feed, 13 percent of the fertilizer, 15 percent of the O_
commercial seeds, and 6 percent of the petroleum products used by  
Kentucky farmers in the 1954-55 season on a dollar-value basis (Table m
. . Z1
1).4 All figures include both purchase through local cooperatives and U
. . . . 3
sales by Southern States Cooperative to its franchised private dealer br
H
agents.
. . . B
, Cooperatives do a relatively small proportion of total farm supply bv
purchasing. However, their opportunities for expansion appear rela- l
tively good if such things as management practices, structure of
4 Based on analysis tags issued by the regulatory departments of the Univer th
sity of Kentucky, the estimated proportions were about 11 percent for feed, ll 4
percent for fertilizer, and 17 percent for commercial seeds. These data were in- of
dependently compiled from existing records and are not available in published at
materials. The wide discrepancy in the two feed figures is not easily understood. a
It seems likely that some under—reporting of feed purchases occurs in the census I
enumeration because feed is purchased in small quantities over several months.
However, comparisons of the sale value of manufactured feeds in the Census ni _
Manufactures and expenditures by farmers for animal feeds in the Census of
Agriculture do not suggest any large under-reporting. Expenditures were ab0¤l rh.
$3.9 billion and manufactures were $2.7 billion. The expenditures items include go
all straight grains and hays while the manufactured items do not. Also, wholesale
and retail margins are not included in the manufactures figure. The relative in
magnitudes suggest that under-reporting, if any, must be relatively small. Ar
10

 rough organization, and member participation in cooperative affairs are
lected geared to the needs of modern agriculture and modern economic
>vem- conditions. The preceding comments have provided an indication of
atives the present situation and history of farm supply purchasing coopera-
mately tives. The following discussion directs attention to some of those
~ elements of management that may affect future progress.
egy The Cooperative Form of Business Orgonizotion
E · A cooperative is a unique form of business organization. Its pur-
‘§‘,§§}$,,, pose is to benefit its members economically as patrons, i.e., as users
T of its services. In order to achieve this purpose, the right to control
% p the organization’s policies or mode of operation is given to the patron-
  members rather than the capital investors. In Kentucky, each member `
ailable) I has one vote regardless of his capital investment or the extent to
which he uses the services of his cooperative.5 In some other states
’; members have a varying number of votes depending on the amount
;g¤§*j;§§ of cooperative services which they use. This situation, when found,
31, Im . usually occurs in marketing or service cooperatives, rather than farm
mmm . supply purchasing cooperatives.
h¤¤d1·=d In addition, cooperatives operate within a special legal framework.
=. pim. In order to enjoy certain privileges, they must obey several special
laws concerning their mode of operation. These are primarily designed
Of the tolassure members the organization will operate in a manner consistent
Sed by iv1th patrons wants and needs. A restriction on the return to capital
(Table p investors is mandatory, and any accruals above necessary expenses
Yes and and reasonable reserves must be returned to patrons. These accruals
dealer are returned to the user of the cooperative services on a pro rata
_ basis. They may be returned in the form of cash, capital stock, other
Supply ° evidence ofueduity in the organization, or evidence of indebtedness
lr mh by the association to the patron.
nre 0i 1 Whot is Cooperative Monogement ond Who Does It?
_ Management is the process by which decisions are made regarding _
fg?/?i the way a business will function. Management is the responsibility
were in- of one or more persons. When it involves more than one, a problem
  arises about the way to distribute these decision-making responsibilities
€ cmu, p among the various people involved.
months? In any cooperative, the members have ultimate authority.“ Norm-
lensus 0 ·  
fmsus Of 5Required by Kentucky law under which cooperatives are organized, and by
FG abmlt the Virginia Cooperative Marketing Act, under which “management contract"
i include Sfluthern States retail cooperatives in Kentucky are organized.
Vholcsale °EXceptions would be those cooperatives chartered under special legislation
Yelmle in Which certain powers are given to a supervisory agency such as the Farm Credit
all. O Administration.
11

