How Could Cooperatives Successfully Develop Their Social
Transcript Of How Could Cooperatives Successfully Develop Their Social
sustainability
Article
How Could Cooperatives Successfully Develop Their Social Responsibility: The Perspective of Life Cycle
Jin Tang 1,2, Timo Sipiläinen 2 and Gang Fu 1,3,* 1 Department of Agricultural and Forestry Economic Management, Faculty of Management, Sichuan Agricultural University, Chengdu 611130, China; [email protected]fi 2 Department of Economics and Management, Faculty of Agriculture and Forestry, University of Helsinki, 00790 Helsinki, Finland; [email protected]fi 3 Faculty of Business, Sichuan Agricultural University, Chengdu 611830, China * Correspondence: [email protected]
Received: 16 October 2020; Accepted: 6 November 2020; Published: 9 November 2020
Abstract: Social responsibility is a natural obligation of cooperatives, and fulfilling social responsibility is of great meaning to the sustainable development of cooperatives and society. This article constructs a “life cycle-cooperative social responsibility framework (LC-CoopSRF)” and analyzes the framework with the case of Chongxin Apiculture Specialized Cooperative of Sichuan Province, China. The research results show that cooperatives should respect the law of life cycle, consider conditions such as operational capabilities and ethical expectations, and fulfill social responsibility in a reasonable manner. The successful cooperative highlights the bottom-line responsibility in the establishment phase, internal responsibility in the growth phase, system responsibility in the maturity phase, and the differentiation phase is the phase of system responsibility.
Keywords: cooperative; social responsibility; life cycle; operational capability; ethical expectations; case study; China
1. Introduction
Specialized farmers’ cooperatives (“cooperative” hereinafter) in China are mutual economic organizations based on rural household contract institutions, in which agricultural producers or agricultural service providers and users are cooperating on a voluntary basis. Their members produce same kind of agricultural products or provide services for production of these products. Cooperatives mainly serve their members in purchasing inputs, marketing, processing, transporting and storing agricultural products, and providing new technologies and information. Due to the characteristics of cooperatives, such as mutual-help orientation, geographically limited activities and commitment to community development, it is expected that the cooperative system takes naturally into account social responsibilities [1].
In recent years, the number of Chinese cooperatives has increased rapidly (see Figure 1). By the end of October 2019, 2.203 million farmers’ cooperatives were registered. Almost half of farmers in China were members of cooperatives. The average annual income of a cooperative member was 32% higher than that of a non-member, which shows that the cooperatives could have a great potential in China’s rural revitalization [2]. However, due to resource constraints, blind promotion of cooperatives by the administration, excessive pursuit for profits, and other reasons, Chinese farmers’ cooperatives have a high rate of empty shells and poor vitality [3]. The average lifetime of cooperatives in China has been less than 3 years [4], and the proportion of empty-shelled cooperatives reaches 30–60% [5]. Thus, the development in the starting phase of many farmers’ cooperatives has not been successful and economically viable, which is undesirable in many respects.
Sustainability 2020, 12, 9282; doi:10.3390/su12219282
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shows that although corporate social responsibility (CSR) activities of the company can be driven by
and therefore, also related to the opportunistic goals in the firm strategy. Accordingly, the demand for
business ethics and reputation, they are also attractive due to the search for competitive advantage
CSR comes from consumers and the company’s stakeholders [6]. The ability to meet the requirements
and therefore, also related to the opportunistic goals in the firm strategy. Accordingly, the demand
of CSR are related to the company’s financial performance and the availability of slack resources [7].
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requirements of CSR are related to the company’s financial performance and the availability of slack
likely that CSR activities and the life cycle are interlinked [6,8]. Hasan and Habib [8] argue further
resources [7]. If ethical/reputation concerns and financial performance vary with the life cycle of the
that richness of resources and better financial performance allow mature firms to invest more in CSR
company, it is likely that CSR activities and the life cycle are interlinked [6,8]. Hasan and Habib [8]
activities than early-stage firms.
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more in CSR activities than early-stage firms.
CSR behavior. Penrose [9] presents a general theory of the growth of the firm and argues that firms’
Firms at different phases of their life cycle are associated with different resources that shape their
growth depends on their resources and production capabilities. Therefore, Helfat and Peteraf [10] state
CSR behavior. Penrose [9] presents a general theory of the growth of the firm and argues that firms’
that the resource-based view must incorporate the development of the firm’s resources and capabilities
growth depends on their resources and production capabilities. Therefore, Helfat and Peteraf [10]
over time and, hence, they introduced “the dynamic resource-based theory” as a follow-up to the
state that the resource-based view must incorporate the development of the firm’s resources and
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2. Prior Research and LC-CoopSR Framework
2. Prior Research and LC-CoopSR Framework 2.1. Prior Research on Cooperative’s Life Cycle
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In this paper, based on literature review and our research questions, we follow Chen et al. [19] and divide the cooperative’s life cycle into four phases, i.e., establishment, growth, maturity, and differentiation. The differentiation phase is further divided into exit and re-development [19,20].
2.2. Prior Research on Cooperative Social Responsibility
The introduction section has given an overview of the definition and content of cooperative social responsibility. In this part, the target groups and classifications of cooperative social responsibility will be introduced.
2.2.1. Target Groups of Cooperative Social Responsibility
Most earlier studies on cooperative social responsibility are intertwined with the stakeholder theory. To fulfill their social responsibilities, cooperatives have to define and take into account their stakeholders as target groups of their business. The target groups of social responsibility of cooperatives should include its members and employees but naturally also consumers, regulators, and communities at large. In the food sector, animal welfare has become an important issue indicating the responsibility of production. Additionally, social responsibility as an essential part of the business model is related to the attractiveness of the company in the investors’ and financiers’ point of view. Business partners and competitors also expect the cooperative like other companies to take responsibility for maintaining fair trade [21–26]. Often, the cooperative social responsibility extends to the sustainability of business activities with respect to the next generation [27].
In this article, we explore how CoopSR actions are targeted at members, employees, production animals, consumers, government, partners, natural environment, and community at different phases of the cooperative’s life cycle.
2.2.2. Classifications of Cooperative Social Responsibility
Different social responsibility target groups have different relevance to cooperatives. According to this, scholars have classified the target groups of cooperative social responsibility into different types (levels) (see Table 1). Zhang et al. [24] divided stakeholders of the cooperative into internal and external parts, where members and employees belong to internal stakeholders, while consumers, obligators, partners, government, natural environment, and community belong to external stakeholders. Alfonso [28] defined also the partners as internal stakeholders. Qiu [22] divided the stakeholders of the cooperative into the dominant stakeholders (members), dormant stakeholders (consumers and government), and recessive stakeholders (community), which was based on the performance characteristics of stakeholders in the cooperatives. Wu [21] divided the stakeholders into two categories, i.e., members, administrators, and employees as the primary, and consumers, suppliers, government, community, competitors, and natural environment as the secondary. Li [29] divided the stakeholders into the closest (i.e., employees), the most common (i.e., consumers), the immediate (i.e., investors and creditors), and the most important (i.e., society). Zhang [30] stressed that a stakeholder of the cooperative might possess several interest relationships, and that the interest relationships among the different stakeholders in the cooperative might not be constant.
Based on the previous research, we distinguished four classifications of the cooperative social responsibility: bottom-line responsibility, internal responsibility, external responsibility, and system responsibility, according to their relevance and importance. Internal and external division is quite similar to Zhang et al. [24] but the bottom-line responsibility includes only members, which emphasizes the importance of members. The target groups of internal responsibility include in addition to members and employees also partners and animals, and the target groups of external responsibility include customers, government, natural environment, and community. In addition, the combination of internal responsibility and external responsibility is called system responsibility.
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Classifications Internal
External
Primary
Secondary
Dominant Dormant Recessive The closest The most common The immediate The most important
Table 1. Classifications of cooperative social responsibility.
Target Groups or Stakeholders?
members and employees consumers, obligators, partners, government, natural
environment, and community
members, administrators, and employees consumers, suppliers, government, community, competitors,
and natural environment
members consumers and government
community
employees consumers investors and obligators
society
Source Zhang et al., 2017
Wu, 2013 Qiu, 2016
Li, 2005
2.3. Analysis Framework of Cooperative Social Responsibility from the Perspective of Life Cycle
By combining the cooperative’s life cycle and social responsibility, this paper constructs the
analytical framework of “life cycle-cooperative social responsibility framework (LC-CoopSRF)”
(See Figure 3), and analyzes the social responsibility models of cooperatives in different
life cycle phases. We hypothesize that the following life cycle-social responsibility pairs
can be observed: establishment—bottom-line responsibility, growth—internal responsibility,
maturity—system responsibility, differentiation—fading responsibility or system responsibilities.
