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Analysis of three factors influencing the performance of fishing cooperative organizations of Yucatan,… Torres-Lara, Ricardo 2000

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ANALYSIS OF T H R E E FACTORS I N F L U E N C I N G T H E P E R F O R M A N C E OF FISHING C O O P E R A T I V E O R G A N I Z A T I O N S OF Y U C A T A N , M E X I C O by RICARDO T O R R E S - L A R A B.Sc, The National Autonomous University of Mexico, 1985 M . S c , The National Politechnical Institute, Mexico, 1987  A THESIS SUBMITTED IN P A R T I A L F U L F I L M E N T OF THE REQUIREMENTS FOR THE D E G R E E OF  DOCTOR OF PHILOSOPHY in THE F A C U L T Y OF G R A D U A T E STUDIES (Institute for Resources and Environment) We accept this thesis as conforming to the required standard  THE UNIVERSITY OF BRITISH C O L U M B I A December 2000  © Ricardo Torres-Lara, 2000  In presenting this thesis in partial fulfilment  of the  requirements for an advanced  degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department  or  by  his or  her  representatives.  It  is  understood  that  copying or  publication of this thesis for financial gain shall not be allowed without my written permission.  Department of  Resource Management and Environmental Studies  The University of British Columbia Vancouver, Canada  Date  DE-6 (2/88)  December 2 2 , 2000  ABSTRACT T h e purpose o f the study is to explore and understand the influence o f several factors that potentially contribute to differences i n performance o f cooperative fisheries organizations i n Y u c a t a n State, Mexico..  T h e three independent  variables examined i n this study, as  influences o n fisheries cooperatives performance are organizational issues, market structure issues, and the ability o f cooperatives to adapt to external change. These factors were identified as potentially important for fisheries cooperatives performance i n the region based o n (1) m y six-year experience w o r k i n g w i t h these  fisheries  cooperatives as a fisheries  manager i n Y u c a t a n State, and (2) a review o f the relevant literature o n organizational and economic  influences  on  cooperatives  performance.  The  performance  of  fisheries  cooperatives, the dependent variable i n this study, is expressed i n two alternative ways. O n e , based o n the judgement o f members, uses the stated satisfaction o f a cooperative's m e m b e r w i t h its performance.  A second approach for characterizing performance is based on- the  physical p r o d u c t i o n o f the cooperatives i n terms o f the average catch over a five-year period.  T h e central tool for data collection and analysis is a mixed-methods design that includes a survey, face-to-face interviews, personal observation, and secondary sources o f i n f o r m a t i o n . I  calculated  non-parametric  correlation  independent and dependent variables. 0.01 level.  coefficients  (Spearman's  rho)  between  the  A l l correlations were statistically significant at the  These results support the predicted relationship between the variables^ that is,  that cooperatives w i t h m o r e operational rules, stronger market position, and higher adaptive ability are more likely to be have members m o r e satisfied and to report higher catches. Multivariate analyses s h o w that the most important variable influencing  cooperatives'  performance is the n u m b e r o f operational rules, w h i c h i n fact explain a little bit m o r e than 7 0 % o f the performance variability, expressed as average catch per cooperative.  T h e results o f the study are discussed i n terms o f their empirical support for social science theories, their c o n t r i b u t i o n o f new theoretical insights i n t o the study o f cooperatives, and the implications for the management o f natural resources.  ii  TABLE OF CONTENTS Abstract  ii  List o f tables  ix  List o f  figures  x  Acknowledgments  1  ' xu  CHAPTER I GENERAL ANALYTICAL FRAMEWORK 1.1  1.2  INTRODUCTION I . l .1 Importance o f studying organizations and cooperatives 1.1.2 Purpose and overview o f the study 1.1.3 Research questions 1.1.4 Hypotheses.. 1.1.5 D e f i n i t i o n o f terms 1.1.5.1. Organization 1.1.5.2. Cooperative  1 1 2 3 3 ^ 4 4  CONCEPTUAL FRAMEWORK 1.2.1  1.2.2 1.2.3  4  Independent variables.... 1.2.1.1. Operational rules 1.2.1.2. A d a p t i v e ability 1.2.1.3. Market position Reasons for using the independent variables Dependent variables  1.3  THEORETICAL FRAMEWORK  1.4  CONTEXT FORANALYSIS 1.4.1 O v e r v i e w o f the fisheries i n M e x i c o 1.4.1.1. O v e r v i e w o f the fisheries i n Y u c a t a n . . 1.4.1.2. F i s h marketing i n Y u c a t a n 1.4.1.3. Characteristics o f fishing communities 1.4.2 D e v e l o p m e n t o f the cooperative sector 1.4.2.1. Cooperatives'organizational structure 1.4.2.2. 1.4.2.3. 1.4.2.4.  -  4 4 5 5 6 6 7 9  9  10 10 10 H H  Inception. Current situation Perspectives  1.5  LIMITATIONS A N D SIGNIFICANCE O F T H E STUDY  1.6  O R G A N I Z A T I O N O F T H E THESIS  13 13 13 ,  14 j  iii  5  CHAPTER II METHODS ILI  INTRODUCTION  16  11.2  SOURCES O F INFORMATION.  16  11.3  T H E SAMPLING PROCESS II.3.1 •II.3.2 11.3.3 11.3.4 11.3.5  11.4  =  T h e target and study populations Sampling design and size T h e sampling frame C h o o s i n g the sample Non-response errors  PRETEST A N D C O D E - B O O K 11.4.1 Questionnaire pretest 11.4.2 C o d e - b o o k  : '.  1  •... -  ."  -—  7  18 18 20 21 21 21 21 22  :  11.5  INSTRUMENTATION  23  11.6  DATA ANALYSIS.... 11.6.1 Qualitative analysis 11.6.2 Statistical analysis  2  3  ••• ^  2  CHAPTER III RULES, ORGANIZATIONAL STRUCTURES A N D PERFORMANCE 111.1 I N T R O D U C T I O N 111.1.1 Purpose o f the chapter 111.1.2 Research question 111.1.3 Hypothesis. 111.1.4 D e f i n i t i o n o f terms 111.1.4.1. Rules. 111.1.4.2. Organizational structure I I I . l .5 Organization o f the chapter  :  26 27 27 27 27 27 28 28  111.2 C O N C E P T U A L F R A M E W O R K  28  111.3 T H E O R E T I C A L F R A M E W O R K  29  111.4 C O N T E X T F O R A N A L Y S I S  3  0  111.5 M E T H O D O L O G Y  3  2  3  2  111.5.1 D a t a collection 111.5.2 Qualitative data analysis 111.5.3 Statistical data analysis  iv  3  3  2 3  111.6 R E S U L T S . . . 111.6.1 D a t a collection 111.6.2 Qualitative analysis 111.6.2.1. C r e a t i o n o f conditions and categories 111.6.2.2.  33 33 33 33  Organizational structures III.6.2.2..1 Permissive cooperatives III.6.2.2..1.1 Laissez-aller cooperatives III.6.2.2..1.2 N o n - d i r e c t i v e cooperatives III.6.2.2..2 D e m o c r a t i c cooperatives III.6.2.2..2.1 Consultative cooperatives...; III.6.2.2..2.2 Participatory cooperatives III.6.2.2..3 Authoritative cooperatives III.6.2.2..3.1 Supervisory cooperatives III.6.2.2..3.2 A u t o c r a t i c cooperatives  34 36 36 36 37 37 37 37 38 38  111.6.3 Statistical analysis. ; 111.6.4 Operational rules i n action: a democratic decision-making III. 6.4.1. Strategic organizational decision-making  38 40 40  111.7 D I S C U S S I O N 111.7.1 T h e nature o f operational rules. 111.7.2 Rules, structures and performance 111.7.3 Informal and formal operational rules o f cooperatives  43 43 44 45  CHAPTER IV ADAPTATION ABILITY AND PERFORMANCE IV. 1 I N T R O D U C T I O N IV.1.1 Purpose o f the chapter IV.1.2 Research question IV.1.3 Hypothesis  IV.2  48 49 49 49  TV. 1.4 Definition o f terms I V . 1.4.1. Organizational adaptation, learning and development  49  IV.1.4.2. Environment TV.1.5 Organization o f the chapter  50 50  49  CONCEPTUAL FRAMEWORK  51  rV.3 T H E O R E T I C A L F R A M E W O R K FV.3.1 Approaches assuming substantial influence from the decision-making units for adaptation IV.3.2 Approaches assuming little or n o influence from the decision-making unit for adaptation  52 52 53  v  IV.4  CONTEXT FORANALYSIS IV.4.1 Legal framework IV.4.2 IV.4.3 IV.4.4 IV.4.5  W.5  IV.6  METHODOLO IV.5.1 IV.5.2 IV.5.3  M a r k e t setting Financial sources Technological level Resources availability GY D a t a collection Qualitative data analysis Statistical data analysis  RESULTS IV.6.1 D a t a collection IV.6.2 Qualitative data analysis IV.6.3 Levels for adaptive ability IV.6.3.1. L o w adaptation. T V . 6.3.2. A d a p t a t i o n for survival IV.6.3.3. A d a p t a t i o n for i m p r o v e m e n t I V . 6.3.4. A d a p t a t i o n for expansion  ••••  54 55 56 56  •• ••  • ••  •  IV.6.4 Cooperative influence o n the adaptation process and adaptive ability. IV.6.5 Statistical data analysis IV. 7  DISCUSSION IV.7.1 Phases o f adaptation at the population level IV.7.2 Cooperatives' adaptive strategies and aids I V . 7.3 Factors constraining adaptation  53 53  57 57 57 58 58 58 58 59 59 61 61 61 62 63  ••  6  4  65 66 68  CHAPTER V T H E INFLUENCE OF INTERMEDIARIES O N T H E PERFORMANCE OF FISHING COOPERATIVES V. 1  INTRODUCTION V. l.l Purpose o f the chapter., V . 1 . 2 Research questions V.1.3 V.1.4  V.1.5  Hypothesis D e f i n i t i o n o f terms V . 1.4.1. Intermediaries V.l.4.2. M a r k e t position Organization o f the chapter  71 71 72 72 72 72 72 72  Y-2  CONCEPTUAL FRAMEWORK  73  V.3  THEORETICAL FRAMEWORK  73  vi  V.4  CONTEXT FORANALYSIS V.4.1 Intermediaries-producers relationship V . 4 . 2 Legal framework for economic regulation V.4.3 F i s h marketing i n Y u c a t a n  V.5  METHODOLOGY rV.5.1 D a t a collection IV.5.2 Qualitative data analysis IV. 5.3 Statistical data analysis  V.6  RESULTS V . 6.1 V.6.2  75 75 76 77  ;  79 79 79 80 8  D a t a collection Qualitative data analysis V.6.2.1. G e n e r a l characteristics o f the fish market  80 81 81  —  V.6.2.2. V.6.2.3.  V.6.3 V.7  DISCUSSION V.7.1 V.7.2 V.7.3 V . 7.4  M a r k e t position o f cooperatives Cooperatives' strategies for market exchange V.6.2.3..1 N o n - r e c i p r o c a l exchange strategies V.6.2.3..2 R e c i p r o c a l exchange strategies V.6.2.3. M a r k e t i n g systems V.6.2.3..1 D e n d r i t i c marketing system V.6.2.3;.2 In-site marketing system V.6.2.4. G o v e r n m e n t as intermediary Statistical data analysis  83 83 84 85 86 86 87 88 89  •  9  T h e resource-power o f the intermediaries Financial dependency and non-reciprocal exchange strategies i n the I F M S and D F M S Financial dependency and reciprocal exchange strategies i n the I F M S Exchange relations and socio-cultural context  0  1  91 92 •  93 93  CHAPTER VI T H E CUMMULATIVE E F F E C T OF I N D E P E N D E N T VARIABLES O N PERFORMANCE VI. l  VI.2  INTRODUCTION V I . 1.1 Purpose o f the chapter VI.1.2 Research questions V I . 1.3 Hypothesis V I . 1.4 Conceptual framework METHODS VI.2.1 D a t a screening and correlation VI.2.2 Cluster analysis  •:  95 95 96 96 96  :  ,  96 96 98  vii  VI..2.3 Multidimensional scaling V I . 2 . 4 Multiple regression analysis VI.3  RESULTS VI.3.1  98 99  : "...  99 99  Correlation  V I . 3 . 2 Cluster analysis.... V I . 3 . 3 Multidimensional scaling V I . 3.4 Multiple regression analysis  101 103 105  VI.4 DISCUSSION  CHAPTER  107  VII  VII. l G E N E R A L C O N C L U S I O N S V I I . 1.1 Operational rules, organizational structure and performance.... V I I . 1.2 A d a p t i v e ability and performance V I I . 1 . 3 . Intermediaries and performance  109 110  ;  Ill  VII.2 I M P A C T S O F T H E F A C T O R S A F F E C T I N G C O O P E R A T I V E ' S P E R F O R M A N C E T O FISHERIES M A N A G E M E N T V I . 2.1 P o s i t i o n o f cooperatives vis-a-vis intermediaries and the government VII.3 C O N T R I B U T I O N S  TO THEORY  V I I . 3.1  T h e measurement o f success  VII.3.2 VII.3.3  O n the organizational framework O n theoretical frameworks  1  •  1  1  ^  :  1  1  4  114 115 :  REFERENCES  ^ ^  •  1  1  8  A P P E N D I X A G u i d e questions to interview cooperatives' b o a r d o f directors  132  A P P E N D I X B Questionnaire for measuring satisfaction a m o n g members  135  A P P E N D I X C O p e r a t i o n a l rules counting system  l  4  ^  A P P E N D I X D C a t c h c o m p o s i t i o n , i n percentage, per cooperative  l  4  ^  A P P E N D I X E T y p i c a l decision situations at different levels o f organizational structure o f cooperatives  viii  147  Table II. 1  LIST O F T A B L E S Relationship between the variables, research items  Table II.2  Summary o f original, adjusted, and real sample size per cooperative  Table I L 3  Section o f the c o d e - b o o k designed to process the information f r o m  Table III.2  Table III.3  Table III.4  !  questions, and survey  18  20  questionnaires and interviews  22  C o n d i t i o n s . Categories, and sub-categories o f organizational structure, and the classes o f cooperatives having similar conditions  35  Average scores o f operational rules a m o n g different organizational structures  36  Summary o f overall satisfaction, average catch (tons), and total score o f operational rules o f fishing cooperatives i n Y u c a t a n  39  Table I V . l  P r i n c i p a l technical characteristics o f the cooperatives' fleet i n Y u c a t a n  56  Table I V . 2  Summary o f conditions, sub-categories ability  60  Table I V . 3  and categories  of  adaptive  A d a p t i v e responses o f fishing cooperatives to environmental disturbances  62  Table I V . 4  N o n - p a r a m e t r i c correlation adaptive vs. performance  63  Table FV.5  Summary o f adaptive ability, satisfaction and average catch (tons) o f fishing cooperatives i n Y u c a t a n  64  Table V . l Table V . 2  - F i s h i n g intermediaries, and their range o f activity, i n Y u c a t a n Summary  o f the  conditions  determining  the  market  position  77 of  cooperatives, Y u c a t a n  84  Table V . 3  M a r k e t strategies developed by cooperatives i n different market systems  85  Table V . 4  D i s t r i b u t i o n o f costs and benefits per trip o f a shrimp trawler i n Yucatan '  89  Table V . 5  Table V . 6  Table V I . 1  Spearman's correlation coefficients for market position w i t h satisfaction and catch per cooperative  90  M a r k e t p o s i t i o n expressed by exchange strategies and their numeric value, and performance per cooperative  90  Summary o f the multivariate methods used for statistical analysis  98  Table V I . 2  G e n e r a l results o f independent and dependent variables per cooperative  100  Table V I . 3  Non-parametric correlation between all variables  101  Table V I . 4  Summary o f the multiple regression analysis  105  Table V I . 5  Summary o f regression coefficients o f multiple regression analysis  105  Table V I . 6  Summary o f the excluded variables f r o m stepwise regression  105  x  Figure I . l  LIST O F F I G U R E S Factors (independent variables) influencing performance (dependent variable) o f fishing cooperatives  Figure 1.2  5  G e o g r a p h i c a l distribution o f primary, (S=Sisal, S F = S a n Felipe, R L = R i o Lagartos, and E C = E 1 Cuyo), secondary (C=Celestun and D B ^ D z i l a m Bravo), and tertiary (P=Progreso) c o m m u n i t i e s i n Y u c a t a n  11  Figure 1.3  Organizational structure o f fishing cooperatives i n M e x i c o  12  Figure III. 1  Relationship between rules and performance  29  Figure III.2  D e c i s i o n a l levels i n the organizational structure o f fishing cooperatives in Mexico  <  31  Figure III.3  Cooperative decision-making process  42  Figure I V . 1  C o n c e p t u a l m o d e l for adaptation  51  Figure r V . 2  C o m m e r c i a l i z a t i o n relationship i n the fishing market i n Yucatan, Mexico  55  Figure I V . 3  Relative positions o f cooperatives regarding their adaptive ability and c o n t r o l over the adaptation process  63  Figure V . l  M a r k e t factors affecting the performance o f cooperatives i n Y u c a t a n  73  Figure V . 2  T y p i c a l fishing exchange arrangements i n fishermen organizations i n Yucatan  78  Figure V . 3  A r t i c u l a t i o n between producers and consumers through intermediaries  79  Figure V . 4  D e n d r i t i c fishing marketing system  87  Figure V..5  In-site fishing marketing system  88  Figure V I . 1  Variables, a n d their relationship, analyzed i n the study  97  Figure V I . 2  Hierarchical cluster analysis. D e n d r o g r a m using average linkage  102  Figure. V I . 3  Scatter-plot o f linear  103  Figure V I . 4  M u l t i d i m e n s i o n a l s c a l i n g ' m a p ' o f cooperatives  fit  104  xi  ACKNOWLEDGEMENTS  T h e culmination o f this thesis is the joint effort o f several people w h o contributed, supported, and even criticized it. A t its strategic level, I ' m greatly thankful to m y academic supervisor, D r . T i m M c D a n i e l s , w h o taught me to focus o n the important variables o f the study, h o w to identify their relationships, analyze them, and then put t h e m together to be explained i n a fluent, clear and understandable way. Equally, I ' m i n debt w i t h the other members o f m y supervisory committee. D r . M i c h a e l Healey taught me h o w important is to incorporate the h u m a n factor i n fisheries assessment and management, a n d to consider the social and e c o n o m i c impacts o f different exploitation regimes. D r . M a u r e e n R e e d encouraged me to check i n the literature to find theoretical support for m y approach; her contribution o n the interaction between different types and communities and their social organizations is highly valuable. Unfortunately, she c o u l d not be i n this university to the c o m p l e t i o n o f this document. D r . Les L a v k u l i c h - p r o v i d e d the philosophical perspective to the study. P u t i n other words, he made think about several aspects o f the study f r o m perspectives different to the academic one. "Virtual' contributions to the study were made by members o f the discussion list cooperative-bus(a),relay.doit.wisc.edu. f r o m w h o m I obtained valuable ideas o n different aspects o f cooperative organizations. I also appreciate the bibliographical support f r o m the International C o o p e r a t i v e Alliance and the Cooperative B r a n c h o f the International L a b o r Organization. In the administrative level, I w o u l d like to thank the administrative staff at the Centre for H u m a n Settlements ( C H S ) at U B C for helping me to solve office-related problems", and for p r o v i d i n g me w i t h a quite and friendly atmosphere that allowed me to concentrate o n m y readings and analysis. Outside U B C , the administrative members o f the t w o funding agencies that supported m y study were also o f great assistance. These agencies are the M e x i c a n C o u n c i l o f Science and T e c h n o l o g y ( C O N A C Y T ) and the International C o u n c i l for Canadian Studies ( I C C S ) . E m o t i o n a l support emerged f r o m three sources. A t C H S , other P h . D . students shared w i t h me their doubts and certainties while completing their programs. I specially thank J o e A r v a i , the best office mate I ever had, for m a k i n g an enjoyable and enlightening experience sitting i n the same office. I h a d enriching discussions w i t h M a h d a v B a d a m i , K e i t s u k e E n o k i d o , and E r i k a de Castro, w h o made valuable recommendation for solving specific p r o b l e m s o f m y study, and w h o offered their enthusiastic friendship. O t h e r special friends volunteer their support w h e n needed. E d u a r d N i s u k , Johanne Dalsgaard and J a s m i n Jawanda read and corrected the earlier version o f some chapters. K i m Jawanda, M i k i k o T e r a s h i m a , Claudia L a c h , M i g u e l Cabrera, Guadalupe M e x i c a n o and V i c t o r H u g o Naranjo, had always an encouraging w o r d to keep me w o r k i n g . I ' m especially grateful to G a l i n a A n t o n o v a for helping me to go b e y o n d the limits.  xu  M y family also played an i m p o r t a n t supporting role. I have n o words to thank m y mother, brothers, sisters, nephews and nieces for backing me up all this time I was away from them. T h e distance was not an i m p e d i m e n t for them to cheer me up. I p r o f o u n d l y regret riiy father and Sonia are not here to celebrate w i t h us. M y infinite gratitude to Silvia and Julieta for being there. Finally, the m o s t important reasons for c o m p l e t i n g this study are N a y e l l i and Sofia, m y two w o n d e r f u l daughters.  xui  CHAPTER I GENERAL ANALYTICAL FRAMEWORK I.l  INTRODUCTION  Resource management has been dominated until recently by natural scientists and economists despite the fact that management involves regulating h u m a n behavior. Historically, the m a i n objectives o f resource management were the conservation o f the stocks, the economic efficiency o f their exploitation, and the efficient allocation o f those resources. In m o d e r n resource management, however, there is a major consideration for the "human dimension". Consequendy, die objectives have expanded to help ensure that economic benefits return to die communities f r o m w h i c h local public resources have been exploited, and that such exploitation is done o n an ecologically sustainable basis. Parallel to die.redefinition and broadening o f resource management objectives is the emergence o f new stakeholders and the re-evaluation o f the role o f previous ones. Intergovernmental agencies and more recendy, non-governmental organizations have emphasized organizational factors as important i n p r o m o t i n g socially and biologically sustainable development (Caddy and M a h o n , 1995). In addition, the reinvigorated participation o f traditional stakeholders has been emphasized, such as the h e w position o f cooperatives regarding the protection o f the environment (Saxena, 1995). Participation o f the affected parties i n the design o f management policies is an expression o f democracy. It implies the redistribution o f authority that enables organizations to be included i n the social, economic and political processes that affect them. T h e y can, i n turn, induce significant reforms that enable them to share the benefits o f the exploitation o f local natural resources. H o w e v e r , not all organizations can propose and induce such reforms. Several characteristics account for an efficient participation i n the design o f management policy. Organizations must be knowledgeable o f the local resources (Holland, 1996), socially and economically homogeneous (Jentoft, 1989), committed to and experienced w i t h rule-making, structured for democratic decision-making, flexible and able to adapt to external conditions (Nielsen and Vedsmand, 1999), and be steered by leaders w i t h dynamic mental models for problem-analysis (Moxnes, 1998). I f we want to encourage more successful organizations i n resource management contexts, it is important to understand w h y some organizations are more effective i n achieving their objectives than others. Cooperatives are potentially one o f the most important and yet most neglected stakeholders i n the design o f resource management schemes. M a n y studies have been conducted to show the benefits and limitations o f cooperatives i n the design o f resource management policies and i n i m p r o v i n g members' standard o f living (Petterson, 1980; M c C a y , 1980; V a l d e z - P i z z i n i , 1990; Jentoft and Sandersen, 1996). However, a number o f studies have demonstrated that not all the cooperatives are successful i n contributing to an efficient resource management (Poggie, 1980; M c G o o d w i n , 1980; Poggie et al., 1988). Furthermore, some cooperatives limit their performance to technical operations without acquiring any direct responsibility i n managing ;the resources that are the basis o f their o w n survival. Thus, for researchers and policy makers, the question o f why,cooperatives p e r f o r m differendy, due to manifold factors is an important topic for research.  1.1.1  Importance of studying organizations and cooperatives  Organizations can be classified according to h o w they are incorporated within the legal structure o f the nation-state, or the instimtional environment. H o w they are incorporated refers to the ways by w h i c h organizations are made part o f the nation-state, and hence h o w they are given certain rights and obligations. I n this way, the state supervises h o w organizations operate and sets up regulations to  1  m o n i t o r those operations.  Organizations i n turn have discretion to act within legal structures and  negotiate more favorable terms for themselves (Butler, 1991). It is hard to imagine our existence without organizations. T h e y are present i n our life from our birth to our death. T h e hospital where we were born, the daycare and schools we attend, the companies that produce our clothes, build our houses or distribute food, the police that defend us from organized crime, and all o f the other private agencies that provide us w i t h the goods and services needed to carry out our m o d e r n life are organizations. A t the national level, the government is the organization that regulates and coordinates our life i n c o m m o n w i t h other people. Understanding more about the structure and operation o f organizations could lead to a more informed insightful life w i t h these organizations. A cooperative is a type o f "mutual benefit" organization that exists for the benefit o f its members. T h e norms o f performance i n a cooperative often have a strong m o r a l component. T h e institutional environment sets up regulations to ensure that the rules o f association are kept, and there is n o misappropriation o f the funds. W h a t makes a producers' cooperative different from other mutual benefit organizations is that their production is commercialized i n the market, so that the cooperative has some characteristics o f a market organization. These features are competitive norms o f performance, and operate under the supervision o f official regulators, w h o ensure that the market remains efficient i n terms o f free flow o f information, products and services. Cooperatives are important because they are economic organizations that reduce members' uncertainty and lower transaction costs that w o u l d be faced by many individual operators. Transaction costs and uncertainty are due t o . a n imperfect legal contract environment (Landa, 1979). Cooperatives also provide job opportunities to residents o f communities i n w h i c h they operate, reducing the need to seek employment alternatives i n other areas. A s a result, familial structure and kinship ties tend to endure more, reinforcing the overall community's social structure; Finally, the cooperatives could be considered part o f the "local implementation structures", that is, the network o f local actors that are directly involved w i t h the delivery o f official development policies (see Sabatier, 1986). Local involvement increases the legitimacy o f policies among the people affected by it, and hence their support and compliance (Torres, unpublished document).  1.1.2  Purpose and overview of the study  T h e purpose o f this study is to explore and understand h o w certain key factors contribute to differences i n the performance o f cooperative organizations, using fishing cooperatives o f the Y u c a t a n State, S E M e x i c o as a case study. T h e type o f organizational structure, the ability to adapt to external disturbances, and the relationship established w i t h other market agents were identified as important factors based o n m y six-year w o r k i n g experience as training coordinator i n the research location, and according to the literature. T h e influence o f those factors o n cooperatives' performance is analyzed i n terms o f their relative effect o n satisfaction o f cooperatives' members and the average catch reported by these organizations during a five-year period. T h e study also develops categories for organizational structure, adaptive ability, and market position, to characterize the different strategies used by cooperatives to achieve their goals. T h e central tool for data collection is a mixed-methods design that includes a survey, face-to-face interviews, personal observation, and the analysis o f secondary sources. T h e relationships a m o n g variables were characterized through qualitative and statistical analysis o f the data. T h e results o f the study are discussed i n terms o f their empirical support for social science theories, especially organization theory, their contribution o f new theoretical insights into the study o f cooperatives, and the implications for the management o f natural resources.  2  1.1.3  Research questions  T h e fundamental question investigated i n this study is w h y cooperatives perform differently w h e n they have been established under the same governmental guidelines and legislation, and their function, at least theoretically, should be identical. E a c h cooperative has access to similar marine resources, and the market structure is comparable i n practically all the fishing communities. A t the level o f the fisher, their fishing technological sophistication, the time spent fishing per year, their educational situation, and their fishing ability are very similar. H o w e v e r , based o n personal observation after six years w o r k i n g experience i n the study are, it was found that there were significant differences i n the organizational structure o f the cooperatives; the way they interact with intermediaries; h o w they have been adapting to social changes i n their communities; to modifications to the legal framework, and to changes i n the market structure due to the globalization o f the economy. I n investigating w h y cooperatives have evolved different organizational structures and, consequendy, are performing i s s i m i l a r l y , the intriguing question was w h y do cooperatives evolve alternate organization strategies w h e n their objectives and goals are similar. Thus, this research addressed the generic issue o f evolution o f organizations rather than a comparison o f changes a m o n g or between individual cooperatives. Comparisons were made across cooperatives to have a better understanding o f the cooperative sector and to compare them relative to their organizational attributes and to their relationship w i t h the surroundings. Analysis at the individual level regarding fishing efficiency, values and strategies for decision-making was peripheral and part o f the context for selecting cooperatives. Observed differences i n performance a m o n g fishing cooperatives led to the following major research question: H o w d o organizational factors, the ability to adapt and market factors affect the performance o f these cooperatives? F o r each o f the three factors identified i n the overall question, I formulated secondary, research questions. T o understand the structure o f the cooperative, it was necessary to k n o w h o w operational rules, and organizational structures have developed over time, and h o w decisions are made concerning the adoption o f these rules and structures. A s for the ability to adapt, it was necessary to k n o w what k i n d o f dynamics exist between cooperatives and their social and economic surroundings, and what are the strategies to adapt to changes i n these settings. Finally, to understand the market, I also considered what k i n d o f relationship existed between cooperatives and market agents, and what were the strategies o f cooperatives to deal w i t h such agents.  1.1.4  Hypotheses  T o guide interpretation o f these research questions, I developed three operational hypotheses that represent particular predictions about the factors under analysis. T h e hypotheses were examined w i t h straightforward statistical tests and qualitative analysis. • Hypothesis one T h e larger the number and the variety o f rules followed by a cooperative, the more successful is the cooperative. Hypothesis two T h e higher the adaptive ability o f a cooperative, the more successful is the cooperative. Hypothesis three T h e stronger the market position o f a cooperative, the more successful is the cooperative. F o r each o f these three hypotheses, success o f a cooperative is measured i n terms o f the stated satisfaction o f its members, and the size o f its catch, w h i c h is a measure o f economic success.  3  1.1.5  Definition of terms  In the interest o f consistency, the following terms are defined for use throughout the study. other concepts are defined as they first appear i n the c o m i n g sections and chapters.  Some  1.1.5.1. Organisation A w o r k i n g definition o f organization is that it is a social unity that has a purpose, boundaries, and patterns o f members' activities i n a recognizable structure. Organizations have physical assets and people doing tasks, taking raw materials, transforming them and cHsttibuting products to the market. A n organization also entails the flow o f capital and information for decision-making and coordination (Buder, 1991). Organizations plan social activities systematically through a set o f strategies o f h o w the activities can be organized to achieve the purpose o f the organization. Activities are implemented using resources allocated to mobilize people w h o are coordinated by an authority system that organizes those activities.  1.1.5.2:  Cooperative  A cooperative is defined as "an autonomous association o f persons united voluntarily to meet their c o m m o n economic, social, and cultural needs and aspirations through a jointiy-owned and democratically controlled enterprise" ( I C A , 1995). T h e definition emphasizes several important attributes o f cooperatives. " A u t o n o m y " means that cooperatives are independent o f government agencies and market enterprises; "association o f persons" embraces any legal definition o f "person", w h i c h includes companies as well as individuals. " V o l u n t a r y " means that members are free to join and to leave at will. " M e e t needs" is the central purpose o f the cooperatives; needs may be economic, cultural, or social. "Joint ownership and democratic c o n t r o l " express the idea o f members o w n i n g the cooperative o n a mutual basis, and that decision is reached by consensus. "Enterprise" indicates that the cooperative is an organized venture that operates i n the marketplace, and engages i n the exchange o f goods and services (Hoyt, 1996). . . • • •  1.2  CONCEPTUAL FRAMEWORK  In the conceptual framework for this study, the factors influencing the performance o f the cooperatives are the independent variables, whereas performance or organizational success is the dependent variable (Figure I . l ) . P r i o r and intervening variables are described for each independent variable i n the following chapters o f this study.  