 ally, however, members do not directly determine the rights and tm
responsibilities of employees. Usually this is left to the discretion of tl?
their elected representatives. Primarily through their votes in electing SH
their representatives, members have the power to determine jointly SU
the rights and responsibilities of (1) the individual members, (2) the
elected representatives of these members, and (3) the appointed CO
(salaried) personnel hired to perform the actual operations of the th'
business. This system of rights and responsibilities, enforced and sup- T}
plemented by law and custom, establishes the overall framework in th'
which management takes place. It establishes the scope of manage- an
ment assigned to each person or group of persons connected with the P0
cooperative. Of course, management in a cooperative is partly an t as;
indirect process. The elected members of the board of directors have C?
wide discretionary powers. They usually determine most of the broad SH
policies governing the operation of the business. They can decide, ml
within broad limits, what responsibilities are delegated to the salaried lh)
manager and to his subordinates. Within these established limits, the
salaried manager exercises discretionary powers over his subordinates, to
and so forth. Thus, hiring and firing of nonsupervisory personnel is
usually delegated by the board to the hired management. A salary UC
schedule may be developed by the board in some cooperatives, in
. others a budget may be established which the hired management may ye,
split up according to its own best judgment.
When local cooperative associations are combined into “regional” th
associations, additional delegations of rights and duties are involved.
Decisions must be made regarding the relations of members of local re
associations to the management of the local and regional associations.  _ ar
Local associations, in some cases, virtually maintain complete responsi-
bility for the management of their own local cooperative’s operations; .
in others much of this responsibility is delegated to the regional m
association. _
V Membership by a local association in Valley Counties of Kentucky m
Cooperative, for example, involves virtually no surrender of local af
autonomy. While the regional offers assistance in training bookkeepers,  
hiring auditors, providing legal service, conducting educational and tu
business meetings, and the like, none of the responsibilities is man- _
datorily delegated to it. l G1-
The manager of Valley Counties of Kentucky Cooperative mH}’ ar
counsel with local managers and boards of directors and facilitate bf
communication among them, but he has no authority over these M
associations. He provides liaison between local cooperatives and . W
private suppliers or associations of cooperatives which provide mw al
12

 and terials handled by the cooperative, but he has no authority to dictate
DH Of the brand or. source that an individual retail cooperative may use. A
ming I Similar relationship exists. between these associations and Southern
indy ( States Cooperative, of which they are also members.
) the The relationship of 84 Kentucky local retail farm supply purchasing
(med _ cooperatives to Southern States Cooperative is established largely by
(f the the terms. of a management contract. with the regional association.
[ Sup V This provides an example of a very different degree of delegation to
mk in the regional association. By this contract, which has been modified
Inge- and refined over the years, the local association conveys a limited
zh the power of attorney to Southern States for management of certain
ily an y aspects of its local operations., A legal document of such complexity
( have Q cannot be adequately summarizedlm a few. words. However, a few ·
broad simplified statements of key provisions will illustrate its effect on the
ecide responsibilities of the local and regional associations. For example,
llarieé the contract:
ts, the (1) Delegates responsibility for personnel recruitment and training
mates) to Southern States.
me] is (2) Requires joint approval of candidates for local manager posi-
Salary tions by Southern States and by the local board.
res; in (3) Delegates primary control over purchase of commodities for
nt may resale to Southern States.
(4) Retains control over -additions or discontinuances of service to
iiomll the local retail associations (unless this involves floating a loan).
'°1V€d‘ (5) Gives the local association the right to determine patronage
f local refunds or to make stock issues (although mechanics of the processes
ation? are handled by Southern States).
gplmsll  I (6) Dele ates res onsibilit for su ervision of auditin , account-
ations; .   _ P Y P g
zgional mg, and retail credit control to Southern States.
Important advantages of this arrangement are that it makes possible
ntuckv increases in efliciency resulting from coordination of retail, wholesale,
E 10 Gil and manufacturing services and brings certain aspects of local manage- —
eepers, i ment under the control of specialists employed by the regional associa-
al and tion.
s man- This contract is completely voluntary and may be cancelled by
either party with proper notice (and other conditions) at the end of
,8 may , MY H$€¢1l year. Apparently the contract is mutually advantageous
mutate ` because there have been no terminations in Kentucky to date. In
_ these addition, the local board and local manager influence, in an informal
gs and I WaY» mtmy aspects of management outside the realm of their formal
jc mw authority. Although the contract delegates formal authority for
V 13