In order to further explain the inherent logic in this design, we refer to Lee and Choi’s [13] research and
introduce two key factors for analysis, one is operational capacity and the other is ethical expectations.
Operational capacity reflects the operating conditions and financial capacity of the cooperative,
which is positively related to cooperative social responsibility. Ethical expectations include not only
the tangible expectations of the target groups of the cooperative, but also the intangible pressure from
the development and changes of the social environment. In the following, we provide a more detailed
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2.3.1. Establishment—Bottom-Line Responsibility
Social responsibility is a natural obligation of cooperatives. However, affected by factors such as operating capabilities and ethical expectations, the ability and content of cooperatives to fulfill social responsibilities should be different at different life phases. Traditionally, cooperative emergence was seen as collaborative attempts by producers to improve their economic position in the absence of a competitive market [16]. Members who joined when the cooperative was established are often
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2.3.1. Establishment—Bottom-Line Responsibility
Social responsibility is a natural obligation of cooperatives. However, affected by factors such as operating capabilities and ethical expectations, the ability and content of cooperatives to fulfill social responsibilities should be different at different life phases. Traditionally, cooperative emergence was seen as collaborative attempts by producers to improve their economic position in the absence of a competitive market [16]. Members who joined when the cooperative was established are often regarded as pathfinders with a relatively small number and are the most valuable resource of the cooperative. The ethical expectations of the cooperative during the establishment phase mainly come from these initial members. On the other hand, cooperatives in the establishment phase always have limited resources, poor operational capacities, and high survival risks. It is difficult for them to fully fulfill their social responsibilities. Therefore, regarding members as the main target group to fulfill social responsibility is the best choice for cooperatives during the establishment phase. Because members are the core and bottom line of the cooperative, we call the social responsibility activities fulfilled by the cooperative during the establishment phase as the bottom-line responsibility. By fulfilling bottom-line responsibilities, it is not only conducive to the cooperatives to connect with the original members, but also to attract new members.
2.3.2. Growth—Internal Responsibility
The growth phase is a stage of rapid development of cooperatives. Compared with the establishment phase, the operational capacity of cooperatives in the growth phase has been greatly improved, and a leading product or a unified brand has been initially formed, but the funds are still insufficient and the ability to fully fulfill social responsibilities is still not available. In order to quickly realize economies of scale, cooperatives always absorb members significantly during the growth phase, and the ethical expectations that cooperatives bear will increase accordingly [20]. In addition, cooperatives in the growth phase often have fixed business partners, which also puts forward further requirements for the social responsibility of cooperatives. Thus, establishing a stable trust relationship with internal target groups through social responsibility is more conducive to the survival and operational continuity of the cooperatives, which we call internal responsibility. Internal responsibility mainly refers to the social responsibility towards members and employees. Since business partners are also vital to the survival and development of cooperatives, we also regard them as internal target groups. In addition, for cooperatives engaged in breeding business, breeding animals are also important internal target groups.
2.3.3. Maturity—System Responsibility
As the cooperative enters a mature phase, the cooperative’s product sales are stable, the industrial chain is complete, it has a certain market share and market popularity, its operating funds are abundant, and its operating capabilities are at its best. In China, cooperatives that have entered a mature phase are often easier to obtain national and provincial honorary titles, and honors come with more policy constraints. At this time, the ethical expectations of cooperatives come from both internal target groups and external governments and society. As the operational capability and ethical expectations are maximized at the same time, the social responsibility of cooperatives has also risen from internal responsibility to system responsibility. System responsibility, or overall responsibility, includes social responsibility towards internal target groups such as members, employees, and animals, and external target groups such as government and community. The fulfillment of system responsibilities not only reinforce the internal strength of the cooperative, but it also helps the cooperative enhance its external reputation, consolidate its market position, and help it extend the maturity period and delay the arrival of the exit phase [29,30].
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2.3.4. Differentiation—Fading Responsibility or Maintaining System Responsibility
As the cooperative enters the phase of differentiation, there are two options: exit and re-development. Thus, social responsibility will either fade or maintain/improve. The cooperative’s responsibility is premised by the normal operation of cooperatives. When cooperatives drift into exit due to the failure of operational strategy or market downturn, they are less likely to engage in social responsibility activities and are more likely to make more “extreme” adjustments, such as restructuring and mergers and acquisitions [13]. Cooperatives in the exit phase do not need to consider the requirements of ethical expectations because the constraints from the shortage of resources are sufficiently large. On the other hand, if cooperatives enter a new phase of development through effective technological and product changes and institutional reforms, they will maintain a strong operational capacity and respond to the ethical expectations of target groups by maintaining system responsibility.
3. A Case Study
In the following, we first introduce the case, and then apply the “LC-CoopSRF” as delineated above to analyze the social responsibilities of CX Cooperative in different phases of the life cycle.
3.1. Case Context
The object of this case study is Chongxin Apiculture Specialized Cooperative of Qionglai, Sichuan Province (“CX Cooperative” hereinafter). By the end of October 2019, 103,000 cooperatives had been registered in Sichuan. However, according to the survey, only 10% of cooperatives were in fact running [31]. CX Cooperative was founded in 2007 and has developed for more than ten years. It has gone through a relatively complete life cycle, which can provide explanation and reference for this study.
CX Cooperative was founded in 2007 by Wang Shun and his colleagues. Through development over the past ten years, the registered capital of CX Cooperative is now 18.75 million yuan and there are 436 members who are from Qionglai and its neighboring counties/districts/cities, and even from Mianyang, Ya’an, Ganzi Prefecture, Liangshan Prefecture, A’ba Prefecture, Panzhihua, Gansu, Ningxia, and Guizhou; and there are more than 90,000 swarms, with over 4000 tons of annual production of bee products, over 60 million yuan of annual output value, and over 10 million yuan of accumulated dividends for farmers raising bees. The nectar source involves over ten provinces including Sichuan, Henan, Shanxi, Gansu, Ningxia, and Qinghai. Chongxin Bee Breeding Station, Chongxin Apiculture Association, and Chongxin Biotechnology Co., Ltd. have been established, and 7 brands, i.e., Chongxin, Home of Nectar, Holy Bee Hall, Holy Bee Valley, Tianlekang, and Bestowed Nectar, have been registered. Its products include honey, royal jelly, bee pollen, propolis, and so on.
3.2. Methods and Data
This study applies the case study method. The case study is a research strategy, which focuses on understanding the dynamics within single settings [32]. Case studies usually need to pay attention to four issues: making controlled observations, making controlled deductions, allowing for replicability, and allowing for generalizability or transferability [33]. Compared with other research methods, case studies can not only describe the case in detail and understand it systematically, but also control the interaction processes and context of the case [34]. Case studies always employ an embedded design, that is, multiple levels of analysis within a single study [35]. As earlier studies on life cycle and social responsibility mainly focus on corporates rather than cooperatives and as it is almost impossible to collect a representative statistical panel dataset from Chinese cooperatives, the longitudinal case study is in practice the only applicable approach for our study. We also carefully examine the business conditions at each phase and include them in the case analysis.
Case studies typically combine data collection methods such as archives, interviews, questionnaires, and observations [32]. In a depth analysis of the cooperative case, we use several data sources.
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The digital data comes from government websites such as the Ministry of Agriculture and Rural Affairs of China, Sichuan Provincial Department of Agriculture and Rural Affairs, and research articles and news that have been published, and annual reports of the cooperative. The introduction of the cooperative comes from the cooperative website. The practice of cooperative’s social responsibility comes from online interviews of the manager and other related personnel of the case. We also conducted a field survey in August 2019. Thus, we utilize triangulation, which increases the reliability of our results.
3.3. Analysis from the “LC-CoopSRF”
In this part, we first analyze the realistic conditions of CX Cooperative in different life cycle phases from the perspective of operational capability and ethical expectations, and then analyze the social responsibility activities of CX Cooperative. According to the interviews with cooperative manager and field survey, we determined the life cycle phases of CX Cooperative: establishment (2007–2009), growth (2010–2014), maturity (2015–2018), differentiation (2019). Besides, as the main business of CX Cooperative is the production and sales of bee products, with the development of the characteristic fruit business of CX Cooperative, we have reason to believe that CX Cooperative has entered the phase of re-development.
