Unification decisions of a cooperative consolidation Public Deposited

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  • Unifications among agricultural cooperatives are becoming increasingly commonplace. This process is prompted by the desire to achieve economies of size, to reduce operating costs, to achieve product diversification, to improve the quality of offered services, to eliminate overlapping memberships, and to achieve marketing and/or bargaining power. Historical data indicate that agricultural cooperatives have become stronger through unifications, but unification is not a sufficient condition for the enhanced economic performance of every unified cooperative. The only valid generalization that can be made in predicting the performance of incipient unifications is that complex, interrelated problems will be encountered. A network diagram is used to clarify and present such activities and events as were completed by a consolidation among five agricultural cooperatives. Examination of this consolidation indicated that no single business function is conspicuously more difficult to unify than any other. Each function is important to the success of the unified entity and each demands managerial attention. However, the resistance of employed personnel to the changes precipitated by unification is the, most pervading source of problems. The most highly interrelated unification event is the selection of the general manager. This may also be the most crucial event since leadership permeates an organization, touching upon seemingly unrelated aspects. In combining the operations of constituent cooperatives, most business functions are related in some fashion to others. Despite these interrelationships, certain functions can be integrated before others with minimal danger of causing grave problems. Problems are best avoided and a rapid unification is best achieved by anticipating what must be done when unifying. The activities which the observed unified cooperative undertook in the course of unifying the operations of its constituent cooperatives are presented in a descriptive network. Yet, merely knowing what must be done is insufficient; one must also understand how unification activities are related as well as each activity's relative importance. These latter conditions are met in part by the prescriptive unification model which employs the PERT technique. Finally, if rapid and effective integration is desired, the relative importance of unification activities is appropriately measured in a temporal context. Transition from independent to unified operation will be most rapidly and effectively achieved by undertaking activities in progressive order as indicated by priority criteria.
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