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'G . ¤"6"`&§ . a1
gg _¤I GG
·¤ cm cnuom th(
neu-.-Im ¤¤-HW
¤¤o¤c<: ¤¤I¤¤<2
O GJ WSU
an M $2 F5
· - I 0v
· ..-1..... th·
" 'I 2:: `
I 2 hm I gg M
SU S3 ‘=" of
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 personnel decisions to Southern States Cooperative, characteristically
a manager of a local cooperative is neither hired nor removed without
the sanction of the local board of directors.
This contrast in the channels through which members exert control
over management decisions is illustrated in Fig. 5. It should be noted
» that in both cases some managerial decisions are made by both elected
and hired personnel of the local. However, in some cases, a majority
of these responsibilities are delegated to others; in other cases many
I are retained by the local cooperatives. In the management contract
type of association (represented by Southern States locals), individual
farmer members ma have much iniluence over local mana ement
g 7
but this influence is to a large extent channeled through the regional
U, i organization. In the nowmanagement contract ("independent") as-
2 sociations, more decisions are delegated directly by the local board of
il _ _
§ — directors to the local hired management, or are made directly by the
§` board of the local association.7
I To summarize, the smaller Valley Counties of Kentucky Coopera-
§ tive depends, to a much greater extent, on informal “family type"
E relations between it and its member associations. Fewer delegations
E of authority to the regional occur and when they do, they are, in most
*3, cases, neither contractual nor legally binding. These same generaliza-
§ . tions apply to any of the so-called “independent” associations which
E operate under franchise arrangements with Southern States or by
E memberships in other regionals which are not tied to management
g ‘ contracts. The more complex, far-flung operations of the Southern
E States organization require that more of these relations be formalized.
E In addition, some differences in point-of—view regarding the importance
I g of coordinating the activities of the regional and local associations are
,,; probably reflected in these more extensive contractual delegations of
E, authority to Southern States Cooperative.
IL
I In addition to these differences in delegations of responsibility, some differ-
cnces in formal organization are recognized. In the Southern States system, as we -
have noted elsewhere, patrons of franchised non-cooperative retail dealer agents
hccome members in Southern States (Regional) Cooperative upon accumulating a
patronage refund equal to one share of membership stock ($1.00). These mem-
bers elect representatives to district election meetings who have voting rights
cqual to delegates representing local cooperative associations. The relation of
. these individuals to Southern States Cooperative is formally similar to the so-called
centralized type of organization, since they have no affiliation with an organized
local association. However, we are concerned here with functional relationships in
I management rather than formal organizational structure. In some cases an in-
K clividual may be a member of a management contract cooperative and, by virtue
of patronizing one or more private dealer agencies, he 1nay also be a member in
Southern States Cooperative. In these cases, the member may exercise his vote
ln Southern States Cooperative and in the local cooperative.
15

 Determinants of Management Decisions
The hired management of a regional association or a local coopera-
tive has a wide range of discretion. Furthermore, at any level, the
hired management is in a position to know more about the detailed bf
operations of the cooperative than the board of directors. The board SK
must therefore depend upon him for information and advice on a Tl
wide range of subjects. For this reason, the manager often influences fa:
the decisions of his board regarding policies directly affecting the ac
rules under which he operates. He is often in a position to exert con- df
siderable iniiuence over the way the annual membership meeting is l hh
conducted and over the selection of nominees from which the members
elect their directors. The hired manager is in a most strategic position fc
to shape the management of the entire organization. Consequently, a lS>
major part of this study is based on facts, opinions, and attitudes IE
obtained from interviews with managers of local retail farm supply fh
cooperatives. af
Decisions by Hired Managers K;
In making managerial decisions hired managers are assumed to p(
be influenced by at least three interrelated sets of factors. The first, all
which has been discussed before, is the scope of their assigned responsi- re
bilities. The second is knowledge of things important to these deci- · W
` sions, including knowledge of the scope of their assigned responsibili-
ties. The third is the group of things which they consider important
to the job as a cooperative manager. We will call this the managers
job perspectives. For any manager, these, in turn, may depend upon
the way he views the organization and its purposes, which involves ti]
knowledge of the organization’s purposes. P;
th
Perspectives of Managers-What They Consider HI
Important to their Job re
· One manager may view his organization as “just another business.): fh
He is likely to make different dec