3.3.1. Establishment
Conditions Analysis
CX Cooperative was established in November 2007; this year is also known as the first year of Chinese cooperatives. In July of that year, China promulgated the “Law of Farmers’ Specialized Cooperative of PRC“, and cooperatives have embarked on a path of development in accordance with the law. However, due to the failure of the Chinese cooperative movement in the 1960s, most farmers had no expectations or even doubts about the cooperatives, and their enthusiasm for participation was not high. By the end of 2007, there were only 26,400 registered cooperatives in China. In this context, as a first mover, Wang Shun, an old bee farmer, selected some bee farmers with good scale and reputation to build CX Cooperative together. At the time of establishment, CX Cooperative had only 22 members and 6500 swarms. Due to the small number of members, limited assets, and large funding gaps, CX Cooperative faced great pressure to survive. At this time, survival is the primary goal of CX Cooperative, and maintaining existing members and attracting new members through social responsibility activities have become an important means of survival.
Social Responsibility Activities
Due to the limitation of operational capability and no requirement of ethical expectations, the social responsibility of cooperatives during the establishment phase mainly revolves around members, which we call bottom-line responsibility. CX Cooperative implemented a number of measures to achieve bottom-line responsibility.
CX is an apiculture cooperative and beekeeping is a special profession. Due to different flowering times of plants and varying climatic conditions, bee farmers must travel around the country to collect honey (see Figure 4). In order to provide protection for its travelling members, CX Cooperative purchased personal accident insurance for all members. In the process of collecting honey, members often suffer from bee poisoning, and even extortion and other problems. CX Cooperative has hired a legal advisor since 2009, in order to maintain the members’ legal rights and obligations. Meanwhile, CX Cooperative also actively invited experts and researchers to train the members on relevant laws and rules, newest policies, product quality safety, and new technologies. Through the implementation of social responsibility actions towards its members, CX Cooperative passed on a member-oriented cooperative service concept, which attracted the surrounding bee farmers to join. The cooperative gradually expanded laying a foundation for its rapid development.
Cooperative has hired a legal advisor since 2009, in order to maintain the members’ legal rights and obligations. Meanwhile, CX Cooperative also actively invited experts and researchers to train the members on relevant laws and rules, newest policies, product quality safety, and new technologies. Through the implementation of social responsibility actions towards its members, CX Cooperative pSuasstasiendabiloitny 2a02m0, 1e2m, 9b28e2r-oriented cooperative service concept, which attracted the surrounding9 obfe1e7 farmers to join. The cooperative gradually expanded laying a foundation for its rapid development.
FFiigure 4. TThheerroouuttee ooff rreelleeaassiinngg bbeeeess off CX Cooperative members.
33..33..22.. GGrroowwtthh Conditions Analysis Conditions Analysis
The growth phase of CX Cooperative is from 2010 to 2014. After the exploration and development durinTghethgereoswtatbhlisphhmaseentopf hCasXe, CwohoepnerCaXtivCeooispefrraotmive2e0n10terteod 2th01e4g. roAwfttehr pthhaesee,xtphleornautimonbearnodf dcoeovpeleorpatmiveenmt demurbinergs thhaedeisntcarbelaisshedmfernotmp2h2asteo,1w11h,eannCd XthCe onoupmebraetrivoef beenetesrweadrmthse hgardowintchrepahsaedsef,rtohme n65u0m0bteor3o3f,6c9o0o.pTerhaetiavnenmuaelmobuetrpsuhtaodf binecereparsoeddufcrtosmrea2c2hteod111510, 0antodntsh,eanndumthbeeranonf ubaeleosuwtparumt svahlaude irnecarcehaesded20frmomilli6o5n0y0utaon3.3C,6X90C. oTohpeearantnivuealhoaudtgpruatdoufablleyeinpcrroedausecdtsirtesaocpheerdat1in50g0catopnasb,ilaintidest,hbeuat nfunnudasl owuetrpeusttilvl ainluseuffirecaiecnhte,dan2d0amlairlglieonamyouuannt.oCf fXunCdosowpeerreatniveeedehdadforgrinadduusatlrlyialicnhcareinasiemdpriotsveompeenrattainngd cbarpanabdilbituieilsd, ibnugt. fAunftders ewnetreerisntgillthinesgurfofiwciethntp, earnidoda, ltahregeetahmicoaul enxtpoefcftuantidosnws fearceendebeydeCdXfoCroionpdeursattriivael chain improvement and brand building. After entering the growth period, the ethical expectations also increased. On the one hand, with the increase in the size and profitability of CX Cooperative, the expectations from members and employees increase. On the other hand, CX Cooperative began to establish fixed cooperative relationships with listed companies such as Tongrentang and China Oil & Foodstuffs Corporation (COFCO) (see Figure 5), and the ethical expectations of business partners had a very important impact on the social responsibility of CX Cooperative. In this context, establishing a stable trust relationship with target groups such as members, employees, and business partners through social responsibilities is more conducive to the survival and operational continuity of the CX Cooperative. That means that CX Cooperative should take internal responsibility. Social Responsibility Activities
In the growth phase, CX Cooperative implemented a number of measures to achieve internal responsibility.
A successful cooperative may seek opportunities to expand or to meet the additional needs of members [16]. CX Cooperative noticed this and implemented a series of measures. In 2010, CX Cooperative established a mutual risk reserve system, which was funded by government subsidies,
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Scuosotapinearbailtiitvy e20s2u0,r1p2l,uxsFrOeRsePrEvEeRs,RaEnVdIEWmembers. In the same year, CX Cooperative spent 1.6 million10youf a1n7 ftaocheedlpbtyheCmXemCoboeprsersaotlivveethaelstorainnscpreoarstaetdio. nOpnrotbhleemosneofhbaeneds ,anwditfheetdhienginsucrgeaarseduine tothpeosoirzheoannedy pharorvfietsatb.iRliteytiorefmCeXnCt hooaspaerlwataivyes,btheeenexopneecotaf ttihoencsofnrocmernms efomrbCehrsinaensde efamrmpleoryse. eIns i2n0c1r1e,aCseX. OCnoothpeeroatthiveer hesatnadb,liCshXeCdothopeeernadtiovwe mbeegnatnintosuersatanbcleisshysfitxeemd,caonodpethraetimveemreblaetrisoncoshuilpdsgwetitshulbisstieddy cfoomr epnadnoiewsmsuecnht ainssTuroanngcreenactaconrgdianngdtoCthhienaquOainl t&ityFaonoddqstuuaflfistyCoofrhpoonraetyiotnhe(yChOaFdChOa)nd(seedeiFni,gwuhreich5)g, raenadtlythinecerethaisceadl ethxepeecnttahtuiosniassmof obfuthsienmesesmpbaerrtns.eArslthhaodugahvCeXryCiomoppoerratatinvte iomrgpaancitzoesn trthaienisnogcifaolr rmesepmobnesribs ielivteyryofyeCaXr, Cthoeompeermatbievres. aIrne gthenisercaollnytenxott, wesetlal-beldisuhciantgedaansdtatbhleeytarurestporeolraitniolneashrnipingwaitbhilittay,rgwehticghrogurepastlysuacffhecatss mtheemtrbaeinrisn, gemouptlcooymeees.,Wanitdhbthuissininesms ipnadr,tniner2s0t1h4r,oCuXghCosoocpiearlarteivspe ocnomsibpiillietdiesa iSsummomrearcyonandducDiveefintoittiohne souf rRveilvaatledanLdawopse, rRautiloens aalncdoPnotilnicuiietsyoonf AthpeicCuXltuCroeofpoerrmateivmeb. eTrhsa[t3m6],ewanhsicthhahteClpXedComoepmerbaetrivs eimshporouvlde ttahkeeiribneteerkneaelpriensgpsoknisllisbimlitoyr.e systematically.
FFiigguurree 55.. MMaaiinn bbuussiinneessss ppaarrttnneerrss ooff CCXX CCooooppeerraattiivvee..
