17

1 Introduction

This study investigates the extent to whichsocial networks influence producers whenthey decide which buyer they will sell theircommodities to a co-operative or an investor-owned firm (IOF) The empirical data originatefrom interviews with ten forest owners inSweden half of them selling their timbermainly to a co-operative and half selling mainlyto IOFs

In most literature on agriculture forestry isnot mentioned In Sweden forestry ishowever considered to be one of the fourmajor agricultural industries together with grainproduction dairying and meat production Theexplanation is that in Sweden like in Finlandand Norway forests to a large extent (50 ofthe total acreage) are owned by privatepersons who often have small lots on average60 hectares whereas forests in most othercountries are owned by large corporations orby governments (Digby and Edwardson1976) As the forests are owned by thousandsof individuals (350000 in Sweden) most oftenfarmers it is understandable that theseindividuals have established processingco-operat ives as well as bargainingco-operatives Half of the countryrsquos forestowners are members of forestry co-operatives(Berlin 2005) The co-operatives buy timberfrom the members and they sell services tothe members in terms of cleaning thinningcutting and final cutting compiling forestmanagement plans and all other tasks to beconducted in the membersrsquo forests

The forestry co-operatives compete withvarious investor-owned firms which performall the tasks that co-operatives do Thenumber of IOF sawmills is large as manysuch firms operate regionally They are oftensmall family-owned businesses Moreover

there are some multinational corporationsbuying timber for their paper pulp production

Even though forestry co-operatives inSweden are considered to be a type ofagricultural co-operative they differ in majorrespects f rom co-operat ives in otheragricultural industries (Berlin and Erikson2007) One reason is that forestry has alwaysworked on free and open markets whereasco-operatives in other agricultural industrieshave been influenced by agricultural policiesThe forestry industry has also always workedin international markets whereas otheragricultural co-operatives have historicallybeen oriented towards the national marketsor even regional or local markets Even thoughthe different co-operative types have differentworking conditions the forestry co-operativesmay be influenced by co-operatives in otheragricultural industries since many forestryco-operative members are also members ofother agricultural co-operatives

Hence a study of forest ownersrsquo choice oftrading partners could take its point ofdeparture in the literature about farmersrsquorelationships to different types of partneringfirms The issue of farmersrsquo choice betweenco-operative and investor-owned tradingpartners has been investigated in a largenumber of empirical studies Closely linked tothis research are issues concerning farmersrsquoloyalty towards co-operatives their trust in theleadership their at t i tude towardsco-operat ives and other behaviouraldimensions The explanatory variables usedin those studies are of two kinds

One type is socioeconomic factors suchas the farmersrsquo age the size of the farmoperations and similar factors (Bravo-Uretaand Lee 1988 Burt and Wirth 1990Wadsworth 1991 Fulton and Adamowicz1993 Klein Richards and Walburger 1997

Trust-creating Social Networks in Forest OwnersrsquoChoice of Trading PartnersJohn Enander Andreas Melin and Jerker Nilsson

This study investigates the role of social networks when producers choose between selling theircommodities to a co-operative firm or an investor-owned firm The empirical basis is personal interviewswith ten forest owners five co-operative suppliers and five IOF suppliers The findings indicate thatforest owners influence each other as to choice of buyer and that the social influences are strongeramong co-operative suppliers than among suppliers to investor-owned buyers The influences from theforest ownersrsquo parents are very strong Most remarkable is that the buying firmsrsquo representatives havea high level of influence

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18

Zeuli and Betancor 2005 Berlin 2006) Theother type is socio-psychological variablesThe farmersrsquo behaviour is explained byvar iables such as sat isfact ion t rust involvement att i tude and commitment(Jensen 1990 Robinson and Lifton 1993Siebert 1994 Gray and Kraenzle 1998Hakelius 1996 Borgen 2001 HansenMorrow and Batista 2002 Lind and Aringkesson2005 James and Sykuta 2006 Bhuyan 2007Fahlbeck 2007 Oumlsterberg and Nilsson 2009Nilsson Kihleacuten and Norell 2009)

None of the prior empirical studies includesocial influences as an explanatory variableStill social relationships may be significantgiven that the choice of buyer is important tothe producers ndash economically socially andpsychologically They are likely to prefer atrading partner that they have trust in andtrust is a concept characterising socialrelationships ldquoTrust is a psychological statecomprising the intent ions to acceptvulnerability based upon positive expectationsof the intentions or behavior of anotherrdquo(Rousseau Sitkin Burt and Camerer 1998395) This study introduces influences insocial networks as a potential explanation toproducersrsquo choice between co-operative andIOF trading partners

The paper is structured as follows The nextsection introduces a theoretical frameworkwhere the focus is directed towards farmersrsquochoice between different types of buyers Thesubsequent sect ion presents themethodological approach for the empiricalstudy ndash interviews with ten forest owners Anaccount of the types of buyers that the forestowners may choose between is found in thenext section The results from the interviewsare reviewed thereafter summarised in twotables The f inal sect ion comprisesconclusions

2 Theoretical Framework

The forest ownersrsquo choice of trading partneris reasonably a well deliberated decisionSuch transactions involve large amounts ofmoney and the forest is normally of greatimportance to the forest owner The choice oftrading partner may also be habitual decision-making for example due to the forest ownersrsquoloyalty but if so the forest owners must at anearlier occasion have passed through adeliberated decision process

The Theory of Planned Behaviour (Ajzen1991) tells that well deliberated decisionmaking has a number of components One isthe decision-makersrsquo attitude towards the actof choosing various decisions outcomesAnother component is the decision-makersrsquopropensity to comply with the social normsthat exist among people who are significantto them A third component is the decisionmakersrsquo perception of being in control of theirbehaviour Finally there may be a randomelement This classification of concepts mayprovide the theoretical foundation for this study

Attitudes towards choosing a co-operativeor an IOF buyer may have many dimensionsOne is the monetary consequences ie theprice a second is services provided by theprocessor a third is the reputation of theprocessor and so on

Some researchers claim that farmersfocus mainly on the price that the processingfirms pay for the agricultural commodities(Karantininis and Zago 2001 1266) It maybe assumed that forest owners to a largeextent consider the economic conditions whenchoosing a partnering firm The conditionsare however more complex in a forestrycontext than in most other agriculturalindustries such as grain or dairy No two salesoccasions are identical All trees to be cut aredifferent the terrain where the trees grow isspecific it is difficult to assess the quality inadvance Hence the forest owners havedifficulties making a rational choice of buyer

In difficult decision situations humansresort to a number of specific behaviouraltraits One is that the decision maker is struckby so-called information overload whereby thedecision outcomes may become less welldel iberated and have an element ofrandomness Another trait is that the manycomplex parameters are merged into a moreaggregate one such as image or reputationBy choosing the opt ion with the bestreputation the decision maker reduces therisk-taking A third possibility is that thedecision-maker becomes follows the advicefrom persons that are considered trustworthy

The ownership of a forest offers a range ofnon-monetary benefits or benefits withindirect monetary effects Such non-monetaryvalues may affect the forest ownersrsquo attitudesto alternative trading partners for example ifthese have the reputation of being carelesswhen working in the forest Berlin (2007) lists

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19

these non-monetary values hunting fishingpicking berries and mushrooms collectingf irewood and t imber outdoor l i fe andrecreation residence in nice naturalenvironment etc She continues to measurehow forest owners appreciate these non-monetary benefits In general they areextremely important to the forest owners

According to the Theory of PlannedBehaviour decision makers are influenced bythe norms that they f ind in their socialenvironment especially among so-calledldquosignificant othersrdquo This variable is calledNormative Compliance The ldquosignificantothersrdquo may comprise the family and relativesbut also the neighbours and friends The forestowners also have relationships with partieswhich are less likely to constitute ldquosignificantothersrdquo with the timber buying firmrsquos localrepresentative the staff at the timber buyingfirmrsquos office (those responsible for paying forthe supplies receiving the order etc) and thefirms which conduct the cutting work etc

The theoryrsquos variable Perceived Control isof a different nature If the forest owners donot themselves choose their trading partnersthe study of their decision making makes littlesense Some external factors must beconsidered for example contracts which limitthe range of choice It is likely that the forestowners are in control of the decision about withwhom should trade though this issue must beinvestigated

Prior research about farmersrsquo choice of aco-operative as their trading partners has astrong orientation towards attitudinal variableswhile the influence of the social networks isabsent The present study focuses on theforest ownersrsquo social networks comprisingtheir willingness to comply with the norms ofboth ldquosignificant othersrdquo and other partiesNevertheless also some attitudes must beincorporated since these factors may haveimportance for the interaction within the socialnetworks When the forest owners talk toothers about the various partner firms theytalk in terms of prices services non-monetaryvalues etc

Some conclusions from the account abovemay be as follows

First it is believed that the forest owners paymuch attention to the opinions of others whenthey are to choose a trading partner Theowner of a forest property has made a large

investment and so one may expect the forestowners to be highly involved in their forest Inorder for the forest owners to reduce the risktaking contacts with people they trust mayinfluence the choice of business partner ndash aco-operative or an IOF They can be expectedto make the same choice as their socialnetwork does

Second one may expect that the co-operativemembers are more prone to comply with thenorms among fellow forest owners Aco-operative member organisationconstitutes a forum for members who meetget to know each other and discuss There isno similar forum for the suppliers to IOFs

Third it is likely that there are differencesbetween the different social networks Mostcrucial are probably the family then otherforest owners (especially so for co-operativemembers) and finally the representatives ofthe trading partners cutting firms and otherbusiness firms

3 Methodological Approach

Information about forest ownersrsquo decision-making can be obtained only from the forestowners themselves Considering that thedesired data may be sensit ive it wasconsidered that the data must be collectedthrough personal interviews Hence personalinterviews were conducted by two of theauthors both coming from forest ownerfamilies and having an education withinforestry This means that they are able toldquospeak the languagerdquo of the respondentswhich increases the chances that theinterviewees trust the interviewers andanswer openly

Due to resource constraints and the timeconsuming interview technique the number ofrespondents must be small Five members ofa forestry co-operative were interviewed andfive forest owners who usually sell their timberto other buyers The small number ofinterviewees reduces the reliability of thefindings but at least some indications mayresult

As this study has a focus on the forestownersrsquo social networks it was considereddesirable to choose respondents who liverelatively close to one another so that therewould be good chances for social interaction

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20

Hence all ten respondents live within a singleparish Another motive for this choice is thatall the respondents have the same set ofpotent ial buyers and similar work ingcondit ions Moreover the fact that theinterviewees live close to one another reducedthe travel costs and the time used for theinterviews The parish was selected by theforestry co-operativersquos member relationsofficer the criterion being that the data shouldoriginate from a district where co-operativesuppliers and IOF suppliers were of about thesame number