1.2.1.1.  1.2.1 Independent variables  Operational rules  O n e important independent variable is the set o f operational rules for cooperatives. Operational rules facilitate collective action for i m p r o v i n g productivity and interpersonal relations to foster cohesiveness. Six operational rules are examined according to O s t r o m (1992) and B u c k (1989). A d d i t i o n a l ecological rules are considered to explore the cooperatives' position regarding the condition o f marine resources: 1. 2. 3. 4. 5. 6. . 7  Eligibility rules, or the conditions to be, or not, a member o f the cooperative D e c i s i o n rules, or the formulas used for decision-making i n collective actions Position rules, that is, the position members can h o l d within the cooperative Payoff rules, or the rewards or penalties w h i c h may be assigned to actions or outcomes Authority rules, or the authorized action members can take independendy Information rules, that is, the information that members should, or not, reveal to others E c o l o g i c a l rules to interact w i t h the biological environment  4  T h e "strength" o f the rules is measured through an arbitrary counting system that assigns a value to a specific rule depending o n its importance to facilitate collective action and personal interrelations. I explain the counting system i n detail i n the next chapter, w h i c h deals w i t h the methodology for data collection and analysis. 1.2.1.2. Adaptive ability A second independent variable concerns the cooperatives' ability to handle external changes, that is, the ability o f a cooperative to re-establish the equilibrium it had w i t h the external environment w h e n a disruption has occurred. Changes i n the surroundings may create problems or offer opportunities to a cooperative. Y e t , i f it is incapable o f reacting to those changes, problems may worsen and opportunities may disappear. D e p e n d i n g o n the severity o f external changes, cooperatives have to mobilize available resources or search for other ones i n order to restore the balance with the external environment. A d a p t i v e ability implies k n o w i n g h o w the groups adapt to the new circumstances, and h o w this adaptive power has lead to different performances. A d a p t a t i o n requires a certain degree o f flexibility i n the rules, internal control for organizational development, and organizational learning capability. A l s o important, is the availability o f financial and material resources necessary to implement adaptive actions. A categorical scale to measure different levels o f adaptability is explained i n the methodology section.  Independent variables  Dependent variable  Operational rules  Adaptive ability  Performance  Market position  Figure 1.1. Factors (independent variables) influencing performance (dependent variable) of fishing cooperatives  1.2.1.3. Market position . A third independent variable is the market position o f cooperatives. T h e position o f the cooperatives i n the market refers here to their role as producers o f raw material. This role is related to the other market agents, or intermediaries, w i t h w h i c h cooperatives have established a range o f different relationships. These relationships affect cooperatives' strength i n influencing the prices they may receive for their production. T h e level o f freedom to bargain depends i n turn o n the dependence that cooperatives have o n specific intermediaries, and o n the willingness o f the latter to i m p r o v e the operating conditions o f the cooperatives. Thus, a cooperative has a stronger market position w h e n it has more freedom to seek better prices and its dependence o n other market agents is l o w . I n some cases, the intermediary contributes to i m p r o v e the efficiency o f the cooperative. Market position is important because the development o f cooperatives is often shaped by their financial dependence o n  5  intermediaries (Acheson, 1981; Medina, 1988; Hartman, 1986). In general, dependent cooperatives have little chance to bargain.over the price of their catches, and no opportunity to seek better prices with other buyers. Consequendy, their capability to capitalize and reinvest in production factors is limited. On the other hand, cooperatives that have access to market information and control over the processing and distribution of their production have more options to negotiate better prices for their catches. In the methodology section I describe a scale of different categories to explain how market position is measured among cooperatives.  1.2.2  Reasons for using the independent variables  There are several practical and theoretical reasons to justify focusing the analysis on the influence of these three independent variables. The most important practical reason is that these variables appeared to be important during my six years working with these cooperatives. Another practical reason is that the federal legislative framework and the state government programs applied exacdy in the same way to all. cooperatives, which allowed me to assume that political factors' influence is homogeneous to all cooperatives. Another practical reason to narrow the analysis to three variables is the limitation in both statistical and qualitative information about cooperatives andfishingcommunities in Mexico. Initially, I tried to explore the relationship between the performance of cooperatives and the social stability of their communities. However, during my fieldwork I found out that there was no statistical information available to assess the stability of the social structure of the coastal communities during any period of time. Consequendy,. I could not do this part of the analysis. Turning to theoretical reasons, I followed the mainstream of the classic, neoclassic and modern structural organization theory concerning the interdependency between the structure and function of organizations. Although these theories analyzed organizations from different perspectives, which are explored in the theoretical framework, all of them recognize the importance of assessing the influence that each variable has on the other. Thefirststep in the analysis of organizations is to understand their internal structure, lines of authority, units of control and coordination, and the operational rules that make the organization run. This understanding, however important, is not sufficient; it is also necessary to know the influence of the external environment on the structure and functioning of the organization, and how it responds to that influence. For this level of analysis, I relied on organization theories concerning the population ecology of organizations, whose major concern is the adjustment of organizations to changes in their environment and how it is affected by the decisions made by the organizations. I divided the external environment into separate elements for analytical purposes, and then I focused on the factor that, according to my experience, had the deepest impact on the performance of Yucatan cooperatives: market intermediaries.  1.2.3  Dependent variable  One of the main purposes of my study was to separately assess the association between three variables considered as independent and one variable defined as dependent. However, in the determination of the relationship between these variables, none of them can be considered as an experimental independent variable. Theoretically, the independent variable is a predictor of the dependent variable, but even if the data show a correlational relationship, they cannot be taken as definitive evidence of a causal relationship, that is, that changes in the independent variable causes variability in the dependent variable. There may be more factors that determine changes in the dependent variable. Moreover, the variable selected as dependent may influence the variable selected as independent. The definition of the variables depends on the objectives of the study, and for this case, the main objective was to characterize the influence of several factors on the performance of the cooperatives. The performance was measured in two different ways. The first one is a subjective, constructed measure, namely members' satisfaction. Satisfaction with the performance of the cooperative is an affective response to a cognitive evaluation of the performance. Thus, satisfaction, is a concept that 6  includes affective and cognitive dimensions (see M o l m , 1991). T h e cognitive evaluation is contrasted against a prevailing criterion, the aspirational level, held by the members o f the cooperative. I f the cognitive evaluation yields a performance that falls below this level o f aspiration, members w o u l d be dissatisfied w i t h the performance o f the cooperative. Therefore, several members may evaluate differendy the performance o f their cooperatives because they have a different level o f aspiration. Members f r o m less structured cooperatives w i t h l o w records o f catch may be more satisfied with their cooperative than members o f highly productive cooperatives, because the aspirational level o f the former is lower, thus l o w catches still represent a g o o d performance for them. T h e other performance measure is a.more direct, natural scale based o n the average total catch reported by each cooperative from 1993 to 1997.  1.3  THEORETICAL FRAMEWORK  Traditional social and economic theories consider several decision-making units, such as companies, resource holders, governments, labor unions and political parties, w h i c h are important i n explaining and predicting social and economic phenomena (Helmberger and H o p s , 1962). I n coastal settings i n M e x i c o , the cooperative organizations are an important decision-rnaker. There are, however, a few k n o w n methodological principles for the analysis o f cooperatives. F o r instance, Helmberger and H o o s (1962) consider "that organization theory provides a broader interpretation o f the firm that is useful for empirical research o n cooperative decision making". These authors go o n to point out that a cooperative can be seen as a firm since it includes both persons and privately o w n e d physical facilities. A l s o , cooperatives mobilize production factors, produce goods and service, and rely primarily o n the proceeds f r o m the sales to meet production costs. T h e two basic differences between a cooperative and a profit-seeking firm are the motivations to be a member o f each organization and the unit o f control. I n a firm, investors seek a high return o f their investment and the control is centralized i n one or few individuals. Conversely, members o f a cooperative seek goods and services provided at cost and the unit o f control is the w h o l e cooperative. Helmberger and H o o s ' study is an exception i n organization theory since most studies about economic and social organizations focus their analysis i n private firms or large bureaucratic agencies (Buder, 1991; Hage, 1980; Cyert and M a r c h , 1988; D o u m a and Schreuder, 1998). C h e n (1984) recognizes that using firm theory is not enough to explain the behavior o f cooperatives, and that a broader interpretation o f the firm is needed to understand differences among the two types o f organizations. T h e approach I adopted for the study o f cooperative organizations is the "systems perspective" i n modern structural organization theory. U n d e r this perspective, a cooperative, as any organization, is viewed as an organized collection o f parts united by prescribed interactions and designed for the accomplishment o f specific goals (Boulding, 1956, quoted by Shafritz and Ott, 1992). Cooperatives are seen as a set o f dynamically interconnected elements including their process, feedback loops and the environment i n w h i c h cooperatives operate and w i t h w h i c h they continuously interact. Structural organization theory differs from the classical theory because the latter developed a simplistic and mechanistic view o f organizations, i n w h i c h any organization could be managed according to general principles o f management operating as 'span o f control' (Simon, 1946). Neo-classical theorists, o n the other hand, contend that organizations have a dynamic nature i n w h i c h the organization and its members impact each other, some times i n unpredictable and unforeseen ways (Shafritz and Ott, 1992): H o w e v e r , these theorists d i d not look beyond the organization's boundaries to explore its relationship w i t h the surroundings. Organization can be examined as well at three different levels o f analysis, that is, m i c r o , meso and macro levels (Hage, 1980). A t the m i c r o level the unit o f analysis is the manager, and the central concern is his or her influence o n the design, morale, and efficiency o f the organization. A t the meso7  level, the organization is the unit o f analysis, and the central concern is the structure o f the organization and its efficiency. A t the macro level the relationship w i t h the extra-organizational environment is the unit o f analysis; the main concern is w i t h the larger economic, social, and political institutions that may influence the development o f the organization. A l t h o u g h I recognize the importance o f the leaders' personal styles i n the development o f the cooperatives, a microanalysis perspective was not adopted because it w o u l d have involved both psychological and behavioral analyses, w h i c h are beyond the scope o f the present study. Therefore, the rest o f the thesis focuses o n the meso and macro levels o f analysis. • In m o d e r n structural organization theory, the structure means relatively stable relationships among the positions, areas, and w o r k processes that make up the organization. T h e theory deals w i t h hierarchical levels o f authority and coordination, and horizontal differentiation between organizational areas. It is also concerned with the same issue as classical theory; the.goal o f organizational rationality is to increase the production o f wealth i n terms o f real goods and services. H o w e v e r , there are three basic assumptions o f the m o d e r n structural theory (Bolman and D e a l , 1984) that make it different and o n w h i c h I based m y analysis o f the meso and macro levels. 1.  Organizations are rational institutions whose primary purpose is to accomplish established objectives. Rational organizational behavior is best achieved through systems o f defined rules and formal authority. Organizational control and coordination are key for mamtaining organizational rationality.  2.  There is an appropriate structure for any organization i n light o f its given objectives, the environmental conditions surrounding the organization, the nature o f its products a n d / o r services, and the technology o f the production processes.  3.  M a n y problems i n an organization result changing/adjusting its structure.  from  structural  flows  and  can  be  solved by  T h e first assumption implies that traditional patterns o f hierarchy, well-defined rules, vertical lines o f communication, and structured decision-making are present at the meso (organizational) level. I examine this assumption first, emphasizing the presence o f several operational rules, different organizational structures, and various decision-making situations and structures. T h e second and third assumptions denote dynamic conditions i n w h i c h the environment changes rapidly and the cooperatives adapt to the best structure possible according to these changes. T h e study focuses then at the macro (environmental) level emphasizing different adaptive responses depending o n several organizational structures. T h e macro level analysis is important because understanding only the inner c o n t r o l and coordination o f an organization is not enough to understand its true nature. Organizations can not exist as selfcontained entities isolated from their environment. Organizations are not static; they are dynamic, changing constantly to different states o f equilibrium. T h e y should be adaptive systems integrated to, and influencing their environment (Shafritz and Ott, 1992). T o facilitate the analysis o f the changes i n the external environment and the adaptive responses by the cooperative organizations, the environment is divided into major market, social, legislative, financial and biological components. T h e final component o f m y study is also at the macro level, but focused o n the market element o f the surrounding environment. I chose specifically to analyze the influence o f intermediaries o n the performance o f the cooperatives, because it is the m a i n extra-organizational force determining the development o f this type o f organization i n the study area. T h e broader theoretical perspective that I 8  have used to carry out this analysis is social exchange theory (Befu, 1977; M o l m , 1991). H o w e v e r , more specific approaches are examined as well, such as the relationship o f buyer-supplier (Lilliecreutz, 1998; Krause, 1997; Krause, 1999); and satisfaction and power within that relation ( M o l m , 1987; M o l m , 1991). These theoretical perspectives are intended to explain h o w the market influence operates, and to predict what level o f organizational performance may be reached given a certain level o f influence.  1.4  C O N T E X T F O R ANALYSIS  T o provide some context for the analysis, this section describes the general social, economic and political conditions under w h i c h cooperative organizations operate i n M e x i c o . Subsection 1.4.1 provides an overview o f the fisheries i n M e x i c o and Yucatan, and a description o f the general characteristics o f the fishing market and communities, w h i c h help to explain the relationships established between cooperatives and the intermediaries examined i n Chapter V. Subsection 1.4.2 describes the organizational structure o f the cooperatives as defined by the M e x i c a n legislation. T h i s legal organizational structure is the basis o f understanding different types o f organization described i n Chapter III. T h e subsection also briefly examines the events that have determined the evolution o f cooperatives; this evolution i s important to understand h o w cooperatives have adapted to different environmental changes during their historical development. Changes and adaptations are analyzed later i n Chapter I V .  1.4.1  Overview of the fisheries in Mexico  M e x i c a n fisheries have had a l o w priority i n terms o f national economic development. In the period from 1993 t o l 9 9 7 , the contribution o f fisheries to the G D P was less than 1.0% ( T N E G I , 1998). M a n y factors have contributed to this situation. O n e o f them is the uneven geographical development o f fisheries. T h e four states i n the N o r t h Pacific coast (Fishing Z o n e I) contribute up to 6 5 % o f the national catch. T h e four states i n the G u l f o f M e x i c o (Fishing Z o n e III) and one other state from the F i s h i n g Z o n e rV, contribute another 2 0 % o f the total production. T h e remaining 1 5 % are reported by other 23 states. T h e concentration o f fish p r o d u c t i o n is followed by a concentration i n the catch composition: i n the same period, 6 9 % o f the total catch (in weight) was made up o f only 10 species, whereas more than 26 species comprised the remaining 3 1 % . A m o n g the most important species were tuna, sardine, shrimp, porgy, and squid. Harvesting i n the M e x i c a n fisheries is predominately at a small-scale level, since 9 7 % o f the more than 100,000 boats complete daily trips close to the coast. T h e value o f the total catch i n 1997 was about $1.2 billion U S D (Ministry o f E n v i r o n m e n t , N a t u r a l Resources and Fisheries, S E M A R N A P , 1999). O n e key reason w h y fishing activities have had a l o w priority i n the development o f the country, is that the economic transition pursued by the M e x i c a n government since the 1940 emphasized a shift from an agricultural to a semi-industrialized economy. Consequendy, the federal government has directed its programs to those sectors o f society that are considered socially, economically and politically important. U s i n g the Gross D o m e s t i c Product ( G D P ) as a basic measure o f the aggregated economic activity, the services sector (commerce, transportation, communication, and financial and personal services) has accounted for more than 5 0 % o f the G D P since 1950. T h e most dynamic sector has been heavy industry (manufacturing, construction, electricity and petrochemicals), whose participation increased from 21.5% o f the G D P i n 1950 up to 27.7% at present. O n the contrary, the primary production sectors (agriculture, catde raising, forestry and fishing) decreased i n their contribution to the G D P from 1 9 % i n 1950 to 8% i n 1985 (Lustig, 1992).  9  1.4.1.1.  Overview of thefisheriesin Yucatan  Fisheries i n Y u c a t a n State, located i n the middle o f Fishing Z o n e I V , parallel what is found at the national level. T h e catch is largely made up o f three species: lobster, grouper, and octopus, w h i c h represent up to 8 0 % o f the fish state production. There are, however, more than 25 species w i t h commercial value. Artisanal boats dominate the fleet with roughly 9 0 % o f the units suited for coastal fishing only ( S E M A R N A P , 1998). Fishing cooperatives represent approximately 1 5 % o f the fishers, 2 0 % o f the small-scale boats and report only 1 2 % o f the total catch. Consequendy, private firms o w n 7 1 % o f the State's small-scale fleet and 8 5 % o f the commercial vessels. I n the last decade, 8 6 % o f the catch was reported by the private sector, although the private sector processed and traded practically the entire State production (Salas and Torres, 1996).  1.4.1.2. Fish marketing in Yucatan Fishing cooperatives i n Y u c a t a n operate i n an imperfectly competitive market, dominated by oligopsonistic competition. A small number o f buyers and a larger number o f sellers, whose product is homogeneous, characterize this type o f market competition (Blomquist et al., 1990). A distinctive feature is that local fish buyers are aware that their buying strategies affect each other, w h i c h influences prices and creates mutual interdependence a m o n g them. Cooperatives as sellers, i n turn, may have preferences for dealing w i t h particular buyers. Some others actually seek buyers outside the region to obtain higher prices. I n b o t h situations, cooperatives can influence prices at least at the community level; the cooperatives actually buy their members' catch to sell it and redistribute the i n c o m e equitably. I f the price offered by the coop were higher than the one proposed outside the group, non-members w o u l d be attracted to sell to the cooperative, obliging other buyers i n the community to increase their prices i n order to ensure their supply.  1.4.1.3.  Characteristics offishingcommunities  There are fifteen fishing communities i n Yucatan. T h e y can be grouped i n three different types, based o n Schnore's classification (Schnore, 1967), w h i c h emphasizes levels o f production. T w e l v e are primary communities, i n w h i c h the. m a i n production is extractive, and the environment is a source for the extraction o f raw material. T h e other two are secondary communities, w h i c h practice secondary as well as primary activities: the m a i n production is manufacturing and processing extracted raw materials. Finally, there is one tertiary community, w h i c h develops primary, secondary and all o f the activities that consist o f distribution o f raw materials and processed goods, and services, such as financial, communication, and recreation. A l t h o u g h not located o n the coast, the capital city is considered as a tertiary community as well, since fishing products are concentrated, processed and exported from there. Figure 1.2 shows the seven coastal communities where fishing cooperatives are distributed. I n the primary communities there is not a noticeable physical separation o f activities and inhabitants; segregation is m i n i m a l since the population is fairly homogeneous, and the activities carried out are highly similar. There is little spatial differentiation because fishermen concentrate i n a central cluster o f dwellings and travel a short distance to peripheral places each day where their boats are docked. T h e tertiary communities are considered the centers o f fish processing and trading, as well as for manufacturing goods and p r o v i d i n g services. T h e occupational heterogeneity is related to a higher social differentiation and stratification, and to their larger population density. T h e two secondary communities' social structure rests between the two previous categories.  10  Figure 1.2. Geographical distribution of primary (S=Sisal, SF=San Felipe, RL=Rio Lagartos, and EC=E1 Cuyo), secondary (C=Celestun and DB=Dzilam Bravo), and tertiary (P=Progreso) communities in Yucatan. T h e relationship between the tertiary and the other two types o f communities o n the coast can be described using a regional analysis framework (see M c C a n n , 1987). Tertiary communities are characterized by their accessibility to extra-regional markets and their diversified profile o f industries, as well as by their high urbanization and concentrated population. These communities are able to influence the economic, social and political decisions o f regional importance. O n the other hand, the other coastal communities are highly dependent o n the exploitation o f primary resources; thus, they are regarded only as providers o f raw material. Their urban systems are weakly integrated and have a restricted political expertise; these communities have limiting physical characteristics such as roads and processing facilities. Consequendy their ability to gain access to extra-regional markets depends o n the facilities and services located i n tertiary communities.  1.4.2  Development of the cooperative sector  Because o f increased exploitation o f Mexico's fishing resources by foreign fleets and companies, at the turn o f the twentieth century the M e x i c a n government tried different ways to restrict further expansion o f those enterprises. Simultaneously, measures were taken to promote the development o f M e x i c a n fishing companies and to create a stable and organized labor force able to harvest national fishing resources. T o support these actions, the M e x i c a n government created a legislative framework i n 1925; a Fisheries L a w recognized state control over fishing resources and its right to regulate their exploitation. O n this basis, preferential access to fishing permits was given to national firms and specific restrictions were placed o n the operation o f foreign vessels i n M e x i c a n waters.  1.4.2.1.  Cooperatives'organisational structure  Cooperatives may have different organizational structures to achieve their objectives. G r o u p i n g units inside the cooperative facilitates the identification o f levels o f decision-making, channels o f communication, allocation o f resources, and lines o f authority. Some cooperatives are organized by. 11  function, where different phases of the fishing process are managed separately, such as harvesting, processing and marketing. Other cooperatives are organized by product, w i t h each unit specializing i n different commodities. Marketing may be another way o f dividing the structure o f the coop, each division focusing o n local, regional or international markets. Furthermore, the specialization o f the units can be directed to different, types o f customers, such as small buyers, large companies or government trading agencies. A c c o r d i n g to the M e x i c a n law o f cooperatives, active cooperatives o f producers i n Yucatan must be organized i n a manner c o m b i n i n g three different types o f structures: line, staff, and committee, as s h o w n i n Figure 1.3. T h e line structure establishes direct vertical links between different levels o f decision-making, and it should represent a clear authority structure. T h e highest level o f authority is the general assembly composed o f all the members. Assemblies are h e l d at least once a year. T h e administrative council, w h i c h executes the assembly agreements, represents the next level, and different committees are at the lowest level o f authority. These committees are groups o f members formally elected every five years by the general assembly to consider or decide o n certain matters. Committees can be permanent or temporary and usually supplement line and staff functions. T h e staff structure implies that non-members with certain skills and knowledge are added to the organization to advise or support the decision-making level. These people can be bookkeepers, secretaries, advisers, or technicians.  General assembly  Council of vigilance  Council of administration  Bookkeeper  Technical control committee  Social prevention committee  Secretaries  Education  Arbitration  committee  committee  Figure 1.3. Organizational structure of fishing cooperatives in Mexico There are 35 fishing cooperatives registered i n Y u c a t a n State, mosdy operating at the small-scale level. M e m b e r s h i p ranges from 15 to 211 fishers. Fishing is carried out using fiberglass boats, ranging i n length from 24 to 35 feet; fishing trips last 8 to 12 hours a day. M a i n species caught depending u p o n their availability and economic value are octopus, grouper and lobster. F i s h i n g gears comprise nets, semi-autonomous diving, a local gear made o f b a m b o o sticks, and l o n g line. M o s t o f the cooperatives lack administrative skills. T h e cooperatives and their members focus, o n harvesting o f the marine resources. Cooperatives do and promote limited processing o f the catch, leaving this activity to the 12  intermediaries. O n l y 3 o f the cooperatives process and trade their catches directiy to the market. F r o m the total catch registered i n Yucatan from 1993 to 1997, cooperatives' participation was 8.2% i n biomass and 10.4% i n economic value. M e m b e r s o f cooperatives i n the middle and West areas o f the coast are full time fishermen, whereas members o f the East Coast cooperatives fish from 8 to 12 months per year. T h e y combine their fishing w i t h some ranching, especially w h e n the weather is not appropriate for fishing. M e m b e r s ' age ranges from 16 to 70 years o l d , 7 5 % o f w h i c h are 25 to 50 years old, and years o f fishing experience ranges from 2 to 49 years. 9 0 % o f members have only elementary education. Family size o f members is from 2 to 6 people.  1.4.2.2. Inception T h e cooperative sector was initiated i n 1934. T h i s was a significant period i n M e x i c o , i n w h i c h state interventions i n the economic life o f the country emphasized nationalist yet populist measures designed to reinforce the government's political alliance w i t h the peasantry, as well as the w o r k i n g and middle classes. Interventions included the establishment o f the Federal L a w o f Cooperatives, and the provision, over a period o f years, o f the reservation o f a number o f commercially valuable marine species, including shrimp, oyster, and lobster, for exclusive exploitation by M e x i c a n fishermen organized i n cooperative organizations. T h e central purpose o f the legislation was to counter the weaknesses o f the private fishing sector by organizing a cohesive labor force and facilitating private investments i n large-scale, capital intensive outfits (Buckles, 1984).  1.4.2.2. Inception T h e cooperative sector was initiated i n 1934. T h i s was a significant period i n M e x i c o , i n w h i c h state interventions i n the economic life o f the country emphasized nationalist yet populist measures designed to reinforce the government's political alliance w i t h the peasantry, as well as the w o r k i n g and middle classes. Interventions included the establishment o f the Federal L a w o f Cooperatives, and the provision, over a period o f years, o f the reservation o f a number o f commercially valuable marine species, including shrimp, oyster, and lobster, for exclusive exploitation by M e x i c a n fishermen organized i n cooperative organizations. T h e central purpose o f the legislation was to counter the weaknesses o f the private fishing sector by organizing a cohesive labor force and facilitating private investments i n large-scale, capital intensive outfits (Buckles, 1984).  1.4.2.3.  Current situation  T h e M e x i c a n government has faced conflicting interests i n the development o f the fishing industry. F r o m the 1930's through the 1950's, the state fostered and emphasized the collective use o f marine resources and its commitment to equity by setting up cooperatives and giving them exclusive exploitation rights over these resources (Vasquez-Leon, 1995). T h i s orientation changed f r o m the 1960's to the m i d 1980's, w h e n the government pursued its commitment to fostering national economic growth by allowing private investors to obtain substantial benefits from the fisheries through the renting o f boats, equipment, and processing facilities to cooperatives. A t the same time, the government dismissed equity concerns by consigning the cooperative sector to its legal base and i n fact d o i n g litde i n the way o f p r o m o t i n g its development (Hernandez, 1988; M e n d o z a , T 9 8 5 ) . T h e most recent and dramatic change i n the fishing policy started i n 1992 w i t h the gradual transfer o f harvesting rights and control over all phases o f production and distribution o f fish-based products to private investors.  