SociaIlnRtehsepgornoswibthiliptyhaAsec,tiwviittihetshe expansion of scope of operations and business needs, CX Cooperative began to hire professional managers. Engaging talented individuals by fulfilling social responsibilities is somInetthhienggrtohwattChXphCaosoep, eCrXatiCveoohpaedratoticvoenismidpelre.mCeXnCteodopaenrautmivbeeprroofvimdeedaseumrepslotoyeaecshwieivthe tirnatienrinnagl, rheoslpidoanysigbiifltisty, p. erformance rewards, and other benefits, and also regularly organized Outward Bound. The cAursruecnctesmsfaunlacgoeorpoefraCtiXveCmooapyesreaetkivoep, pShoritLuinnigti,eshatos ebxepeannedmoprlotoyemdeebtythCeXaCddoiotpioenraaltinveeesdisncoef m20e0m9.bSehrse [h1i6g]h. lCigXhtCs othoapteervateirvyethniontgictehde tchoiospaenradtiivmephlaesmdeonnteedfoar tsheerieesmopflomyeeeassuhraess.inIcnre2a0s1e0d, hCeXr Cenogoapgeermateivnet teostwabolrikshiendthaemCuXtuCaolorpisekrarteisveervsoe fsayrs.tem, which was funded by government subsidies, coopeSroactiiavleressupropnlusisbrielistyerovfetsh, eancdoompeermatbiverest.oIwn athrdessaitms beuyseianre,sCs XpaCrtonoeprseriastaivlseosipmepnotr1t.a6nmt. iIlnlioonrdyeuratno teonshuerlpe pthreodmuecmt qbueraslistoy,lvCeXthCeotorapnesrpatoirvteateisotnabplrioshbeledmasqouf ableiteys tarnadcefaebeidliitnygssyusgteamr daunedtoanpoeolerchtroonneiyc htraarcveeasbti.lRiteytiirnefmoremnat thioasnamlwanayasgebmeeennot nsyesotfemth.eTcohnecpeernrssofnoarlCinhfionremseaftaiormn eorfsb. eIne 2fa0r1m1,eCrsXisCmooaprekreadtiovne ethsetapbalicskhaegdintgheofeneadcohwbmatecnhtoifnpsurordanuccetsssyosttehmat,parnodcetshseorms ceamnbienrqsuciroeualdboguetttshuebssoiduyrcefoirnfeonrdmoawtimonenotf ienascuhrabnoctteleacocfohrdoinnegy.toFtrhoemqu2a0n13ti,tyCaXnCdoqoupaelirtaytiovfeheosnteaybltihsheyedhalodnhga-ntedremd isntr,awtehgicichcgoroepatelryaitniocnrewasietdh tlihseteedncthoumspiaasnmiesofsuthceh masemTobnegrrse. nAtaltnhgo,uCgOh FCCXOC, oanopdeLraBtXivePhoarrgmanaiczye,satnrdainbiencgamfoer omneemobf etrhse etvhererye ycoenars,tatnhtesmupepmlibeerrssoafrbeeegepnreordaullcytsnooft CwOeFllC-eOduinca2te0d16a. nIdn othrdeyeratroecpreoaotre ains mleuarcnhinpgroafibtilaistyp, owsshibiclhe gtoreiatstlypaarfftencetrsst,hCeXtraCinoionpgeorautticvoemceh.oWseitthothbiesairnimtsinowd,ninr2is0k1s4,inCXthCeoeoxppeorrattibvuescionmespsi,lewdhaicShumfumrthareyr adnedepDenefeidnittihoentoruf sRteolaftietds pLaarwtns,erRsu. leIsnaandddPitoiolinc,ieCsXonCAooppiceuralttuivree faolrsomeenmtebreerds i[n36to], awchoicohpehrealtpioedn mreleamtiobnersshiipmwpritohvSeicthheuiarnbAeegkreiceuplitnugraslkUilnlsivmerosrietysyanstdemotahteircainllsyt.itutions, and built an integrated system of “inIndutshtrey-gurnoiwvethrsiptyh-arsees,eawrcihth”. the expansion of scope of operations and business needs, CX Cooperative began to hire professional managers. Engaging talented individuals by fulfilling social responsibilities is something that CX Cooperative had to consider. CX Cooperative provided employees with training, holiday gifts, performance rewards, and other benefits, and also regularly organized Outward Bound. The current manager of CX Cooperative, Shi Ling, has been employed
Article
How Could Cooperatives Successfully Develop Their Social Responsibility: The Perspective of Life Cycle
Jin Tang 1,2, Timo Sipiläinen 2 and Gang Fu 1,3,* 1 Department of Agricultural and Forestry Economic Management, Faculty of Management, Sichuan Agricultural University, Chengdu 611130, China; [email protected]fi 2 Department of Economics and Management, Faculty of Agriculture and Forestry, University of Helsinki, 00790 Helsinki, Finland; [email protected]fi 3 Faculty of Business, Sichuan Agricultural University, Chengdu 611830, China * Correspondence: [email protected]
Received: 16 October 2020; Accepted: 6 November 2020; Published: 9 November 2020
Abstract: Social responsibility is a natural obligation of cooperatives, and fulfilling social responsibility is of great meaning to the sustainable development of cooperatives and society. This article constructs a “life cycle-cooperative social responsibility framework (LC-CoopSRF)” and analyzes the framework with the case of Chongxin Apiculture Specialized Cooperative of Sichuan Province, China. The research results show that cooperatives should respect the law of life cycle, consider conditions such as operational capabilities and ethical expectations, and fulfill social responsibility in a reasonable manner. The successful cooperative highlights the bottom-line responsibility in the establishment phase, internal responsibility in the growth phase, system responsibility in the maturity phase, and the differentiation phase is the phase of system responsibility.
Keywords: cooperative; social responsibility; life cycle; operational capability; ethical expectations; case study; China
1. Introduction
Specialized farmers’ cooperatives (“cooperative” hereinafter) in China are mutual economic organizations based on rural household contract institutions, in which agricultural producers or agricultural service providers and users are cooperating on a voluntary basis. Their members produce same kind of agricultural products or provide services for production of these products. Cooperatives mainly serve their members in purchasing inputs, marketing, processing, transporting and storing agricultural products, and providing new technologies and information. Due to the characteristics of cooperatives, such as mutual-help orientation, geographically limited activities and commitment to community development, it is expected that the cooperative system takes naturally into account social responsibilities [1].
In recent years, the number of Chinese cooperatives has increased rapidly (see Figure 1). By the end of October 2019, 2.203 million farmers’ cooperatives were registered. Almost half of farmers in China were members of cooperatives. The average annual income of a cooperative member was 32% higher than that of a non-member, which shows that the cooperatives could have a great potential in China’s rural revitalization [2]. However, due to resource constraints, blind promotion of cooperatives by the administration, excessive pursuit for profits, and other reasons, Chinese farmers’ cooperatives have a high rate of empty shells and poor vitality [3]. The average lifetime of cooperatives in China has been less than 3 years [4], and the proportion of empty-shelled cooperatives reaches 30–60% [5]. Thus, the development in the starting phase of many farmers’ cooperatives has not been successful and economically viable, which is undesirable in many respects.
Sustainability 2020, 12, 9282; doi:10.3390/su12219282
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SSuussttaaininaabbiliiltityy22002200,,1122,,x9F28O2R PEER REVIEW
2 2ofof1177
Number of cooperatives (million)
2.5
2
1.5
1
0.5
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year
Figure 1. Number of Chinese cooperatives since 2007.
In this context, studyFiinggurteh1e. cNouompbeerratoifvCehsionceisaelcroeosppeornatsivibeislistiyncies 2o0f0g7.reat importance. However,
most of the prior researches focus on corporate but not cooperative social responsibility. The research
showIns tthhiast caoltnhtoeuxtg,hstcuodrpyionrgattehseoccoiaolpreersaptoivnesisboilciitayl (rCesSpRo)nascitbiviliittiyesisoof fthgerecaotmimpapnoyrtcaannceb.eHdorwiveevnebr,y
mbuosstinoefstsheetphriicosrarnedseraerpchuetastfioocnu,sthoenycaorrepoarlsaoteabtturtanctoivt ceodoupeertaotitvheessoecairaclhrefsoprocnosmibpileittiyt.ivTehaedrevsaenatracghe
shows that although corporate social responsibility (CSR) activities of the company can be driven by
and therefore, also related to the opportunistic goals in the firm strategy. Accordingly, the demand for
business ethics and reputation, they are also attractive due to the search for competitive advantage
CSR comes from consumers and the company’s stakeholders [6]. The ability to meet the requirements
and therefore, also related to the opportunistic goals in the firm strategy. Accordingly, the demand
of CSR are related to the company’s financial performance and the availability of slack resources [7].
fIofretChSicRal/croempuetsatfiroonmcocnocnersnusmaenrds
and the financial
company’s stakeholders [6]. performance vary with the life
The ability cycle of the
to meet company,
the it is
requirements of CSR are related to the company’s financial performance and the availability of slack
likely that CSR activities and the life cycle are interlinked [6,8]. Hasan and Habib [8] argue further
resources [7]. If ethical/reputation concerns and financial performance vary with the life cycle of the
that richness of resources and better financial performance allow mature firms to invest more in CSR
company, it is likely that CSR activities and the life cycle are interlinked [6,8]. Hasan and Habib [8]
activities than early-stage firms.
argueFfiurmrthsearttdhiaffterriecnhtnpehssaosefsreosfotuhreciresliafendcybcelettaerrefiansasnocciiaaltepderwfoitrhmdainffceereanlltorwesmouartcuersetfhiramt sshtaopienvtheesitr
more in CSR activities than early-stage firms.