The addresses of the five co-operativemembers were picked randomly from the co-operativersquos member register for the parishwhere the interviews were to be conductedThe five other forest owners were randomlyselected from the register of real estateowners compiled by a governmental body Allthe identif ied respondents agreed to beinterviewed and all were available at theagreed-upon hours

The interviews were conducted in March2008 All the interviews took place in the forestownersrsquo homes They took between fifteen andthirty minutes each A total of three days wereused for the interviews including travelbetween the forest ownersrsquo homes Afterpermission f rom the interviewees al linterviews were recorded so that correctquotes can be included The intervieweeswere promised confidentiality

An interview guide was producedcomprising in total 23 questions including sixbackground variables (acreage type of forestowner rsquos living at the property length ofownership length of family ownership capitalconditions) Four questions concerned theforest ownersrsquo social networks in relation totheir forestry Nine questions concerned theforest ownerrsquos knowledge assessment andchoice of the buyers of timber Finally fourquestions concerned the forest ownersrsquo viewof their forest and their work in the forest

4 The Forestry Co-operative SoumldraSkogsaumlgarna and the Other Buyers

Forest owners may choose a forestryco-operative or an IOF as their trading partnerWithin the parish where the interviews wereconducted there is one co-operative and anumber of IOFs These firms are presentedin this section

Soumldra Skogsaumlgarna (henceforth Soumldra) isby far the largest of the four Swedish forestryco-operatives I t runs its operat ions insouthern Sweden The membershipcomprises 52000 forest owners living at37000 farms In 2007 the turnover amountedto SEK 18000 millions (EUR 1750 million)1The number of employees was 3700 Theequity capital was SEK 10500 million (EUR1020 million) and the equity ratio was 63The return on capital was 15 Soumldra has amarket share of about 50 of the timber thatis cut within its operating area All figuresoriginate from Soumldrarsquos annual report 2008

When Soumldra was established in 1938 itworked only as a bargaining co-operativewhich is a common type of activity also intodayrsquos forestry co-operatives The firstproduction plants were established in 1940(tar mill) 1943 (sawmill) and 1959 (paper pulpplant) Since then the number of sawmills hasincreased to nine The largest investmentshave however been in the paper pulpindustry The paper pulp produced in theseplants is sold to paper works all over the worldSoumldra is the worldrsquos largest exporter of paperpulp and the worldrsquos third largest producer ofsulphate pulp

Two of the five pulp plants are located inNorway These are processing Norwegiantimber but the Norwegian suppliers are notmembers Likewise Soumldra imports largevolumes of raw material predominantly fromthe Baltic countries

Except for wood processing Soumldraprovides extensive services to its membersThe forest owners can get practically all thehelp they would like ndash no service at all to thosewho manage their forestry operat ionsthemselves and complete management of theforest for those who have no knowledge inforestry no time or no opportunities for theseactivities In between these extremes Soumldraoffers assistance in thinning planting cuttingetc These services are offered to themembers according to a service-at-costprinciple

Other business branches are production ofbuilding material and energy production bothfrom the forests (fuel wood and wood chips)and from windmills If the members want toSoumldra may erect wind power plants in theirforests

While by far most other agriculturalco-operatives offer the members as high a

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21

commodity price as possible Soumldra hasanother policy The membersrsquo supply of timberis paid at a market price Hence Soumldra has aprofit maximisation objective This has theconsequence that Soumldra normally gets veryhigh profits One-third of the profits beforetaxes are paid to the members as capitalreturns in a variety of ways On top of that arebonus shares The rationale behind this profitdistribution principle is that Soumldra at all timeswants an even flow of raw material to its paperpulp plants Given the huge investments inthese plants it is necessary to use theproduction capacity as much as possible Ifthe co-operat ive were to have a pricemaximisation goal it would some years havetoo little raw material to its pulp plants andother years too much

The profit distribution takes place in variousforms First the patronage refunds are mostoften quite high almost 10 Second themembers receive a high interest rate for theshares that they own (8-20 during the lastfew years) Third Soumldra hands over bonusshares to the members every yearcorresponding to a capital return of 5 perannum Fourth Soumldra has at two occasionsemitted B-shares to be bought by membersand by employees and also these areawarded a very high interest rate thoughdepending on the profits All the three types ofshares are freely traded on the market iealso appreciable Finally the members havethe possibility to voluntarily invest more moneyin the co-operat ive and also theseinvestments give a high interest

Through this financial model often calledthe Soumldra model the co-operative is able totransfer more money to the memberscompared to if it were to pay the highestpossible price for the timber It is likely that inmost cases the forest owners would get abetter deal by selling to Soumldra provided thatall the future cash flows were included Formany members not to talk about non-members the Soumldra model is howeverdifficult to comprehend It is impossible toknow in advance what the economic benefitswill be Many of the members are alsomembers of other agricultural co-operativesall with a traditional organisational and financialstructures and these members may find itstrange that Soumldra has such dif ferentprinciples and practices

The Soumldra model has a great importance

for member involvement Having a largenumber of members spread out over a largearea and having huge investments inwidespread and complex business activitiesmainly downstream in the value chain thereis a great risk that members become alienatedfrom the co-operative Other studies ofco-operatives with similar attributes indicatelow trust in the leadership low involvementand low sat isfact ion (Hogeland 2006Oumlsterberg and Nilsson 2009 Nilsson Kihleacutenand Norell 2009) In a forestry co-operativecontext the r isk is even larger as themembers typically deliver timber with severalyearsrsquo interval Thanks to the Soumldra model themembers have dealings with the co-operativeevery year though in their ownership role notin their supplier role Experience from Soumldraindicates that this reasoning is correct

It should be added that Soumldra is still agenuine co-operative as the only way wherebythe members can get access to the profit-generating shares is through supplies ie asmall share of every timber payment istransferred to the membersrsquo accounts Hencethe members have a strong incentive to deliverto Soumldra

While Soumldra is the largest player in theparish where the interviews took place it hasone-third of the market in that parish Ofsimilar size is a firm that is owned jointly bythe large paper pulp and paper corporationsA third actor is almost of the same size It is aprivately owned firm that runs sawmills in alarge part of southern Sweden Except forthese three several sawmills exist oftenfamily-owned and quite small

5 Results

The results from the five interviews withco-operative members are summarised inTable 1 whi le Table 2 summarises theinterviews with the five forest owners who selltheir t imber to IOF buyers All the teninterviewees report that they are in full controlof all decisions as to their forestry (column ein the two tables) Hence their choice of tradingpartners is a deliberated decision whichmeans that it is meaningful to analyse theresponses according to the Theory of PlannedBehaviour framework

There are no socioeconomic differencesbetween the two groups In terms of timeperspective (column a) and acreage (column

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24

b) there is a within-group spread but it is notpossible to claim that systematic differencesexist The same is true for other backgrounddata

Forest ownership is loaded with traditionsMany of the interviewees grew up at theproperty that they now own and theirancestors have often owned the forest(column a) The most extreme in the sampleis from a family that has owned the forestsince 1727 Due to the traditional values inforestry some forest owners want to managetheir forest in the same manner as theirparents (father) did Several interviewees referto their parents This also applies to theirchoice of buyers ie they have to some extentinherited the parentsrsquo view on co-operativeswhether a positive view or a negative viewDuring their upbringing they have becomesocialised into being pro-co-operative or anti-co-operative Therefore the parents may besaid to be a crucial part of the forest ownersrsquosocial network when it comes to choice oftrading partner

bull Daddy was a member too and that is fun(Interviewee 4 co-operative supplier)

bull We are doing business with [name of oneIOF buyer] So did Daddy too (Interviewee7 IOF supplier)

bull I conduct the thinning in the same manneras my father did (Interviewee 10 IOFsupplier)

Social influences have little importance whenit comes to the forest ownersrsquo evaluation ofprices and other economic factors (columnf) This observation is remarkable as theeconomic factors are important for the forestowners equally for the co-operative membersand IOF suppliers No forest owner says thatthe economic return is of no or l i t t leimportance but several have qualifications tothe question Two of the co-operat ivemembers say that long-term profitability iscrucial which means that the price at everysingle sales occasion does not need to thehighest possible None of the IOF supplierssays the same while three of them stress theprice for the single offers

bull I sell to the one who pays the best but ofcourse also good service matters(Interviewee 1 co-operative supplier)

bull It may be that I could find another buyer

who is willing to pay a higher price atspecific occasions but Soumldra is the bestin the long run (Interviewee 2 co-operativesupplier)

The IOF suppliersrsquo stress on the price issurprising as the co-operative actually paysthe same price and on top of that themembers receive a good return on the capitalthat they have invested in the co-operative Acouple of the IOF suppliers express a criticalview of Soumldra saying that some of the moneyis paid very late ie the patronage refunds andthe dividends One explanation may be thatthe Soumldra model is complicated which alsoimplies that the members do not alwaysconsider the capital returns when they maketheir choice of buyer another one that the IOFsuppliers have an anti-co-operative attitude

bull It is strange that there is not more debateabout the Soumldra model (Interviewee 4co-operative supplier)

As to non-monetary motivational factors(column g) the forest ownersrsquo social networkshave no influence When the intervieweesdiscuss with others they never do that inconnect ion with non-monetary factorsWalking in the forest for recreational purposesenjoying nature hunting elks and deer andpicking mushrooms and berries are privateaffairs Moreover the non-monetary factorshave limited importance for the choice ofbuyer the main exception being that somecutting firms are claimed to cause damageas they are careless with their hugemachinery and cutting firms are contractedby the buyer of the timber

One would expect less experienced forestowners (column d) to have a strongerpreference for a co-operative than moreexperienced owners This is however notpossible to verify There does not seem to bea connection between forestry skills and thechoice of trading partner In the group ofco-operative members only interviewee 3admits poor knowledge of forestry but thisperson relies heavily on a cousin who is anexpert in forestry as well as on the buyerrepresentative Among the IOF suppliers bothinterviewees 6 and 7 declare themselves tobe only slightly knowledgeable leaningtowards the buyer representative The forestownersrsquo degree of practical work in their forest

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25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

18

Zeuli and Betancor 2005 Berlin 2006) Theother type is socio-psychological variablesThe farmersrsquo behaviour is explained byvar iables such as sat isfact ion t rust involvement att i tude and commitment(Jensen 1990 Robinson and Lifton 1993Siebert 1994 Gray and Kraenzle 1998Hakelius 1996 Borgen 2001 HansenMorrow and Batista 2002 Lind and Aringkesson2005 James and Sykuta 2006 Bhuyan 2007Fahlbeck 2007 Oumlsterberg and Nilsson 2009Nilsson Kihleacuten and Norell 2009)