1.4.2.4. Perspectives T h e most important legal access that cooperatives have to fish resources is a concession, w h i c h is a fishing license that lasts from 5 to 20 years, w i t h the possibility o f renewal. U n l i k e the concession i n 13  previous versions o f the law, this legal instance is n o w transferable. T o put it briefly, the most recent version o f the. Fisheries L a w (1994) reintroduced natural resources as private property, with the advantage o f being legally secure for a longer p e r i o d o f time. I n addition, the concession is transferable and can be sold (Villamar, 1994). A s result o f these measures, the goal o f gaining economic efficiency through the privatization o f fishing resources, the possibility o f mercantile exchange, the official deregulation, and the freedom o f market forces are factors that are operating i n , and w i l l determine the fishing development i n M e x i c o . Defining private property rights i n this way, the concession as commodity, has at least three consequences. T h e first one is the weakening o f the cooperative sector, since private, powerful investors willing to exploit fishing resources more efficiendy may eventually displace the cooperatives. T h e second consequence relates to the first one i n the sense that the displacement might mean lack o f employment and a struggle for subsistence to thousands o f fishers. T h e third one relates to the ecological costs o f privatization, w h i c h might be high i n achieving such an economic efficiency, as it has occurred i n many fisheries around the world.  1.5  LIMITATIONS A N D SIGNIFICANCE OF T H E STUDY  A t least two limitations merit discussion i n this study. T h e first one is the ontological question o f "What is reality?" T h e qualitative nature o f the study determines that reality is constructed by the individuals involved i n the research situation (see Creswell, 1994). Therefore, the findings could be subject to interpretations different from mine. I tried to rrunimize this shortcoming by. reporting precisely the opinions and definitions o f the informants. T h e other limitation is related to the survey design I used to collect information. It is k n o w n as 'static group comparison design', and aims to explain and interpret relationships a m o n g variables across comparison groups (Creswell, 1994). I categorized the various comparison groups (cooperatives), using the values o f the selected independent variables. B y comparing the corresponding dependent variable scores, it was possible to assess whether there is a relationship between the variables. However, there is the possibility that other independent variables between two comparison groups not considered here might also affect the dependent variable. S u c h independent variables are alternative explanations for different dependent variable values. A n o t h e r aspect o f this design is that it enables one to meet only the first criterion for deducting causation, that is, the correlation between variables. T h e other two criteria for causation are that the independent variable precedes the dependent variable i n time and that there are n o alternative explanations o f the group differences i n the dependent variable. T h e significance o f this study for other researchers includes identifying the necessity o f designing further studies to address this shortcoming and meet these two criteria o f causation. O n e study w o u l d have to be longitudinal to meet the time-order criterion, taking into account changes over time by collecting data i n two or more periods. A n o t h e r study should be a cross-sectional design to meet the third criterion by using variables to represent phenomena that explain the differences among groups that have occurred over, a period o f time. O n e aspect o f the significance o f this study for researchers includes the n o v e l use o f survey methodology and the various social theories used for studying cooperatives. F o r fishery managers, the study is important because it points out deficiencies i n the local adoption o f u n k n o w n and sometimes adverse management schemes devised by centralized public agencies. It also exhibits the necessity o f creating strategies for freeing the cooperatives from social and economic constraints during the market exchange. T h e study also identifies some factors that w o u l d be promoted and some that should be discouraged i f i m p r o v i n g the performance o f cooperatives is considered as an objective i n fisheries development.  14  Finally, there is an obvious significance o f the study to my professional development. I understand that reporting the correlation between variables is not sufficient to understand a phenomenon, and that describing it is not necessarily an analysis. I have tried to make this study meaningful by putting it i n the largest context o f the fishery i n M e x i c o and its management, and by finding patterns o f occurrence o f key variables. M y intention is to k n o w the cause o f this occurrence to improve the existing operating conditions o f cooperatives and to propose solutions to several practical problems. I also understand that theories are at best a simplification o f a highly complex reality. B u t the first way to start dealing w i t h this complexity is by confronting it w i t h one's theories, however simple, i n a continuous and dialectic way that may enhance the understanding o f our reality.  1.6  ORGANIZATION OF T H E THESIS  T h e thesis is organized i n seven chapters. This chapter has outlined the general conceptual, theoretical, and operational frameworks to set the general context i n w h i c h the cooperatives operate i n M e x i c o . Chapter II describes the methods used for data collection and qualitative and statistical analysis. It describes h o w independent variables were measured and h o w classification schemes o f cooperatives were developed. E a c h o f chapters III to V I consists o f a brief introduction, specific research questions and a hypothesis. Particular details complementing the methodology described i n Chapter II are also included. Results for each variable are discussed i n order to address and answer the research questions. T h e purpose for this design is to emphasize the analysis and findings relevant to each factor affecting cooperatives' performance. In this way, operational rules are analyzed i n Chapter III, the adaptive ability is investigated i n Chapter I V , whereas the market position is examined i n Chapter V . Chapter V I provides a statistical analysis o f the three independent variables together to disclose their potential c o m b i n e d influence o n the performance o f the cooperatives. T h e last chapter provides general conclusions about all the variables analyzed, emphasizing the implications o f the study for the management o f fisheries i n M e x i c o .  15  C H A P T E R II METHODS 11.1  INTRODUCTION  This chapter outlines the methods used to collect and analyze the information needed to answer the research questions. T h e approach is the combination o f quantitative and qualitative methods because certain methods are more appropriate than others for a specific situation w i t h i n a single study. This mixed-methodology design allowed m e to c o m b i n e methodological steps at several phases o f the data collection-analysis process. F o r example, the survey is a quantitative method o f data collection; this information is then analyzed through statistical tests to generalize from the sample to the population. O n the other hand, interviews, documents and observations are qualitative methods for collecting data. T h e analysis o f the information obtained provides the basis for developing categories from particular sets o f information, and developing a qualitative narrative that shows patterns for that information (Creswell, 1994). T h e study locations were seven fishing communities i n the coast o f the Yucatan State, i n the southeast o f M e x i c o . T h e case study focused o n 21 small and large-scale fishing cooperatives grouped i n two separate federations. 12 Small-scale cooperatives were those operating fiberglass .boats n o more than twenty-seven feet i n length and w h i c h have the capacity for one-day trips. Average catch d i d not exceed 100 K g / d a y . O n the other hand, 9 large-scale cooperatives operate vessels ranging from thirty-five to sixty-five feet i n length, w h i c h are capable o f carrying out trips o f two to four weeks. Average catch is variable, depending o n the gear and the deck capacity, but usually is above 150 K g / d a y . Information from the field offices o f the Ministry o f Fisheries, the federations and the cooperatives related to the number o f cooperatives and membership, was contradictory. H o w e v e r , it seems that there were about 35 cooperatives operating with approximately 1,500 members, w h i c h represents approximately 1 0 % o f the total number o f fishermen i n Yucatan. .  11.2 S O U R C E S O F I N F O R M A T I O N F o u r different methods for collecting information were used during the summer o f 1998 i n the study location. T h e methods were: •  A semi-structured, open-ended interviews c o m p l e m e n t e d w i t h personal notes  • • •  A survey based o n closed-ended questionnaires O c c a s i o n a l observational notes, taken as an observer (not as participant) Analysis o f public documents  T w o different protocols were devised for the interviews and the survey. T h e interview protocol covered descriptive and reflective components (open-ended questions) i n w h i c h informants provided specific information and were allowed to expand their points o f view for each question (see A p p e n d i x A ) . Interviewees were the members o f the boards o f directors for each of. the 21 cooperatives. T h e resulting data were used to classify the independent variables, that is, operational rules, adaptive ability, and market position. I took reflective notes after the interviews to record my  16  o w n thoughts and impressions; interviews also comprised a demographic component to record the 'age' o f the organization, number o f members, number o f boats, and the like. T h e questionnaire p r o t o c o l also included descriptive and reflective components, i n w h i c h informants were allowed to elaborate an explanation o f w h y they were (dis)satisfied w i t h the performance o f their cooperatives i n different aspects. These aspects included the relationships w i t h fish buyers, communities and authorities; the performance o f the cooperative i n getting loans, training courses, and technical support; its ability for searching for technological innovations, l o b b y i n g and bargaining, and others (see A p p e n d i x B ) . T h r o u g h a satisfaction scale based o n U k e r t ' s scale (DeVellis, 1991), where l = v e r y satisfied and 5=very dissatisfied, an average overall satisfaction measure was estimated for each cooperative. T h e process o f asking questions to members o f the cooperatives, allowed me to build a numeric characterization o f the sample from the target population. T h e survey design allowed me to generalize from a sample to the population and make inferences about the occurrence of. some organizational characteristics o f this population (see Creswell, 1994). T h e survey I used i n this study was a special case o f a cross-sectional design called 'static group comparison design' survey. It was cross-sectional because the information was collected at one point i n time, but differed from standard cross-sectional designs because it compared groups only once, based o n one or few criteria. O n e advantage o f the survey was that, as a non-experimental research method, I was able to define w h i c h variables were independent and w h i c h dependent. T h i s characteristic played an important role i n deciding the methods applied for data analysis. O t h e r advantages were (1) it was relatively easy and cheap to design the survey and to collect and organize the information; (2) it was also relatively simple to identify attributes o f a population f r o m a small group o f members o f that population. Practical considerations were also important i n deciding w h i c h survey design to use. T h e data collection procedure was convenient because it was cheaper to visit the fishing communities i n M e x i c o than to request the information by telephone from Canada. I also had to consider the fact that members o f the cooperatives are still not used to telephone or mail interviews, i n w h i c h case a h i g h rate o f non-respondents w o u l d be expected. Finally, being i n the communities meant it was convenient for me to invite fishermen to participate i n the survey and to randomly select them o n site. Table II. 1 shows w h i c h survey items were used to answer the research questions. T h e final source o f information was catch reports obtained f r o m the same cooperatives and f r o m the offices o f the Ministry o f Fisheries.  I analyzed the catches per m o n t h and per species as  reported by each cooperative from 1993 to 1997. T h e n I calculated the total average catch during that period.  II.3 T H E S A M P L I N G PROCESS T h e sampling process covered many steps from defining the target population to actually choosing the sample. T h e sampling process was designed to select the sample to w h i c h the questionnaire was a p p l i e d . T h e process was developed following steps outlined by Czaja and Blair (1996) or as noted.  17  II.3.1 The target and study populations T h e target population was the group to w h i c h the results o f the study could be generalized. In this case, the target population included all 1,500 members o f the thirty-five fishing cooperatives i n Yucatan. T h e study or survey population was a subgroup o f the target population from w h i c h respondents were selected to answer the survey. T h e boundaries o f the units o f analysis delimited the study population. T h e unit o f analysis i n this case was the fishing cooperative, and the boundaries regarded as important were the following: •  Legal: the L a w o f Fisheries and the G e n e r a l L a w o f Cooperatives define this boundary, and excludes other types o f fishing organization.  •  Geographic: Cooperatives were selected f r o m the seven fishing communities along the coast o f Y u c a t a n where these groups are located.  •  Cooperatives' age:. O n l y groups w i t h more than five years operating i n the study area were chosen. T w o important exceptions were made; two cooperatives started operations i n 1996 as cooperatives, but they have been operating under different legal denomination since the beginning o f the 1990s.  These boundaries narrowed the study population to twenty-one fishing cooperatives, identifying automatically the sample for the interviews w i t h the boards o f directors.  Table II. 1 Relationship between the variables, research questions, and survey items. Survey items  Research questions  Variables Independent  How:  Interviews  •  Operational rules  •  •  Questions  .•  A d a p t i v e ability  •  •  Questions 20-33  •  Market position  •  •  Questions 34-43  •  Complete questionnaire  O p e r a t i o n a l rules affect performance? A d a p t i v e ability affect performance? M a r k e t position affect performance?  1-19  Dependent •  L e v e l o f satisfaction  II.3.2 Sampling design and size T h e sample design applied to estimate the number o f members to assess their satisfaction was a simple multiple-stage sampling design that comprises a two-stage sampling process. I n b o t h stages, I used a simple r a n d o m sampling technique. T h e first stage involved a r a n d o m selection o f groups, i n this case the cooperatives, and the second stage involved the r a n d o m selection o f members o f the selected cooperatives to produce the final sample. T h i s multistage approach required trade-off between i m p r o v e d precision o f the sample estimates and higher complexity. A s the number o f stages increases, the precision decreases. H a v i n g only two stages reduces the difference between  18  estimates o f statistics and parameters, and thus increases the reliability o f the inferences from the sample-to the population (Czaja and Blair, 1996; H e n r y , 1990). T h e sample selection within each cooperative was independent and guaranteed an equal probability o f selection to all its members. Since the probability o f selection is determined by the cumulative probability o f selection, unequal probability o f selection i n the first stage was compensated i n the second stage. F r o m the cooperatives selected i n the first stage, the sample size i n each was estimated with the probability proportionate to size, P P S , (Henry 1990), because cooperatives have different sizes o f membership. T h e cooperatives selected i n the first stage are referred to as Primary Sampling Units or P S U , and the purpose o f applying P P S was to give similar probability to any member o f any cooperative to be selected i n the sample. T h e formula to calculate the sample size at this stage was:  p = c * Nc/N where p is the probability o f selection c is the number o f P S U (cooperatives) N c is the number o f elements i n each P S U N is the total number o f elements i n the study population Whereas N c was obtained f r o m each cooperative, c was calculated direcdy as 6 0 % o f the total number o f cooperatives registered i n Y u c a t a n . T h i s arbitrary first stage sample size yielded twenty-one cooperatives, w h i c h were selected from the seven fishing communities based o n the convenience to sample them according to their distribution. T h u s , eight cooperatives were selected direcdy because they were located i n five communities, m a k i n g it easier to sample them. F o u r m o r e cooperatives f r o m another c o m m u n i t y were selected based o n their availability since I d i d not k n o w w h i c h ones were still operating and what was the chance o f contacting the members. T h e remaining nine cooperatives were selected from the last c o m m u n i t y where fourteen cooperatives operate. Because the sample sizes o f cooperatives w i t h more than one hundred members were extremely large, I adjusted them by re-estimating the probability o f selection with an arbitrary weighing factor (wf). It was calculated as the probability o f selection calculated from the P P S , divided by the same probability times ten: wf = p / p * 1 0  This procedure yielded a probability o f selection o f 0.1 for these cooperatives. T h e criteria to choose this adjusting factor were to calculate a new probability o f selection less than 1 0 % or to have sub-sample sizes around twenty members o f less. T h e samples for larger cooperatives were recalculated w i t h this correction factor. T h e total sample size was estimated as 164 members as a target, based o n these criteria. D u e to the presence o f non-respondents, the real sample size was 155 members, from sixteen cooperatives. T h e real sample size represents 9 4 % o f the adjusted  19  sample, and 14% o f the total membership i n the study population, and also reveals the n o n respondent cooperatives. T a b l e II.2 summarizes the sample sizes per cooperative, original, adjusted and real.  II.3.3 The sampling frame T h e sampling frame is the list(s) or resource(s) that contain the members o f the study population. T h i s frame was defined from three different yet related types o f lists: official records managed by the Ministry o f E n v i r o n m e n t , N a t u r a l Resources and Fisheries, records from the most recent ordinary assembly, and updated members' list supervised by the boards o f directors. B y c o m b i n i n g these three lists it was possible to compile the most recent list o f the cooperatives' members. It was important that the definition o f the target and study population is clear so all or most members o f the study population were members o f the target population as well. I n this way, differences between study population's statistics and target population's parameters (non-sampling bias) were reduced; inferences from the sample to the population were, therefore, more reliable (Henry 1990).  ^ Table II.2 Summary of the original, adjusted and real sample size per cooperative Cooperative ID  N o . of members  RLP  Probability of selection (PPS)  Sub-sample size . adjusted  Subsample size  56  1.0  56  6  Real sample size n.r.  SF  207  3.8  793  21  21  DB  99  1.8  181  10  21  TPM  •22  0.4  9  9  n.r.  PS  12  0.2  3  3  n.r.  CA  18  0.3  6  6  10  PG  53  1.0  • 52  5  10  CP  211  3.9  824  21 .  21  EC  118  2.2  258  12  13  RL  160  3.0  474  16 n.r. n.r.  16  CCB  20  0.4  7  7  PD  15  0.3  4  4  CPP  24  0.4  7  15  0.3  11 4  11  PI  4  5  DP  15  0.3  4  4  5  PII  12  0.2  3  3  4  15  0.3  4  •4  5  15  0.3  4  4  5  15  0.3  4  4  5  EC  18  0.3  6  6  5  B  15  0.3  4  4  5  164  155  '  PC PCH NK  Total  '  1,135  2,655  20  11.3.4 Choosing the sample There were four steps to generate a list of respondents to assess the level of satisfaction. First, from the complete list of members of each cooperative, the sub-sample size was identified. Second, the identification number assigned by SEMARNAP to each fisherman was used to select him randomly. In doing so, the last four digits of the identification number were compared with the last four digits in a random number table. Random numbers were automatically generated using standard computer routines. In the third step, each member whose identification number matched a number in the random table was selected as respondent. The process was repeated, without replacement, until the number of members necessary to complete the sub-sample size was obtained. Some more individuals were further selected to replace possible refusals or individuals that for some reason were unable to answer the questionnaire. Finally, with the help of the board of directors, the selected members were notified and told the time and place to administer the questionnaire. The process was easier in six of the communities with small-scale level of harvesting. In the remaining community, the largest one, where all of the members usually carry out two to three week trips on industrialized ships, having the selected members at the same time was very difficult. In fact, it was not possible to apply the questionnaire to three cooperatives in that community. This situation, known as non-response bias, created differences between the study and target populations. The omission of this group of respondents from the data collection was not random thus creating a bias in the results. 11.3.5 Non-response errors In order to prevent and reduce non-response errors during the survey, I took preventive measures according to two types of error. The unit non-response error is related to respondents, therefore gaining fishers' trust from the beginning was essential to get their participation, especially with inefficient cooperatives that tended to be distrustful and blame their failure on "outsiders" in general. Thus, being honest and clear about the purposes of the study was very helpful to make fishermen more willing to participate in the survey. In the case of the three cooperatives mentioned above, I tried different strategies and times to contact them and thus reduce this type of error; however, they were never willing to participate in the survey. In the case of item non-response error, two measures were equally important. The first one was carefully designing a set of questions that were not harmful, especially in sensitive issues, such as giving an opinion about the board of directors. The second one refered to assuringfishermenthat the information they provided was both necessary and confidential. These measures were necessary to reduce as much as possible errors due to the lack, of information either because respondents were not able to answer the questionnaires, or because the questions were unclear or threatening. The idea was to devise a routine, secure procedure to get fishermen's cooperation in answering all or most of the questions.  II.4 PRETEST A N D CODE-BOOK This section describes the questionnaire pretest and the elaboration of a codebook for entering information from the questionnaires and interview protocols into computerized databases. II.4.1 Questionnaire pretest The first draft of the questionnaire was distributed among ten peers for review and comments. Considering that most of them did not know anything aboutfisheriesin Mexico, they were asked to  21  focus o n format and clarity. Therefore, the details most frequendy pointed out were concerning the widening o f the measurement scales to 5 or 7 attributes containing a very positive and a very negative ends, w o r d i n g with understandable concepts, and including the "Missing/refuse" category. A second pretest was carried out i n Yucatan, once the questionnaire was translated into Spanish. O n this occasion the reviewers were three technicians w i t h ample-working experience at the coast o f the state. T h e focus at that time was o n wording, clarity and timing. Since the technicians knew the style i n w h i c h people speak Spanish at the coast, their suggestions were helpful to make the questions understandable. A thkty-minute time frame was estimated to answer all the questions. T h e technicians mentioned that the sequence o f the questions was logical and clear, so it w o u l d be easy for the fishermen to follow the questionnaire.  II.4.2 Code-book I developed separate codebooks to enter responses to the questionnaire and the interviews, and to process and analyze the information. A sample codebook is s h o w n i n Table II.3.  Table II.3. Section of the code-book designed to process the information from questionnaires and interviews  Question number  Variable name  Value Label  Variable label  Value  I  Ident.  Identification number  Person 1... Person 100  001... 100  1  Managsty  Satisfaction with management style  1 2 3 4 5 9  Fisbuy  Evaluation of dealing with fish buyer  • • • • • • • • • • • •  2.a  Completely satisfied Mostly satisfied Mixed Mostly dissatisfied Completely dissatisfied Refused/missing Excellent Very good Good Fair Poor Refused/missing  1 2 3 4 5 9  T h e first c o l u m n refers to the progressive numbering o f the questions i n the protocols. T h e "variable name" c o l u m n represents the column's head i n the database screen and the SPSS program uses it i n all the statistical tests; the variable name has to be shorter than 8 characters. T h e "variable label" c o l u m n represents the complete variable name and is used to label the variables i n the outputs (graphs and tables). T h e value label a n d value columns show the variables' categories and their values from the questionnaires. F o r instance, satisfaction was ascertained by direcdy asking members their opinion about different aspects o f the cooperatives' management; i n this case, categories ranged from "Completely satisfied" to "Completely dissatisfied". E a c h o f these categories has a corresponding numeric value, w h i c h was assigned by the researcher. "Completely satisfied" had a value o f 1, while "Completely dissatisfied" had a value o f 5. T h e values were used to estimate an average overall satisfaction for every cooperative, considering the total answers o f each member.  22  11.5  INSTRUMENTATION  Instrumentation refers to the characteristics o f the tools used during the data collection. First, the survey questionnaire and interview protocols were self-designed because there were n o previous experiences i n the study area. Second, to evaluate the validity o f the survey instrument (questionnaire), that is, to k n o w i f the answers provided by the respondents were valid measures o f what I was trying to measure, I analyzed patterns o f association o f the answers. T h e evidence o f h o w g o o d was the measurement o f satisfaction was indirect because I was measuring a subjective phenomenon. Since subjective states o f people are not direcdy observable, I could only infer that what I was measuring should behave i n a predictable way (see Fowler Jr., 1995). T o evaluate this pattern o f association I relied o n predictive, construct and face validity. Predictive validity is the extent to w h i c h a measure predicts the answers to different questions. Construct validity means that i f several questions are measuring the same or closely related things, then they should be highly correlated w i t h one another. Predictive and construct validity are closely linked because one can expect that i f questions measuring similar things are highly correlated, the answer o f one question w o u l d be a g o o d predictor o f the answer to a correlated question. T h e questionnaire I used i n this study was built to measure construct and predictive validity. F o r instance, after asking for the satisfaction about the overall administration o f the cooperative, the members were asked for their satisfaction about different administrative activities, such as the relationship established w i t h authorities and buyers, the ability o f managers to get financial and technical assistance, and the way operational rules were applied, among other situations. N e x t , some o f these situations were 'broken d o w n ' to more detailed situations, such as access o f members to financial aid, equipment and facilities and technical assistance. I n this way, I could expect that members satisfied w i t h the general administration o f the cooperative w o u l d be similarly satisfied w i t h specific administrative activities and w i t h different situations related to these activities. T h e final measure o f satisfaction was the average satisfaction o f all those situations. T h e last way to measure patterns o f association was face validity, w h i c h occurs w h e n the questions measure what the questionnaire purports to measure. Face validity was carried out during the field pretest o f the questionnaire. In this situation, people w h o were tested w i t h the questionnaire were able to express direcdy i f the questions measured what they were intended to measure. Field pretest also helped to improve the w o r d i n g o f the questions and their format.  11.6 D A T A A N A L Y S I S II.6.1 Qualitative analysis T h e qualitative analysis o f the data was based o n its reduction and interpretation (see Creswell, 1994), w h i c h was performed to create categories w i t h i n w h i c h to accommodate the organizational structures, market position and adaptive ability o f cooperatives as explained by the directors interviewed. B y reduction and interpretation I mean that I reduced a large amount o f information to a few categories based o n the patterns o f appearance o f certain organizational and market characteristics, and adaptive responses to extra-organizational changes. I then analyzed and interpreted those categories to help answer the research questions. T h e methodology for category construction i n the case o f organizational and market issues, and for the ability to adapt, i n v o l v e d five basic steps: (1) g r o u p i n g answers, (2) writing notes, (3) g r o u p i n g for conditions, (4) creating categories, and (5) creating classes. I n the first step, I  23  quickly read the transcripts f r o m the interviews, to gather first impressions from the data, and make major groups o f answers. G r o u p s were created after constandy c o m p a r i n g answers f r o m different respondents to specific questions. O n c e I had these groups o f answers, I wrote several notes w i t h two purposes. T h e first one was to associate thoughts as I read the interviews again or while w o r k i n g o n any other task o f m y study. W h e n e v e r a thought came to m y m i n d related to the groups o f answers, I wrote as m u c h i n f o r m a t i o n as I c o u l d relate to groups o f answers even though some o f it seemed Unimportant. T h e second purpose o f writing the notes was to initiate the generation o f conditions emerging f r o m the data, i.e. to track data from the immediate answers o f the respondents, the notes and the resulting conditions. C o n d i t i o n s are the situations required i m p r o v i n g the performance o f the cooperatives. T h e conditions were grouped into general categories. T o facilitate the p o s i t i o n i n g o f cooperatives i n each category, I developed sets o f sub-categories. H a v i n g developed the categories, I read the transcripts o f the interviews once more and compared them w i t h the conditions created to place the cooperatives w i t h the same conditions into different classes. These classes represent similar types o f conditions that groups o f cooperatives have created to reach their objectives hence deterrrrining their performance.  II.6.2 Statistical analysis T h e analysis o f the data was carried out at two levels. T h e first was a descriptive analysis o f all independent and dependent variables. Descriptive statistics were used to organize the data to present them i n an orderly way. T h e report o f this analysis is s h o w n i n the Results sections o f Chapters III, I V , and V . T h e descriptive analysis includes m y design o f an arbitrary counting system to estimate the number o f rules from the interview w i t h the boards o f directors. E a c h rule was assigned with a numeric value according to two criteria. T h e first criterion depends o n the action implied by the rule; for instance, i f a position rule implies the implementation o f four committees, one point is assigned per committee implemented. T h e second criterion depends o n the rule's relative importance for the achievement o f the organizational objectives. F o r instance, i n the case o f eligibility rules, giving a member the opportunity to defend himself supported by witnesses, was considered a more "structured" rule (value=3) than without witnesses (value—2) or excluding any defense opportunity for the member ( v a l u e ^ l ) . Finally, the values were simply added up to have a total score per cooperative. T h e counting system showing the score per rule is displayed i n Appendix C. T h e next level o f analysis was performed using the Statistical Package for Social Sciences (SPSS) software (Norusis 1997). A t this level o f analysis, the strength and direction o f the relationship between variables was determined for testing research hypotheses and answering research questions. T h i s level included the application o f inferential statistics to make generalized conclusions by inferring characteristics o f the population from the numeric description o f the sample. Inferential statistics were i n turn divided i n two major categories. O n the one hand, bivariate statistics refer to the determination o f the relationship between two variables where neither is an experimental independent variable. T h e way i n w h i c h relationships a m o n g variables were analyzed was by l o o k i n g at their association, that is, i f one variable increases (or decreases) as the other one increases. A s one o f the major purposes o f the analysis was to assess individually the association among independent, variables and the dependent variables, the Spearman's coefficient o f correlation was chosen to measure that association.  