Member commitment in farmers’ cooperatives in China: The role of contractual and relational governance mechanisms

PLOS ONE RESEARCH ARTICLE Member commitment in farmers’ cooperatives in China: The role of contractual and relational governance mechanisms Lijun Zeng ID1☯, Junyi Wan ID2☯*, Qinying He2 1 School of Finance and Economics, Guangdong Polytechnic Normal University, Guangzhou, China, 2 College of Economics and Management, South China Agricultural University, Guangzhou, China a1111111111 a1111111111 a1111111111 a1111111111 a1111111111 OPEN ACCESS Citation: Zeng L, Wan J, He Q (2023) Member commitment in farmers’ cooperatives in China: The role of contractual and relational governance mechanisms. PLoS ONE 18(7): e0288925. https:// doi.org/10.1371/journal.pone.0288925 Editor: Charles Odilichukwu R. Okpala, Wroclaw University of Environmental and Life Sciences: Uniwersytet Przyrodniczy we Wroclawiu, POLAND Received: October 21, 2022 Accepted: July 6, 2023 Published: July 27, 2023 Copyright: © 2023 Zeng et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Data Availability Statement: All relevant data are within the paper and its Supporting Information files. Funding: This work was supported by the National Social Science Fund Project of China [Grant No. 21&ZD090]; the Social Science Foundation of Guangdong Province, China [Grant No. GD21YGL04]; the Natural Science Foundation of Guangdong Province, China [Grant No. 2021A1515011444]; and the High-level Introduction of Talent Research Foundation of ☯ These authors contributed equally to this work. * Abstract Farmers’ cooperatives play a critical role in social, economic, and environmental sustainability in terms of poverty reduction, food quality and safety, farm sustainability, and members’ well-being. However, they are generally faced with low or declining member commitment, which restricts their performance and sustainable development. This study aims to investigate the effect of cooperative governance on member commitment as well as the moderating effects of cooperative types through an empirical exploratory study applying a random sampling survey. The results indicate that both contractual and relational governance have significant positive effects on member commitment, but vary with cooperative types. Specifically, there is a greater effect of contractual governance in company-affiliated cooperatives than in primary cooperatives, while the effects of relational governance increase in the order of company-affiliated, primary, and company-led cooperatives. Moreover, relational governance displays a greater positive influence on member commitment than contractual governance. These findings suggest that cooperatives should take organizational features, contractual and relational governance into consideration to improve member commitment and sustainable development. 1. Introduction Farmers’ cooperatives (hereafter referred to as ‘cooperatives’) have substantially contributed to achieving the United Nations’s Sustainable Development Goals [1–3]. Reducing poverty and promoting food quality, members’ well-being as well as sustainable farm practices are some of the noticeable achievements of cooperatives [4–6]. Since cooperatives largely rely on members’ collective actions to achieve their organizational goals, their success and survival require high member organizational commitment [7]. Cooperatives with weak member commitment are more likely to have internal conflict and opportunistic behaviors. Currently, cooperatives face the great challenge of declining member commitment due to increasing heterogeneity in members’ attitudes and perceptions resulting from their development and expansion [8]. This challenge is particularly great in China and other Eastern PLOS ONE | https://doi.org/10.1371/journal.pone.0288925 July 27, 2023 1 / 17 PLOS ONE Guangdong Polytechnic Normal University, China [Grant No. 2021SDYKB033]. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Competing interests: The authors have declared that no competing interests exist. Member commitment in farmers’ cooperatives countries, as well as in the African region. In these areas, smallholders with high risk aversion and a lack of money and knowledge dominate the agricultural production sector [9]. Unlike user-owned and user-controlled cooperatives in Western countries, cooperatives are more like buyer-supplier alliances, with a few core members acting as initiators, owners, and controllers, as well as the majority of members serving only as users/ patrons [10, 11]. Additionally, since all types of agricultural operating subjects have been allowed to join cooperatives, cooperatives in China have become increasingly diverse and complex, with the appearance of many secondary cooperatives (i.e., cooperatives derived from the addition of other operating subjects on the basis of primary cooperatives (“cooperatives + farmers”) established by a horizontal union of farmers, such as “companies + cooperatives + farmers”, hereafter denoted by C+C+F). These cooperatives had a comparatively high level of member heterogeneity at the start of their existence. Consequently, cooperative firms are more likely to have incompatible interests with their members in these areas, posing a severe risk to member commitment to cooperatives [12]. Over the past few decades, an increasing number of studies have been conducted to investigate the determinants of member commitment. However, many studies addressing this topic have been theoretical [13] and carried out in Western countries such as the United States [14], France [15], and the Netherlands [16]. The way to govern the cooperative-member relationship has been convincingly shown to have significant impacts on member commitment [17]. For example, member commitment is positively influenced by their participation in cooperative governance [14, 16]. Surprisingly, while it is increasingly understood that governance mechanisms are critical to member commitment and cooperative performance [18, 19], very few studies have explicitly focused on how various governance mechanisms differentially affect member commitment. The governance mechanisms of cooperatives can be divided into contractual and relational governance based on alliance governance theory. Contractual and relational governance have been extensively confirmed as critical predictors of collaboration outcomes such as collaboration satisfaction and relationship performance in interfirm alliances [20], but their relative effects on members’ continuance versus affective commitment have received scant attention. Moreover, whether they have a positive or negative effect on collaboration outcomes is highly controversial due to differences in things like specific transaction situations and theoretical model applications [20 (...truncated)