None of the prior empirical studies includesocial influences as an explanatory variableStill social relationships may be significantgiven that the choice of buyer is important tothe producers ndash economically socially andpsychologically They are likely to prefer atrading partner that they have trust in andtrust is a concept characterising socialrelationships ldquoTrust is a psychological statecomprising the intent ions to acceptvulnerability based upon positive expectationsof the intentions or behavior of anotherrdquo(Rousseau Sitkin Burt and Camerer 1998395) This study introduces influences insocial networks as a potential explanation toproducersrsquo choice between co-operative andIOF trading partners

The paper is structured as follows The nextsection introduces a theoretical frameworkwhere the focus is directed towards farmersrsquochoice between different types of buyers Thesubsequent sect ion presents themethodological approach for the empiricalstudy ndash interviews with ten forest owners Anaccount of the types of buyers that the forestowners may choose between is found in thenext section The results from the interviewsare reviewed thereafter summarised in twotables The f inal sect ion comprisesconclusions

2 Theoretical Framework

The forest ownersrsquo choice of trading partneris reasonably a well deliberated decisionSuch transactions involve large amounts ofmoney and the forest is normally of greatimportance to the forest owner The choice oftrading partner may also be habitual decision-making for example due to the forest ownersrsquoloyalty but if so the forest owners must at anearlier occasion have passed through adeliberated decision process

The Theory of Planned Behaviour (Ajzen1991) tells that well deliberated decisionmaking has a number of components One isthe decision-makersrsquo attitude towards the actof choosing various decisions outcomesAnother component is the decision-makersrsquopropensity to comply with the social normsthat exist among people who are significantto them A third component is the decisionmakersrsquo perception of being in control of theirbehaviour Finally there may be a randomelement This classification of concepts mayprovide the theoretical foundation for this study

Attitudes towards choosing a co-operativeor an IOF buyer may have many dimensionsOne is the monetary consequences ie theprice a second is services provided by theprocessor a third is the reputation of theprocessor and so on

Some researchers claim that farmersfocus mainly on the price that the processingfirms pay for the agricultural commodities(Karantininis and Zago 2001 1266) It maybe assumed that forest owners to a largeextent consider the economic conditions whenchoosing a partnering firm The conditionsare however more complex in a forestrycontext than in most other agriculturalindustries such as grain or dairy No two salesoccasions are identical All trees to be cut aredifferent the terrain where the trees grow isspecific it is difficult to assess the quality inadvance Hence the forest owners havedifficulties making a rational choice of buyer

In difficult decision situations humansresort to a number of specific behaviouraltraits One is that the decision maker is struckby so-called information overload whereby thedecision outcomes may become less welldel iberated and have an element ofrandomness Another trait is that the manycomplex parameters are merged into a moreaggregate one such as image or reputationBy choosing the opt ion with the bestreputation the decision maker reduces therisk-taking A third possibility is that thedecision-maker becomes follows the advicefrom persons that are considered trustworthy

The ownership of a forest offers a range ofnon-monetary benefits or benefits withindirect monetary effects Such non-monetaryvalues may affect the forest ownersrsquo attitudesto alternative trading partners for example ifthese have the reputation of being carelesswhen working in the forest Berlin (2007) lists

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

19

these non-monetary values hunting fishingpicking berries and mushrooms collectingf irewood and t imber outdoor l i fe andrecreation residence in nice naturalenvironment etc She continues to measurehow forest owners appreciate these non-monetary benefits In general they areextremely important to the forest owners

According to the Theory of PlannedBehaviour decision makers are influenced bythe norms that they f ind in their socialenvironment especially among so-calledldquosignificant othersrdquo This variable is calledNormative Compliance The ldquosignificantothersrdquo may comprise the family and relativesbut also the neighbours and friends The forestowners also have relationships with partieswhich are less likely to constitute ldquosignificantothersrdquo with the timber buying firmrsquos localrepresentative the staff at the timber buyingfirmrsquos office (those responsible for paying forthe supplies receiving the order etc) and thefirms which conduct the cutting work etc

The theoryrsquos variable Perceived Control isof a different nature If the forest owners donot themselves choose their trading partnersthe study of their decision making makes littlesense Some external factors must beconsidered for example contracts which limitthe range of choice It is likely that the forestowners are in control of the decision about withwhom should trade though this issue must beinvestigated

Prior research about farmersrsquo choice of aco-operative as their trading partners has astrong orientation towards attitudinal variableswhile the influence of the social networks isabsent The present study focuses on theforest ownersrsquo social networks comprisingtheir willingness to comply with the norms ofboth ldquosignificant othersrdquo and other partiesNevertheless also some attitudes must beincorporated since these factors may haveimportance for the interaction within the socialnetworks When the forest owners talk toothers about the various partner firms theytalk in terms of prices services non-monetaryvalues etc

Some conclusions from the account abovemay be as follows

First it is believed that the forest owners paymuch attention to the opinions of others whenthey are to choose a trading partner Theowner of a forest property has made a large

investment and so one may expect the forestowners to be highly involved in their forest Inorder for the forest owners to reduce the risktaking contacts with people they trust mayinfluence the choice of business partner ndash aco-operative or an IOF They can be expectedto make the same choice as their socialnetwork does

Second one may expect that the co-operativemembers are more prone to comply with thenorms among fellow forest owners Aco-operative member organisationconstitutes a forum for members who meetget to know each other and discuss There isno similar forum for the suppliers to IOFs

Third it is likely that there are differencesbetween the different social networks Mostcrucial are probably the family then otherforest owners (especially so for co-operativemembers) and finally the representatives ofthe trading partners cutting firms and otherbusiness firms

3 Methodological Approach

Information about forest ownersrsquo decision-making can be obtained only from the forestowners themselves Considering that thedesired data may be sensit ive it wasconsidered that the data must be collectedthrough personal interviews Hence personalinterviews were conducted by two of theauthors both coming from forest ownerfamilies and having an education withinforestry This means that they are able toldquospeak the languagerdquo of the respondentswhich increases the chances that theinterviewees trust the interviewers andanswer openly

Due to resource constraints and the timeconsuming interview technique the number ofrespondents must be small Five members ofa forestry co-operative were interviewed andfive forest owners who usually sell their timberto other buyers The small number ofinterviewees reduces the reliability of thefindings but at least some indications mayresult

As this study has a focus on the forestownersrsquo social networks it was considereddesirable to choose respondents who liverelatively close to one another so that therewould be good chances for social interaction

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

20

Hence all ten respondents live within a singleparish Another motive for this choice is thatall the respondents have the same set ofpotent ial buyers and similar work ingcondit ions Moreover the fact that theinterviewees live close to one another reducedthe travel costs and the time used for theinterviews The parish was selected by theforestry co-operativersquos member relationsofficer the criterion being that the data shouldoriginate from a district where co-operativesuppliers and IOF suppliers were of about thesame number

The addresses of the five co-operativemembers were picked randomly from the co-operativersquos member register for the parishwhere the interviews were to be conductedThe five other forest owners were randomlyselected from the register of real estateowners compiled by a governmental body Allthe identif ied respondents agreed to beinterviewed and all were available at theagreed-upon hours

The interviews were conducted in March2008 All the interviews took place in the forestownersrsquo homes They took between fifteen andthirty minutes each A total of three days wereused for the interviews including travelbetween the forest ownersrsquo homes Afterpermission f rom the interviewees al linterviews were recorded so that correctquotes can be included The intervieweeswere promised confidentiality

An interview guide was producedcomprising in total 23 questions including sixbackground variables (acreage type of forestowner rsquos living at the property length ofownership length of family ownership capitalconditions) Four questions concerned theforest ownersrsquo social networks in relation totheir forestry Nine questions concerned theforest ownerrsquos knowledge assessment andchoice of the buyers of timber Finally fourquestions concerned the forest ownersrsquo viewof their forest and their work in the forest

4 The Forestry Co-operative SoumldraSkogsaumlgarna and the Other Buyers

Forest owners may choose a forestryco-operative or an IOF as their trading partnerWithin the parish where the interviews wereconducted there is one co-operative and anumber of IOFs These firms are presentedin this section

Soumldra Skogsaumlgarna (henceforth Soumldra) isby far the largest of the four Swedish forestryco-operatives I t runs its operat ions insouthern Sweden The membershipcomprises 52000 forest owners living at37000 farms In 2007 the turnover amountedto SEK 18000 millions (EUR 1750 million)1The number of employees was 3700 Theequity capital was SEK 10500 million (EUR1020 million) and the equity ratio was 63The return on capital was 15 Soumldra has amarket share of about 50 of the timber thatis cut within its operating area All figuresoriginate from Soumldrarsquos annual report 2008

When Soumldra was established in 1938 itworked only as a bargaining co-operativewhich is a common type of activity also intodayrsquos forestry co-operatives The firstproduction plants were established in 1940(tar mill) 1943 (sawmill) and 1959 (paper pulpplant) Since then the number of sawmills hasincreased to nine The largest investmentshave however been in the paper pulpindustry The paper pulp produced in theseplants is sold to paper works all over the worldSoumldra is the worldrsquos largest exporter of paperpulp and the worldrsquos third largest producer ofsulphate pulp

Two of the five pulp plants are located inNorway These are processing Norwegiantimber but the Norwegian suppliers are notmembers Likewise Soumldra imports largevolumes of raw material predominantly fromthe Baltic countries

Except for wood processing Soumldraprovides extensive services to its membersThe forest owners can get practically all thehelp they would like ndash no service at all to thosewho manage their forestry operat ionsthemselves and complete management of theforest for those who have no knowledge inforestry no time or no opportunities for theseactivities In between these extremes Soumldraoffers assistance in thinning planting cuttingetc These services are offered to themembers according to a service-at-costprinciple

Other business branches are production ofbuilding material and energy production bothfrom the forests (fuel wood and wood chips)and from windmills If the members want toSoumldra may erect wind power plants in theirforests

While by far most other agriculturalco-operatives offer the members as high a

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

21

commodity price as possible Soumldra hasanother policy The membersrsquo supply of timberis paid at a market price Hence Soumldra has aprofit maximisation objective This has theconsequence that Soumldra normally gets veryhigh profits One-third of the profits beforetaxes are paid to the members as capitalreturns in a variety of ways On top of that arebonus shares The rationale behind this profitdistribution principle is that Soumldra at all timeswants an even flow of raw material to its paperpulp plants Given the huge investments inthese plants it is necessary to use theproduction capacity as much as possible Ifthe co-operat ive were to have a pricemaximisation goal it would some years havetoo little raw material to its pulp plants andother years too much

The profit distribution takes place in variousforms First the patronage refunds are mostoften quite high almost 10 Second themembers receive a high interest rate for theshares that they own (8-20 during the lastfew years) Third Soumldra hands over bonusshares to the members every yearcorresponding to a capital return of 5 perannum Fourth Soumldra has at two occasionsemitted B-shares to be bought by membersand by employees and also these areawarded a very high interest rate thoughdepending on the profits All the three types ofshares are freely traded on the market iealso appreciable Finally the members havethe possibility to voluntarily invest more moneyin the co-operat ive and also theseinvestments give a high interest