CSR behavior. Penrose [9] presents a general theory of the growth of the firm and argues that firms’
Firms at different phases of their life cycle are associated with different resources that shape their
growth depends on their resources and production capabilities. Therefore, Helfat and Peteraf [10] state
CSR behavior. Penrose [9] presents a general theory of the growth of the firm and argues that firms’
that the resource-based view must incorporate the development of the firm’s resources and capabilities
growth depends on their resources and production capabilities. Therefore, Helfat and Peteraf [10]
over time and, hence, they introduced “the dynamic resource-based theory” as a follow-up to the
state that the resource-based view must incorporate the development of the firm’s resources and
craepsaobuirlciteiebsaosveedrvtiimewe abnydW, heernnceer,fethlte[y1i1n]taronddutcheedr‘e‘tshoeudrcyenbaamsiecdrevsioewurcoef-bcoasmedpetthietiovrey”adavsaanftoalgloewb-y
uBpartnoeyth[e12r]e. sTohuerc“edybnaasemdicvrieeswoubrcye-Wbaesrenderthfeelot r[y1”1]reafenrds ttohegerneesroaulrpcaettbearnsesdofvcihewangoefscionmthpeefitirtimve’s
acdavpaanbtialigtieesbyovBearrntiemye[.1T2]h.eTrhefeo“rde,yint aismimicpreosrotaunrtceto-buanseddertshteaonrdy”threefaesrssotcoiagtieonnesrableptwateteernntshoefpchhaasnegseosf
ilniftehceyfcilrema’ns dcaCpSaRbiilnitvieoslvoevmeretnimt [e8.].TIhteirseefsopree,ciitalilsyiminpteorretsatnintgtotounsedeehrsotwantdhtehsee atwssoocairaetiionntesrblientkweedenin
tthheepehvaosleustioofnlioffepcryocdleuacenrdcCooSpReirnavtiovlevse.ment [8]. It is especially interesting to see how these two are
interliInnkeCdhiinnath, etheveroeluatiroenvoefrpyrofdewucesrtucodoiepseroantivceoso. perative social responsibility (CoopSR) and
coopIenraCtivhein’sal,ifethceyrcele.aTrehevreefroyref,ewwe csotnusdtireusctoan“licfoeocpycelrea-tciovoepesoractiiavle rseoscpiaolnresisbpiolintysib(iClitoyofprSamR)ewanodrk
(LC-CoopSRF)” and discussed different social responsibility targets. In order to further explain the
cooperative’s life cycle. Therefore, we construct a “life cycle-cooperative social responsibility
firnahmeerwenotrklo(gLicC-iCn otohpisSRdeFs)”igann, dwdeisrceufesrsetdo dLiefefearenndt Csohcoiai’lsre[1s3p]onressibeailrictyh taanrgdetins.trIondourcdeeroptoerfautritohnearl
ecxapplaacinitythaendinehtehriecnatl eloxgpiecctinatitohniss adsestihgenm, waien rceofnerdittoioLnesefoarnadnaClhyosiis’s. O[1u3]r mreaseinarrcehseaanrdchinptrroobdleumces
oapree:raHtioownaslhcoaupladcictoyoapnedraettihviecsafluelxfiplletchtaetiriosnosciaasl trheespmonaisnibcilointidesitoiovnesr ftoimr ae,naanlydsiws.hOatuarrme tahine areimsesaracnhd
pmroebalnesmosfafruel:fiHllionwg sthheomul?dIcnoooprdeerarttiovevsefruiflyfiltlhtahtetihr eso“cLiaCl-rCeospoopnSsRiFb”iliitsiersepovroedr uticmibel,eaannddwohpaetraarteiotnhael,
awime sanaanldyzme eaasnuscocefsfsufulflilclionogpethraetmiv?eIcnasoer,dCehr otongvxeirnifAyptihcautlttuhree“SLpCec-CiaoliozpeSdRCFo”oipserreaptirvoedoufcQibiloenagnladi,
oSpicehrautaionnParlo, vwinecaen. aClyXzCeoaospuecrcaetsivsfeuwl caosoepstearbaltiisvheecdaisne,2C00h7oanngdxitnheAbpuicsuinletussrehSaspebceieanligzerodwCinoogpfoerramtiovree
otfhaQniotennglyaei,arSsi.chItuhaansPgroonveinthcero. uCgXh Cthoeoppreerdateifivneewdapsheassteasbolifsthheedliifne c2y0c0l7e aanndd pthreovbiudseisnaenssinhtaesrebsetienng
gcraoswe isntugdfyortomthoirseatrhtiacnlet.en years. It has gone through the predefined phases of the life cycle and
provides an interesting case study to this article.
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2. Prior Research and LC-CoopSR Framework
2. Prior Research and LC-CoopSR Framework 2.1. Prior Research on Cooperative’s Life Cycle
2.1. PIrnior19R7e2s,eaGrcrheionnerCpoorpeesreanttiveed’stLhiefemCoydcleel of growth and development of organizations. He stated
that Itnhe19g7r2o,wGtrheinoef rapnreosregnatneidzathtieonmofodlelol wofsgfriovwe tphhaansdesd, ei.vee.,losptamrte-nutpo, faogrggraengiaztaitoinon, s.taHnedastradtiezdatihoant, tmheagturoriwtyt,haonfdanreo-rdgeavneilzoaptimonenfot lolorwesxifit.vAe pdhizaesses[,1i4.e].,psrteasret-nutped, atghgeredgeavtieolonp, smtaenndtairndi1z0atsitoang,ems,awtuhritcyh, asnydmrbeo-dlizevedeltohpemmeanttuorriteyxoitf.tAhedtihzesor[y14o]fplirfeesceyncteledotfhoerdgeavneizloaptimonesn. tTihne1c0usrtraegnetsr,ewsehaircchhsoynmlibfoelcizyecdle tohfeomrgaatnuirziatytioonfstfhoecuthseesormyoostflylifoenccyocrlepoorfatoersgraantihzeartitohnasn. Tcohoepceurartrievnets r[e1s5e]a. rCchoookn[1l5if,e16c]ybculeiltofa ofrgamaneiwzaotrioknosf cfocoupseersatmiveo’sstllyifeocnyccloerfpraomraetewsorakt,hwerhitchhadnivciodoepdetrhaeticvoeosp[e1r5a]t.ivCeo’solkife[1c5y,c1l6e]inbtuoilftivae fprahmaseews:oerckonoof mcoicopjuesrtaitfivcaet’siolnif,eocrgyacnleizfartaimoneawl odreks,igwnh, igcrhowditvhi-dgelodryth-heecteoroopgeernaetitvye,’srelcifoegncyitcioleninantod fiinvteropshpaescetsi:oenc,oannodmcihcojuicseti(fisceaetiFoing,uorreg2aan)i.zTahtieonlaasltdpehsaigsne,cgornotwaitnhe-gdloforuy-rhseiteuraotgioenseiitnyc, lruedcoinggnirteioinnvaenndt, isnttartousspeqcutoio,ns,paanwdnchaonidcee(xsiet.e BFaigsuedreo2na)t.hTehreelsaesatrpchhaosfeCconotkai[n1e5d,1f6o],uHr suituetataiol.n[s17in]csltuuddiniegdreNinedvean-tto, sPtaottuastoquCoo,ospaerwantivaen,dDexeiPt.roBdausecdenotnCthheeeresseeaCrochopoefrCatoiovke [a1n5,d16F],loH-ruaeHtoalll.a[n1d7] Fstluodwiedr NCoedopa-etroaPtiovteation CNoeotpheralatinvde., DTehPeryoduccoennctluCdheedesethCaotopief raCtihvienan’sd Fclooo-praeHraotlilvaensd FwloawntertCoooimpeprarotivvee inthNeierthmerlaarnkdet. Tchoemypceotnitcilvuedneedssth, tahteifyCmhuinsat’gsocotohproeuragthivaeslownagn-tetormimlipnrgoevreinthgeoirfmthaerkgerot cwotmh-ppertoitsipvenrietsys-,htehteeyromguenstegitoy tshtraoguegshaanldonggr-atderumallinmgperoinvgeomfethnetsg. rZohwatnhg-perot sapl.er[i1t8y]-hdeitveirdoegdentehietydsetavgeelospamndengrtaodfucaoloimpeprraotviveemseinnttso. Zfihvaenpgheatsaesl.—[1s8t]ardti-vuipd,eidnttrhoedduectvieolno,pgmroewntho,fmcoaotupreirtayt,ivanesdindtifofefirvenetpiahtaiosnes, —bassteadrt-ounpt,hinetdroifdfeurcetniocnes, gorfowptrho,fimtaabtiulitryit,y,saenrvdicdeiffcearpenabtiialittiyo,n,libqausieddityon atnhde dsiofflevreennccye,s oabf iplirtoyfittaobilhiteyl,psetrhveicecocmapmaubinlity,, lciqounicdeinttyraatniodnsoflvoewncnye,rashbilpit,yantodhmelepchthaneicsommomf usunriptyl,ucsodnicsetrnitbruation of coowonpeerrsahtivpe,san(sdeemFeicghuarnei2sbm). oCfhseunrpeltuasl.d[i1s9tr]ibduivtiodnedotfhceoolipfeercaytcilveesof(sceoeopFeigrautrieve2sbi)n. toCfhoeunr epthaals.e[s1,9i].ed.,ivesidtaebdlisthemleinfet,cgyrcolwe tohf, cmooaptuerriatyti,vaensdindtiofffeoruenr tpiahtaiosnes(,Fii.ge.u, reest2acb).liTshme deinftf,ergernotwiatthio, nmpahtuarsietyw, asndfudrtihffeerrednivtiiadteiodnin(Ftoigeuxriet a2nc)d. Trhe-eddeivffeelorepnmtieantito.n phase was further divided into exit and re-development.