24  A l t h o u g h neither correlation n o r regression analysis facilitates the definition o f the independent variable as predictor o f the dependent variable, it is important to stress that while the data show correlational relationship (as s h o w n i n latter chapters) they can not be taken as definitive evidence o f a causal relationship. There may be m o r e factors that determine whether the dependent variable w i l l change according to one or m o r e independent variables. It may also be true that the variable selected as dependent influences the variables selected as independent. T h e p o i n t is that defining the independent and dependent variables depends u p o n the research's objectives and should not be interpreted to mean that the independent variable invariably causes the dependent variable i n the real w o r l d . T o prove causality it is necessary to prove that the relationship is n o n spurious, the predictor preceded the effect i n time, and there is a plausible rationale for w h y one variable should be a cause o f another. Multiple correlation analysis, cluster analysis, multiple regression analysis, and multidimensional scaling were applied o n Chapter V I to find out the relationship, o f all variables influencing performance. T h e analysis then concentrated o n the performance o f cooperatives during the last year, 1997, o f the period analyzed, because it was the only year for w h i c h more detailed information o n the performance was available. T h e purpose was to find i f there is a differential influence o f the variables analyzed between cooperatives practicing small and large-scale fishing. I used multivariate analysis because I needed to analyze several related variables simultaneously and, without a priori assessment, I considered each variable equally important at the beginning o f the analysis. Multivariate statistical methods allowed me to study the joint relationships o f variables that are positively correlated. T h e use o f multivariate statistical analysis i n this study is an illustrative example o f h o w variables can be analyzed. I had small sample size because I was w o r k i n g w i t h organizations as the unit o f observation, and it was impossible to obtain a larger sample size. Recognizing these limitations, the estimates derived through the multidimensional scaling and cluster analysis are the best estimates available o f the parameters, given the information available. T h e findings should be considered only illustrative given the small sample size. Regarding the sample size for multiple regression analysis, an important consideration is to have more cases than variables. I n stepwise regression, a suggested m i n i m u m case-to-variable ratio required is to have at least 4 to 5 times more cases than independent variables (Tabachnick and Fidell, 1996). A c c o r d i n g to this criterion, 15 cases should be adequate as I analyzed 3 independent variables. However, I had 21 cases (cooperatives) making the ratio o f 7 cases per each independent variable.  25  CHAPTER III  RULES, ORGANIZATIONAL STRUCTURES A N D PERFORMANCE III.l INTRODUCTION Information collection for resource management, particularly i n fisheries, is often focused o n the resources themselves rather than o n the resource users and their organizations. W h e n information regarding resource users is available, it is often statistical, focused o n their numbers, production units, and quantity o f outputs. I n the same fashion, economic information for resource management often addresses prices per unit produced, production costs, benefits from exports, net incomes, and so o n . O n l y recendy have more qualitative factors, such as values, perceptions, group affiliation, and other socio-cultural users' traits been seen as important w h e n developing resource management policies. (Specific references regarding this topic appeared i n the special issue o f Aquatic L i v i n g Resources, V o l . 8, Nb. 3, 1995.) T o be successful, resource management regulations must reflect and be supported by the cultural context within w h i c h the management regime operates (Buck, 1989). B r o a d resource management regimes should also reflect an understanding o f local rules i n order to avoid disrupting social relationships. Y e t , combining more formal resource management with local rules w i l l not necessarily ensure social cohesion i n resource exploitation. A s Gross and Rayner (1985) indicate, the number o f rules i n a management context does not necessarily indicate the strength or w i s d o m o f prescriptions. G r o u p s may use multiple and contradictory rules that ultimately undermine social order and optimal production. O n l y w h e n rules enhance authority is the advancement o f social goals more likely to occur. Similarly, organizational goals are most often achieved w h e n clear rules, and an orderly structure, yield the desired level o f performance. O n the other hand, organizational structure and performance have been shown to be associated w i t h different organizational characteristics, such as communication (Fisher, 1974), organizational values (Van Wart, 1998), members' roles (Ross and Ross,- 1989), and decision-making behavior (Cyert and M a r c h , 1988). O t h e r researchers have studied the relationship between rules and organizational structure, and h o w changes i n one variable affect the other. T h o s e studies indicate that w h e n rules have been largely institationalized, the structure tends to become rigid, allowing only a small margin for adjustment and adaptation. Rigidity is often a precursor to organizational decline, especially w h e n the environment changes constantiy and exposes new challenges to w h i c h the organization can not respond adequately i n time or mode. O n the other hand, w h e n rules and the organizational structure are flexible, adaptation is easier and the changing environment can be confronted more effectively (Cameron, 1984). Flexibility is especially valuable for new, innovative organizations that need to adjust frequendy. H o w e v e r , too m u c h ability to "bend and twist" may create a sluggish organization where processes and goals are not completely achieved. Organizational structures are thus the vehicle by w h i c h rules are embodied and implemented. Rules vary across organizations i n many dimensions: the severity o f sanctions for violating rules, the consistency o f enforcement, the degree i n w h i c h members internalize rules, the way they are carried across generations, and the amount o f compliance they receive. Organizations need to develop rules and fit them to an appropriate structure i f they are to survive and advance i n their specific environmental surroundings. '  26  111.1.1 Purpose of the chapter T h e purpose o f this chapter is to explore and understand the organizational factors that have contributed to differences i n the performance o f fishing cooperatives i n Yucatan, M e x i c o . Based o n m y six-year working experience i n the research area, I concentrated o n -the operational rules that members have implemented to govern their personal associations inside the cooperatives. A l s o , I was interested i n h o w such rules have determined the organizational structure o f the cooperatives and h o w rules and structure have influenced their performance. T h i s study develops several organizational categories to illustrate h o w the number and type o f rules determine the control within the cooperative, and what organizational elements have been implemented along the levels o f decision inside the cooperative's structure.  111.1.2 Research question I n the first Chapter, I established that the two main questions o f the study were (1) what are the major sources o f differential performance o f cooperatives, and (2) h o w do those sources affect such performance. T h e sources I analyze i n this chapter are operational rules; specifically I explore h o w they determine the c o n t r o l over interpersonal relationships and influence the emergence and continuance o f different levels o f organizational structure.  111.1.3 Hypothesis T h e operational hypothesis tested to explore specifically the underlying relationship operational rules and performance (hypothesis one, page 3) is the following:  between  T h e larger the number and variety o f operational rules followed by a cooperative, the more satisfied its members and the more catch reported  111.1.4 Definition of terms 1111.4.1. Rules In the study o f organizations, a rule is a regulatory mechanism o f social control by w h i c h behavior is shaped into predictable, orderly relationships. I n this regulatory connotation, rules are the basis for order within human groups, the mechanism by w h i c h behavior becomes dependable by group standards, the procedure by w h i c h the internal conflicts are regulated, and the instrument by w h i c h collective efforts are m o b i l i z e d to goal attainments (Neal, 1971)- Effective rules, either i n a small group or i n a whole civilization, are patterns o f social relationships that are mutually influencing. T h u s , through rules, the interdependency o f members upon.each other is emphasized, arid collective goals are more likely to be attained. Y e t , the mere existence o f rules does not assure their compliance. Between rules and observed behaviors lie the mental calculations o f individuals w h o make choices. Some strategies for making choices may result i n reciprocity between individuals, whereas some others may lead to 'free-rider' behavior, that is, w h e n some individuals capitalize the benefits o f collective action without contributing to the collective effort (Oakerson, 1992). Therefore, central to both types o f strategies is the capacity o f the organizations to enforce the rules (Fortes, 1983). Enforcement and, by corollary, the breaking o f rules, is associated with a system o f inducements and punishments intended to make people comply w i t h regulations. In this study the concept o f 'rule' w i l l be used concerning its regulatory connotation: a rule is a shared understanding o f h o w people should behave and what should be done i f someone behaves i n a way that conflicts w i t h that shared understanding (Edgerton, 1985). Rules are important because they reflect the character o f a group. T h e n , by identifying certain rules, it is possible to anticipate partially the likelihood o f a particular behavior i n the group (Buck, 1989). Perhaps the most important characteristic for group survival and i m p r o v e d performance is the extent  27  to w h i c h rules are k n o w n , recognized, accepted and uniformly internalized by all members o f the organization. A l s o important is the strength o f those rules to adaptation to changing extraorganizational conditions. Similarly, recognition and acceptance o f rules requires a high degree o f correspondence between personal motives and group goals. Thus, the success o f social organizations depends u p o n the extent to w h i c h they maximize the fit between personal goals and collective objectives through internal rules, to regulate the interrelationships o f members, and suitable structures to reach the objectives (Neal, 1971). III. 1.4.2. Organisational structure Broadly defined, an organizational structure is a social arrangement i n w h i c h the activities o f a group o f people are systematically planned by others i n order to achieve some goal. F r o m this definition^ it is apparent, that functional division operates w i t h i n an organization. A central authority coordinates the implementation o f plans and rules, and the administration o f the material and financial capital. T h e plan is a set o f operations organized to achieve the organizational goals, and the capital is the equipment, buildings, experience, ,funds, and any other factor that can.be used for the operation o f the organization (Stinchcombe, 1967). Thus, an appropriate organizational structure is required for the collective action o f numerous individuals under similar w o r k i n g conditions. Flows o f information, group-decision processes, coordination, and enforcement call for a particular structure (Zusman, 1994). W i t h o u t some group coordination or organization, n o benefits can be obtained from the collective action (Olson, 1971). A n organizational consequence o f the need o f efficient information, coordination, and enforcement is some f o r m o f hierarchy (Williamson, 1975). Likewise, Ross and Ross (1989) assert that these hierarchies are necessary to develop rules, roles and leadership according to the people involved, their collective goals, and the changing external circumstances.  III.1.5 Organization of the chapter T h e next sections describe three different frameworks important for this chapter. T h e conceptual framework, using a graphical device, identifies the variables and shows their relationships. T h e theoretical framework explains the m a i n theoretical approaches used to analyze the relationship between the variables. T h e context for analysis describes the typical organizational structure o f cooperatives and the legal rules designed for their operation i n M e x i c o . N e x t , the methodology section describes briefly the process o f collecting and analyzing the information, emphasizing the procedure used to estimate the number and strength o f rules and creating the categories o f organizational structures i n w h i c h the cooperatives were classified. T h e subsequent section then presents the results o f the qualitative and statistical analysis applied to answer the research question and the relationships found between rules and different cooperatives' organizational structures. This section also describes the individual group, and organizational decision-making situations faced at three levels o f decision within the cooperatives. T h e chapter concludes w i t h a discussion o n the results obtained, focusing o n the influence o f official and traditional rules and corresponding formal and informal organizational structures, o n the decision-making processes and, ultimately, o n the performance o f the cooperatives.  III.2 C O N C E P T U A L F R A M E W O R K Figure II. 1 depicts the conceptual framework employed, i n this study regarding the relationship between operational rules and performance. F o r analytical purposes and based o n m y empirical knowledge i n the study area, I assume that operational rules influence the organizational structure, w h i c h is an intervening variable that also affects the performance o f cooperatives.  28  Variables  Prior Collective goals  Intervening  Independent  w W  Rules w  Organizational structure  Dependent  Performance w  Figure III.l. Relationship between rules and performance  T h e independent variable for this study comprises a set o f six operational rules along w i t h a set o f ecologically related rules. T h e former set facilitates collective action and interpersonal relations, and is adapted from B u c k (1989), w h o uses them to describe social relationships i n situations where c o m m o n property resources are at stake. Operational rules comprise the following kinds o f rules: * Eligibility, w h i c h refers to the conditions to be member o f a cooperative * Decision, w h i c h refers to the approaches and rules used for decision-making i n collective actions * Position, w h i c h refers to the conditions that must be satisfied to h o l d a position i n the various committees * Payoff, w h i c h refers to the rewards or penalties assigned to actions or outcomes * Authority, w h i c h refers to the authorized actions members can take independendy, and * Information, w h i c h refers to the nature and quality o f information that members should share. T h e set o f ecologically related rules explores the cooperative's attitude towards the biophysical environment and fishing resources. T h e dependent variable is measured as the members' level o f satisfaction and the average total catch per cooperative from 1993 to 1997.  III.3 T H E O R E T I C A L F R A M E W O R K T h e analysis approach adopted here assumes that rules and types o f organizational structure are intertwined: rules facilitate the rise o f specific structures, and these structures i n turn determine the design and modification o f rules or the emergence o f new ones. Because o f this intertwined nature, rules and structures are analyzed from the perspective o f stxuctural-functional organization theories that are concerned w i t h the relationships a m o n g positions o f authority, groups o f positions, and w o r k processes. In these theories, the organization is the analytical unit and the central concerns are the structure and effectiveness (Hage, 1980). A structure-functional perspective focuses o n the achievement o f established objectives through systems o f defined rules and formal authorities (Shafritz and Ott, 1992). I n answering the basic question underlying this perspective (what forms o f organization are the most effective and what are the key structural variables influencing performance), I emphasize general variables that transcend cultural settings and. time. Thus, structure itself and rules are used to explain organizational goals. T h e biggest weakness o f structural functionalism, however, is its general lack o f attention to anything outside the organization (Hage, 1980), concentrating hence o n the centralization o f power. I n m y study, I interpret centralization o f power to be the basis for defining the decision-making unit. T h e analysis i n this chapter also recognizes that organizations include formal and informal rules. T h e informal rules complement the formal organization by establishing traditional norms o f operation 29  w i t h i n the cooperative.  Therefore, it is necessary to have an understanding o f the parallel formal and  informal elements o f the organizational structure (Blau and Scott, 1962). This analysis o f the organizational structures o f cooperatives also assumes the presence o f three levels o f task performance and decision-making: top or strategic, middle or administrative,. and b o t t o m or operational. Theorists recognize these levels i n any complex organization; for example, Kleindorfer et al. (1993), describe strategic, tactical and routine decision levels! Similarly, M i n t z b e r g (1979) recognizes a strategic apex, a middle line including • supportive administrative staff, and an operating core as components o f the flow o f formal authority i n his five interdependent part organizational model. A t the top level o f coordination and decision, the managers are charged with the overall responsibility o f the organization. T h e y have to ensure that the organization serves its mission i n an effective way and fulfill the needs o f the w h o l e membership. T h e formulation o f strategic decisions at this level involves the interpretation o f the environment and the design o f consistent patterns o f organizational behavior to deal w i t h the environment. These strategies affect the well being and nature o f the organization. A l t h o u g h leaders make strategic decisions, decisions can also be highly influenced by people at the other levels o f decision-making. People at the middle level o f formal authority coordinate mechanisms o f direct supervision. These persons pass information o n the performance o f the lower to the top level, and help the latter to carry out supervisory activities over the lower level. M i d d l e managers also intervene i n the flow o f resources that must be allocated a m o n g organizational areas. They also elaborate plans and operational rules. Kleindorfer et al. (1993) m e n t i o n that decisions made at this level are tactical. T h e y may contain strategic element, but largely such decisions do not impact the structure or alter the development o f the organization. H o w e v e r , the cumulative impact o f tactical decisions may be as great as that from strategic decisions. Finally, the lower level o f organizations comprises those members w h o perform the basic w o r k related direcdy to the production and distribution o f products and services. T h e operational or technical core is the heart o f every organization; it produces the essential outputs that keep it alive. Therefore, it is what the organization seeks to protect through the standardization o f activities. Standardization means that activities are repetitive, local i n scope, m i n o r i n consequence, and guided by operational rules.  III.4 C O N T E X T F O R A N A L Y S I S The legal boundaries within w h i c h the cooperatives operate i n M e x i c o are set out i n the General L a w o f Cooperative Organizations (1994). T h e law specifies, a m o n g others things, the basic organizational components i n a cooperative, the positions and responsibilities held by members, the range o f activities i n w h i c h cooperatives can participate, and the lines o f communication to connect cooperatives to umbrella organizations and the government. This law describes briefly i n three sections the basic structure o f the operational rules described earlier. T h e three sections are about the cooperative's regulatory chart, the responsibilities o f the general assembly, and the duties and rights o f members. H o w e v e r , the description o f the rules is so vague that each cooperative may interpret these rules according to their o w n interests and experience, and complement them with traditional rules that do not contradict the official regulations. Some o f the most significant rules are those concerning eligibility (in three articles), w h i c h outline the conditions for excluding members and h o w they can apply for reconsideration. T h e only decision rule that appears i n one article is the majority rule to make decisions during the general assembly. General discussion o f payoff, information, and position rules appear i n two articles, and o f authority rules i n one article. N o other type o f rule is specified i n this law. 30  In this section, I also illustrate the basic structure o f a cooperative as defined by the law above mentioned. Figure II.2 shows graphically the levels at w h i c h decisions are undertaken within a cooperative, as well as their corresponding structural units. T h e b o t t o m level has n o structural units and comprises all the members not holding a position.  General Strategic level  assembly  Council o f  Council o f administration  vigilance  Bookkeeper  Secretaries  Adininistrative level  Technical control committee  Operational level  Social prevention committee.  Education committee  Arbitration committee  Membership  Figure 111:2. Decisional levels in the organizational structure offishingcooperatives in Mexico  A t the top level, the general assembly ( G A ) , w h i c h is the gathering o f all o f the members, is recognized as the supreme authority. T h e G A analyzes the performance o f the cooperative during the most recent year, a n d discusses the goals and strategies for the u p c o m i n g year. Agreements undertaken i n the general assembly apply to all members. T h e G A attempts to solve all-important problems and may use traditional rules to shape the development o f the cooperative. These traditional rules have to agree w i t h the official rules defined i n the cooperatives' charter. In the same top level, the board o f directors ( B D ) is the executive body o f the G A and w i l l represent the cooperatives i n the presence o f authorities, suppliers and buyers. Since the B D is a standing committee, it often has to make short-term strategic decisions whenever there is a p r o b l e m but it is impossible to gather the G A . Members o f the B D can be i n their position for five years and be reelected only once for the same period. Decisions at the top level include selecting the appropriate k i n d o f financial sources, defining strategies to control or have access over the harvesting, processing and trading, selecting the k i n d o f markets to deal with, and determining the m o d e l o f cooperative's growth (specialization or diversification). A n o t h e r important committee at this level is the surveillance  31  committee, whose duties are to supervise all levels o f the cooperative. T h e committee is i n charge o f ensuring that all actions undertaken by any member c o m p l y w i t h the regulations o f the cooperative. O n e or more committees and the hired administrative staff represent the middle organizational level. E a c h committee is formed by three members and can be i n charge o f technical control, cooperative education, social prevention (to prevent and attend health problems), and arbitration. Staff may include hired secretaries, bookkeepers, and administrators. Administrative decisions include where to purchase spare parts, h o w to allocate incomes to pay services, where and w h e n to contact potential buyers, h o w to manage the bank accounts, and h o w to allocate economic benefits a m o n g the members according to their daily catches. Administrative decisions are related to situations that are repeated routinely every day. Finally, all members that are not h o l d i n g a position at the top or middle levels represent the b o t t o m organizational level where only technical operations are carried out o n a daily basis. These include securing the supply o f raw material for production, transforming the raw material into products, distributing the production to the buyers, and p r o v i d i n g direct support (e.g. maintenance o f equipment) to the previous activities. There are n o w o r k i n g units and all members have equal responsibilities and rights.  III.5 M E T H O D O L O G Y III.5.1 Data collection Information regarding the independent variables, operational rules, was collected through a series o f face-to-face, semi-structured interviews with members o f boards o f directors o f 21 cooperatives. Questions focused o n the kinds o f rules these cooperatives use to regulate the personal interaction o f members and to improve the compliance o f these rules. I was also interested i n learning what kinds o f organizational structures were designed to make the rules operational. Scores o f rules were estimated as described i n Chapter II for each cooperative. T h e dependent variables regarding performance were measured i n terms o f the stated satisfaction o f members as well as the total average catch per cooperative. I designed a questionnaire to measure the level o f members' satisfaction, as described i n Chapter II. T h e level o f satisfaction was measured as the average o f overall satisfaction o f members w i t h i n a cooperative regarding all aspects o f cooperative administration, using Likert-like scales ranging f r o m 1 = very satisfied to 5 = very dissatisfied. T h e design o f the questionnaire and interviews was informed by Fowler Jr. (1995), and Czaja and Blair (1996). Information about the fish production per cooperative was obtained direcdy from the offices that the Secretariat o f Fisheries have i n the seven Communities where the cooperatives are located. C a t c h records contained information o n the amount o f K g per species, per m o n t h for each cooperative, from 1993 to 1997. I calculated an average annual catch per species for each cooperative to identify production strategies (diversification vs. specialization). A d d i n g the catch per species, I also estimated an average annual total catch per member as a measure o f effectiveness.  HI.5.2 Qualitative data analysis T h e qualitative analysis o f the data is based o n its reduction and interpretation. B y reduction and interpretation, I mean that I reduced a large amount o f information to few categories based o n the patterns o f appearance o f certain rules and organizational characteristics. I then analyzed and interpreted those categories to help answer the research questions. T h e methodology for reducing and interpreting the information involved five basic steps: (1) grouping similar or related answers into categories, (2) writing notes, (3) grouping o n the basis for external and internal conditions, (4) creating categories, and (5) creating classes o f organizational structure. I n the first step, I quickly read the transcripts from the interviews to gather first impressions f r o m the data, 32  and make major groups o f answers. G r o u p s were created after constandy comparing answers from different respondents to specific questions. O n c e I had these groups o f answers, I wrote several notes to associate thoughts as I read the interviews again, and to initiate the identification and grouping o f conditions emerging from the data, tracking them from the immediate answers from the respondents, to my notes and to these conditions. C o n d i t i o n s are the situations required for i m p r o v i n g the performance o f the cooperatives, and were grouped into general categories. T o facilitate the positioning o f cooperatives i n each category, I developed sets o f sub-categories. O n c e I had the categories, I read the transcripts o f the interviews again, and compared them w i t h the conditions created to accommodate the cooperatives presenting the same conditions i n different classes. These classes represent groups o f cooperatives that have created similar conditions to reach their objectives.  III.5.3 Statistical data analysis Spearman's coefficient o f correlation analysis was applied to determine i f there is a relationship between operational rules and performance, that is, i f the second one increases as the first one does. Regression analysis was not attempted since the relationship between independent and dependent variables is not linear and no other relation was robust enough to allow this analysis.  III.6 RESULTS 111.6.1 Data collection A s shown i n Table II.2, Chapter II, five cooperatives i n two communities, were not willing to participate i n the survey to measure the level o f satisfaction, therefore the questionnaires were applied to 155 members o f sixteen cooperatives, instead o f the target sample o f 164 members. A s these cooperatives represent two different kinds o f organizational structure, results o n satisfaction should be considered with caution. T h e total average catch per cooperative during 1993 to 1997 shows dissimilar levels o f production, ranging from less than twenty tons per. year from barely operating cooperatives, to more than four hundred and fifty tons from the most productive ones. Catches are arranged and s h o w n i n the statistical analysis subsection.  111.6.2 Qualitative analysis 111.6.2.1. Creation of conditions and categories T h e m a i n category created regarding organizational issues was organizational control (see Table III.2). This category involves the control o f cooperative tasks through well-defined lines o f authority expressed by the presence o f different w o r k i n g units w i t h specific responsibilities (Sub-category: structural units). Organizational control involves i n turn the assemblage o f different levels o f decisionmaking depending o n the type o f decision situation faced (Sub-category: level o f decision-making), and a corresponding unit o f strategic decision-making (Sub-category: unit o f strategic decision-making). T h e 'structural units' sub-category is defined by several conditions that show the kinds o f administrative units that have been established by cooperatives to delegate authority and responsibilities for the achievement o f collective objectives. T h e kinds o f units included having n o units at all, setting up the board o f directors and several cornmittees, devising an administrative unit and hiring secretaries and bookkeepers, and implementing processing, packing, and trading areas. Finally, categories were created to group cooperatives into those without any structural units, those that have some o f these units, and those that present almost all o f the units. T h e 'levels o f decision' category involves a b o t t o m level represented by members making only operational decisions concerning daily fishing activities, a middle level that involves several committees, 33  secretaries, and bookkeepers that make mainly administrative decisions, and a top level that is concerned w i t h strategic decisions to solve very important problems that may affect the development and even the survival o f the cooperative. T h e top level focused o n the next sub-category, the unit o f control, the one that makes the strategic decisions. Possible conditions ranged from no one making such decisions, or these being made by the board o f directors, the general assembly, or by an autocratic or supervisory leader. Table III.2 shows the classes o f cooperatives according to the conditions they have implemented to improve their effectiveness. Classes are described i n detail i n the following subsection. T o make a rough estimation o f h o w well, or bad, cooperatives are doing, they were compared w i t h an ideal democratic cooperative ( I D C ) , w h i c h hypothetically should have the following conditions: 1. 2. 3. 4. 5.  