Through this financial model often calledthe Soumldra model the co-operative is able totransfer more money to the memberscompared to if it were to pay the highestpossible price for the timber It is likely that inmost cases the forest owners would get abetter deal by selling to Soumldra provided thatall the future cash flows were included Formany members not to talk about non-members the Soumldra model is howeverdifficult to comprehend It is impossible toknow in advance what the economic benefitswill be Many of the members are alsomembers of other agricultural co-operativesall with a traditional organisational and financialstructures and these members may find itstrange that Soumldra has such dif ferentprinciples and practices

The Soumldra model has a great importance

for member involvement Having a largenumber of members spread out over a largearea and having huge investments inwidespread and complex business activitiesmainly downstream in the value chain thereis a great risk that members become alienatedfrom the co-operative Other studies ofco-operatives with similar attributes indicatelow trust in the leadership low involvementand low sat isfact ion (Hogeland 2006Oumlsterberg and Nilsson 2009 Nilsson Kihleacutenand Norell 2009) In a forestry co-operativecontext the r isk is even larger as themembers typically deliver timber with severalyearsrsquo interval Thanks to the Soumldra model themembers have dealings with the co-operativeevery year though in their ownership role notin their supplier role Experience from Soumldraindicates that this reasoning is correct

It should be added that Soumldra is still agenuine co-operative as the only way wherebythe members can get access to the profit-generating shares is through supplies ie asmall share of every timber payment istransferred to the membersrsquo accounts Hencethe members have a strong incentive to deliverto Soumldra

While Soumldra is the largest player in theparish where the interviews took place it hasone-third of the market in that parish Ofsimilar size is a firm that is owned jointly bythe large paper pulp and paper corporationsA third actor is almost of the same size It is aprivately owned firm that runs sawmills in alarge part of southern Sweden Except forthese three several sawmills exist oftenfamily-owned and quite small

5 Results

The results from the five interviews withco-operative members are summarised inTable 1 whi le Table 2 summarises theinterviews with the five forest owners who selltheir t imber to IOF buyers All the teninterviewees report that they are in full controlof all decisions as to their forestry (column ein the two tables) Hence their choice of tradingpartners is a deliberated decision whichmeans that it is meaningful to analyse theresponses according to the Theory of PlannedBehaviour framework

There are no socioeconomic differencesbetween the two groups In terms of timeperspective (column a) and acreage (column

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

24

b) there is a within-group spread but it is notpossible to claim that systematic differencesexist The same is true for other backgrounddata

Forest ownership is loaded with traditionsMany of the interviewees grew up at theproperty that they now own and theirancestors have often owned the forest(column a) The most extreme in the sampleis from a family that has owned the forestsince 1727 Due to the traditional values inforestry some forest owners want to managetheir forest in the same manner as theirparents (father) did Several interviewees referto their parents This also applies to theirchoice of buyers ie they have to some extentinherited the parentsrsquo view on co-operativeswhether a positive view or a negative viewDuring their upbringing they have becomesocialised into being pro-co-operative or anti-co-operative Therefore the parents may besaid to be a crucial part of the forest ownersrsquosocial network when it comes to choice oftrading partner

bull Daddy was a member too and that is fun(Interviewee 4 co-operative supplier)

bull We are doing business with [name of oneIOF buyer] So did Daddy too (Interviewee7 IOF supplier)

bull I conduct the thinning in the same manneras my father did (Interviewee 10 IOFsupplier)

Social influences have little importance whenit comes to the forest ownersrsquo evaluation ofprices and other economic factors (columnf) This observation is remarkable as theeconomic factors are important for the forestowners equally for the co-operative membersand IOF suppliers No forest owner says thatthe economic return is of no or l i t t leimportance but several have qualifications tothe question Two of the co-operat ivemembers say that long-term profitability iscrucial which means that the price at everysingle sales occasion does not need to thehighest possible None of the IOF supplierssays the same while three of them stress theprice for the single offers

bull I sell to the one who pays the best but ofcourse also good service matters(Interviewee 1 co-operative supplier)

bull It may be that I could find another buyer

who is willing to pay a higher price atspecific occasions but Soumldra is the bestin the long run (Interviewee 2 co-operativesupplier)

The IOF suppliersrsquo stress on the price issurprising as the co-operative actually paysthe same price and on top of that themembers receive a good return on the capitalthat they have invested in the co-operative Acouple of the IOF suppliers express a criticalview of Soumldra saying that some of the moneyis paid very late ie the patronage refunds andthe dividends One explanation may be thatthe Soumldra model is complicated which alsoimplies that the members do not alwaysconsider the capital returns when they maketheir choice of buyer another one that the IOFsuppliers have an anti-co-operative attitude

bull It is strange that there is not more debateabout the Soumldra model (Interviewee 4co-operative supplier)

As to non-monetary motivational factors(column g) the forest ownersrsquo social networkshave no influence When the intervieweesdiscuss with others they never do that inconnect ion with non-monetary factorsWalking in the forest for recreational purposesenjoying nature hunting elks and deer andpicking mushrooms and berries are privateaffairs Moreover the non-monetary factorshave limited importance for the choice ofbuyer the main exception being that somecutting firms are claimed to cause damageas they are careless with their hugemachinery and cutting firms are contractedby the buyer of the timber

One would expect less experienced forestowners (column d) to have a strongerpreference for a co-operative than moreexperienced owners This is however notpossible to verify There does not seem to bea connection between forestry skills and thechoice of trading partner In the group ofco-operative members only interviewee 3admits poor knowledge of forestry but thisperson relies heavily on a cousin who is anexpert in forestry as well as on the buyerrepresentative Among the IOF suppliers bothinterviewees 6 and 7 declare themselves tobe only slightly knowledgeable leaningtowards the buyer representative The forestownersrsquo degree of practical work in their forest

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

19

these non-monetary values hunting fishingpicking berries and mushrooms collectingf irewood and t imber outdoor l i fe andrecreation residence in nice naturalenvironment etc She continues to measurehow forest owners appreciate these non-monetary benefits In general they areextremely important to the forest owners

According to the Theory of PlannedBehaviour decision makers are influenced bythe norms that they f ind in their socialenvironment especially among so-calledldquosignificant othersrdquo This variable is calledNormative Compliance The ldquosignificantothersrdquo may comprise the family and relativesbut also the neighbours and friends The forestowners also have relationships with partieswhich are less likely to constitute ldquosignificantothersrdquo with the timber buying firmrsquos localrepresentative the staff at the timber buyingfirmrsquos office (those responsible for paying forthe supplies receiving the order etc) and thefirms which conduct the cutting work etc

The theoryrsquos variable Perceived Control isof a different nature If the forest owners donot themselves choose their trading partnersthe study of their decision making makes littlesense Some external factors must beconsidered for example contracts which limitthe range of choice It is likely that the forestowners are in control of the decision about withwhom should trade though this issue must beinvestigated

Prior research about farmersrsquo choice of aco-operative as their trading partners has astrong orientation towards attitudinal variableswhile the influence of the social networks isabsent The present study focuses on theforest ownersrsquo social networks comprisingtheir willingness to comply with the norms ofboth ldquosignificant othersrdquo and other partiesNevertheless also some attitudes must beincorporated since these factors may haveimportance for the interaction within the socialnetworks When the forest owners talk toothers about the various partner firms theytalk in terms of prices services non-monetaryvalues etc

Some conclusions from the account abovemay be as follows

First it is believed that the forest owners paymuch attention to the opinions of others whenthey are to choose a trading partner Theowner of a forest property has made a large

investment and so one may expect the forestowners to be highly involved in their forest Inorder for the forest owners to reduce the risktaking contacts with people they trust mayinfluence the choice of business partner ndash aco-operative or an IOF They can be expectedto make the same choice as their socialnetwork does

Second one may expect that the co-operativemembers are more prone to comply with thenorms among fellow forest owners Aco-operative member organisationconstitutes a forum for members who meetget to know each other and discuss There isno similar forum for the suppliers to IOFs

Third it is likely that there are differencesbetween the different social networks Mostcrucial are probably the family then otherforest owners (especially so for co-operativemembers) and finally the representatives ofthe trading partners cutting firms and otherbusiness firms

3 Methodological Approach

Information about forest ownersrsquo decision-making can be obtained only from the forestowners themselves Considering that thedesired data may be sensit ive it wasconsidered that the data must be collectedthrough personal interviews Hence personalinterviews were conducted by two of theauthors both coming from forest ownerfamilies and having an education withinforestry This means that they are able toldquospeak the languagerdquo of the respondentswhich increases the chances that theinterviewees trust the interviewers andanswer openly

Due to resource constraints and the timeconsuming interview technique the number ofrespondents must be small Five members ofa forestry co-operative were interviewed andfive forest owners who usually sell their timberto other buyers The small number ofinterviewees reduces the reliability of thefindings but at least some indications mayresult

As this study has a focus on the forestownersrsquo social networks it was considereddesirable to choose respondents who liverelatively close to one another so that therewould be good chances for social interaction

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

20

Hence all ten respondents live within a singleparish Another motive for this choice is thatall the respondents have the same set ofpotent ial buyers and similar work ingcondit ions Moreover the fact that theinterviewees live close to one another reducedthe travel costs and the time used for theinterviews The parish was selected by theforestry co-operativersquos member relationsofficer the criterion being that the data shouldoriginate from a district where co-operativesuppliers and IOF suppliers were of about thesame number

The addresses of the five co-operativemembers were picked randomly from the co-operativersquos member register for the parishwhere the interviews were to be conductedThe five other forest owners were randomlyselected from the register of real estateowners compiled by a governmental body Allthe identif ied respondents agreed to beinterviewed and all were available at theagreed-upon hours

The interviews were conducted in March2008 All the interviews took place in the forestownersrsquo homes They took between fifteen andthirty minutes each A total of three days wereused for the interviews including travelbetween the forest ownersrsquo homes Afterpermission f rom the interviewees al linterviews were recorded so that correctquotes can be included The intervieweeswere promised confidentiality

An interview guide was producedcomprising in total 23 questions including sixbackground variables (acreage type of forestowner rsquos living at the property length ofownership length of family ownership capitalconditions) Four questions concerned theforest ownersrsquo social networks in relation totheir forestry Nine questions concerned theforest ownerrsquos knowledge assessment andchoice of the buyers of timber Finally fourquestions concerned the forest ownersrsquo viewof their forest and their work in the forest

4 The Forestry Co-operative SoumldraSkogsaumlgarna and the Other Buyers

Forest owners may choose a forestryco-operative or an IOF as their trading partnerWithin the parish where the interviews wereconducted there is one co-operative and anumber of IOFs These firms are presentedin this section