(a)
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In this paper, based on literature review and our research questions, we follow Chen et al. [19] and divide the cooperative’s life cycle into four phases, i.e., establishment, growth, maturity, and differentiation. The differentiation phase is further divided into exit and re-development [19,20].
2.2. Prior Research on Cooperative Social Responsibility
The introduction section has given an overview of the definition and content of cooperative social responsibility. In this part, the target groups and classifications of cooperative social responsibility will be introduced.
2.2.1. Target Groups of Cooperative Social Responsibility
Most earlier studies on cooperative social responsibility are intertwined with the stakeholder theory. To fulfill their social responsibilities, cooperatives have to define and take into account their stakeholders as target groups of their business. The target groups of social responsibility of cooperatives should include its members and employees but naturally also consumers, regulators, and communities at large. In the food sector, animal welfare has become an important issue indicating the responsibility of production. Additionally, social responsibility as an essential part of the business model is related to the attractiveness of the company in the investors’ and financiers’ point of view. Business partners and competitors also expect the cooperative like other companies to take responsibility for maintaining fair trade [21–26]. Often, the cooperative social responsibility extends to the sustainability of business activities with respect to the next generation [27].
In this article, we explore how CoopSR actions are targeted at members, employees, production animals, consumers, government, partners, natural environment, and community at different phases of the cooperative’s life cycle.
2.2.2. Classifications of Cooperative Social Responsibility
Different social responsibility target groups have different relevance to cooperatives. According to this, scholars have classified the target groups of cooperative social responsibility into different types (levels) (see Table 1). Zhang et al. [24] divided stakeholders of the cooperative into internal and external parts, where members and employees belong to internal stakeholders, while consumers, obligators, partners, government, natural environment, and community belong to external stakeholders. Alfonso [28] defined also the partners as internal stakeholders. Qiu [22] divided the stakeholders of the cooperative into the dominant stakeholders (members), dormant stakeholders (consumers and government), and recessive stakeholders (community), which was based on the performance characteristics of stakeholders in the cooperatives. Wu [21] divided the stakeholders into two categories, i.e., members, administrators, and employees as the primary, and consumers, suppliers, government, community, competitors, and natural environment as the secondary. Li [29] divided the stakeholders into the closest (i.e., employees), the most common (i.e., consumers), the immediate (i.e., investors and creditors), and the most important (i.e., society). Zhang [30] stressed that a stakeholder of the cooperative might possess several interest relationships, and that the interest relationships among the different stakeholders in the cooperative might not be constant.
Based on the previous research, we distinguished four classifications of the cooperative social responsibility: bottom-line responsibility, internal responsibility, external responsibility, and system responsibility, according to their relevance and importance. Internal and external division is quite similar to Zhang et al. [24] but the bottom-line responsibility includes only members, which emphasizes the importance of members. The target groups of internal responsibility include in addition to members and employees also partners and animals, and the target groups of external responsibility include customers, government, natural environment, and community. In addition, the combination of internal responsibility and external responsibility is called system responsibility.
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Classifications Internal
External
Primary
Secondary
Dominant Dormant Recessive The closest The most common The immediate The most important
Table 1. Classifications of cooperative social responsibility.
Target Groups or Stakeholders?
members and employees consumers, obligators, partners, government, natural
environment, and community
members, administrators, and employees consumers, suppliers, government, community, competitors,
and natural environment
members consumers and government
community
employees consumers investors and obligators
society
Source Zhang et al., 2017
Wu, 2013 Qiu, 2016
Li, 2005
2.3. Analysis Framework of Cooperative Social Responsibility from the Perspective of Life Cycle
By combining the cooperative’s life cycle and social responsibility, this paper constructs the
analytical framework of “life cycle-cooperative social responsibility framework (LC-CoopSRF)”
(See Figure 3), and analyzes the social responsibility models of cooperatives in different
life cycle phases. We hypothesize that the following life cycle-social responsibility pairs
can be observed: establishment—bottom-line responsibility, growth—internal responsibility,
maturity—system responsibility, differentiation—fading responsibility or system responsibilities.
In order to further explain the inherent logic in this design, we refer to Lee and Choi’s [13] research and
introduce two key factors for analysis, one is operational capacity and the other is ethical expectations.
Operational capacity reflects the operating conditions and financial capacity of the cooperative,
which is positively related to cooperative social responsibility. Ethical expectations include not only
the tangible expectations of the target groups of the cooperative, but also the intangible pressure from
the development and changes of the social environment. In the following, we provide a more detailed
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2.3.1. Establishment—Bottom-Line Responsibility
Social responsibility is a natural obligation of cooperatives. However, affected by factors such as operating capabilities and ethical expectations, the ability and content of cooperatives to fulfill social responsibilities should be different at different life phases. Traditionally, cooperative emergence was seen as collaborative attempts by producers to improve their economic position in the absence of a competitive market [16]. Members who joined when the cooperative was established are often
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2.3.1. Establishment—Bottom-Line Responsibility
Social responsibility is a natural obligation of cooperatives. However, affected by factors such as operating capabilities and ethical expectations, the ability and content of cooperatives to fulfill social responsibilities should be different at different life phases. Traditionally, cooperative emergence was seen as collaborative attempts by producers to improve their economic position in the absence of a competitive market [16]. Members who joined when the cooperative was established are often regarded as pathfinders with a relatively small number and are the most valuable resource of the cooperative. The ethical expectations of the cooperative during the establishment phase mainly come from these initial members. On the other hand, cooperatives in the establishment phase always have limited resources, poor operational capacities, and high survival risks. It is difficult for them to fully fulfill their social responsibilities. Therefore, regarding members as the main target group to fulfill social responsibility is the best choice for cooperatives during the establishment phase. Because members are the core and bottom line of the cooperative, we call the social responsibility activities fulfilled by the cooperative during the establishment phase as the bottom-line responsibility. By fulfilling bottom-line responsibilities, it is not only conducive to the cooperatives to connect with the original members, but also to attract new members.
2.3.2. Growth—Internal Responsibility
The growth phase is a stage of rapid development of cooperatives. Compared with the establishment phase, the operational capacity of cooperatives in the growth phase has been greatly improved, and a leading product or a unified brand has been initially formed, but the funds are still insufficient and the ability to fully fulfill social responsibilities is still not available. In order to quickly realize economies of scale, cooperatives always absorb members significantly during the growth phase, and the ethical expectations that cooperatives bear will increase accordingly [20]. In addition, cooperatives in the growth phase often have fixed business partners, which also puts forward further requirements for the social responsibility of cooperatives. Thus, establishing a stable trust relationship with internal target groups through social responsibility is more conducive to the survival and operational continuity of the cooperatives, which we call internal responsibility. Internal responsibility mainly refers to the social responsibility towards members and employees. Since business partners are also vital to the survival and development of cooperatives, we also regard them as internal target groups. In addition, for cooperatives engaged in breeding business, breeding animals are also important internal target groups.