Setting up o f the board o f directors and four committees Setting up o f an aa'ministrative unit, hiring secretaries and professional bookkeepers Setting up o f a processing, packing, and trading unit M a k i n g operational, administrative, and strategic decisions at the corresponding bottom, middle and top levels H a v i n g democratic control  111.6.2.2. Organisational structures I defined three classes o f organizational structure based o n the qualitative analysis o f information provided by the interviewees. I called these three classes permissive, democratic and authoritative (Table III.2). T h e three classes defined here, w h i c h follow the approach o f Ross and Ross (1989), are parallel to the institutional arrangements explored, by O r b e l l and W i l s o n II (1978) i n their study o f institutional solutions for N-prisoners' dilemma. These arrangements are uncoordinated individualism, majoritarian democracy, and selfish dictatorship. E a c h class i n m y study contains two different structure types described o n a control continuum. A t one extreme, laissez-aller (unrestricted freedom) cooperatives exert practically n o control o n their members: O n the other extreme, autocratic leaders exert total control over the other members o f their cooperatives. T h e following description o f the structures explains the different levels o f decision-making and the organizational units present i n each type o f structure. T h e description also identifies the unit o f control, and relies o n the average score o f rules per type o f structure to emphasize what rules are the most significant for each type (see Table II.3). Finally, it shows the relationship between the number and type o f organizational elements and score o f rules. It is appropriate to recall that the hypothesis is that the cooperatives w i t h higher scores o f rules have more structural units, make decisions at the three different levels, have a more democratic control, and therefore are more likely to be more successful.  34  U  Q  + + + +  +  + 9  +  +  CJ  co V  •ti  CS o  u  +  O  eS <U  s  a,  w  Po- • t>i  eS u  .  w  co U  CO CO  CS  §* o  +  +  u  +  4-  +  +  73 o <u  CO  ti .ti  -a  u  cs u „ cs  <u  CJ CJ •ti  CO  -j  eS  CS  cj  o  •a-  u  Q ti  +  + +  PH  B  3  CO  CO  + +  +  +  +  r-  ti  O  o  u  §  u  •g a ' ^ u  a  CO  ti  *d o CO  fl  •fl  §  o  N  « '2 5  o •ti  ^  U co S3, 'cs CO  +  +  o  5 8  auu  u  W> cS eS ti U -ti ' co  ti  la si  O CJ  ti o  <U -ti  4)  o  . u  >  o  (J  o <u cs  o w CS  i  CJ  CS  l.s  CS  C cs  •a  O  u  •ti <S  i-i  de  4»  •a  o y  o o  Xl  a  S-I  O  a o •tl o  <u CO CO eS  <U  aCJ  ISO  «  + + +  <u .&  IT)  J  Table III.3 Average scores of operational rules among different organizational structures. Organizational structures  Rules Eligibility Decision Position Payoff  Nondirective (N=3)  Authoritative  Democratic  Permissive Laissez -aller (N=3)  Consultative (N=4)  Participatory (N=3)  Supervisory  Autocratic  (N=3)  (N=5)  15  1  14  0  10  14  If  11 12  11  33  41  56  46  Authority  Information Ecological Total  N— the number o f cooperatives i n each class  III.6.2.2..1 Permissive cooperatives In this class, organizational control o f members' actions is minimal. O n c e this m i n i m u m o f organizational control is achieved, the cooperative focuses o n mamtaining the status quo. There is practically n o organizational structure. 111.6.2.2.. 1.1Laissez-aller cooperatives Three out o f twenty-one cooperatives i n the sample are at this level o f control. Laissez-aller cooperatives exhibit the weakest type o f members' control. T h a t is, they have devised the smallest number o f operational rules among cooperatives i n Yucatan. T h e total average score o f rules is eleven. Scores for decision and information rules is zero, and for position and authority rules are only two, reflecting the lack o f a board o f directors, committees, or any other organizational unit. T h i s situation means that expectations and objectives o f the members can be satisfied w i t h a l o w organizational level. These cooperatives avoid defining responsibilities and lines o f authority, their members make mosdy operational decisions and take adaptive actions to reduce the effects o f problems but without correcting them. T h e i r only 'strategic' objective is to get fishing permits for catching lobster, but once the permit is obtained, each member works individually i n his o w n boat, and usually sells his catch to the buyer w h o finances the fishing permit fee. N o n e o f these cooperatives has administrative staff, assets or capital, and they do not hold any formal meetings. III.6.2.2..1.2 Non-directive cooperatives Non-directive cooperatives show a higher organizational level since their average score o f rules is thirty-three points, nineteen o f w h i c h are concentrated o n eligibility and decision rules. T h e average scores for position, authority, payoff and information rules are o n average tAvo-three points, not too different from scores i n laissez-aller cooperatives (see Table III.3). Therefore, these cooperatives are characterized by unclear lines o f authority, merely informative general assemblies, l o w members' participation, and weak patterns o f c o m m u n i c a t i o n i n the decision m a k i n g process. These cooperatives are focused o n maintaining the status quo; this type o f control is efficient w h e n there is n o need for change. Objectives are reduced to provide members w i t h a job opportunity and to accomplish m i n i m u m production expectations. There are n o goals to increase production or level o f organization. 36  Three cooperatives operate with this organizational structure, i n w h i c h the board o f directors performs the administrative tasks since there is n o other supporting committee or staff. Assets include the boats, engines, gears, and basic equipment to keep the catch for one day and to transport it to the buyer processing facilities.  III.6.2.2..2 Democratic cooperatives In democratic cooperatives, the general assembly is recognized as the supreme authority. Since the assembly is the gathering o f all the members, there is a more democratic control over the cooperatives' interests. Therefore, there is an increased level o f participation o f the members i n the development o f the cooperative. M e m b e r s ' participation i n decision-making is expressed through individual votes. III. 6.2.2:. 2.1 Consultative cooperatives In consultative cooperatives, there is a general increment i n the different rules average score. T h e total average score is forty-one points, fourteen o f w h i c h are for decision rules. Despite the recognition o f the general assembly as the supreme authority, the board o f directors is the effective unit o f control over the decisions that affect the whole organization. T h e board o f directors is very influential as it receives information direcdy from the extra-organizational environment w h e n representing the cooperative with the authorities and dealing with buyers and suppliers. This information is then used to influence the o p i n i o n and position o f other members regarding specific decisions. A l t h o u g h patterns o f participation are higher than i n previous levels because members share the cooperatives' problems and provide ideas and suggestions, the final decisions made by the B D may not reflect the membership's inputs. This situation corresponds to the consultative level o f citizen participation described by Arnstein (1969) i n w h i c h participants are asked for their o p i n i o n regarding a specific issue but w h i c h is finally solved without considering such opinion. T h e board tends to be ready to make changes w h e n they are required, but without previous commitment to change. Four cooperatives exhibit a consultative level o f control w i t h a number o f committees to back up the board o f directors. These cooperatives have hired secretaries and bookkeepers to perform the administrative duties. T h e value o f assets owned by consultative cooperatives is higher since gear, truck and catchicing equipment are newer and bigger; each cooperative owns its o w n building to. h o l d meetings, and to accommodate administrative offices and storage rooms. III.6.2.2..2.2 Participatory cooperatives I n participatory cooperatives, the participation o f members i n the management o f the cooperatives is at its m a x i m u m expression. Correspondingly, decision and eligibility rules scored eighteen and fifteen, respectively, are the highest scores a m o n g the cooperatives sampled. I n general, members are more willing to plan alternatives to achieve their objectives. Setting forward production goals and planning members' development i n advance are important elements for the progress o f these cooperatives. Besides regular meetings to m o n i t o r the directors' performance and to discuss any k i n d o f p r o b l e m affecting the organization, positions rules allow the set up o f committees to delegate responsibilities among members, w h i c h then have more participation i n the control o f the cooperative. Specialized staff carries out the administrative duties, always under the supervision o f the committees' members. Three cooperatives are at this organizational level, w h i c h has made it easier for them to o w n more varied and valuable assets. F o r instance, one group has processing, packing, and freezing facilities, w h i c h allows it to sell direcdy to the national and international markets. A n o t h e r cooperative manages its o w n gas station to supply about one thousand fishermen i n three fishing communities.  III.6.2.2..3 Authoritative cooperatives I n this class, the cooperatives' control depends almost entirely o n one leader whose o p i n i o n is accepted by his authority inside the group. T h e structure o f the cooperatives reflects the structure o f the  37  corporate sector, since these groups are located i n the most developed fishing community that has a business-oriented atmosphere. Cooperatives try to copy the administrative structure o f the fishing firms located i n the community, although some o f them are inactive because the leaders exerted exclusive control over the organization, using it entirely to satisfy their personal interests. III.6.2.2..3.1 Supervisory cooperatives T h e organizational structure o f supervisory cooperatives is reduced to one leader, one general administrator, and administrative staff. H e n c e , position rules' scores represent only 8% o f the total score. D u e to the small size o f these groups (less than 20 members), n o other committee is set up. T h e leader, holding the president position i n the board o f directors over a course o f five to ten years, exerts general supervision o n all the fishing processes; from preparing the vessels for catching to processing and trading o f the catches. D e c i s i o n rules comprise 2 6 % o f the total score. Because o f this concentration o f power, information, and responsibility, these groups are thought o f as the most efficient cooperatives because o f their firm-like structure. T h e leaders tend to plan their actions ahead o f time i n order to achieve the cooperatives' objectives. Administrative staff usually includes one or two secretaries and a bookkeeper supervised all the time by the leader or the administrator. Despite the fact that the leaders define production goals and strategies, they consider members' information and input to assess or to generate alternative options. This feature increases the legitimacy o f decisions a m o n g the members. Three cooperatives are identified as supervisory, two o f them o w n large-scale vessels, vehicles, offices, and processing facilities; thus are technically and financially independent. IIL6.2.2..3.2 Autocratic cooperatives • . . ' In autocratic cooperatives, the tightest control is exerted over the members. H o w e v e r , rules scores are the second lowest, fourteen o n average, because rules are highly personalized, thus constrained, to satisfy the leaders' interests. In these groups, the leader exercises a strict, close supervision o f the members and their tasks. T h e concentration o f authority and decision-making is the highest a m o n g all types o f cooperatives. T h e leaders make decisions without consulting or mforming the members. There is n o delegation o f authority; therefore, the leader's personal interests override cooperatives' interests. Administrative staff is reduced to a single secretary. Assets included mainly large-scale ships that were acquired through bank credits, but had been lost because the financial administration directed the investments to satisfy the leaders' welfare. These cooperatives had n o processing facilities, m a k i n g them entirely dependent o n the buyers to process and trade the catches. A l l o f the five autocratic cooperatives reported very l o w catches during the five-year period o f catches analyzed.  III.6.3 Statistical analysis Table III.4 shows the results o f the average overall satisfaction, the average catch and the score o f rules per cooperative. A not-so-clear association was found between the scores o f rules and performance. F o r example, some cooperatives w i t h scores o f rules ranging from 42 to 53 reported less satisfied members (average satisfaction = 2-3) than other cooperatives w i t h lower scores o f rules ranging from 28 to 40 (average satisfaction = 1.7-1.9). Similarly, despite a tendency o f higher average catches matched w i t h higher rule scores, there are some inconsistencies w i t h this relationship. F o r instance, less structured cooperatives ( C P , E C , and R L ) recorded higher catches (343, 217, 337 tons respectively) than those having a more structured organization and higher scores o f rules ( T P M with 179 tons, P S w i t h 133 tons, and C A with 17 tons). I n the next section I discuss the causes o f these discrepancies. A l l other cooperatives have lower rules' scores and reported their members as dissatisfied (4) and very dissatisfied (5).  38  Table III.4 Summary of overall satisfaction, average catch (tons), and total score of operational rules offishingcooperatives in Yucatan Total of Average Average Cooperatives Organizational Satisfaction Catch (tons) rules score structure Id  RLP  SF DB TPM PS CA PG CP EC  PvL  CCB PD CPP PI DP PII PC PCH NK E B  Participatory  n.a.  433 •  64  Participatory  2.9  484  53  Participatory  2.0  318  52  Supervisory  n.a.  179  48  Supervisory  n.a.  133  47  Supervisory  1.2 2.7  . 1 7 100  43  Consultative Consultative  3.0  343  42  Consultative  1.7  217  40  Consultative  1.7 n.a.  337  40  Non-directive  69  36  Non-directive  n.a.  • • -37  Non-directive  1.9  68  28  Autocratic  5.0  5  18  Autocratic  5.0  1  17  Autocratic  5.0  19 ,  13  Laissez-aller  5.0 4.0  0 1  12  Autocratic  .  43  35  12  Autocratic  5.0  0  12  Laissez-aller  4.0  2  10  Laissez-aller  5.0  0  10  I estimated total catch per cooperative and catch per member as direct measure o f performance. H o w e v e r , all performance measures have some inherent biases and limitations. T o t a l catch seems like a g o o d measure but it ignores the different sizes o f membership o f cooperatives. . C a t c h per m e m b e r seems reasonable, but it has disadvantages too. U s i n g total catch, a ranking o f the cooperatives, f r o m the most productive to the least productive, gives the following order: participatory, supervisory, consultative, non-directive, autocratic, and laissez-aller. O n the contrary, w h e n using catch per member, the order is different: supervisory, non-directive, participatory, consultative, autocratic and laissez-aller. That is, i n comparison w i t h the total catch per cooperative as indicator, catch per member switched the position o f non-directive' cooperatives to be more successful than democratic cooperatives. T o make productive each fishing trip, a crew o f at least two fishers, or even three w h e n catching octopus, need to be present to operate the boats. I didn't use the catch per member as an indicator o f cooperatives' performance because i n non-directive cooperatives the number o f members and boats is almost the same, indicating that there is only one member per boat. Therefore, non-members are required to operate the boats. T h i s situation overestimates the catch per member i n non-directive cooperatives. Regarding the organizational structure, the cooperatives w i t h the lowest number o f rules have the lowest control and hence the weakest organizational structure (none or few committees and administrative staff), whereas the cooperatives w i t h higher structured organization (several committees and administrative staff) have higher rules' scores. O n one extreme, the three participatory 39  organizations ( R P , S F , and D B ) accounted for higher scores o f rules, reflecting their democratic nature. A l l types o f rule are i n v o k e d during" the general assemblies and during the daily tasks to coordinate the operations o f committees, members and staff. O n the other extreme, all non-directive, laissez-aller, and autocratic cooperatives have n o administrative units and staff, hence their structure needs fewer rules to maintain a n d operate. Supervisory and consultative cooperatives are i n an intermediate position, although the former shows a higher score o f rules. T h e difference is that supervisory cooperatives have implemented more structured rules to interact w i t h intermediaries. T h e Spearman correlation coefficients estimated from the total score o f rules as independent variable and the satisfaction and average catch as dependent variables are Ro=0.68 for satisfaction and R o 0 . 8 6 for average catch. Because o f these coefficient values, it is possible to say, according to the :r:  sample analyzed, that there is a positive relationship between performance and operational rules. Put i n other words, it is possible to assert that there is a tendency for the cooperatives w i t h higher score o f rules to have more satisfied members and to report higher levels o f production. III.6.4 Operational rules in action: a democratic decision-making I describe the way decisions should be made i n a democratic cooperative organization to make the application o f operational rules more understandable. There are at least four decision-making situations that cooperatives i n Y u c a t a n have to deal w i t h depending o n the type o f organizational structure. T h e situations can be: 1.  organisational strategic when, important decisions are made during the general assembly, as i n  2.  participatory cooperatives; individual strategic w h e n relevant decisions are made by individuals, as i n supervisory cooperatives;  3.  group administrative w h e n the board o f directors make mosdy administrative decisions, as i n n o n -  4.  individual operational w h e n members make only individual decisions related to their fishing activity, as i n laissez-allure a n d autocratic cooperatives. .  directive and consultative cooperatives, and  Therefore, the general assembly, the leaders, and the board o f directors can be considered as the units o f control i n different cooperatives. T h e cooperatives m a k i n g organizational and individual strategic decisions also make administrative and operational decisions at the corresponding middle and b o t t o m levels. T h e cooperatives m a k i n g group administrative decisions also make operational decisions at the b o t t o m level. T h e cooperatives m a k i n g individual operational decisions make n o other k i n d o f decision.  I describe only organizational strategic decisions to illustrate the implementation o f  operational rules. T h e other three types o f decision-making are described i n detail i n A p p e n d i x E . 111.6A.1. Strategic organisational decision-making A  descriptive m o d e l o f organizational decision-making explains h o w cooperatives make strategic  decisions concerned w i t h the achievement o f collective goals.  T h e m o d e l assumes that the general  assembly is recognized as the major authority. T h e m o d e l was developed based o n the descriptions made by the interviewees and o n the Ross and Ross (1989) and Fisher (1974) models. Figure II.3 depicts the three phases o f the decision-making process.  I n the first phase, before the general  assembly, a p r o b l e m is identified mainly concerning the failure o f achieving a specific collective goal. Information rules define the authorized channels o f communication between members  o f the  cooperative h o l d i n g different positions. Information rules also specify the way information has to be transmitted (language and form) from those concerned w i t h the identified p r o b l e m to the board o f directors, and from this to the rest o f the members.  40  N e x t , using authority rules, the board o f directors has to set an agenda to discuss the problem, propose alternative solutions to it, and determine what structural units are going to implement the solution adopted. T h e same board carries out the procedure to call for the meeting, defining the date and time. In the second phase, during the assembly, there are i n turn three stages to reach a consensus and actually make a decision. T h e stages are information, discussion, and emergence o f a decision. I n the information stage, the members take a tentative position because they might have a partial information or understanding o f the decision situation. Therefore, this stage serves to ask for and receive information, w h i c h has to be, under information rules, clear and reliable. Information should provide the members w i t h directions and ideas to support or reject alternative solutions to the problem. In the discussion stage, at least three coalitions emerge: those w h o support and those w h o oppose the decision proposals, and a non-participatory coalition. Therefore, negative-positive interactions are always present i n the development o f any cooperative. T h e non-participatory coalition does not actively engage i n the discussion between the other, two coalitions, typically playing a spectator role. . H o w e v e r , this coalition can be gready important w h e n it comprises most o f the members: i f they have to take a position and vote, they w i l l determine the final decision. Therefore, the 'pro' and 'con' coalitions have to be talented i n formulating convincing arguments i f they want to succeed i n the decision process. Still at the discussion stage, a consensus may arise regarding the setting o f the solution. Members may. realize that the solution can be found internally and that the cooperative has the means and resources to implement a specific solution. O n the contrary, members may find out that the solution is external to the cooperative, and they have to deal with the environment to reduce or eliminate the problem. It may happen as well that the solution has a combination o f b o t h internal and external conditions i n w h i c h case m i x e d actions and means have to be implemented. Scope rules play an important role at this stage because these specify the set o f means and actions, and their costs, the cooperative considers as acceptable. I f the solution is internal, the p r o b l e m may be divided into sub-problems and either assigning them to w o r k i n g units for specific solutions, or attending the sub-problems at different times. T h e first o p t i o n is k n o w n as local rationality, whereas the second option as sequential attention (Cyert and M a r c h , 1963, i n C h e n , 1984). I n either case, distributional or temporal paths allow for the efficient use o f the means and resources that the cooperative has readily available to solve its problems. O n the other hand, i f the solution is external, the first action is to search for information to find the means, resources, and aid necessary to solve the problem. Authority rules are used at this point to decide the structural units (committee, aclministrative staff) that should take actions. D e p e n d i n g o n the severity o f the problem, the information search can be made simpler by seeking assistance from k n o w n sources at the local level. C o m p l e x information search involves looking for new sources o f assistance at the regional or national levels. O n c e identified, cooperatives have to negotiate w i t h the sources o f assistance, w h i c h include political, legal, scientific, social and economic agents. T h e experience o f the members influences the success o f the searching and negotiation (Chen, 1984). T h e third stage i n the second phase, during the assembly, is the decision emergence, w h e n the coalitions have expressed both 'pro' and 'con' arguments and the cooperative moves close to consensus because members are changing their o p i n i o n or because they temporarily accept the other coalition's . opinion. M e m b e r s make their position public regarding the decision situation at the end o f this stage i n the v o t i n g process. U n a n i m i t y is not necessary to make a cooperative decision since the majority rule, a decision rule, has been agreed i n most cases. T h e majority rule gives the consensual character o f  41  decision-making i n cooperatives. O n c e a decision has been made, the agreement is valid to all members, even those i n opposition and the absent ones. T h e final phase i n the decisionmaking process, after the general assembly, implies the implementation o f the appropriate action to overcome the problem, according to the agreement reached. I f the solution proposed implies costs and benefits for the members, payoff rules will help to define h o w these costs and benefits are to be distributed a m o n g members. I n this phase, there is a prescriptive component o f the decision-making process regarding organizational learning. I f the p r o b l e m is solved, the cooperative should reinforce or increase its knowledge about the definition and evaluation o f problems, and the implementation o f appropriate solution actions. T h e knowledge gained should then be applied to achieving other collective goals. I f the p r o b l e m is not solved, a new meeting is called u p o n to reevaluate the problem and identify better solutions. This feedback mechanism may help to neutralize extra-organizational disturbances and the associated risk and uncertainty. I n Chapter I V , I discuss i n more detail h o w cooperatives incorporate new knowledge to increase their ability to adapt to new extraorganizational circumstances and h o w it influences their performance.  III.7 DISCUSSION A c t i o n within and performed by cooperative organizations. is collective action. Collective action implies an interdependent aggregation o f individual choices aimed to reach a c o m m o n goal. O f course, individuals may have different and often contradictory interests. I n order to regulate the personal interaction o f self-oriented individuals and lead them towards the achievement o f c o m m o n goals, coordination mechanisms and rules have to be devised and implemented. Mechanisms and rules should focus o n individual decision as well as o n group structure and interaction. O t h e r researchers have reviewed many formal theories and models o f collective action (Oliver, 1993). O n e m o d e l that seems relevant to this study is based o n the general issue o f 'second order' problems o f collective action, such as the generation o f sanctioning and rule-creating systems. H e c k a t h o r n (1988, i n Oliver, 1993) models sanctioning systems i n w h i c h an external control agent imposes collective actions o n a group: i f any member o f the group defects, the w h o l e group is punished. T h e m o d e l shows that external sanctions can drive members either way, to enforce compliance or use their local sanctions to resist the external control agent. B y considering the central government as the external agent o f control, formal rules as the external sanctions, and locally developed sanctions as informal rules, it can be s h o w n that fishing cooperatives i n Y u c a t a n had imposed internal rules to force cooperation and reduce defection. I elaborate more o n formal and informal rules below  III.7.1 The nature of operational rules In this chapter, I a m interested i n a set o f operational rules used by more than one person to regulate decision-making and interpersonal relationships during interdependent collective actions. T h e character o f the set o f rules is defined as prescriptive and configurational. It is prescriptive because it refers to actions that are prohibited, permitted or required. I n this way, rules structure particular situations. Since rules are variables that can be changed and are used to structure situations, it is then possible to modify these situations by changing the rules. Theoretically, operational rules may be modified i n order to change the structure and internal personal interrelationships o f any organization (see O s t r o m , 1986). T h e set o f operational rules I analyzed i n this chapter is configurational because they joindy affect the structure o f situations. Configuration means that the operation o f one rule depends  43  u p o n the operation o f the other rules i n the set. Thus, authority rules that define delegation o f authority from the board o f directors to the administrative level to the operational level should be complemented w i t h position rules to define what structural units should h o l d authority o n a particular matter. C o m p l e x organizations, because, o f their size (democratic cooperatives) or their diversification (supervisory cooperatives), have set up more committees w i t h authority to coordinate more complicated relationships among an increased number o f members w i t h a more diversified range o f activities. Similarly, payoff and eligibility rules may act together as a barrier or an incentive for potential members. Harder eligibility criteria, small rewards and tougher penalties (as i n democratic cooperatives) may prevent fishermen from joining a cooperative. Flexible eligibility criteria, large rewards and few or no penalties (as i n laissez-aller cooperatives) may i n turn induce fishermen to participate i n a cooperative. T h e methodological consequence o f the configurational character o f the operational rules is that a researcher needs to specify a set o f rules, instead o f a single rule, as the unit o f analysis. Operational rules are norms that can not be studied separately. Instead, w h e n changing a rule, theoretically and practically, it is necessary to consider carefully w h i c h other rules may be affected or should be modified and h o w the outcome relationships or situations may change. Thus, w h e n the question is h o w to change an organizational structure (as a particular situation) it is necessary to k n o w w h i c h set o f operational rules determine, a m o n g other factors, that structure (see O s t r o m , 1986).  III.7.2 Rules, structures and performance T h e partially n o n - c o n f o r m i n g results s h o w n i n Table III.4 between rule scores and performance can be explained i n at least two ways. T h e first is that satisfaction o f members and collective goals may be achieved w i t h a few operational rules and a lower organizational structure. F o r instance, members o f non-directive cooperatives have reached individual goals with fewer, simpler rules, and have matched them with cooperative's goals. Routine activities o f members are focused o n production and consequendy, decision-making rules are not directed to best outcomes, but to satisfactory ones. T h e administration o f these cooperatives is conducted i n fact by the intermediary, whose administrative structure and capabilities are more developed. Transferring their administration to intermediaries provides less structured cooperatives a two-fold benefit. First, there is n o need to set up committees or hire external staff; and second, being i n charge o f the processing arid commercialization o f the catches the buyer absorbs uncertainty from the market. B o t h situations allow the cooperatives to concentrate o n p r o d u c t i o n and.to protect the operative tasks from disturbances. Consequendy, however, the connections between organizational levels are weak, developing a loosely coupled system (Weick, 1966, i n H o u g l a n d and Shepard, 1980), whose main, i f not the only, objective is to maintain a specific level o f production. T h e second factor that may explain why more structured organizations are apparendy less efficient is cooperatives' readiness to change. F o r instance, the three supervisory cooperatives started their adaptation to a firm-like organizational structure i n the early 1990s. I n fact, one o f them re-structured its organization i n 1996. Re-strucmring was necessary since these cooperatives were performing poorly; it is since their re-stmcturing that catches have been steadily increasing. O n the contrary, the previous non-directive cooperatives have maintained their structure since their inception i n the early 1980s, w h i c h has allowed them to dominate their technical operations and keep constant catch records.  44  O n the other hand, organization size has a positive effect o n administrative intensity because the organization's structure becomes more elaborate, producing coordination problems for w h i c h the organization compensates by hiring additional admimstrative staff. Administrative intensity is defined as the relative size o f administrative personnel i n the organization (Freeman and H a n n a n , 1975). T h e participatory and consultative cooperatives are the biggest ones (100 - 200 members), thus having the necessity to create a higher number o f committees and hire professional and nonprofessional supportive staff at the middle level i n order to maintain their more complex democratic structure. D e p e n d i n g o n the relative number and complexity o f operational rules, cooperatives depend, to a varying degree, o n their o w n resources or external forces to shape their development. Internal and external dependency influences, i n turn, the performance o f these groups. T h e market dependency o f consultative, non-directive, autocratic, and laissez-aller cooperatives is inversely proportional to the respective total rules' scores: the lower their scores, the higher their dependency. Autocratic and laissez-aller cooperatives depend totally o n different buyers, transferring to them all strategic and administrative decisions. Consultative and non-directive cooperatives deal w i t h the same buyer, but the reliance o n more operational rules makes consultative cooperatives more independent than non-directive ones. O n the other hand, participatory cooperatives have established exchange relations w i t h one or two buyers, but the higher number o f operational rules devised allow them to increase their influence o n , and minimize the influence from the market. Therefore, the wider the range o f rules, decisions, and options available, the more independent a cooperative is from external regulations. O n the contrary, the more dependent it is o n outsiders, the less autonomy o n decision-making and rule devising. I n summary, there is a general tendency o f Y u c a t a n cooperatives to be less effective as their autonomy decreases.  