||Cooperatives throughout North America are consolidating at an increasing
rate and for a variety of reasons. While many cooperatives merge with others
or are acquired to achieve greater economies of scale, several fail due
to changes in the external economy, which make them redundant. Often, such
redundancy is reflected in a heightened sense of member dissatisfaction.
Many argue that such dissatisfaction is likely to arise in cooperatives
as a result of principal-agent problems. In order to determine whether
or not cooperative managers maintain the same goals as their owners, this
study uses data from a member-survey to compare Alberta cooperative members"
objectives with those they believe to be held by their cooperatives' managers.
An econometric model of the difference between members' expectations and
perceptions shows how various socioeconomic variables affect the extent
to which these objectives are aligned. The results of this analysis can
help cooperative boards design managerial incentive programs to better
align their goals with those of the cooperative membership.