Soumldra Skogsaumlgarna (henceforth Soumldra) isby far the largest of the four Swedish forestryco-operatives I t runs its operat ions insouthern Sweden The membershipcomprises 52000 forest owners living at37000 farms In 2007 the turnover amountedto SEK 18000 millions (EUR 1750 million)1The number of employees was 3700 Theequity capital was SEK 10500 million (EUR1020 million) and the equity ratio was 63The return on capital was 15 Soumldra has amarket share of about 50 of the timber thatis cut within its operating area All figuresoriginate from Soumldrarsquos annual report 2008

When Soumldra was established in 1938 itworked only as a bargaining co-operativewhich is a common type of activity also intodayrsquos forestry co-operatives The firstproduction plants were established in 1940(tar mill) 1943 (sawmill) and 1959 (paper pulpplant) Since then the number of sawmills hasincreased to nine The largest investmentshave however been in the paper pulpindustry The paper pulp produced in theseplants is sold to paper works all over the worldSoumldra is the worldrsquos largest exporter of paperpulp and the worldrsquos third largest producer ofsulphate pulp

Two of the five pulp plants are located inNorway These are processing Norwegiantimber but the Norwegian suppliers are notmembers Likewise Soumldra imports largevolumes of raw material predominantly fromthe Baltic countries

Except for wood processing Soumldraprovides extensive services to its membersThe forest owners can get practically all thehelp they would like ndash no service at all to thosewho manage their forestry operat ionsthemselves and complete management of theforest for those who have no knowledge inforestry no time or no opportunities for theseactivities In between these extremes Soumldraoffers assistance in thinning planting cuttingetc These services are offered to themembers according to a service-at-costprinciple

Other business branches are production ofbuilding material and energy production bothfrom the forests (fuel wood and wood chips)and from windmills If the members want toSoumldra may erect wind power plants in theirforests

While by far most other agriculturalco-operatives offer the members as high a

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

21

commodity price as possible Soumldra hasanother policy The membersrsquo supply of timberis paid at a market price Hence Soumldra has aprofit maximisation objective This has theconsequence that Soumldra normally gets veryhigh profits One-third of the profits beforetaxes are paid to the members as capitalreturns in a variety of ways On top of that arebonus shares The rationale behind this profitdistribution principle is that Soumldra at all timeswants an even flow of raw material to its paperpulp plants Given the huge investments inthese plants it is necessary to use theproduction capacity as much as possible Ifthe co-operat ive were to have a pricemaximisation goal it would some years havetoo little raw material to its pulp plants andother years too much

The profit distribution takes place in variousforms First the patronage refunds are mostoften quite high almost 10 Second themembers receive a high interest rate for theshares that they own (8-20 during the lastfew years) Third Soumldra hands over bonusshares to the members every yearcorresponding to a capital return of 5 perannum Fourth Soumldra has at two occasionsemitted B-shares to be bought by membersand by employees and also these areawarded a very high interest rate thoughdepending on the profits All the three types ofshares are freely traded on the market iealso appreciable Finally the members havethe possibility to voluntarily invest more moneyin the co-operat ive and also theseinvestments give a high interest

Through this financial model often calledthe Soumldra model the co-operative is able totransfer more money to the memberscompared to if it were to pay the highestpossible price for the timber It is likely that inmost cases the forest owners would get abetter deal by selling to Soumldra provided thatall the future cash flows were included Formany members not to talk about non-members the Soumldra model is howeverdifficult to comprehend It is impossible toknow in advance what the economic benefitswill be Many of the members are alsomembers of other agricultural co-operativesall with a traditional organisational and financialstructures and these members may find itstrange that Soumldra has such dif ferentprinciples and practices

The Soumldra model has a great importance

for member involvement Having a largenumber of members spread out over a largearea and having huge investments inwidespread and complex business activitiesmainly downstream in the value chain thereis a great risk that members become alienatedfrom the co-operative Other studies ofco-operatives with similar attributes indicatelow trust in the leadership low involvementand low sat isfact ion (Hogeland 2006Oumlsterberg and Nilsson 2009 Nilsson Kihleacutenand Norell 2009) In a forestry co-operativecontext the r isk is even larger as themembers typically deliver timber with severalyearsrsquo interval Thanks to the Soumldra model themembers have dealings with the co-operativeevery year though in their ownership role notin their supplier role Experience from Soumldraindicates that this reasoning is correct

It should be added that Soumldra is still agenuine co-operative as the only way wherebythe members can get access to the profit-generating shares is through supplies ie asmall share of every timber payment istransferred to the membersrsquo accounts Hencethe members have a strong incentive to deliverto Soumldra

While Soumldra is the largest player in theparish where the interviews took place it hasone-third of the market in that parish Ofsimilar size is a firm that is owned jointly bythe large paper pulp and paper corporationsA third actor is almost of the same size It is aprivately owned firm that runs sawmills in alarge part of southern Sweden Except forthese three several sawmills exist oftenfamily-owned and quite small

5 Results

The results from the five interviews withco-operative members are summarised inTable 1 whi le Table 2 summarises theinterviews with the five forest owners who selltheir t imber to IOF buyers All the teninterviewees report that they are in full controlof all decisions as to their forestry (column ein the two tables) Hence their choice of tradingpartners is a deliberated decision whichmeans that it is meaningful to analyse theresponses according to the Theory of PlannedBehaviour framework

There are no socioeconomic differencesbetween the two groups In terms of timeperspective (column a) and acreage (column

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

24

b) there is a within-group spread but it is notpossible to claim that systematic differencesexist The same is true for other backgrounddata

Forest ownership is loaded with traditionsMany of the interviewees grew up at theproperty that they now own and theirancestors have often owned the forest(column a) The most extreme in the sampleis from a family that has owned the forestsince 1727 Due to the traditional values inforestry some forest owners want to managetheir forest in the same manner as theirparents (father) did Several interviewees referto their parents This also applies to theirchoice of buyers ie they have to some extentinherited the parentsrsquo view on co-operativeswhether a positive view or a negative viewDuring their upbringing they have becomesocialised into being pro-co-operative or anti-co-operative Therefore the parents may besaid to be a crucial part of the forest ownersrsquosocial network when it comes to choice oftrading partner

bull Daddy was a member too and that is fun(Interviewee 4 co-operative supplier)

bull We are doing business with [name of oneIOF buyer] So did Daddy too (Interviewee7 IOF supplier)

bull I conduct the thinning in the same manneras my father did (Interviewee 10 IOFsupplier)

Social influences have little importance whenit comes to the forest ownersrsquo evaluation ofprices and other economic factors (columnf) This observation is remarkable as theeconomic factors are important for the forestowners equally for the co-operative membersand IOF suppliers No forest owner says thatthe economic return is of no or l i t t leimportance but several have qualifications tothe question Two of the co-operat ivemembers say that long-term profitability iscrucial which means that the price at everysingle sales occasion does not need to thehighest possible None of the IOF supplierssays the same while three of them stress theprice for the single offers

bull I sell to the one who pays the best but ofcourse also good service matters(Interviewee 1 co-operative supplier)

bull It may be that I could find another buyer

who is willing to pay a higher price atspecific occasions but Soumldra is the bestin the long run (Interviewee 2 co-operativesupplier)

The IOF suppliersrsquo stress on the price issurprising as the co-operative actually paysthe same price and on top of that themembers receive a good return on the capitalthat they have invested in the co-operative Acouple of the IOF suppliers express a criticalview of Soumldra saying that some of the moneyis paid very late ie the patronage refunds andthe dividends One explanation may be thatthe Soumldra model is complicated which alsoimplies that the members do not alwaysconsider the capital returns when they maketheir choice of buyer another one that the IOFsuppliers have an anti-co-operative attitude

bull It is strange that there is not more debateabout the Soumldra model (Interviewee 4co-operative supplier)

As to non-monetary motivational factors(column g) the forest ownersrsquo social networkshave no influence When the intervieweesdiscuss with others they never do that inconnect ion with non-monetary factorsWalking in the forest for recreational purposesenjoying nature hunting elks and deer andpicking mushrooms and berries are privateaffairs Moreover the non-monetary factorshave limited importance for the choice ofbuyer the main exception being that somecutting firms are claimed to cause damageas they are careless with their hugemachinery and cutting firms are contractedby the buyer of the timber

One would expect less experienced forestowners (column d) to have a strongerpreference for a co-operative than moreexperienced owners This is however notpossible to verify There does not seem to bea connection between forestry skills and thechoice of trading partner In the group ofco-operative members only interviewee 3admits poor knowledge of forestry but thisperson relies heavily on a cousin who is anexpert in forestry as well as on the buyerrepresentative Among the IOF suppliers bothinterviewees 6 and 7 declare themselves tobe only slightly knowledgeable leaningtowards the buyer representative The forestownersrsquo degree of practical work in their forest

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

20

Hence all ten respondents live within a singleparish Another motive for this choice is thatall the respondents have the same set ofpotent ial buyers and similar work ingcondit ions Moreover the fact that theinterviewees live close to one another reducedthe travel costs and the time used for theinterviews The parish was selected by theforestry co-operativersquos member relationsofficer the criterion being that the data shouldoriginate from a district where co-operativesuppliers and IOF suppliers were of about thesame number

The addresses of the five co-operativemembers were picked randomly from the co-operativersquos member register for the parishwhere the interviews were to be conductedThe five other forest owners were randomlyselected from the register of real estateowners compiled by a governmental body Allthe identif ied respondents agreed to beinterviewed and all were available at theagreed-upon hours

The interviews were conducted in March2008 All the interviews took place in the forestownersrsquo homes They took between fifteen andthirty minutes each A total of three days wereused for the interviews including travelbetween the forest ownersrsquo homes Afterpermission f rom the interviewees al linterviews were recorded so that correctquotes can be included The intervieweeswere promised confidentiality

An interview guide was producedcomprising in total 23 questions including sixbackground variables (acreage type of forestowner rsquos living at the property length ofownership length of family ownership capitalconditions) Four questions concerned theforest ownersrsquo social networks in relation totheir forestry Nine questions concerned theforest ownerrsquos knowledge assessment andchoice of the buyers of timber Finally fourquestions concerned the forest ownersrsquo viewof their forest and their work in the forest

4 The Forestry Co-operative SoumldraSkogsaumlgarna and the Other Buyers

Forest owners may choose a forestryco-operative or an IOF as their trading partnerWithin the parish where the interviews wereconducted there is one co-operative and anumber of IOFs These firms are presentedin this section

Soumldra Skogsaumlgarna (henceforth Soumldra) isby far the largest of the four Swedish forestryco-operatives I t runs its operat ions insouthern Sweden The membershipcomprises 52000 forest owners living at37000 farms In 2007 the turnover amountedto SEK 18000 millions (EUR 1750 million)1The number of employees was 3700 Theequity capital was SEK 10500 million (EUR1020 million) and the equity ratio was 63The return on capital was 15 Soumldra has amarket share of about 50 of the timber thatis cut within its operating area All figuresoriginate from Soumldrarsquos annual report 2008