III.7.3 Informal and formal operational rules of cooperatives A s a formal organization, the cooperatives are shaped by formal rules that are designed by the central government and are stated i n the cooperatives' chart. Therefore, it is expected that all cooperatives w i l l c o m p l y w i t h these rules^ A t the same time, there is a set o f customary, informal rules characteristic to each group that make them different i n one way or another. T h u s , the particular combination o f these two sets o f rules determine the structure o f the cooperatives i n the way o f setting positions to be held by members, defining the conditions to enter to and exit from the group, and determining lines o f authority, information patterns, and payoff arrangements. T h e control that results from a combination o f rules and organizational structure gives each cooperative its distinct capabilities to achieve.its particular goals. Rules i n general are important because the interdependence o f members u p o n one another is complex. I f collective goals have to be attained, effective control within voluntary associations needs to design patterns o f social relationships that are supportive and mutually reinforcing. C o n t r o l is achieved through rules that have to be well understood by participants to be used i n any situation (Ostrom, 1986). Further, rules can be viewed as relations stiucmring these situations. I n this situational analysis, rules are not seen as direcdy affecting the participants' behavior. Rather, members use rules to determine a set o f actions or outcomes from participating i n a group. Individuals rarely expect only one outcome from being a member o f an organization (Ostrom, 1986).  45  T w o general types o f rules have governed personal interrelationships within cooperative organizations. O n e type includes informal or traditional rules, w h i c h have behind them the authority o f the society that have created them, increasing the compliance o f individuals o n what is sanctioned. Informal rules are designed i n a c o m m o n language that is understandable to any individual. This fact facilitates incLividuals' participation i n the enforcement o f the rules. Dissemination is usually done through cultural practices, such as storytelling, performances, dances, and patterns o f behavior defined locally. Informal rules pervade even social organizations' boundaries because the practical performance o f organizations is determined by the social context within w h i c h they operate (Putnam, 1992). T h e other general type o f rules comprises formal rules, w h i c h are designed by experts that use a more technical language and have control or direct access to social structures w i t h enforcement capabilities. D u e to the written nature o f formal rules, only literate people have direct access to them, but because they are fraught with technicalities, their correct interpretation is restricted to other specialists. T h e dissemination o f formal rules is transferred to a legal structure or a central administration. F o r m a l rules are often equated to laws dictated and enforced only by central governments, embedded i n highly complex legal frameworks, and being increasingly ambiguous. These characteristics make formal rules hard to understand and adopt by individuals that have followed traditional rules for generations. It is hard to say w h i c h type o f rule has been more important for the development o f the cooperative sector i n Y u c a t a n fisheries. W h a t seems reasonable to accept, according to the interviews, is that the relative compliance o f cooperatives' members is positively related to the strength o f external, formal rules and the level o f control exerted by other members. A n o t h e r external control agent that also imposes rules o n the behavior o f cooperatives is the market. Its influence has contributed to render interesting patterns o f distribution o f organizational structures along the coastal communities i n Yucatan. Spagnolo (1999) points out that cooperation becomes harder i n communities after they get i n touch w i t h developed markets. H o w e v e r , the personal (or impersonal) relationship established direcdy between the community and its organizations, and the market agents (intermediaries) has to do also w i t h the continuance or breakdown i n cooperation. F o r example, the five democratic cooperatives distributed i n the four easternmost communities have higher levels o f cooperation and compliance w i t h official and market rules because members have traditionally based their personal interactions o n strong social, production and resource c o n t r o l rules (Murphy and Solis, 1983). O n the contrary, laissez-aller cooperatives i n the westernmost community had responded to external control agents i n an entirely different manner. Access to developed markets has brought an increase i n freedom to engage i n market exchange relations o n an individual basis and this has eroded cooperation. E a c h cooperative member has become free to interrupt his relation w i t h the cooperative, to obtain credit from the intermediaries instead o f continuing to cooperate i n the credit relations o f the cooperative, and to seek particular buyers instead o f selling his catches to the cooperative. Loyalty to cooperative organizations has been drastically undermined. Market regulations have reduced the strength o f traditional rules and punishments, guaranteeing intermediaries a higher level o f production. Informal rules have been overcome by exchange transactions, reducing cooperation and collective action to the  46  point that traditional social and resource control relationships are not sustainable i n the long-, term. T h e basic process through w h i c h community informal rules are transmitted into voluntary organizations, such as cooperatives, is by imitating the success o f other community members (see Zucker, 1987). Imitating the social reality o f the community within the organizations' structure is important because it increases the flow o f societal resources and enhances longterm social stability w i t h i n (he organization. O n the other hand, the process by w h i c h formal rules are transmitted to voluntary organizations is through a normative transference o f legal rules. W h e n legal rules exert large pressure o n the social organizations, these usually protect their operational activities by isolating them from the rest o f the organizational structure, reducing its efficiency by focusing o n production (Meyer and R o w a n , 1977). F o r instance, as changes i n the legal framework for exploiting fishing resources introduced the responsibility o f fishermen to manage and plan their production, most cooperatives focused only o n production and transferred management and planning to the intermediaries. Finally, rules also arise w i t h i n the organizations. Some internal regulations are readily "institutionalized", that is, codified into operational rules and maintained without further justification and elaboration, and are highly resistant to change (Zucker, 1987). Thus, understanding particular combinations o f formal and informal rules is important to understand the structure and performance o f cooperatives.  47  C H A P T E R IV ADAPTATION ABILITY A N D PERFORMANCE IV.l INTRODUCTION Adaptation to change is a fundamental process by w h i c h entities thrive over time. W i t h i n biology, adaptation refers to both physiological and evolutionary processes. Physiological adaptation is an organismic response. to variations i n environmental parameters i n order to maintain homeostasis. Evolutionary adaptation i n turn refers to genetically based changes across generations that may result i n more efficient use o f specific environments (Alland, 1975). Anthropologists have adopted these definitions to provide analogies o f human individual processes i n cultural studies. Adaptation has also provided a framework based o n evolution and natural selection that incorporates the heterogeneity o f individual and collective h u m a n behavior (Barlett, 1980). I n organization theory, population ecology approaches focus o n competition, selection, and survival o f the fittest i n populations o f organizations. These approaches resemble D a r w i n i a n theory o f evolution i n that survival o f an organization depends o n its ability to acquire adequate supplies o f critical resources (Shafritz and Ott, 1992). T h e term adaptation does not imply that there is a best, unique o p t i m u m response to a specific environmental situation. O n the contrary, it conveys the idea that adaptation has enough positive features to re-establish equilibrium w i t h the environment, but at the same time it also has negative features. Just as biological evolution is constrained by the inherited structure o f populations, h u m a n groups and individuals are affected by inherited cultural structures (Barlett, 1980). I n fact, some authors have distinguished between individual and organizational adaptive strategies (Whitten and Whitten, 1972). T h e difference is that individual strategies are short-range choices to adjust to their environment, whereas long-range changes made by organizations are adaptive processes that involve structural reorganization. Adjustment strategies and adaptation processes are responses to different kinds o f crises between the individual or organization and the environment (Hage, 1980). Before responding to environmental changes, organizations must seek information helpful i n clarifying the choice o f response. T h e gap between the information the organization possesses and what is needed as a result o f a new relationship w i t h the environment, generates levels o f uncertainty that limit the ability o f the organization to plan and to make decisions (Galbraith, 1973). O n e o f the m a i n objectives o f any organization is to close this gap and reduce uncertainty. Changes i n the environment may be produced by different elements, w h i c h may be divided into two major categories, the technicalnatural environment, and the social, political and economic environment (Barlett, 1980). Adaptation has been analyzed at the individual level (Payne et al. 1990; Dalsgaard, 1996), as well as at the collective level, such as i n higher education schools (Peck, 1984; C a m e r o n 1984), firms (Cyert and K u m a r , 1996), and other organizations (Whetten, 1987; Cyert and M a r c h , 1988). Studies o f fast adaptation responses have been supported by the military (Payne et al., 1993). A few studies have tried to understand the influence o f a set o f adaptive responses o n cooperatives' performance w h e n adjusting to environmental disturbances. M c C a y (1980) and O r b a c h (1980) have characterized cooperatives as an adaptive mechanism for improvement o f members' economic performance, especially w h e n they depend financially o n a monopolistic group o f intermediaries. O n e set o f cooperatives' adaptive approaches, as outlined by M c C a y (1980), includes investing i n facilities, purchasing supplies, and hiring professional managers. A d a p t i v e strategies o f cooperatives to adjust to market demand and resource availability include specialization and diversification o f production (Vasquez-Leon, 1995). I n addition to economic adaptive responses, Petterson (1980) analyzes the political and social adaptation o f fishing cooperatives o n the pacific coast o f M e x i c o . A d a p t i v e psycho48  cultural characteristics, such as independence, have also been identified as mechanisms to help fishermen to cope w i t h environmental uncertainty (Poggie, 1980).  IV.1.1 Purpose of the chapter T h e purpose o f this study is to investigate h o w organizational factors influence the performance o f fishing cooperatives i n Yucatan, M e x i c o . Based o n m y empirical experience and m y review o f relevant organizational literature, I concentrate i n this chapter o n the adaptive ability o f cooperatives to respond to changes i n the extra-organizational environment as a means o f re-establishing its equilibrium with the external environment. I also analyze h o w these responses are determined by different organizational structures, and what aids and strategies cooperatives use for adaptation. T o achieve this analysis, I have developed a framework w i t h several levels o f organizational adaptive ability to classify cooperatives according to their ability to adapt. J  IV.1.2 Research question I established two main research questions i n the first chapter. These were (1) what are the major factors influencing differences i n performance o f cooperatives, and (2) h o w those factors affect cooperative performance. T o answer these questions, it is important to k n o w what k i n d o f dynamic relationships exist between the cooperatives and their social, economic, biophysical, and political surroundings.  IV.1.3 Hypothesis T o guide the answer o f the research questions, I formulated the following operational hypothesis: T h e higher the adaptive ability o f a cooperative, the more satisfied its members and the more catch reported.  IV. 1.4 Definition of terms  TV. 1.4.1. Organisational adaptation, learning and development A l l a n d (1975) defines adaptation as the ability o f a system to return to the previous state w h e n conditions permit. External changes are usually discontinuous and require some sort o f response from the organization. F o r some responses there is n o need to transform the organization from one type to another. These responses are regarded as adjustments. O n the contrary, C a m e r o n (1984) argues that for real adaptation it is necessary to modify the organizational design or its components i n order to adapt to changes i n the external environment. Hage (1980) mentions that transformation occurs only w h e n there is an imbalance between structure and performance. Thus, adjustments and adaptation as transformation o f structure will be used i n this chapter to analyze the ability o f cooperatives to respond to extra-organizational changes and to describe two major adaptation phases i n their historical development i n Yucatan. A brief distinction between organizational learning and organizational development is needed to distinguish differential characteristics o f organizational adaptation. It w i l l help to understand h o w these three processes proceed i n parallel throughout the 'history' o f any organization. A n organization follows a development plan to achieve its overall objective o f surviving. Organizational development focuses o n changes motivated from within the organization and is oriented to assess the impact o n individual attitudes and behaviors. It aims at keeping the actual direction and intensity o f development as planned ( G o o d m a n and K u r k e , 1982, i n C a m e r o n , 1984). O n the other hand, the main aspiration o f organizational learning is to improve the performance o f the organization, either from planned activities or from adaptation. Organizational learning is oriented to shape targets, such as success, w h i c h is measured by the difference between pre-established outcomes 49  and the aspiration o f the organization to those outcomes. Organizational learning is a process at the individual and organizational levels since b o t h learn, have a collective memory and experience, and design mechanisms to disseminate that experience and learning (Levitt and M a r c h , 1988). Cooperatives also have to learn to assess their o w n performance and to draw lessons from attempts to adjust to environmental disturbances.  IV.1.4.2.  Environment  There are at least two general conceptions o f the environment i n the organization theory literature. I n one representation, the environment is the flow o f information perceived by members at the cooperative's boundaries. A n essential concept i n this representation is uncertainty since the complexity and instability o f the environment flavors the information flowing into the cooperative w i t h uncertainty. T h e information search and analysis o f this environment performed by the organization can generate uncertainty as well. I n the second version the resources available represent the environment, paying less attention to the process by w h i c h members capture information. W h e n the environment is considered as a stock o f resources, an important concept is dependence o n external agents for resources (Aldrich and Pfeffer, 1976). It is intuitively appealing to expect that resources may vary from one community to another, and different structures and information systems may lead decision-makers to perceive reality differendy. Thus, the environment i n w h i c h organizations operate can be considered i n b o t h ways: as a stock o f resources available and by the way organization's managers perceive reality. H o w e v e r , i n m y study I considered the environment only as a supply o f resources (legal, financial, biological, market, and technological) that the cooperatives have to appropriate i n different ways according to changes i n this supply. T r y i n g to understand the way managers perceive reality w o u l d have led the study to a microanalysis perspective. H o w e v e r , I mentioned i n the first chapter that this perspective was not considered because it w o u l d have involved psychological and individual behavioral analyses. B o t h analyses are beyond the scope o f this study.  IV.1.5 Organization of the chapter T h e remainder o f the chapter includes three different frameworks to conclude the introduction. T h e conceptual framework identifies the variables under analysis, that is, the adaptive ability o f cooperatives and their performance, and explains h o w these variables are interrelated. F o r the explanation, the framework uses a graphic representation o f the interdependent variables. T h e n , the theoretical framework explains the different theoretical perspectives to analyze organizational adaptation. It w i l l explain two approaches to analyze the relationship organization-environment: w h e n organizations make choices and design strategies to respond to environmental changes, and w h e n the environment selects the fittest organizations and leads the weak ones to extinction. T h e operational framework will describe the relevant characteristics within w h i c h cooperatives operate i n Yucatan; the description w i l l help the reader to understand the environmental disturbances and the appropriateness o f the cooperatives' responses. I n the methodology section I briefly describe h o w the information was collected, arranged and analyzed. T h e next section shows the qualitative and statistical results. T h e final section is the discussion that focuses o n the phases o f adaptation at the cooperative's population level, the cooperatives' strategies and aids for adaptation, and the factors constraining the adaptation o f cooperatives.  IV.2 C O N C E P T U A L F R A M E W O R K Figure I V . 1 depicts the conceptual m o d e l adopted i n this paper to characterize the relationship between adaptive ability, organizational learning and development, organizational structure, and performance. T h e variables' terminology described by Davis (1985), identifies variables prior to the 50  independent variables, and intervening variables between independent and dependent variables. E n v i r o n m e n t a l disturbances are prior variables because they precede the independent variable i n time, and because. they define the adaptive ability o f cooperatives. T w o intervening variables, the organizational structure and the organizational development influence the adaptive ability. It means that cooperatives may respond differendy to the same stimuli depending o n their o w n structure, developmental plan, methods and resources available to achieve that plan. A d a p t i v e responses are actions and strategies that lead to either the achievement o f objectives or its failure. T h e level o f performance is ultimately the dependent variable under study. Whatever the performance is, cooperatives should be able to learn and apply this knowledge w h e n adjusting to new extraorganizational changes; therefore, organizational learning may be referred to as a consequent or parallel variable.  Parallel variable  Organizational learning  Independent variable  Prior variables  Performance  Adaptive responses  Environmental disturbances  Dependent variable Organizational structures  Organizational development  Intervening variables  Figure I V . l . Conceptual model for adaptation T h e independent variable, adaptive response to environmental disturbances, was classified according to the different adaptation strategies developed by cooperatives. A d a p t i v e responses vary according to the type o f disturbance, the organizational structure, and the type o f decision-making unit. T h e ability o f the cooperative to respond to external changes implies k n o w i n g h o w the cooperative adapts to new circumstances, and h o w this ability has led to different performances. A d a p t a t i o n requires a certain degree o f flexibility i n the rules, internal control for organizational development, and organizational learning capability. N o less important, availability o f financial and material resources is necessary to implement adaptive actions. T h e dependent variable is measured i n two ways: the first one is as the stated members' level o f satisfaction w i t h the general cooperative management, and the second one is the average total catch per cooperative during 1993 — 1997.  IV.3 T H E O R E T I C A L F R A M E W O R K There are at least two approaches by w h i c h organization theory tries to explain the interaction between organizations and environment. T h e analytical device to view these approaches is an "influence c o n t i n u u m " i n w h i c h one end represents the power that organizational decision-making units have to adapt to ensure survival and i m p r o v e performance. A t the other end, decision-making units have n o  51  p o w e r to adapt; therefore, the continuance o f these organizations depends o n the environment and its changing nature (Cameron, 1984).  IV.3.1 Approaches assuming substantial influence from the decisionmaking units for adaptation I n these approaches, organizations are assumed to have the power to act and influence their environment. A l t h o u g h these models recognize the importance o f extra-organizational influence and the need for organization-environment equilibrium, the existence o f a number o f strategies available to decision-making units to modify the environment and determine the success or failure o f adaptation is assumed (Cameron, 1984). T h e literature o n organizational adaptation based o n decision-makers'.actions is divided i n two major perspectives. I n the cybernetic-adaptive perspective, organizations are open, social systems w i t h always changing processes o f interactions among organizational and environmental elements (Katz and K a h n 1966). Organizations are adaptive systems that are integral parts o f the environment; they must adjust to changes i n their environment i f they are to survive. Wiener, (1948) developed a classic m o d e l o f an organization as an adaptive system by applying the concept o f cybernetics to mean multiple structures and functions o f control and information processes. T h e main concept o f cybernetics applied to adaptive organizations is self-regulation through biological, social, or technological systems that can identify problems, do something about them, and receive feedback to adjust themselves automatically (Shafritz and O t t 1992). This, perspective merges,.among others, a systems approach, strategic choice and organizational behavior. In strategic choice, organizations select alternative pathways to m o v e from one state to another (Child 1972). I n the organizational behavior, an organization is adaptive because it modifies its behavior according to its experience. B u t it is also incompletely rational because it acts u p o n imperfect and incomplete information about alternatives and their consequences. Finally, the organization is a political coalition because it consists o f individuals and groups w i t h different values and often-contradictory demands (Cyert and M a r c h , 1988). In these approaches, the environment is perceived as a stock o f resources available for the organization. T h e other perspective o f organizational adaptation is labeled "symbolic action". It focuses o n the change o f symbols, interpretations and stories as opposed to changes i n the organizational structure and technology to appropriate resources. Here, the environment is perceived as a flow o f information apprehended by members at the boundaries o f the organization. A c c o r d i n g to this conception, organization members share c o m m o n interpretations o f reality, c o m m o n symbols and stories, creating a particular cultural m a k i n g o f reality. Thus, adaptation comes w h e n members change their language, rituals, and symbolic behavior. T h i s type o f adaptation m o d e l , however, will not be discussed further because the original,design o f the thesis d i d not consider this level o f the social psychology o f •cooperatives. H o w e v e r , it is considered as an interesting approach for future research.  IV.3.2 Approaches assuming litde or no influence from the decision-making unit for adaptation These approaches are taken from the population ecology theory, w h i c h assumes that natural selection processes operate a m o n g organizations. These do not adapt to their changing environment by making decisions; instead, the environment selects a m o n g organizational forms. Population ecology theory is based i n the ecological concept o f niche, or the specific place i n the environment filled by a particular organization. T h e niche is the sub-unit o f the environment that supports the organization. T h e amount o f market, financial, legislative, technological and biological resources available to the organization determine its size. Its shape is defined by the organizational activities performed by the cooperative to appropriate those resources (see A l d r i c h and Pfeffer, 1976; H a n n a n and Freeman,  52  1977). B o t h , resource availability and the way o f appropriation determine the position and influence that a cooperative has w i t h respect to other organizations within its "population". This ecology-sociologic analogy predicts that generalist organizations —the ones performing a wider range o f activities- have more adaptation capabilities w h e n the shape o f the niche is transformed. O n the contrary, specialist organizations —those that focus to a narrow range o f activities- adapt better w h e n the size o f the niche is altered. I n other words, diversification is the strategy for successful adaptation w h e n there is a change i n the way organizations appropriate resources, whereas specialization is the successful adaptive strategy w h e n there is change i n the availability o f resources (Cameron, 1984). A final comment o n population ecology is that adaptation is meaningful only at the population level o f analysis, and that there is a selection process o f the fittest organizations driven by their environment.  IV.4 C O N T E X T F O R A N A L Y S I S Some o f the most important elements o f the external environment i n w h i c h fishing cooperatives operate i n Y u c a t a n are the legislative framework, the market and financial settings, the technological level o f fishing, and the availability o f resources. A l l o f them are briefly introduced to provide a context for analyzing the adaptive responses to disturbances i n the external environment. It is important to note that these disturbances do not necessarily appear isolated and spontaneously. T h e y may occur because o f intertwined factors. H e n c e , the adaptive responses may be progressive and have multiple unintended effects. Therefore, the following uni-dimensional disruption-response treatment is only a simplification for clarity.  IV.4.1 Legal framework T h e Fisheries L a w o f M e x i c o has endured many modifications since it was first decreed i n 1924. However, the most important changes occurred i n 1992, w h e n a series o f modifications altered its basic nature (Legal Framework for Fisheries, 1992). Before 1992, all the Fisheries L a w versions reflected the 2 7 Constitutional article, w h i c h established that all natural resources are originally Stateowned, and are given to individuals for a socially-orientated exploitation. U n d e r this condition, fishing policies were oriented to elaborate regulations to ensure the rational exploitation, preservation and social orientation (giving priority to food production) i n the appropriation o f marine resources (Fisheries L a w , Articles 1 and 2, 1986). T h e Secretariat o f Fisheries was vested w i t h the obligation o f setting the scientific and technical basis to elaborate legal regulations. T h e central legal instrument to access the fisheries was the fishing permit, w h i c h was non-transferable and was valid for two years. Similarly, a non-transferable concession was also available. E i g h t o f the most valuable species were given for exclusive exploitation to fishing cooperatives (Fisheries L a w , 1986). th  T h e situation changed drastically w h e n the most recent Fisheries L a w was decreed i n June 1992. T w o fundamental statements were erased from the previous version: 'the State has original property rights' and 'this L a w is o f public domain and social interest'. T h e juridical consequences are that the Secretariat o f Fisheries obligation o f regulating the exploitation o f marine resources is narrowed to the vague, ambiguous statement o f "establishing the allowable catch levels". T h e pivotal legal tool for accessing fisheries is n o w a transferable concession that can last from five to twenty years, or even fifty years i n the case o f aquacultural practices (Chapter II, Articles 4, 6, and 8, Fisheries L a w , 1992) (Villamar, 1994). It seems. reasonable to view this extension as giving legal assurance to potential private investors, since the "exclusivity" condition for valuable resources was abrogated i n the new law, as it stated i n its Article 7, Chapter II:  53  "The Secretariat of Fisheries could subject the granting of licenses and or permits to a process of competitive bidding for the utilization of an area, species or groups of species for commercial fishing" Other usual fishery regulations include closed seasons for lobster (March-June) and octopus (JanuaryAugust), plus m i n i m u m legal sizes, protection o f egg-carrying females and use o f legal fishing gear for all species. In summary, legal changes made the concession the central mechanism to exploit species and fishing areas, opened the possibility to private investors to get a concession since it can be transferred as a c o m m o d i t y and, consequendy, increased the competition and pressure from the market toward the cooperative sector.  IV.4.2 Market setting Before the creation o f the first cooperative i n Yucatan i n the second half o f the 1950s, markets for fishing products were developed at the local level, concentrating o n sell o f fresh and dried products i n the coast and the capital city. A s production was increased and diversified i n the early 1960s, the new market opportunities were developed and expanded. T h e market response was i n turn a growing demand for fresh and processed species, especially lobster, grouper and octopus (see Sanchez, 1995, and G o n z a l e z et al., 1989). E x p a n d i n g markets provided opportunities for investments i n processing facilities, introduction o f technological innovations, and hiring personnel for marketing activities. H o w e v e r , (Medina 1988) argues that fishermen were unprepared to take over this new situation because they had traditionally concentrated o n harvesting. A diverse group o f middlemen started buying fishermen's catches and selling them first regionally and then at the national level. T h e entry o f fish buyers redefined the local fishing market. Currendy, the market agents are fishermen, "small-scale" fish buyers, and fishing companies. O n l y 1 5 % o f fishermen are associated i n cooperatives and other similar associations. Small buyers acquire fish from individual fishermen and sell inexpensive species direcdy into the local market, whereas the most expensive ones are sold to b i g companies. These enterprises also buy the catches o f cooperatives and other fishermen associations, and possess their o w n fleets to ensure their fish supply, since they sell direcdy to the national and international markets (see Figure IV.2).  Producers  Processing and trading  Markets International  Cooperatives  (64%)  Other groups  Fishing companies (85%)  National  Small  Local  buyers (15%)  (6%)  (30%)  Figure IV.2. Commercialization relationships in the fishing market in Yucatan, Mexico 54  T h u s , fishermen are entangled i n a market structure i n w h i c h an oligopsonistic group o f m i d d l e m e n has the power to influence the species' price according to their convenience. M i d d l e m e n c o n t r o l the demand, determine the way catches have to be handled onboard, and have access to the national and international markets' information (see Blomquist et al., 1990). U n d e r this scheme, middlemen practice collusive price fixing to limit competition, and abuse their dominant position by setting l o w purchase prices and adopting strategic barriers to restrain entry o f new or outside fish buyers (see A c o c e l l a , 1998). T h e major market exchanges are original expansion o f demand i n quantity and diversification i n catch composition, the latter concentration o f demand o n basically three species, and the new relationships established w i t h the fish buyers.  