2.3.3. Maturity—System Responsibility
As the cooperative enters a mature phase, the cooperative’s product sales are stable, the industrial chain is complete, it has a certain market share and market popularity, its operating funds are abundant, and its operating capabilities are at its best. In China, cooperatives that have entered a mature phase are often easier to obtain national and provincial honorary titles, and honors come with more policy constraints. At this time, the ethical expectations of cooperatives come from both internal target groups and external governments and society. As the operational capability and ethical expectations are maximized at the same time, the social responsibility of cooperatives has also risen from internal responsibility to system responsibility. System responsibility, or overall responsibility, includes social responsibility towards internal target groups such as members, employees, and animals, and external target groups such as government and community. The fulfillment of system responsibilities not only reinforce the internal strength of the cooperative, but it also helps the cooperative enhance its external reputation, consolidate its market position, and help it extend the maturity period and delay the arrival of the exit phase [29,30].
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2.3.4. Differentiation—Fading Responsibility or Maintaining System Responsibility
As the cooperative enters the phase of differentiation, there are two options: exit and re-development. Thus, social responsibility will either fade or maintain/improve. The cooperative’s responsibility is premised by the normal operation of cooperatives. When cooperatives drift into exit due to the failure of operational strategy or market downturn, they are less likely to engage in social responsibility activities and are more likely to make more “extreme” adjustments, such as restructuring and mergers and acquisitions [13]. Cooperatives in the exit phase do not need to consider the requirements of ethical expectations because the constraints from the shortage of resources are sufficiently large. On the other hand, if cooperatives enter a new phase of development through effective technological and product changes and institutional reforms, they will maintain a strong operational capacity and respond to the ethical expectations of target groups by maintaining system responsibility.
3. A Case Study
In the following, we first introduce the case, and then apply the “LC-CoopSRF” as delineated above to analyze the social responsibilities of CX Cooperative in different phases of the life cycle.
3.1. Case Context
The object of this case study is Chongxin Apiculture Specialized Cooperative of Qionglai, Sichuan Province (“CX Cooperative” hereinafter). By the end of October 2019, 103,000 cooperatives had been registered in Sichuan. However, according to the survey, only 10% of cooperatives were in fact running [31]. CX Cooperative was founded in 2007 and has developed for more than ten years. It has gone through a relatively complete life cycle, which can provide explanation and reference for this study.
CX Cooperative was founded in 2007 by Wang Shun and his colleagues. Through development over the past ten years, the registered capital of CX Cooperative is now 18.75 million yuan and there are 436 members who are from Qionglai and its neighboring counties/districts/cities, and even from Mianyang, Ya’an, Ganzi Prefecture, Liangshan Prefecture, A’ba Prefecture, Panzhihua, Gansu, Ningxia, and Guizhou; and there are more than 90,000 swarms, with over 4000 tons of annual production of bee products, over 60 million yuan of annual output value, and over 10 million yuan of accumulated dividends for farmers raising bees. The nectar source involves over ten provinces including Sichuan, Henan, Shanxi, Gansu, Ningxia, and Qinghai. Chongxin Bee Breeding Station, Chongxin Apiculture Association, and Chongxin Biotechnology Co., Ltd. have been established, and 7 brands, i.e., Chongxin, Home of Nectar, Holy Bee Hall, Holy Bee Valley, Tianlekang, and Bestowed Nectar, have been registered. Its products include honey, royal jelly, bee pollen, propolis, and so on.
3.2. Methods and Data
This study applies the case study method. The case study is a research strategy, which focuses on understanding the dynamics within single settings [32]. Case studies usually need to pay attention to four issues: making controlled observations, making controlled deductions, allowing for replicability, and allowing for generalizability or transferability [33]. Compared with other research methods, case studies can not only describe the case in detail and understand it systematically, but also control the interaction processes and context of the case [34]. Case studies always employ an embedded design, that is, multiple levels of analysis within a single study [35]. As earlier studies on life cycle and social responsibility mainly focus on corporates rather than cooperatives and as it is almost impossible to collect a representative statistical panel dataset from Chinese cooperatives, the longitudinal case study is in practice the only applicable approach for our study. We also carefully examine the business conditions at each phase and include them in the case analysis.
Case studies typically combine data collection methods such as archives, interviews, questionnaires, and observations [32]. In a depth analysis of the cooperative case, we use several data sources.
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The digital data comes from government websites such as the Ministry of Agriculture and Rural Affairs of China, Sichuan Provincial Department of Agriculture and Rural Affairs, and research articles and news that have been published, and annual reports of the cooperative. The introduction of the cooperative comes from the cooperative website. The practice of cooperative’s social responsibility comes from online interviews of the manager and other related personnel of the case. We also conducted a field survey in August 2019. Thus, we utilize triangulation, which increases the reliability of our results.
3.3. Analysis from the “LC-CoopSRF”
In this part, we first analyze the realistic conditions of CX Cooperative in different life cycle phases from the perspective of operational capability and ethical expectations, and then analyze the social responsibility activities of CX Cooperative. According to the interviews with cooperative manager and field survey, we determined the life cycle phases of CX Cooperative: establishment (2007–2009), growth (2010–2014), maturity (2015–2018), differentiation (2019). Besides, as the main business of CX Cooperative is the production and sales of bee products, with the development of the characteristic fruit business of CX Cooperative, we have reason to believe that CX Cooperative has entered the phase of re-development.
3.3.1. Establishment
Conditions Analysis
CX Cooperative was established in November 2007; this year is also known as the first year of Chinese cooperatives. In July of that year, China promulgated the “Law of Farmers’ Specialized Cooperative of PRC“, and cooperatives have embarked on a path of development in accordance with the law. However, due to the failure of the Chinese cooperative movement in the 1960s, most farmers had no expectations or even doubts about the cooperatives, and their enthusiasm for participation was not high. By the end of 2007, there were only 26,400 registered cooperatives in China. In this context, as a first mover, Wang Shun, an old bee farmer, selected some bee farmers with good scale and reputation to build CX Cooperative together. At the time of establishment, CX Cooperative had only 22 members and 6500 swarms. Due to the small number of members, limited assets, and large funding gaps, CX Cooperative faced great pressure to survive. At this time, survival is the primary goal of CX Cooperative, and maintaining existing members and attracting new members through social responsibility activities have become an important means of survival.
Social Responsibility Activities
Due to the limitation of operational capability and no requirement of ethical expectations, the social responsibility of cooperatives during the establishment phase mainly revolves around members, which we call bottom-line responsibility. CX Cooperative implemented a number of measures to achieve bottom-line responsibility.
CX is an apiculture cooperative and beekeeping is a special profession. Due to different flowering times of plants and varying climatic conditions, bee farmers must travel around the country to collect honey (see Figure 4). In order to provide protection for its travelling members, CX Cooperative purchased personal accident insurance for all members. In the process of collecting honey, members often suffer from bee poisoning, and even extortion and other problems. CX Cooperative has hired a legal advisor since 2009, in order to maintain the members’ legal rights and obligations. Meanwhile, CX Cooperative also actively invited experts and researchers to train the members on relevant laws and rules, newest policies, product quality safety, and new technologies. Through the implementation of social responsibility actions towards its members, CX Cooperative passed on a member-oriented cooperative service concept, which attracted the surrounding bee farmers to join. The cooperative gradually expanded laying a foundation for its rapid development.
Cooperative has hired a legal advisor since 2009, in order to maintain the members’ legal rights and obligations. Meanwhile, CX Cooperative also actively invited experts and researchers to train the members on relevant laws and rules, newest policies, product quality safety, and new technologies. Through the implementation of social responsibility actions towards its members, CX Cooperative pSuasstasiendabiloitny 2a02m0, 1e2m, 9b28e2r-oriented cooperative service concept, which attracted the surrounding9 obfe1e7 farmers to join. The cooperative gradually expanded laying a foundation for its rapid development.
FFiigure 4. TThheerroouuttee ooff rreelleeaassiinngg bbeeeess off CX Cooperative members.