When Soumldra was established in 1938 itworked only as a bargaining co-operativewhich is a common type of activity also intodayrsquos forestry co-operatives The firstproduction plants were established in 1940(tar mill) 1943 (sawmill) and 1959 (paper pulpplant) Since then the number of sawmills hasincreased to nine The largest investmentshave however been in the paper pulpindustry The paper pulp produced in theseplants is sold to paper works all over the worldSoumldra is the worldrsquos largest exporter of paperpulp and the worldrsquos third largest producer ofsulphate pulp

Two of the five pulp plants are located inNorway These are processing Norwegiantimber but the Norwegian suppliers are notmembers Likewise Soumldra imports largevolumes of raw material predominantly fromthe Baltic countries

Except for wood processing Soumldraprovides extensive services to its membersThe forest owners can get practically all thehelp they would like ndash no service at all to thosewho manage their forestry operat ionsthemselves and complete management of theforest for those who have no knowledge inforestry no time or no opportunities for theseactivities In between these extremes Soumldraoffers assistance in thinning planting cuttingetc These services are offered to themembers according to a service-at-costprinciple

Other business branches are production ofbuilding material and energy production bothfrom the forests (fuel wood and wood chips)and from windmills If the members want toSoumldra may erect wind power plants in theirforests

While by far most other agriculturalco-operatives offer the members as high a

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

21

commodity price as possible Soumldra hasanother policy The membersrsquo supply of timberis paid at a market price Hence Soumldra has aprofit maximisation objective This has theconsequence that Soumldra normally gets veryhigh profits One-third of the profits beforetaxes are paid to the members as capitalreturns in a variety of ways On top of that arebonus shares The rationale behind this profitdistribution principle is that Soumldra at all timeswants an even flow of raw material to its paperpulp plants Given the huge investments inthese plants it is necessary to use theproduction capacity as much as possible Ifthe co-operat ive were to have a pricemaximisation goal it would some years havetoo little raw material to its pulp plants andother years too much

The profit distribution takes place in variousforms First the patronage refunds are mostoften quite high almost 10 Second themembers receive a high interest rate for theshares that they own (8-20 during the lastfew years) Third Soumldra hands over bonusshares to the members every yearcorresponding to a capital return of 5 perannum Fourth Soumldra has at two occasionsemitted B-shares to be bought by membersand by employees and also these areawarded a very high interest rate thoughdepending on the profits All the three types ofshares are freely traded on the market iealso appreciable Finally the members havethe possibility to voluntarily invest more moneyin the co-operat ive and also theseinvestments give a high interest

Through this financial model often calledthe Soumldra model the co-operative is able totransfer more money to the memberscompared to if it were to pay the highestpossible price for the timber It is likely that inmost cases the forest owners would get abetter deal by selling to Soumldra provided thatall the future cash flows were included Formany members not to talk about non-members the Soumldra model is howeverdifficult to comprehend It is impossible toknow in advance what the economic benefitswill be Many of the members are alsomembers of other agricultural co-operativesall with a traditional organisational and financialstructures and these members may find itstrange that Soumldra has such dif ferentprinciples and practices

The Soumldra model has a great importance

for member involvement Having a largenumber of members spread out over a largearea and having huge investments inwidespread and complex business activitiesmainly downstream in the value chain thereis a great risk that members become alienatedfrom the co-operative Other studies ofco-operatives with similar attributes indicatelow trust in the leadership low involvementand low sat isfact ion (Hogeland 2006Oumlsterberg and Nilsson 2009 Nilsson Kihleacutenand Norell 2009) In a forestry co-operativecontext the r isk is even larger as themembers typically deliver timber with severalyearsrsquo interval Thanks to the Soumldra model themembers have dealings with the co-operativeevery year though in their ownership role notin their supplier role Experience from Soumldraindicates that this reasoning is correct

It should be added that Soumldra is still agenuine co-operative as the only way wherebythe members can get access to the profit-generating shares is through supplies ie asmall share of every timber payment istransferred to the membersrsquo accounts Hencethe members have a strong incentive to deliverto Soumldra

While Soumldra is the largest player in theparish where the interviews took place it hasone-third of the market in that parish Ofsimilar size is a firm that is owned jointly bythe large paper pulp and paper corporationsA third actor is almost of the same size It is aprivately owned firm that runs sawmills in alarge part of southern Sweden Except forthese three several sawmills exist oftenfamily-owned and quite small

5 Results

The results from the five interviews withco-operative members are summarised inTable 1 whi le Table 2 summarises theinterviews with the five forest owners who selltheir t imber to IOF buyers All the teninterviewees report that they are in full controlof all decisions as to their forestry (column ein the two tables) Hence their choice of tradingpartners is a deliberated decision whichmeans that it is meaningful to analyse theresponses according to the Theory of PlannedBehaviour framework

There are no socioeconomic differencesbetween the two groups In terms of timeperspective (column a) and acreage (column

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

24

b) there is a within-group spread but it is notpossible to claim that systematic differencesexist The same is true for other backgrounddata

Forest ownership is loaded with traditionsMany of the interviewees grew up at theproperty that they now own and theirancestors have often owned the forest(column a) The most extreme in the sampleis from a family that has owned the forestsince 1727 Due to the traditional values inforestry some forest owners want to managetheir forest in the same manner as theirparents (father) did Several interviewees referto their parents This also applies to theirchoice of buyers ie they have to some extentinherited the parentsrsquo view on co-operativeswhether a positive view or a negative viewDuring their upbringing they have becomesocialised into being pro-co-operative or anti-co-operative Therefore the parents may besaid to be a crucial part of the forest ownersrsquosocial network when it comes to choice oftrading partner

bull Daddy was a member too and that is fun(Interviewee 4 co-operative supplier)

bull We are doing business with [name of oneIOF buyer] So did Daddy too (Interviewee7 IOF supplier)

bull I conduct the thinning in the same manneras my father did (Interviewee 10 IOFsupplier)

Social influences have little importance whenit comes to the forest ownersrsquo evaluation ofprices and other economic factors (columnf) This observation is remarkable as theeconomic factors are important for the forestowners equally for the co-operative membersand IOF suppliers No forest owner says thatthe economic return is of no or l i t t leimportance but several have qualifications tothe question Two of the co-operat ivemembers say that long-term profitability iscrucial which means that the price at everysingle sales occasion does not need to thehighest possible None of the IOF supplierssays the same while three of them stress theprice for the single offers

bull I sell to the one who pays the best but ofcourse also good service matters(Interviewee 1 co-operative supplier)

bull It may be that I could find another buyer

who is willing to pay a higher price atspecific occasions but Soumldra is the bestin the long run (Interviewee 2 co-operativesupplier)

The IOF suppliersrsquo stress on the price issurprising as the co-operative actually paysthe same price and on top of that themembers receive a good return on the capitalthat they have invested in the co-operative Acouple of the IOF suppliers express a criticalview of Soumldra saying that some of the moneyis paid very late ie the patronage refunds andthe dividends One explanation may be thatthe Soumldra model is complicated which alsoimplies that the members do not alwaysconsider the capital returns when they maketheir choice of buyer another one that the IOFsuppliers have an anti-co-operative attitude

bull It is strange that there is not more debateabout the Soumldra model (Interviewee 4co-operative supplier)

As to non-monetary motivational factors(column g) the forest ownersrsquo social networkshave no influence When the intervieweesdiscuss with others they never do that inconnect ion with non-monetary factorsWalking in the forest for recreational purposesenjoying nature hunting elks and deer andpicking mushrooms and berries are privateaffairs Moreover the non-monetary factorshave limited importance for the choice ofbuyer the main exception being that somecutting firms are claimed to cause damageas they are careless with their hugemachinery and cutting firms are contractedby the buyer of the timber

One would expect less experienced forestowners (column d) to have a strongerpreference for a co-operative than moreexperienced owners This is however notpossible to verify There does not seem to bea connection between forestry skills and thechoice of trading partner In the group ofco-operative members only interviewee 3admits poor knowledge of forestry but thisperson relies heavily on a cousin who is anexpert in forestry as well as on the buyerrepresentative Among the IOF suppliers bothinterviewees 6 and 7 declare themselves tobe only slightly knowledgeable leaningtowards the buyer representative The forestownersrsquo degree of practical work in their forest

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

21

commodity price as possible Soumldra hasanother policy The membersrsquo supply of timberis paid at a market price Hence Soumldra has aprofit maximisation objective This has theconsequence that Soumldra normally gets veryhigh profits One-third of the profits beforetaxes are paid to the members as capitalreturns in a variety of ways On top of that arebonus shares The rationale behind this profitdistribution principle is that Soumldra at all timeswants an even flow of raw material to its paperpulp plants Given the huge investments inthese plants it is necessary to use theproduction capacity as much as possible Ifthe co-operat ive were to have a pricemaximisation goal it would some years havetoo little raw material to its pulp plants andother years too much

The profit distribution takes place in variousforms First the patronage refunds are mostoften quite high almost 10 Second themembers receive a high interest rate for theshares that they own (8-20 during the lastfew years) Third Soumldra hands over bonusshares to the members every yearcorresponding to a capital return of 5 perannum Fourth Soumldra has at two occasionsemitted B-shares to be bought by membersand by employees and also these areawarded a very high interest rate thoughdepending on the profits All the three types ofshares are freely traded on the market iealso appreciable Finally the members havethe possibility to voluntarily invest more moneyin the co-operat ive and also theseinvestments give a high interest

Through this financial model often calledthe Soumldra model the co-operative is able totransfer more money to the memberscompared to if it were to pay the highestpossible price for the timber It is likely that inmost cases the forest owners would get abetter deal by selling to Soumldra provided thatall the future cash flows were included Formany members not to talk about non-members the Soumldra model is howeverdifficult to comprehend It is impossible toknow in advance what the economic benefitswill be Many of the members are alsomembers of other agricultural co-operativesall with a traditional organisational and financialstructures and these members may find itstrange that Soumldra has such dif ferentprinciples and practices

The Soumldra model has a great importance

for member involvement Having a largenumber of members spread out over a largearea and having huge investments inwidespread and complex business activitiesmainly downstream in the value chain thereis a great risk that members become alienatedfrom the co-operative Other studies ofco-operatives with similar attributes indicatelow trust in the leadership low involvementand low sat isfact ion (Hogeland 2006Oumlsterberg and Nilsson 2009 Nilsson Kihleacutenand Norell 2009) In a forestry co-operativecontext the r isk is even larger as themembers typically deliver timber with severalyearsrsquo interval Thanks to the Soumldra model themembers have dealings with the co-operativeevery year though in their ownership role notin their supplier role Experience from Soumldraindicates that this reasoning is correct