IV.4.3 Financial sources W h e n cooperatives had to respond to the expanded fish product demand with increased productivity, they had to modernize their equipment. H o w e v e r , government loans were slow because o f bureaucratic processes, and expensive i n terms o f the political compromise. T h e bank loans were expensive i n terms o f the interest rates. T h e last resort was the middlemen, w h o provided fast credit w i t h 'no interest', but under the condition o f exclusive right to buy cooperatives' catches, and to have preference i n setting the prices. U n d e r this arrangement, most cooperatives were unable to accumulate enough capital to pay back their debts, then were forced to ask for more financial aid from the same buyers. This relationship has largely determined the market and financial situation o f most fishing cooperatives i n Yucatan. T h e c o m m o n financial sources that cooperatives should have are sales o f catches, financial holdings, and borrowing money, but imbalances among these three sources have led some cooperatives to cases o f financial restriction, total financial dependency, and even bankruptcy. Imbalances are described using the financial structure depicted by Dalsgaard (1996). T h e system is a series o f three boxes from w h i c h resource users can get money to carry o n planned activities. T h e cash b o x is for o n g o i n g cash payments, the assets b o x contains the current holding o f financial assets and outstanding accounts used for investment purposes, and the debt box comprises the current cooperative's debt. Imbalances can appear w h e n any o f the boxes is m u c h bigger than the other two. F o r instance, putting a high, percentage o f the profits i n the assets b o x may reduce the cash box. W h e n the assets b o x is b i g enough to invest i n durable possessions, it may cause inflexibility i n the purchasing o f short-span equipment. In summary, financial disturbances, w h i c h are mtimately linked to the market, stem from the original financial dependency o n government, banks and middlemen and, more recendy, only o n middlemen.  Table I V . l Principal technical characteristics of the cooperatives' fleet in Yucatan Large-scale Middle-scale Small-scale Characteristics Length (m)  7.3  10.1-16.7  18.3-20.0  Material  Fiberglass  Fiber glass  Fiber glass, w o o d  Gear  H o o k and line, " j i m b a "  Long-line  L o n g line  Engines  Outboard  Stationary  Stationary  Power (H.P.)  45-65  85-175  225 - 450  Catch-keeping system  Ice  Ice  Ice — freezing  Navigation system  L o r a n i n few cases  L o r a n , radar  L o r a n , radar  55  IV.4.4 Technological level O n l y four out o f the twenty-one cooperatives sampled operate large and middle size long-liners, while the other seventeen cooperatives operate small-scale boats with multiple-purpose fishing equipment (i.e. suitable to catch several species). T h e m a i n fleet technical characteristics are summarized i n Table  rv.i: T h e level o f technological development o f cooperatives is influenced by the species behavior, the physical characteristics o f the environment, the availability o f financial assets to purchase equipment, and by the need to adapt to changes i n the market preferences. Before the 1960s, fishing methods were based o n the traditional ecological knowledge produced through generations o f experience. C o m b i n i n g traditional knowledge about the target species and imagination, there was not any need for a sophisticated technology, w h i c h was more. efficient and w o u l d impact the natural processes o f the stock under exploitation. After the market expansion, fiber glass boats, outboard engines and nylon lines were introduced i n all coastal communities, plus the introduction i n one community o f large vessels operated w i t h advanced technology for navigation and harvesting. These have been the largest technological disturbances i n fishing, besides a recent attempt made by the Secretariat o f Fisheries to ban a metallic stick that is used to catch lobster.  IV.4.5 Resource availability T h e level o f resource exploitation varies for each species according to the market demand. I n this way, octopus, lobster, and grouper are the species w i t h higher demand and hence the fisheries w i t h alarming symptoms o f over-exploitation and over-capitalization. Salas and Torres (1997) conducted an analysis o f the level o f marine resources use i n the Yucatan Peninsula based o n the scientific literature. They concluded that there is n o definitive information for assessing the condition o f most stocks other than the three most important species listed above. However, because o f increased exploitation, the catch per unit o f effort has been arminishing gradually. A c c o r d i n g to several studies i n the area, the distribution o f different species is assumed to be homogeneous along the region (Yanez-Arancibia, 1994), although catch composition i n each community may provide an index o f a differential species' distribution. Changes i n the abundance and distribution o f different species are considered the major disruptions to the resource.  IV.5 METHODOLOGY IV.5.1 Data collection Information regarding the independent variable, adaptive ability, was collected through a series o f faceto-face, serni-structured interviews w i t h members o f cooperatives' board o f directors. Questions focused the kinds o f responses the cooperative usually implements w h e n there are disturbances i n the surrounding environment. I was also interested i n k n o w i n g what aids and strategies they use to implement the responses. T h e dependent variable, performance, was measured as the satisfaction o f members and as total average catch per cooperative. I designed a questionnaire to measure the level o f members' satisfaction, as described i n Chapter II. T h e design o f the questionnaires and interviews followed approaches outlined i n F o w l e r Jr. (1995), and Czaja and Blair (1996). Information about the fish production per cooperative was obtained direcdy from the offices that the Secretariat o f Fisheries has i n the seven communities where cooperatives are located. C a t c h records contained information o n the amount o f ¥Lg per species, per m o n t h for each cooperative, from 1993 to 1997. I calculated an average annual catch per species for each cooperative to identify production strategies (diversification vs. specialization). A d d i n g the catch per species, I also estimated an average annual total catch per member as efficiency measure.  56  IV.5.2 Qualitative data analysis T h e qualitative analysis o f the data regarding independent variables is based o n its reduction and interpretation. I reduced a large amount o f information to a few categories based o n the patterns o f appearance o f certain adaptive responses to extra-organizational changes. I then analyzed and interpreted those categories to help answer the research questions. T h e methodology for reducing and interpreting the information involved five basic steps: (1) grouping answers, (2) writing notes, (3) grouping for conditions, (4) creating categories, and (5) creating levels. In the first step, I quickly read the transcripts from the interviews, gathered first impressions from the data, and attempted some preliminary major groups o f answers. G r o u p s were created after constandy comparing answers from different respondents to specific questions. O n c e I had these groups o f answers, I wrote several notes with two purposes. T h e first one was to associate thoughts as Tread the interviews again or while w o r k i n g o n any other task o f m y study. T h e second purpose o f note-writing was to initiate the identification o f conditions emerging from the data, tracking them from the immediate answers from the respondents, to my notes and to these conditions. Conditions are the situations required for i m p r o v i n g the adaptive ability o f the cooperatives. Similar conditions were grouped into general categories and sub-categories. I then read the transcripts o f the interviews again, and compared them w i t h the conditions identified i n order to group together those cooperatives having similar conditions and hence having similar levels o f adaptation ability. A n additional, brief analysis identifying w h i c h cooperatives have developed a more autonomous decisionmaking format to choose their adaptation processes and w h i c h ones depend m o r e o n the external environment, specifically o n the market (intermediaries) . component, was also done. This supplementary analysis was done by comparing their degree o f autonomy f r o m intermediaries against their adaptive ability.  IV.5.3 Statistical data analysis Correlation analysis was applied to determine i f there is a relationship between adaptive ability and performance, that is, i f the second one increases as the first one does. A n analysis o f the catches per species for each cooperative was performed to illustrate h o w different strategies have been developed to adapt to the changes i n the abundance o f resources, that is, i n the size o f the niche, as mentioned i n section IV.3.2.  IV.6 RESULTS IV.6.1 Data collection Results o n data collection are similar to those s h o w n i n Chapter III,, that is, information for analyzing the independent variables was obtained from interviews w i t h 21 members o f the board o f directors o f 21 cooperatives. T h e dependent variable was analyzed w i t h information from the survey o n satisfaction, i n w h i c h 155 members o f 16 cooperatives participated. T o measure the performance i n terms o f production, the total average catch per cooperative was calculated from official records including 1993 to 1997.  IV.6.2 Qualitative data analysis T h e major category created from the analysis o f the interviews is the ability to adapt, and includes several sub-categories according to different elements o f the extra-organizational environment. These sub-categories describe what conditions (responses, aids, and strategies) the cooperatives have devised to adapt to changes o n these elements (see Table IV.2). I n the case o f the relationship w i t h the market, the responses for i m p r o v i n g the performance are creating conditions such as having freedom to sell the catches, having influence o n pricing the catches, searching for market information, and increasing 57  thek bargaining power. I n the case o f the financial situation sub-category, the response conditions relate to the balance, o f the cooperative's financial system and its reinvestment policy. W h e n changes are i n the legislative arena, conditions created as response i n this sub-category are an active or a passive lobbying for those legal changes affecting the cooperative. In the technology sub-category, the only condition found was whether or not the cooperatives i m p r o v e their catching technology. Regarding marine species, cooperatives may diversify or specialize i n the composition o f the catch, or they may propose measures to protect these species. In the aids and strategies sub-category, the types o f aid devised to improve adaptation include the creation o f scenarios to foresee what alternative settings l o o k like and make decisions based o n those scenarios. A n o t h e r c o m m o n aid is comparing themselves w i t h other cooperatives' failures and successes to, evaluate their performance and identify h o w others have solved problems. Strategies refer to concrete actions aimed to achieve adaptation. Major strategies are those i n w h i c h it is necessary to negotiate with the environment, specifically with the market and the legal elements o f it, i n w h i c h case responses are referred as political. T h e other adaptations are those :that are primarily internal, such as diversifying or specializing i n the catch composition, and expanding operations. T h e latter implies either making structural changes pr devising parallel processes. In addition, internal adaptations reflect a cooperative's maturation process because routines are institutionalized as they prove to be efficient i n achieving adaptation. Routines include rules, procedures, strategies, technologies, beliefs, frameworks, paradigms and knowledge (Levitt and M a r c h , 1988). A l l cooperatives have to cope with the market element o f the environment. In d o i n g so, adaptive strategies o f negotiating w i t h the environment are basically dealing w i t h the fish buyers, a relationship that determines to a great extent the financial, technological and biological changes i n the extraorganizational surroundings. T h e other adaptive strategy is the political response to legal changes, w h i c h also has influenced, and is influencing, the financial, technological and biological components. A s i n the previous chapter, to have an idea o f h o w well cooperatives are performing i n response to changes i n the extra-organizational environment, they were compared to an ideal democratic cooperative ( I D C ) having the following conditions. Hypothetically, this ideal cooperative has every condition to adapt effectively to the external environment (considering the conditions o f Y u c a t a n fisheries). 1. 2. 3. 4. 5. 6. 7.  H a v i n g freedom for selling the catches H a v i n g influence o n pricing the catches ; Searching for market information Increasing their bargaining p o w e r . Balancing the cooperative's financial system Reinvesting i n fishing equiprhent and other assets H a v i n g an active lobbying for legal changes .  '  .  8. I m p r o v i n g the catching technology 9. Diversifying or not the composition o f the catch 10. P r o p o s i n g measures for protecting marine species 11. Creating scenarios for solving problems 12.C o m p a r i n g their performance with other cooperatives 13. Politically negotiating legal changes 14. Institutionalizing the expansion, diversification and specialization o f operations  58  IV.6.3 Levels for adaptive ability According to table IV.2, cooperatives are grouped into four different levels of adaptation: (1) low adaptation, (2) adaptation for survival, (3) adaptation for improvement, and (4) adaptation for expansion. Rather than displaying a series of sharply differentiated levels, this grouping represents an adaptation gradient where it is possible to identify the relative position of the fishing cooperatives. At the same time, responses. may adjust to more than one disruption providing intentional and unintentional results. IV. 6.3.1. Low adaptation ' Cooperatives with low adaptation are the ones that depend more heavily on intermediaries. Because these cooperatives seek protection from middlemen to cope with the market uncertainty, they have no bargaining power; thus, they.cannot influence the price of their catches. Consequendy, their position makes it unnecessary for them to seek market information in order to look for better prices. In any case, they do not have capital or experience to search for information. Lack of capital is explained because the financial system is ill adapted to the market. The cash and assets boxes are so depleted that they lack financial reserves to be able to adjust. Put in other words, the borrowing capacity and the. ability to raise money at any rate are exhausted. Consequendy, there are no reinvestment plans. When there have been changes in the fishing legislation, these cooperatives adjust passively enough to keep their registration and to be eligible to obtain thefishingpermits. 1  59  + r-  •s a  o  •0  5 <u  I  s o •o  +  8*1 U  •c Si or a  °»  +  29  a, •a <«  3  +  a o  T3  o  <  13 13  a  a  X,  '1  •a o •o  fit  C4  O  .tr  O M  u I  CO  s  o •a  a o  u o  e  < uC  o co  u U3  i  tl  .  (5i  "2 '3  o, O  !^  hi  a-  ov  H  U  «  13 u •d  ll  o u  co  §01  a,  al  &  1  '•2  T3  P  •a * .u>  &  •§  a  CO  3  o  J3  a o  ••o u  co  u I  s CO  1'  a o  8.1  o u  i  ts 3  'So  ts  u  i  CO  o  Technologically, they have kept at the small-scale level, w h i c h allows them to catch only a reduced number o f species distributed close to the coast. Their fishing strategy regarding the resource availability is highly specialized since the catch composition concentrates more than 8 5 % o n one species (see cooperatives P C , R C , E , and N i n A p p e n d i x D ) . U s i n g the classification for cooperatives developed i n Chapter III, laissez-aller and autocratic cooperatives show l o w adaptation. F o r these cooperatives, it has brought almost n o organizational structure and catching is at the lowest level. Moreover, i n the latter cooperatives, adaptations were not as needed, showing that there are " b a d " adaptations and that, despite the pervasiveness o f their negative consequences, there was n o organizational learning to improve adjustment to future disruptions or even to correct the previous w r o n g one. M o s t autocratic groups are n o w out o f operation. YV.6.3.2. Adaptation for survival T h e cooperatives categorized as non-directive and consultative adapt just to keep their structure alive. Their responses to financial, legislative, and technological changes are almost the same as the previous cooperatives. Contrary to l o w adaptive groups, this type o f cooperative has a visible structure, and some assets, although reinvestment has concentrated i n replacement o f fishing equipment. They also have diversified more i n their catch composition, since more than 8 5 % o f it is represented by three or four species. Non-directive cooperatives ( P D , C P P , and C C B ) catch between four and eight different species i n lower proportion than 5%, whereas consultative cooperatives ( E C , C P , and R L ) catch between five and twenty-four other species (see table i n A p p e n d i x D ) . Diversification gives the opportunity to cooperatives to expand their production and to negotiate its price with the fish buyers, especially i n the case o f the expensive ones. F o r instance, P D , C P P , and C C B cooperatives catch important percentages o f yellow tail snapper that is more expensive than the lower priced grouper. IV.6.3.3. Adaptation for improvement G r o u p s i n the 'adaptation for improvement' category are more competitive than cooperatives i n the previous categories since they can influence the prices paid i n their communities. A l t h o u g h they sell almost their entire production to one buyer, they can get access to market information and have some power to negotiate prices with the buyer for the most valuable species. H o w e v e r , they have not been able to eliminate their historical financial dependency o n middlemen. T h e i r financial system is less unbalanced than i n the previous case, w h i c h allows for reinvestment i n equipment and facilities. Regarding changes i n the fishing legislation, these cooperatives actively oppose the regulations w h e n they are unfavorable for them. Interest i n technological innovations is expressed by the fact that many boat owners use simple navigation equipment to mark the most productive fishing spots. These groups have diversified their production and have proposed protective measures besides official regulations, such as reducing the entrance o f new boats i n order to safeguard local resources. •IV.6.3.4. Adaptation for expansion These cooperatives display full competition because they o w n processing facilities and have experience i n commercializing. Therefore, they have access to market information that is used to negotiate their catch price, m o s d y w i t h more than one buyer. I n d o i n g so, the groups do not depend entirely o n one single buyer, i n .acquiring financial independence. In this way, liquidity allows cooperatives to keep a l o w debt and increases their readiness to adjust i f required. These groups lobby actively w h e n proposed new regulations are likely to reduce the benefits a n d / o r increase the costs o f their activity. Since efficiency is one o f the goals set by these cooperatives, they are m o r e interested i n exploring technological innovations i n both harvesting and processing. I n an attempt to balance the efficient use  61  o f resources and their conservation, these groups have proposed protective measures. F i s h i n g strategies include diversification and specialization according to collective goals. Table IV.3 summarizes the responses and levels o f adaptation.  Table IV. 3 Ability to adapt 1 Low adaptation  2  Adaptation for survival  3  Adaptation for improvement  4 Adaptation for expansion  Market  Financial -  Seek protection No influence on price No information searching No bargaining power  Unbalanced Financial system  Seek protection Some influence on price No information searching Some bargaining power-  Unbalanced financial system  Seek independence Some influence on price Some information searching Some bargaining power  Unbalanced financial system  Full competitiveness Influence on price Control information Bargaining power  Legislative  Technology  Species' availability  Passive, limited to get permits  Status quo  Specialization  Passive, limited to get permits  Status quo  Diversification  Active lobbying, opposingsupporting fishing policies  Some interest in changing  Diversification  Active lobbying, opposing— supporting fishing policies  More interest in changing  No reinvestment  No reinvestment  Reinvestment on equipment and facilities Balanced financial system Reinvestment on equipment and facilities  Protective measures  Diversification -specialization Protective measures  IV.6.4 Cooperative influence on the adaptation process and adaptive ability I graphically associated the level o f adaptive ability and the control that cooperatives h o l d to choose and direct alternative ways to adapt to disturbances i n the external environment. I show i n Figure TV. 3 the relative position o f cooperatives i n Y u c a t a n w i t h regard to these two variables. T h e cooperatives that have more control i n deciding what adaptive actions to. take are those i n w h i c h the unit o f control, whether an individual or the general assembly, makes strategic decisions enabling the survival and advancement o f the cooperative. O n the other hand, cooperatives w i t h less control to adapt are those i n w h i c h the environment 'determines' their survival, because their dependency o n different components o f the environment is higher. I n this way, these cooperatives may miss advancement opportunities i f they do not take control over plans o f action w h e n there is a disruption i n their relationship with the environment. U n d e r this line o f analysis, participatory cooperatives and those w i t h autocratic and supervisory leaders have substantial power to make adaptive decisions. H o w e v e r , autocratic cooperatives have lower level o f adaptation. These are cooperatives w i t h n o organizational resources (structure, rules, and adaptive ability) to respond to changes i n the environment, and have a m i n i m a l influence over their surroundings. O n the other hand, laissez-aller cooperatives are the ones that are completely at the mercy o f the environment, because the market component o f the environment controls these groups.  62  T h i s situation has made them to h o l d the slightest level o f adaptation, or it is sufficient only to satisfy their goals, which seems to be just for survival.  Higher level (4) o f adaptive abilitv supervisory participatory consultative Higher control over the adaptive resnonses  L o w e r control over the adaptive nrocess  laisseza^er  nondirective autocratic L o w e r level (1) o f adaptive abilitv  Figure IV.3. Relative position of cooperatives regarding their adaptive ability and control over the adaptation process IV.6.5 Statistical data analysis A positive correlation was found between the adaptive ability o f cooperatives and their performance. T h e Spearman's rho test gave the results shown i n Table I V . 4 . These results indicate strong positive relationship between the variables. Since the correlation coefficient measures the linearity o f the relationship, members' satisfaction and average catch w i l l i n general, be higher as the adaptive ability o f the cooperative increases, w h i c h allows me to accept the hypothesis stated i n Chapter I.  Table IV.4  Adaptive ability Significant at level (1-tailed) Number of cooperatives  Overall satisfaction  Average catch  0.83  0.76  0.01  0.01  16  21  .  T h e results also reflect a higher impact o f the cooperative adaptation responses o n the members' satisfaction than o n the average catch. I n fact, I found that some cooperatives w i t h the higher level o f  63  • ability to adapt ( T P M , P S , and C A ) reported lower average catches than some w i t h less adaptive ability. (CP, R L , and E C ) (see Table IV.5).  Table rv.5 Summary of adaptive ability, satisfaction and average catch (tons) of fishing cooperatives in Yucatan Average Average Cooperatives Level of adaptive satisfaction catch (tons) Id ability RLP SF DB TPM PS CA PG CP EC RL CCB PD CPP PT KKH JMC PC PCH NK E B  4  N.a.  433  3. 3  2.9  484  2.0  318  4  N.a.  179  4  N.a.  133  1.2  17  3  2.7  100 .  3  3.0  343  3  1.7  217  4  ,  1.7  337  N.a.  69  2  N.a.  37  2 1  1.9  68  5.0  5  1  5,0 5.0  19  1 • 1  5.0  0  4.0  1  1  5.0  0  1  4.0  2-  1  5.0  0  3 2  1  .  •  '  1  IV.7 DISCUSSION T h e approach o f analyzing cooperatives from an organization theory perspective assumes that they are open, dynamic systems that adapt to environmental disturbances b o t h by the availability o f strategies to decision-making units and by the environmental influence (Hage 1980). I n the first case, greater attention is directed to the internal political decision-making processes and to the idea that organizations seek to manage or strategically adapt to their environment. Regarding environmental influence, or natural selection model, it states that environmental factors select those organizational characteristics that best fit the environment (Aldrich and Pfeffer, 1976). I n this section, I argue that the development o f the cooperatives' population i n Yucatan can be divided into two major phases, according to the source o f influence i n modifying the cooperatives' structure. T h e first phase is characterized by a great environmental influence, w h i c h leads to the appearance o f homogeneous organizations, whereas the second one is distinguished by a major influence from within the same cooperatives. I n this case, the results include the appearance o f six different organizational structures. After that, different levels o f ability o f cooperatives i n Yucatan to adapt are compared, i n light o f their 64  strategies and aids for adaptation. T h e n , the discussion is focused o n constraints for adaptation, o r o n non-responsiveness i n adapting. IV.7.1 Phases of adaptation at the population level T h e rise o f a c o m m o n legal framework uniformly influenced cooperatives' organizational structure and behavior. T h e legal framework specified many aspects that characterized the inception stage o f the cooperatives' sector i n Yucatan. A s a result, one could expect some consistency a m o n g cooperatives i n existence at that time. Cooperatives emerged as direct responses to government mandates, their technological level o f fishing, resource availability, and the development level o f the market. T h o s e factors were consistendy influencing the newly formed cooperatives to adopt the same structure and to w o r k at the same pace and intensity.  This stage, w h e n the external environment was substantially  influential o n cooperatives for adaptation, characterizes the 'coercive i s o m o r p h i s m ' described by D i M a g g i o ' and P o w e l l (1983). T h i s process arises from political, governmental influences and determines the appearance o f a homogeneous organizational structure i n all cooperatives at that time. Isomorphism is a consequence o f a stabilizing natural selection, i n w h i c h the external environment directed the appearance o f similar cooperatives because o f homogeneous extra-organizational factors. Latter, a diversifying natural selection has favored the appearance o f a 'balanced p o l y m o r p h i s m ' , w h i c h includes the emergence o f different structures i n noticeable proportions. T h i s type o f selection involves extra and intra organizational factors, whose relevant role depends o n w h i c h one has more influence i n determining adaptive responses. A s a result, there are cooperatives i n w h i c h the external environment has a substantial influence o n adapting, while i n others the environment has none or very little influence. Despite the initial similarities o f environmental factors a n d adaptive responses, it is reasonable to expect that socio-cultural differences emerge a m o n g cooperatives, even i n those located i n the same community. It may also be reasonable to expect that environmental factors change over time. I n these kinds o f changing conditions, different responses to specific environmental variations were developed by cooperatives seeking organizational stability (see D o u m a and Schreuder, 1998). A t the population level, adaptive responses led to several stable organizational forms being reached either sequentially o r simultaneously. I f the process is simultaneous, it means that stable, gradual environmental changes are present. I n the Y u c a t a n context, cooperatives i n communities with homogeneous social structure coupled with a stable a n d protective market are more likely to develop isomorphic structures. This is the case o f the two communities on the West Coast, where laissez-aller and non-directive cooperatives (each type i n one community) had emerged due mainly to an imitation process to cope w i t h uncertainty. D i M a g g i o and P o w e l l (1983) refer to this process as a 'mimetic i s o m o r p h i s m , ' O n the other hand, stable organizational forms may be reached i n a sequential trend due to gradual adjustment  o f environmental factors  (e.g. slufting i n demand, compliance o f the national legal  framework with international agreements) to organizational traits (e.g. successive political power o f coalitions, emergence o f a leader).  F o r instance, the equilibrium is reached w h e n the environmental  condition A is matched to the organizational f o r m A+.  W h e n a new imbalance occurs, a cooperative  may strive to return to the previous steady state o r to m o v e to the next environmental condition B, by adjusting its organizational structure to B+.  It may be possible that some other cooperative designs a  structure B*, w h i c h may be even more successful i n reaching equilibrium.  T h e process stabilizes  w h e n organizational objectives are met and environmental variations d o n o t force a change i n the cooperative's structure. Therefore, different organizational forms may coexist i n the same community, each o f which-may make slight adjustments i n order to preserve the equilibrium w i t h the environment.  65  T h i s situation has arisen i n the largest fishing community, where at least three different types o f cooperative's forms have emerged, namely participatory, supervisory, and autocratic. Therefore, combinations o f environmental conditions and organizational characteristics lead to viable organizational structures i n Y u c a t a n cooperatives. It is also true that some other combinations are not viable, w h i c h is consistent w i t h the strategic choice o f organizational orientation i n the sense that there are alternative organizational forms, not just one suitable for any specific set o f environmental conditions (Hage, 1980). T h e viability o f these different forms affects one's ability to assess the concept o f adaptation efficiency i n this context. It becomes very difficult to determine w h i c h organizational structure has been more effective i n adapting to their particular environment. U n d e r such circumstances, one can not easily answer i f " l o w adaptation" cooperatives are less efficient that the ones that adapt to expand their operations. O n e may think that survival is enough to exhibit adaptive efficiency i f survival satisfies members' aspirational level. T h e approach undertaken i n this study does not contend direcdy w i t h those questions, but rather emphasizes the fact that organizations change to fit their environment better without necessarily involving the idea o f progress to complex or higher forms. o f organizational structure (see the natural selection m o d e l described by A l d r i c h and Pfeffer, 1976). In one extreme, l o w adaptation cooperatives do not respond to changes nor are prepared to adapt to new changes. N o n responsiveness to change seems to be a successful survival strategy for cooperatives, w h i c h are still i n existence. O n the other extreme, cooperatives adapted for expansion are those that make gradual adjustments not only to adapt to current changes but to be ready for future ones, as long as these can be reasonably foreseen. ' V i e w i n g cooperatives at their population level, it can be said that different, simultaneous equilibria have been reached since six different organizational structures had previously been identified, although autocratic cooperatives' fate seems to be an unavoidable extinction. M o s t o f the autocratic cooperatives are n o w idle or operating at a very l o w level. A t this point, it is necessary to recall that different steady states w i t h corresponding organization-environment relationships have c o m e forth i n part because decision-making units have differential influence o n adaptation.  