33..33..22.. GGrroowwtthh Conditions Analysis Conditions Analysis
The growth phase of CX Cooperative is from 2010 to 2014. After the exploration and development durinTghethgereoswtatbhlisphhmaseentopf hCasXe, CwohoepnerCaXtivCeooispefrraotmive2e0n10terteod 2th01e4g. roAwfttehr pthhaesee,xtphleornautimonbearnodf dcoeovpeleorpatmiveenmt demurbinergs thhaedeisntcarbelaisshedmfernotmp2h2asteo,1w11h,eannCd XthCe onoupmebraetrivoef beenetesrweadrmthse hgardowintchrepahsaedsef,rtohme n65u0m0bteor3o3f,6c9o0o.pTerhaetiavnenmuaelmobuetrpsuhtaodf binecereparsoeddufcrtosmrea2c2hteod111510, 0antodntsh,eanndumthbeeranonf ubaeleosuwtparumt svahlaude irnecarcehaesded20frmomilli6o5n0y0utaon3.3C,6X90C. oTohpeearantnivuealhoaudtgpruatdoufablleyeinpcrroedausecdtsirtesaocpheerdat1in50g0catopnasb,ilaintidest,hbeuat nfunnudasl owuetrpeusttilvl ainluseuffirecaiecnhte,dan2d0amlairlglieonamyouuannt.oCf fXunCdosowpeerreatniveeedehdadforgrinadduusatlrlyialicnhcareinasiemdpriotsveompeenrattainngd cbarpanabdilbituieilsd, ibnugt. fAunftders ewnetreerisntgillthinesgurfofiwciethntp, earnidoda, ltahregeetahmicoaul enxtpoefcftuantidosnws fearceendebeydeCdXfoCroionpdeursattriivael chain improvement and brand building. After entering the growth period, the ethical expectations also increased. On the one hand, with the increase in the size and profitability of CX Cooperative, the expectations from members and employees increase. On the other hand, CX Cooperative began to establish fixed cooperative relationships with listed companies such as Tongrentang and China Oil & Foodstuffs Corporation (COFCO) (see Figure 5), and the ethical expectations of business partners had a very important impact on the social responsibility of CX Cooperative. In this context, establishing a stable trust relationship with target groups such as members, employees, and business partners through social responsibilities is more conducive to the survival and operational continuity of the CX Cooperative. That means that CX Cooperative should take internal responsibility. Social Responsibility Activities
In the growth phase, CX Cooperative implemented a number of measures to achieve internal responsibility.
A successful cooperative may seek opportunities to expand or to meet the additional needs of members [16]. CX Cooperative noticed this and implemented a series of measures. In 2010, CX Cooperative established a mutual risk reserve system, which was funded by government subsidies,
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Scuosotapinearbailtiitvy e20s2u0,r1p2l,uxsFrOeRsePrEvEeRs,RaEnVdIEWmembers. In the same year, CX Cooperative spent 1.6 million10youf a1n7 ftaocheedlpbtyheCmXemCoboeprsersaotlivveethaelstorainnscpreoarstaetdio. nOpnrotbhleemosneofhbaeneds ,anwditfheetdhienginsucrgeaarseduine tothpeosoirzheoannedy pharorvfietsatb.iRliteytiorefmCeXnCt hooaspaerlwataivyes,btheeenexopneecotaf ttihoencsofnrocmernms efomrbCehrsinaensde efamrmpleoryse. eIns i2n0c1r1e,aCseX. OCnoothpeeroatthiveer hesatnadb,liCshXeCdothopeeernadtiovwe mbeegnatnintosuersatanbcleisshysfitxeemd,caonodpethraetimveemreblaetrisoncoshuilpdsgwetitshulbisstieddy cfoomr epnadnoiewsmsuecnht ainssTuroanngcreenactaconrgdianngdtoCthhienaquOainl t&ityFaonoddqstuuaflfistyCoofrhpoonraetyiotnhe(yChOaFdChOa)nd(seedeiFni,gwuhreich5)g, raenadtlythinecerethaisceadl ethxepeecnttahtuiosniassmof obfuthsienmesesmpbaerrtns.eArslthhaodugahvCeXryCiomoppoerratatinvte iomrgpaancitzoesn trthaienisnogcifaolr rmesepmobnesribs ielivteyryofyeCaXr, Cthoeompeermatbievres. aIrne gthenisercaollnytenxott, wesetlal-beldisuhciantgedaansdtatbhleeytarurestporeolraitniolneashrnipingwaitbhilittay,rgwehticghrogurepastlysuacffhecatss mtheemtrbaeinrisn, gemouptlcooymeees.,Wanitdhbthuissininesms ipnadr,tniner2s0t1h4r,oCuXghCosoocpiearlarteivspe ocnomsibpiillietdiesa iSsummomrearcyonandducDiveefintoittiohne souf rRveilvaatledanLdawopse, rRautiloens aalncdoPnotilnicuiietsyoonf AthpeicCuXltuCroeofpoerrmateivmeb. eTrhsa[t3m6],ewanhsicthhahteClpXedComoepmerbaetrivs eimshporouvlde ttahkeeiribneteerkneaelpriensgpsoknisllisbimlitoyr.e systematically.
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SociaIlnRtehsepgornoswibthiliptyhaAsec,tiwviittihetshe expansion of scope of operations and business needs, CX Cooperative began to hire professional managers. Engaging talented individuals by fulfilling social responsibilities is somInetthhienggrtohwattChXphCaosoep, eCrXatiCveoohpaedratoticvoenismidpelre.mCeXnCteodopaenrautmivbeeprroofvimdeedaseumrepslotoyeaecshwieivthe tirnatienrinnagl, rheoslpidoanysigbiifltisty, p. erformance rewards, and other benefits, and also regularly organized Outward Bound. The cAursruecnctesmsfaunlacgoeorpoefraCtiXveCmooapyesreaetkivoep, pShoritLuinnigti,eshatos ebxepeannedmoprlotoyemdeebtythCeXaCddoiotpioenraaltinveeesdisncoef m20e0m9.bSehrse [h1i6g]h. lCigXhtCs othoapteervateirvyethniontgictehde tchoiospaenradtiivmephlaesmdeonnteedfoar tsheerieesmopflomyeeeassuhraess.inIcnre2a0s1e0d, hCeXr Cenogoapgeermateivnet teostwabolrikshiendthaemCuXtuCaolorpisekrarteisveervsoe fsayrs.tem, which was funded by government subsidies, coopeSroactiiavleressupropnlusisbrielistyerovfetsh, eancdoompeermatbiverest.oIwn athrdessaitms beuyseianre,sCs XpaCrtonoeprseriastaivlseosipmepnotr1t.a6nmt. iIlnlioonrdyeuratno teonshuerlpe pthreodmuecmt qbueraslistoy,lvCeXthCeotorapnesrpatoirvteateisotnabplrioshbeledmasqouf ableiteys tarnadcefaebeidliitnygssyusgteamr daunedtoanpoeolerchtroonneiyc htraarcveeasbti.lRiteytiirnefmoremnat thioasnamlwanayasgebmeeennot nsyesotfemth.eTcohnecpeernrssofnoarlCinhfionremseaftaiormn eorfsb. eIne 2fa0r1m1,eCrsXisCmooaprekreadtiovne ethsetapbalicskhaegdintgheofeneadcohwbmatecnhtoifnpsurordanuccetsssyosttehmat,parnodcetshseorms ceamnbienrqsuciroeualdboguetttshuebssoiduyrcefoirnfeonrdmoawtimonenotf ienascuhrabnoctteleacocfohrdoinnegy.toFtrhoemqu2a0n13ti,tyCaXnCdoqoupaelirtaytiovfeheosnteaybltihsheyedhalodnhga-ntedremd isntr,awtehgicichcgoroepatelryaitniocnrewasietdh tlihseteedncthoumspiaasnmiesofsuthceh masemTobnegrrse. nAtaltnhgo,uCgOh FCCXOC, oanopdeLraBtXivePhoarrgmanaiczye,satnrdainbiencgamfoer omneemobf etrhse etvhererye ycoenars,tatnhtesmupepmlibeerrssoafrbeeegepnreordaullcytsnooft CwOeFllC-eOduinca2te0d16a. nIdn othrdeyeratroecpreoaotre ains mleuarcnhinpgroafibtilaistyp, owsshibiclhe gtoreiatstlypaarfftencetrsst,hCeXtraCinoionpgeorautticvoemceh.oWseitthothbiesairnimtsinowd,ninr2is0k1s4,inCXthCeoeoxppeorrattibvuescionmespsi,lewdhaicShumfumrthareyr adnedepDenefeidnittihoentoruf sRteolaftietds pLaarwtns,erRsu. leIsnaandddPitoiolinc,ieCsXonCAooppiceuralttuivree faolrsomeenmtebreerds i[n36to], awchoicohpehrealtpioedn mreleamtiobnersshiipmwpritohvSeicthheuiarnbAeegkreiceuplitnugraslkUilnlsivmerosrietysyanstdemotahteircainllsyt.itutions, and built an integrated system of “inIndutshtrey-gurnoiwvethrsiptyh-arsees,eawrcihth”. the expansion of scope of operations and business needs, CX Cooperative began to hire professional managers. Engaging talented individuals by fulfilling social responsibilities is something that CX Cooperative had to consider. CX Cooperative provided employees with training, holiday gifts, performance rewards, and other benefits, and also regularly organized Outward Bound. The current manager of CX Cooperative, Shi Ling, has been employed