It should be added that Soumldra is still agenuine co-operative as the only way wherebythe members can get access to the profit-generating shares is through supplies ie asmall share of every timber payment istransferred to the membersrsquo accounts Hencethe members have a strong incentive to deliverto Soumldra

While Soumldra is the largest player in theparish where the interviews took place it hasone-third of the market in that parish Ofsimilar size is a firm that is owned jointly bythe large paper pulp and paper corporationsA third actor is almost of the same size It is aprivately owned firm that runs sawmills in alarge part of southern Sweden Except forthese three several sawmills exist oftenfamily-owned and quite small

5 Results

The results from the five interviews withco-operative members are summarised inTable 1 whi le Table 2 summarises theinterviews with the five forest owners who selltheir t imber to IOF buyers All the teninterviewees report that they are in full controlof all decisions as to their forestry (column ein the two tables) Hence their choice of tradingpartners is a deliberated decision whichmeans that it is meaningful to analyse theresponses according to the Theory of PlannedBehaviour framework

There are no socioeconomic differencesbetween the two groups In terms of timeperspective (column a) and acreage (column

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

24

b) there is a within-group spread but it is notpossible to claim that systematic differencesexist The same is true for other backgrounddata

Forest ownership is loaded with traditionsMany of the interviewees grew up at theproperty that they now own and theirancestors have often owned the forest(column a) The most extreme in the sampleis from a family that has owned the forestsince 1727 Due to the traditional values inforestry some forest owners want to managetheir forest in the same manner as theirparents (father) did Several interviewees referto their parents This also applies to theirchoice of buyers ie they have to some extentinherited the parentsrsquo view on co-operativeswhether a positive view or a negative viewDuring their upbringing they have becomesocialised into being pro-co-operative or anti-co-operative Therefore the parents may besaid to be a crucial part of the forest ownersrsquosocial network when it comes to choice oftrading partner

bull Daddy was a member too and that is fun(Interviewee 4 co-operative supplier)

bull We are doing business with [name of oneIOF buyer] So did Daddy too (Interviewee7 IOF supplier)

bull I conduct the thinning in the same manneras my father did (Interviewee 10 IOFsupplier)

Social influences have little importance whenit comes to the forest ownersrsquo evaluation ofprices and other economic factors (columnf) This observation is remarkable as theeconomic factors are important for the forestowners equally for the co-operative membersand IOF suppliers No forest owner says thatthe economic return is of no or l i t t leimportance but several have qualifications tothe question Two of the co-operat ivemembers say that long-term profitability iscrucial which means that the price at everysingle sales occasion does not need to thehighest possible None of the IOF supplierssays the same while three of them stress theprice for the single offers

bull I sell to the one who pays the best but ofcourse also good service matters(Interviewee 1 co-operative supplier)

bull It may be that I could find another buyer

who is willing to pay a higher price atspecific occasions but Soumldra is the bestin the long run (Interviewee 2 co-operativesupplier)

The IOF suppliersrsquo stress on the price issurprising as the co-operative actually paysthe same price and on top of that themembers receive a good return on the capitalthat they have invested in the co-operative Acouple of the IOF suppliers express a criticalview of Soumldra saying that some of the moneyis paid very late ie the patronage refunds andthe dividends One explanation may be thatthe Soumldra model is complicated which alsoimplies that the members do not alwaysconsider the capital returns when they maketheir choice of buyer another one that the IOFsuppliers have an anti-co-operative attitude

bull It is strange that there is not more debateabout the Soumldra model (Interviewee 4co-operative supplier)

As to non-monetary motivational factors(column g) the forest ownersrsquo social networkshave no influence When the intervieweesdiscuss with others they never do that inconnect ion with non-monetary factorsWalking in the forest for recreational purposesenjoying nature hunting elks and deer andpicking mushrooms and berries are privateaffairs Moreover the non-monetary factorshave limited importance for the choice ofbuyer the main exception being that somecutting firms are claimed to cause damageas they are careless with their hugemachinery and cutting firms are contractedby the buyer of the timber

One would expect less experienced forestowners (column d) to have a strongerpreference for a co-operative than moreexperienced owners This is however notpossible to verify There does not seem to bea connection between forestry skills and thechoice of trading partner In the group ofco-operative members only interviewee 3admits poor knowledge of forestry but thisperson relies heavily on a cousin who is anexpert in forestry as well as on the buyerrepresentative Among the IOF suppliers bothinterviewees 6 and 7 declare themselves tobe only slightly knowledgeable leaningtowards the buyer representative The forestownersrsquo degree of practical work in their forest

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

24

b) there is a within-group spread but it is notpossible to claim that systematic differencesexist The same is true for other backgrounddata

Forest ownership is loaded with traditionsMany of the interviewees grew up at theproperty that they now own and theirancestors have often owned the forest(column a) The most extreme in the sampleis from a family that has owned the forestsince 1727 Due to the traditional values inforestry some forest owners want to managetheir forest in the same manner as theirparents (father) did Several interviewees referto their parents This also applies to theirchoice of buyers ie they have to some extentinherited the parentsrsquo view on co-operativeswhether a positive view or a negative viewDuring their upbringing they have becomesocialised into being pro-co-operative or anti-co-operative Therefore the parents may besaid to be a crucial part of the forest ownersrsquosocial network when it comes to choice oftrading partner

bull Daddy was a member too and that is fun(Interviewee 4 co-operative supplier)

bull We are doing business with [name of oneIOF buyer] So did Daddy too (Interviewee7 IOF supplier)

bull I conduct the thinning in the same manneras my father did (Interviewee 10 IOFsupplier)

Social influences have little importance whenit comes to the forest ownersrsquo evaluation ofprices and other economic factors (columnf) This observation is remarkable as theeconomic factors are important for the forestowners equally for the co-operative membersand IOF suppliers No forest owner says thatthe economic return is of no or l i t t leimportance but several have qualifications tothe question Two of the co-operat ivemembers say that long-term profitability iscrucial which means that the price at everysingle sales occasion does not need to thehighest possible None of the IOF supplierssays the same while three of them stress theprice for the single offers

bull I sell to the one who pays the best but ofcourse also good service matters(Interviewee 1 co-operative supplier)

bull It may be that I could find another buyer

who is willing to pay a higher price atspecific occasions but Soumldra is the bestin the long run (Interviewee 2 co-operativesupplier)

The IOF suppliersrsquo stress on the price issurprising as the co-operative actually paysthe same price and on top of that themembers receive a good return on the capitalthat they have invested in the co-operative Acouple of the IOF suppliers express a criticalview of Soumldra saying that some of the moneyis paid very late ie the patronage refunds andthe dividends One explanation may be thatthe Soumldra model is complicated which alsoimplies that the members do not alwaysconsider the capital returns when they maketheir choice of buyer another one that the IOFsuppliers have an anti-co-operative attitude

bull It is strange that there is not more debateabout the Soumldra model (Interviewee 4co-operative supplier)

As to non-monetary motivational factors(column g) the forest ownersrsquo social networkshave no influence When the intervieweesdiscuss with others they never do that inconnect ion with non-monetary factorsWalking in the forest for recreational purposesenjoying nature hunting elks and deer andpicking mushrooms and berries are privateaffairs Moreover the non-monetary factorshave limited importance for the choice ofbuyer the main exception being that somecutting firms are claimed to cause damageas they are careless with their hugemachinery and cutting firms are contractedby the buyer of the timber

One would expect less experienced forestowners (column d) to have a strongerpreference for a co-operative than moreexperienced owners This is however notpossible to verify There does not seem to bea connection between forestry skills and thechoice of trading partner In the group ofco-operative members only interviewee 3admits poor knowledge of forestry but thisperson relies heavily on a cousin who is anexpert in forestry as well as on the buyerrepresentative Among the IOF suppliers bothinterviewees 6 and 7 declare themselves tobe only slightly knowledgeable leaningtowards the buyer representative The forestownersrsquo degree of practical work in their forest

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

25

may serve as an indicator of knowledge andexperience (column c) However almost allof the ten interviewees report themselves todo most of the thinning cleaning and othertasks on their own

Most interviewees talk to other forestowners often (column h) It is not possible todiscern any differences between co-operativesuppliers and IOF suppliers There seemshowever to be a pattern such that theco-operative members talk to each other andthe non-co-operators talk to each other Theco-operative members are more or lessconvinced that the co-operative is the bestbuyer Likewise none of the IOF suppliers canimagine themselves selling to a co-operative

When the interviewees got the questionwhether there are influences by other forestowners all but one denied that They talk toeach other but they neither try to influenceanother forest owner as to choice of buyer norare they influenced by others The choice of aco-operative or an IOF buyer is a sensitivematter and therefore this is not a topic ofconversation The issue of a co-operative oran IOF supplier is loaded with sentiments Theforest owners do not even care aboutinforming themselves about optional tradingpartners

bull I donrsquot know the business principles of othertimber buyers I am a member of Soumldra(Interviewee 2 co-operative supplier)

bull Most forest owners around here deliver toSoumldra ( Interviewee 5 co-operat ivesupplier)

The high degree of loyalty to one type of tradingpartner becomes evident when theinterviewees are faced with the questionabout what could induce them to changepartnering f irm The question is almosthypothetical in the eyes of the forest owners

bull If I were to abandon Soumldra because anotherfirm sometimes offers a better price Thatwould not be a good idea (Interviewee 3co-operative supplier)

bull A huge pr ice offer ( Interviewee 5co-operative supplier)

bull I would change buyer if Jerry [the IOFrsquosrepresentative] died (Interviewee 8 IOFsupplier)

bull No I donrsquot care about Soumldra I amindependent (Interviewee 10 IOF supplier)

Another expression of loyalty is whether theforest owners sometimes deliver to variousbuyers (column l) Soumldrarsquos bylaws do notrequire delivery obligations so also the co-operative members could deliver to any otherbuyer The data reveal however that suchbehaviour is extremely rare Only one Soumldramember says that he somet imes hasdelivered to an IOF and nobody in the othergroup has ever delivered to Soumldra though theyhave sold to different IOFs Nevertheless theIOF suppliers appreciate the co-operative

bull If we hadnrsquot had Soumldra we would not haveany good prices (Interviewee 8 IOFsupplier)

There is a clear difference between the twogroups as to understanding of the Soumldramodel and the appreciation of this (column k)All non-members dislike the model but theyare poorly informed about it None of themembers objects to the Soumldra model ndash theyare instead quite posit ive The mostremarkable observation is that the knowledgeabout this model is not very widespread amongthe members

bull The Soumldra model ndash it is reasonable(Interviewee 5 co-operative supplier)

bull I get the money rather than any capitalisthellip I feel l ike an owner of the f i rm(Interviewee 5 co-operative supplier)

A str ik ing observat ion is that mostinterviewees seek advice from the localrepresentatives of the trading partners(column j) As seen from the partnering firmsrsquoperspective this is an ideal situation as theirrepresentatives thereby are able to makemore money The forest owners do not seemto realise that they and the representativeshave opposing interests Some of theinterviewees even talk about theserepresentatives as if they were close friendsmentioning only their f i rst names Anexplanation for this high degree of trust is thatthe forest owners meet the partnering firmsrsquorepresentatives fairly often so personalrelationships may evolve another one thatthese representatives are very knowledgeablein forestry issues

There is no dif ference betweenco-operative membersrsquo and non-membersrsquotrust in the trade partnersrsquo representative In

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

26

both categories four of the five intervieweeshave much trust in the representatives Onewould expect the co-operative suppliers to bemore inclined to trust the Soumldra representativeas a co-operat ive is less l ikely to actopportunistically towards its members Therisk for deceitful behaviour would be higher inthe IOF case Such behaviour will howeverbe reduced to the extent that the firm has beenon the market for many years and plans tostay there for many more years and that theopportunistic behaviour may be discovered bythe trading partners The firmsrsquo reputation isof vital importance

bull When we sold some timber last time wesold to [name of one of the IOF buyers]because we know him (Interviewee 6 IOFsupplier)

bull We do not sell at highest possible price ndash itis also a matter of personal relations(Interviewee 7 IOF supplier)

bull We sell to [name of one of the IOF buyers]and Jerry He is good I think (Interviewee7 IOF supplier)

bull I have a very good representative in Jerryat [name of one IOF buyer] a person youcould really trust (Interviewee 8 IOFsupplier)

6 Conclusions

The study suffers from a small sample andfrom a data collection technique which doesnot provide hard data Both these problemsare a consequence of sensitive issues andthey are thereby impossible to avoid Forest

owners consider that their way of running theforests is nobody elsersquos business

Figure 1 provides an overview over howmany of the forest owners in the two groupshave mentioned social networks ndash parentsother family members and relatives otherforest owners and the buying f i rmsrsquorepresentatives The figure indicates that onemay expect these four categories to form ascale of closeness Parents and familymembers are likely to constitute ldquosignificantothersrdquo which is to say that the decision-makersrsquo propensity to comply with the normsare strong while the opposite is true for theother end of the scale

Based on the theoretical overview it wasexpected that the forest owners would beinfluenced by their social networks when theyare to decide about which trading partner theyshould collaborate with Even though thecontacts are not very strong and frequent aconclusion must be that the forest owners areclearly affected by others Especially in onerespect the influence is strong and thatconcerns the influence from the parents

The interviewees generally deny both thatthey are influenced by other forest owners andthat they try to influence others This holds trueno matter if the forest owners assess theeconomic aspects of forestry or the non-monetary They talk to each other aboutforestry and all the forest owners know whichtrading partners others have chosen Thereason why the forest owners refrain frominfluencing each other is probably that theywant to preserve good relations with theirneighbours and colleagues ndash talking about a

1 4 3

4

3

4

4

Processorrsquos representative

Family and relatives

Other forest owners

4

Legend Suppliers to the co-operative (five people) Suppliers to IOFs (five people)

Parents

Forest owner

Expected to be strongly ldquosignificant othersrdquo Expected to be weakly ldquosignificant othersrdquo

5 0

Figure 1 Social networks for co-operative and IOF suppliers as concerns choice of buyer(figures express the number of interviewees who mention the specific type of contact)

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

27

sensitive issue like the choice of tradingpartner might be interpreted as offensive

A second expectat ion is that theco-operative members are more likely to beinfluenced by each other This seems to bethe case All five co-operative members talkto other forest owners but only three of thesuppliers to IOFs say that they do so Oneexplanation for this difference might be thatthe co-operativersquos member democratic systemis organised with local wards at the grass rootlevel and these wards are often quite activeThe IOFs do not have any similar organisationIn a forum like this the co-operative memberstend to confirm each othersrsquo existing choices

This is not to say that co-operative ideologyis important The membersrsquo loyalty to Soumldrais due to the social networks that the membershave with other members as well as withvarious employees within Soumldra They havecome to perceive themselves as co-operativemembers Co-operative ideology was notmentioned once during the interviews with theco-operative members The suppliers to IOFshave rather an anti-co-operative ideologyThey can not imagine themselves as suppliersto any co-operative

The third expectation was that there shouldbe a stronger influence from persons who areexpected to be important for the decision-makers The findings do however not indicate

that The parentsrsquo choice of trading partner iscertainly important but with one exception theinterviewees do not mention their family andrelatives to be important One interpretationis that such an influence exists but it is soself-evident that the interviewees do notmention it

The most remarkable observation is thatthe trading partnersrsquo local representatives arevery important and so for both categories offorest owners These representatives enjoymuch trust probably due to their knowledgeand skills Thereby they have come to beconsidered as ldquosignificant othersrdquo by the forestowners The forest owners do not realise thatthese representativesrsquo interests are opposedto their own interests

This study indicates that trust is importantin the producersrsquo choice of trading partner Thesocial networks are crucial for their choicebetween a co-operative and an investor-owned business partner The forest ownersrsquotrust in their family especially their parentsand in the buying firmsrsquo representatives playa decisive role The influences betweendifferent forest owners are less importantpossibly because the forest owners want topreserve a good relationship with their friendsand colleagues by not talking about thesensitive issue of trading partners

The Authors

John Enander is a forestry engineer working as a real estate agent at LRF KonsultSkoumlvde Sweden He is also the chairman of the organisation for young farmers inSweden Andreas Melin is a forestry engineer working as purchasing officer in a woodprocessing firm Rydaholm Sweden Jerker Nilsson is professor of Co-operativeBusiness and Market at the Department of Economics Swedish University ofAgricultural Sciences Uppsala Sweden as well as at the Department of Work ScienceBusiness Economics and Environmental Psychology Swedish University of AgriculturalSciences Alnarp Sweden

References

Ajzen I (1991) The Theory of Planned Behavior Organizational Behavior and Human Decision Processes50 179-211

Berlin C (2005) Collective Decision Constraints in Cooperatives Theory and Application on SwedishForest Owner Associations Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Berlin C (2006) Forest Owner Characteristics and Implication for the Forest Owner Cooperative UmearingSweden Department of Forest Resource Management Swedish University of Agricultural Sciences

Berlin C and Erikson L O (2007) A comparison of characteristics of forest and farm cooperative membersJournal of Cooperatives 20 50-63

Berlin C (2007) How do the Swedish Forest Owners organizations cooperative with their membesHistorical track and future roads Umearing Sweden Department of Forest Resource Management SwedishUniversity of Agricultural Sciences

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy

28

Bhuyan S (2007) The peoplersquo factor in cooperatives An analysis of membersrsquo attitudes and behaviorCanadian Journal of Agricultural Economics 55 275ndash298

Borgen SO (2001) Identification as a trust-generating mechanism in cooperatives Annals of Public andCooperative Economics 72 208ndash228

Bravo-Ureta B E and Lee T C (1988) Socioeconomic and technical characteristics of New England dairycooperative members and non-members Journal of Agricultural Cooperation 3 12ndash27

Burt L and Wirth M E (1990) Assessing the effectiveness of a farm supply cooperative A comparison offarmer and manager viewpoints Journal of Agricultural Cooperatives 5 17ndash26

Digby M and Edwardson T E (1976) The Organization of Forestry Co-operatives Oxford UK The PlunkettFoundation

Fahlbeck E (2007) The horizon problem in agricultural cooperatives ndash only in theory In K Karantininisand J Nilsson (Eds) Vertical Markets and Cooperative Hierarchies The Role of Cooperatives in theAgri-Food Industry (pp255ndash274) Dordrecht Netherlands Springer

Fulton J R and Adamowicz W L (1993) Factors that influence the commitment of members to theircooperative organization Journal of Agricultural Cooperatives 8 39ndash53

Gray T W and Kraenzle C A (1998) Member participation in agricultural cooperatives A regression andscale analysis RBS Research Report 165 Washington DC US Department of Agriculture RuralBusiness ndash Cooperative Service

Hakelius K (1996) Cooperative values Farmersrsquo Cooperatives in the Minds of the Farmers PhDDissertation Uppsala Sweden Swedish University of Agricultural Sciences

Hansen M H Morrow Jr J L and Batista J C (2002) The impact of trust on cooperative membershipretention performance and satisfaction An exploratory study International Food amp AgribusinessManagement Review 5 41ndash59

Hogeland J A (2006) The economic culture of US agricultural cooperatives Culture amp Agriculture 2867-79

James Jr H S and Sykuta M E (2006) Farmer trust in producer- and investor-owned firms Evidence fromMissouri corn and soybean producers Agribusiness An International Journal 22 135ndash153

Jensen K (1990) Factors associated with the selection of cooperative vs proprietary handlers of milk inTennessee Journal of Agricultural Cooperation 5 27ndash35

Karantininis K and Zago A (2001) Endogenous membership in mixed duopsonies American Journal ofAgricultural Economics 83 1266ndash1272

Klein K K Richards T J and Walburger A (1997) Determinants of co-operative patronage in AlbertaCanadian Journal of Agricultural Economics 45 93ndash110

Lind L W and Aringkesson E (2005) Pig producersrsquo choice of slaughterhouse ndash co-operative or investor-owned International Journal of Co-operative Management 2 (2) 40ndash46

Nilsson J Kihleacuten A and Norell L (2009) Are traditional cooperatives an endangered species Aboutshrinking satisfaction involvement and trust International Food and Agribusiness Management Review12 103ndash123

Oumlsterberg P and Nilsson J (2009) Membersrsquo Perception of their Participation in the Governance ofCooperatives The Key to Trust and Commitment in Agricultural Cooperatives Agribusiness AnInternational Journal 25 181ndash197

Robinson L and Lifton D (1993) Convincing growers to fund cooperative marketing activities Insightsfrom the New York wine grape industry Agribusiness An International Journal 9 65ndash76

Rousseau D M Sitken S B Burt R S and Camerer C (1998) Not so different after all A cross-disciplineview of trust Academy of Management Review 23 (1) 393ndash404

Siebert J B (1994) Co-ops What farmers think Berkeley University of California Department of Agriculturaland Resource Economics Center for Cooperatives

Wadsworth J J (1991) An analysis of major farm characteristics and farmersrsquo use of cooperatives Journalof Agricultural Cooperatives 6 45ndash53

Zeuli K and Betancor A (2005) The effects of cooperative competition on member loyalty Paper presentedat the NCERE-194 2005 Annual Meeting Minneapolis MN November 8ndash9

Notes

1 Currency exchange rates as of 11 November 2008

Journal of Co-operative Studies 433 December 2010 17-28 ISSN 0961 5784copy