IV.7.2 Cooperatives' adaptive strategies and aids In this section, aids and strategies for adaptation are analyzed for each level o f ability to adapt. A s the Results section showed, laissez-aller and autocratic cooperatives had s h o w n l o w adaptation because they depend largely o n the environment for their performance, especially o n the market factor. I n seeking for the fish buyer's. "buffering action", these cooperatives had established a mutualistically beneficial relationship: the fish buyer receives a supply o f fresh, raw material at l o w price, while the cooperatives receive the immediate sale o f their catches. I n this way, cooperatives operate as a technical unit within a larger fishing firm, w h i c h has other units to process and trade the catches, and to perform admiriistrative tasks. I n addition, the buyer has the prerogative o f defining the demand. Because they are concentrating exclusively o n the technical task dimension (fishing), these l o w adaptive cooperatives do not have to deal w i t h building up an organizational structure, defining authority lines and channels o f communication, performing administrative duties, m a k i n g strategic decisions, n o r adapting to the environment. O n the one hand, this condition is convenient for them because it brings stability at l o w price and effort. O n the other hand, the drawbacks are the impossibility o f accumulating capital for reinvestment, the lack o f freedom to make changes, and the shortage o f opportunities to spread out economic benefits into their communities. 66  The. aid these cooperatives use for supporting the adaptive strategy is simply comparing their performance w i t h other's cooperatives. It is especially true i n the case o f laissez-aller cooperative since leaders expressed that it seemed that members o f the first cooperative that negotiated w i t h the market were " d o i n g well". T h u s , other groups imitated the former i n negotiating w i t h fish.buyers for an identical relationship. T h e only routine institutionalized has been then specializing i n catching exclusively one species needed by the fish buyer. A s i n the previous case, non-directive and consultative cooperatives exhibiting adaptation for survival had compared themselves for standard adaptive responses to the market environment, leading to a separate mimetic isomorphism, although these have two different strategies for adjusting to the environment. Non-directive cooperatives i n the West Coast o f Y u c a t a n are highly homogeneous, so are consultative cooperatives i n the East Coast. Adjusting strategies are the diversification o f the catch composition, and negotiating with the environment. I n the case o f the market strategy, these cooperatives also seek protection from the buyer, although i n this case the cooperatives have diversified their production. T h e dependency o n the environment is more evident o n non-directive groups' political strategy since they seek the governor's support through their federation, while, consultative cooperatives lobby actively i n addition to their o w n federation, showing more interest for solving legislative disputes. Besides comparing themselves with others, participatory cooperatives that adapt for improvement employ 'best a n d . worse' scenarios before adapting. Interestingly, scenarios include many environmental factors. Management boards explained that gaining access to or controlling processing facilities, having technological aids (computers) for administrative tasks, increasing their participation i n the design o f fishing policies, and i m p r o v i n g their bargaining power, w o u l d better the development o f their groups. A better condition was consistendy envisioned as increasing incomes to augment their members' and communities' well being. T h e insights obtained by this scenario construction, provides some basis for analysis o f the alternative consequences o f a proposed action. Negotiating with the market and political environment strategies are similar to those for the consultative cooperatives, although the political influence o f these cooperatives is higher than the previous ones. These tend to lead lobby actions and to make more proposals that are assertive w h e n c o p i n g w i t h legal changes. T h e other difference is the expanding o f operations: one o f the cooperatives got the concession to manage a gas station i n its community. A l t h o u g h it didn't imply a change i n the organizational structure, it brought the necessity o f vertically integrating the control and distribution o f fuel. H i r i n g members' relatives to operate the gas station and adding a new task to the administrative staff solved the situation.; Regarding cooperatives that adapt for expansion, i n addition to comparing themselves w i t h other cooperatives and creating scenarios, these perform information searching for supporting decisionmaking. M o s t o f the information gathered is related to extra-regional markets, w h i c h is then compared w i t h local conditions to be i n a better position for bargaining. T h e searching experience and goals o f the cooperatives' members determined the information searching (Chen, 1984), and one could add by the searching options available to members. Market and political strategies are similar to those o f previous cooperatives. E x p a n s i o n o f operations is done through vertical integration, w h i c h corresponds to their organizational development, since these cooperatives o w n processing facilities and have marketing experience. U n d e r these conditions, they control the entire fishing process, from catching to selling, but they still want to expand their market through increasing their production's quality. A t the time o f my fieldwork, personnel o f these cooperatives were taking a course o n i m p r o v i n g the processing and hygiene o f their catches, since this is a requirement established i n the 67  N o r t h A m e r i c a Free Trade Agreement. A n o t h e r institutionalized routine is the specialization o n a few numbers o f species o w i n g to the fact that they have direct access to the demand and thus k n o w first hand the preferences o f the market.'  IV.7.3 Factors constraining adaptation Success can be viewed as the agreement between what is expected and what can be done. I f a person achieves a desired objective with the resources available, that person can be thought o f as successful. Similarly, w h e n an organization needs to adapt to a changing situation, resources have to be used to reestablish its equilibrium with the environment. I f resources are sufficient, appropriate, and used wisely, it is more likely that the adaptation w i l l be successful and the equilibrium reestablished. T h e opposite situation, or non-responsiveness to adaptation, occurs w h e n there are not resources to accomplish the adaptive objective. Nevertheless, not only the lack o f resources may constrain adaptation. A series o f internal and external elements impinges u p o n a cooperative i n the possibility o f adapting. Such factors include environmental constraints, like financial dependency, and internal organization factors, like decision-makers' psychological traits, rigidity and the very same organizational " structure (Hage 1980). O n e important factor i n analyzing the performance o f decision-makers is that there are limits to knowledge and cognition. S i m o n (1955) pointed out that decision-makers pursue 'bounded' rationality. Similarly, Gahs (1996) demonstrates that under conditions o f incomplete information, it is impossible for decision-makers to rationally order alternative actions. O t h e r authors have s h o w n that decisionmakers use heuristics to make judgments. Heuristics are advantageous i n that they reduce time and effort i n making reasonable predictions from alternative ways o f action, although they can sometimes be misleading (Pious 1993). It was found through the interviews, that for most o f the management boards, incomplete approximations were enough before making a decision. This situation might be influenced by the fishers' educational level and, as corollary, the confidence they have i n their o w n experience. Leaders o f authoritative cooperatives located i n the community w i t h the highest fishing industry development, feel that making decisions i n this way w i l l increase their stature before the other members. Management staff is non-existent i n all cooperatives, and directors may rely only o n bookkeepers for administrative decisions. I n cases where leaders have been guiding the development o f the cooperative for several years, allowing for increased experience and knowledge o f the environmental conditions, biases o n judgements may be reduced (although not totally), i n supervisory cooperatives. It may also happen that decisions are biased i n a consistent way, resulting i n under or over estimation o f alternatives and their consequences. W h e n mistakes are more visible and cosdy, and resources are scarce, leaders may be isolated, ridiculed, blamed, and even sued (see Whetten, 1987). A t the same time that leaders credibility decreases, members' frustration increases, leading to a halt i n participation, communication, and the capacity for adaptation. T h i s scenario describes what happened to the autocratic cooperatives, where leaders exceeded their management abilities and also failed to change the structure o f their organizations to reflect the dominant economic institutions (fishing firms) located i n their community. A l t h o u g h there is not evidence to assess the accuracy o f group judgements, i n democratic cooperatives, where members' pattern o f participation is higher, collective m e m o r y and experience seems to increase the possibility o f reaching accurate judgements. H o w e v e r , other factors also have to be considered i n  68  judging the success o f group decision-making, such as the complexity o f the issue under consideration (Pious 1993). A n o t h e r factor that impedes adaptation is instimtionalization o f success. W h e n cooperatives have adapted well to environmental changes and continue to adjust successfully, it is more difficult to change from what experience has s h o w n to be the successful m o d e l o f responding. T h i s situation was found i n one participatory cooperative, coupled w i t h me preeminence o f one coalition's values. T h e coalition is constituted by the founders o f the cooperative, and has been guiding its development, i n one way or another, since its inception i n > 1958. Considered as the guiding force o f one o f the most successful cooperatives i n the state, this group is hesitant i n changing its approach to pursuing the cooperatives' goals and allowing new ideas i n management from younger members. N o major crisis has occurred because the environment has continued fairly stable, especially the market and the legislation. H o w e v e r , it w o u l d be interesting to see h o w well it does i f an imbalance emerges between the cooperative and its surroundings or a m o n g its w o r k i n g units. T h e most c o m m o n reason for. lack o f adaptation is the lack o f resources, mainly capital, staff, and knowledge. There is an incompatibility between what is needed to be done and what can possibly be done. It may happen that the adaptation designed is the appropriate one, but due to the lack o f resource bases it can not be partly or completely implemented. T h i s lack o f implementation could give the impression that there is n o c o m m i t m e n t to adapt, or that the response is w r o n g . T h e deficiency i n implementation may be due to scarce financial assets or to the lack o f trained personnel, as i n the case w h e n adaptation requires the purchase, import, and operation o f new technology. Extreme cases are w h e n there is not enough money even to replace the same type o f fishing equipment. K n o w l e d g e is a necessary resource also w h e n an information search is needed, or w h e n environmental monitoring is required. K n o w l e d g e increases information feedback that eventually may lead to choice o f right action or adaptation. A l l cooperatives analyzed face, to a varying degree, a lack o f resource base. T h e scarcity o f capital is mtimately linked to the financial dependency o n middlemen, and is considered to be highly important as s h o w n i n Chapter III, w h i c h deals w i t h the relationship w i t h the fish buyers. K n o w l e d g e deserves more attention o w i n g to its connection with learning and adaptation. Learning is a source o f knowledge. Learning at the organizational level, as it was mentioned i n the introduction, is history-dependent, w h i c h means that it is based o n the acknowledgement o f past experience. L e a r n i n g can be done from one's o w n experience or f r o m other people's experience (Levitt and M a r c h , 1988). W h e n it is from direct experience, or learning by doing, ah action may be chosen i f it is associated w i t h success o f reaching the objective. T h e situation corresponds to the representativeness heuristic described by Tversky and K a h n e m a n (1974), i n Pious (1993), w h i c h explains that people often make judgments "by the degree to w h i c h A is representative o f B , that is, by the degree to w h i c h A resembles B " . Inversely, an action w o n ' t be chosen i f it is associated with failure. Learning by direct experience is the most c o m m o n way o f increasing knowledge across the fishing cooperatives i n Y u c a t a n since most o f the interviewees, or i n i n f o r m a l conversations, made statements like "we won't follow this course o f action because it didn't w o r k for us", or conversely "this strategy has been very useful, so we w i l l use it as m u c h as possible". T h e other c o m m o n source o f learning is other peoples' or organizations' experiences. Mechanisms o f diffusion o f experiences are described by Levitt and M a r c h (1988), although i n the case o f Y u c a t a n the second mechanism seems to be the most important. It is the spreading o f experience or knowledge through the contact between members o f different organizations. T h e process is highly efficient especially w h e n two or more cooperatives are located i n the same community or i n nearby 69  communities, and may contribute to the mimetic i s o m o r p h i s m described above (see D i M a g g i o and P o w e l l , 1983). It also contributes to the ecologies o f learning; cooperatives are constituted by subgroups learning i n an environment where other cooperatives are adapting and learning at the same time. This circumstance offers an interesting approach for analyzing the organizational adaptation process, but escapes to the scope o f the present study. Nevertheless, diffusion is not problematic for Yucatan fishermen since there has been a high traffic o f people, and consequendy o f ideas, along the coast from pre-Hispanic times. . Finally, one factor that has not been sufficiendy addressed is setting learning as an objective rather than a by-product o f sharing experiences or information searching. V i e w i n g learning consciously as a specific outcome to be pursued may help cooperatives to i m p r o v e their structure o f k n o w i n g and experiencing. M o r e studies must be addressed to understand the obstacles and aids for i m p r o v i n g organizational learning at b o t h levels individual (leaders) and organizational (assemblies).  70  CHAPTER V T H E I N F L U E N C E O F INTERMEDIARIES O N T H E PERFORMANCE OF FISHING COOPERATIVES INTRODUCTION T h e role o f intermediaries i n the development o f fisheries, and other e c o n o m i c activities, has been amply documented (Desai and Baichwal, 1960; Stuster, 1980; A c h e s o n , 1981; M i l l e r , 1982; H a r t m a n , 1986; D e u t s c h , 1995). Intermediaries have been regarded as corrupt (Oldenburg, 1987), triumphant entrepreneurs (Rosado and R o s a d o , 1995; D e u t s c h , 1995), and as uninterested i n the full development o f the producers (Desai and Baichwal, 1960). There are cases, however, i n w h i c h intermediaries advance the performance o f producers. T h i s is especially true w h e n an intermediary depends entirely o n producers to meet marketing goals. I f the producer's performance is hampered, some intermediaries are likely to invest personnel, time and resources to increase that performance (Krause, 1999). H o w e v e r , intermediary standard behavior is to advance short-term loans to producers for purchasing short-lived p r o d u c t i o n factors. A simple definition o f an intermediary states that the person is a trader w h o handles a c o m m o d i t y between producers and consumers. U n d e r this definition, two important characteristics illustrate the type o f intermediary analyzed i n this study. O n e is the intermediary " i n between" p o s i t i o n , having direct contact w i t h the t w o other parties and hence orienting the actions at h i s / h e r convenience. T h e other characteristic is that more than passing o n a c o m m o d i t y , the intermediary may influence the social, cultural and e c o n o m i c development o f the marketing system, i n c l u d i n g the producers and consumers. Intermediaries' range o f activities includes marketing, money-lending, and p r o v i s i o n o f necessary p r o d u c t i o n inputs, and it provides them w i t h a strong bargaining p o s i t i o n that helps them to concentrate o n high e c o n o m i c margins (Hartman, 1986; D e s a i and B a i c h w a l , I960). T h e range o f activities also eases long-lasting relationships w i t h the producers because the latter can market their o w n p r o d u c t i o n successfully, thus reducing market uncertainty ( A c h e s o n , 1981). The intermediaries d o m i n a n t p o s i t i o n is based also o n the fact that producers usually concentrate o n harvesting, m a k i n g themselves financially, technically and administratively dependent. Because o f this situation, producers lack i) sufficient technical knowledge to i m p r o v e their production's quality, ii) appropriate managerial skills, iii) financial capacity for capitalization to i m p l e m e n t reinvestment and pricing policies, and iv) the capability to adapt adequately to environmental changes.  V.l.l  Purpose of the chapter  V a r i o u s types o f producers and intermediaries have established variations o f this general relationship, p r o v i d i n g distinct market p o s i t i o n to b o t h parties. T h e purpose o f this chapter is to explore and understand market factors that have contributed to differences i n the performance o f fishing cooperatives o f the Y u c a t a n state, M e x i c o . T h e chapter analyzes the relationship between the cooperatives and intermediaries from an e c o n o m i c perspective, to find out h o w this relationship has defined the development o f the cooperatives. T h e influence o f the relationship o n the performance o f cooperatives is expressed as the relative difference o n satisfaction o f cooperatives' members and the average catch reported by these organizations d u r i n g a five-year period. T h e chapter also develops categories o f market position to reflect the strategies for the achievement o f cooperative's goals. T h e central tool for data collection and analysis is a mixed-methods design that includes a survey, face-to-face interviews, personal observation, and secondary sources. T h e results 71  are discussed in terms of their empirical support for social exchange theories, their contribution of new theoretical insights into the study of cooperatives, and the implications for the management of natural resources.  V.1.2  Research questions  The heterogeneous performance of fishing cooperatives has led to two major research questions: what are the major sources of differential performance of cooperatives? A n d how do those sources affect performance? Emphasizing market influencing those sources, important questions include: What kinds of relationships exist between cooperatives and market agents? What are the strategies of cooperatives to confront such agents? What are the market systems in which cooperatives operate and what is the market influence on the performance of cooperatives?  V.1.3  Hypothesis  T o help answer the research questions, I tested an operational hypothesis to represent a particular prediction of the relation that exists among the factors under analysis. The stronger the market position of a cooperative, the more satisfied its members and the more catch it reports.  V.1.4 V.l.4.1.  Definition of terms  Intermediaries  Intermediaries, besides buyers and sellers, are an essential component of any market. Intermediaries play an important role of facilitating trade between producers and consumers of goods and services. There are different types of intermediaries, such as retailers, brokers, and middlemen. In this study, I define intermediaries as those economic agents who handle fish-based products from their producer to their consumer, and that produce similar products as well. By handling I mean that intermediaries buy, process, pack, and sell the catch of the cooperatives. The basic difference with middle-persons is that these people buy and sell products but they do not produce (Li 1998). In this chapter, I do not refer to other intermediaries, that is, middlemen or retailers, because they do not make exchange relations with fishing cooperatives.  V.l.4.2.  Market position  The position of a cooperative in the market refers here to its role as producer of raw material. The strength of the position depends on the cooperative's freedom to bargain its catches, the degree of dependency on intermediaries, and the intermediaries' willingness to improve the market position of the cooperatives. Cooperatives have established different relationships with the intermediaries, varying their strength to influence the price of their production. Thus, a cooperative has a stronger market position when it has more freedom to seek better prices and its dependency on other market agents is small; in cases of dependency, the intermediary may contribute to improve the efficiency of the cooperative.  V.1.5  Organization of the chapter  The remainder of the chapter describes three frameworks. The first one is a conceptual framework that graphically describes the presumed relationship between the independent and dependent variables. Then, the theoretical framework explains the theories used for analyzing the variables and their relationships. The last one is an operational framework that describes the relevant conditions of operation for the cooperatives in Yucatan. Next, the methodology includes details on the information gathering process and the analysis of the data. The results show the market position  72  categories and the influence o f intermediaries o n the performance o f cooperatives.  Finally, the  discussion focuses o n the current exchange arrangements i n the fishing market systems.  V.2  CONCEPTUAL FRAMEWORK  I advance the following conceptual framework as a graphical and organizational device to structure the research p r o b l e m and to identify the key variables and the presumed relationships a m o n g them. T h e factors influencing cooperatives' performance are referred to as the independent variables, whereas performance is referred to as the dependent variable. Figure V . l shows the relationship between the variables just defined. A m o n g other factors, the way i n w h i c h the independent variables are understood, designed and implemented can influence the performance o f the cooperative.  Marketing system  Dependence relations  Market position  Performance  Exchange strategies  Figure V . l . Market factors affecting the performance of cooperatives in Yucatan. T h e independent variable is the market position, w h i c h was considered because it has been s h o w n that the development o f cooperatives is often shaped by their financial dependency o n intermediaries ( A c h e s o n , 1981; M e d i n a , 1988; H a r t m a n , 1986). I n general, dependent cooperatives have n o chance to bargain over the price o f their catches, and n o opportunity to seek better prices w i t h other buyers. Consequendy, their capability to capitalize and reinvest i n p r o d u c t i o n factors is limited. O n the contrary, cooperatives that have access to market i n f o r m a t i o n and c o n t r o l over the processing and distribution o f their p r o d u c t i o n have m o r e options to negotiate better prices for their catches.  V.2  THEORETICAL FRAMEWORK  T h e general analytical framework used to analyze the role o f intermediaries i n the development o f cooperatives is social exchange theory. T h i s theory analyzes h o w the structure o f rewards and punishments i n relationships affects patterns o f interaction ( M o l m , 1991). I n order to be consistent w i t h its terminology, I regard intermediaries as buyers and cooperatives as producers. F r o m the typology developed On different exchange relations by Befu (1977), the balanced exchange relation matches the market exchange association between intermediaries and cooperatives. I n market or  73  balanced exchange, every tiling received has to be reciprocated by its customary equivalent i n a finite p e r i o d (Sahlins, 1965, quoted by Befu, 1977). A special case o f balanced exchange is a relationship o f dependence and power dominated by one o f the participants. I n this type o f relationship, the development and satisfaction o f one participant depends o n h i s / h e r ability to adjust to the other participants' needs; the dependent participant may adjust by developing reciprocal and non-reciprocal strategies. In their traditional form, exchange theories were restricted to the exchange o f positive outcomes. H o w e v e r , the study o f relations o f dependence based o n the c o n t r o l over negative outcomes is n o w widely accepted ( M o l m , 1987). E x c h a n g e o f positive and negative outcomes applies to relations i n v o l v i n g economic agents. Based o n the expectation o f reciprocity, dependence-power relations between functionally equivalent agents develop reciprocal strategies o f rewarding and punishing. O n the contrary, i n power-imbalance relations, the use o f a p o w e r advantage results i n a decrease i n reciprocity and an increase i n non-reciprocal strategies, i n w h i c h the power holder w i t h h o l d s rewards to exercise such p o w e r ( M o l m , 1991). A special case o f the power-imbalance relation is the buyer-dominated relationship, i n w h i c h the buyer dictates the development o f the producer. Buyers are active, proactive agents that determine the demand shifts. O n the contrary, suppliers are m o r e or less passive and typically reactive; their development strategies traditionally are constrained to suit the buyer's e c o n o m i c development (Lilliecreutz, 1998). H o w e v e r , producers may.develop strategies to i m p r o v e their market position. S o m e o f these strategies are designed and implemented by the producers i n the f o r m o f a supplier system (Churchman, 1968), whereas others i n v o l v e an active role o f buyers to i m p r o v e producers' performance (Krause and E l l r a m , 1997; Krause, 1999). M y analysis also considers the lack o f producers' freedom as a major characteristic o f market exchange that constrains the development o f the producers i n the buyer-dominated relationships. T h e absence o f interference by others defines the freedom to engage i n exchange relations (Preston, 1984). T h i s interference may be interpreted as market agreements reflecting a system o f manipulation and c o e r c i o n that reduces the choice o f freedom. T h e solution to acquire freedom that Preston (1984) proposes is that besides absence o f interference, an individual, before decision and action, should possess the relevant capacities and conditions for deliberate choice regarding the particular matter under consideration. Capacities are the skills, abilities, and understanding w i t h respect to particular choices, whereas conditions refers to factors i n a situation i n w h i c h an individual makes deliberate decisions and actions possible (Preston, 1984). I n this study, cooperatives' capacities refer to the understanding o f market demands and the fishing skills to maintain and increase their fish supply. C o n d i t i o n s , o n the other hand, refer to previously established relationships w i t h fish buyers and the level o f development o f the contract law. B o t h previous relations and contract law are constraining conditions for acquiring freedom. I mentioned earlier that an indirect way o f measuring cooperatives' performance is by assessing the satisfaction among members. A relevant prediction o f exchange theory is that satisfaction varies w i t h the actual value o f outcomes received relative to ah expected value ( M o l m , 1991). T h e expected value is likely to depend o n the aspirational level o f each participant i n the exchange. I n light o f this idea, l o w outcomes may be highly satisfying to an individual i f they are higher than h i s / h e r aspirational value. Therefore, i f the relative i m p a c t . o f different outcomes depend o n expectations, then the relationship between outcomes and satisfaction should vary w i t h the p o s i t i o n o f the participant i n the relationship (Lee, 1988, quoted by M o l m , 1991). Individuals i n a disadvantaged position (producers) should not only receive lower outcomes, but also expect to 74  receive lower outcomes. Individuals entering a relationship i n a disadvantaged position may still find it satisfying i f outcomes are higher than their aspirational level. U n d e r the market exchange perspective described above, I show that the relationship between cooperatives and intermediaries i n Y u c a t a n is a power-imbalance type o f social exchange, i n w h i c h one o f the e c o n o m i c agents (intermediaries) holds the p o w e r to c o n t r o l the exchange o f raw material. Therefore, the relationship involves p o w e r and dependence. D u e to their dependency, the cooperatives lack market freedom and legal support, show various degrees o f satisfaction, and report different levels o f production. M a r k e t strategies o f cooperatives vary depending o n being either i n a balanced or unbalanced relationship.  V.3  C O N T E X T FOR ANALYSIS  T h i s section presents the general fish marketing system i n w h i c h the cooperatives operate i n Yucatan. T h e first part explains the general attributes o f the relationship between cooperatives and intermediaries; the second part briefly examines the legal settings for regulating such relationship. Finally, the third part explains the existence o f the fishing market i n w h i c h producers and buyers engage i n exchange relations w i t h each other and w i t h the markets.  V.4.1  Intermediaries-producers relationship  Several characteristics describe the relationship that intermediaries have established w i t h small-scale producers. T h e most striking is that the intermediary dominates the relationship. M o r e than a horizontal association it represents a vertical dependence o f the producer o n the intermediary. T e c h n i c a l and pricing inefficiencies i n the marketing system seem to account for this situation. F r o m the technical perspective, small-scale producers often are located far away f r o m storage and processing facilities and c o m m u n i c a t i o n infrastructure is non-existent or insufficient. Low-quality p r o d u c t i o n results f r o m unsatisfactory h a n d l i n g during harvesting and landing, as w e l l as from the l o n g time spent before reaching the market, especially i n the case o f highly perishable products (Deutsch, 1995; H a r t m a n , 1986). A n o t h e r characteristic is that production's backward (supply o f production factors) and forward linkages (processing and marketing) are m o r e than often controlled by the intermediary. P r i c i n g inefficiencies arise f r o m the intermediaries financial strength to provide w o r k i n g capital, consumer goods, and p r o d u c t i o n inputs c o u p l e d w i t h the producers' inadequacy o f obtaining credits and lack o f storage, preservation, transport, and processing facilities (Hartman, 1986; D e s a i and Baichwal, 1960). Consequendy, intermediaries are i n the p o s i t i o n to d e m a n d the mortgage o f the p r o d u c t i o n or the exclusive right to buy a share o f it at the price they set (Miller, 1982). A second characteristic o f the relationship is the pervasive influence o f the intermediaries o n all aspects related and non-related to the p r o d u c t i o n process. Producers often b o r r o w money for c o m m u n i t y and familial events, and the debt adds to the one related to the p r o d u c t i o n activity. I n the absence o f any other arrangements (lack o f official regulation), intermediaries may direct the economic and even the social development o f communities i n a region, as w e l l as the character o f the local marketing system. A third characteristic is that the relationship continues for l o n g periods to the advantage o f the buyers ensuring the supply o f raw material. O n c e a producer borrows f r o m the buyer, it is extremely difficult to free the former f r o m the e c o n o m i c dependence (Desai and Baichwal, 1960). T h e situation is worsened because small-scale producers usually have a limited choice o f oudets for the sale o f (especially) highly perishable products (Hartman, 1986). O n the contrary, buyers tend to 75  operate i n a club-like e c o n o m i c organization o n a collusive basis for price setting, facing n o effective competition (Landa, 1979).  V.4.2 Legal framework for economic regulation Regulation o f the market exchange relations between cooperatives and general artd ambiguous; hence, interpretation can be discretional. It is legal framework that has contributed to the strengthening o f intermediaries. T h i s section briefly reviews three central aspects o f the antitrust legislation, taxation, and price control.  fish buyers i n M e x i c o is very precisely this attribute o f the the dominant p o s i t i o n o f market regulation i n M e x i c o :  T h e Federal L a w o f E c o n o m i c Competence regulates the contracting between e c o n o m i c agents w i t h the purpose o f avoiding m o n o p o l i s t i c practices. T h e Federal C o m m i s s i o n o f C o m p e t e n c e , depending administratively o n the Ministry o f C o m m e r c e and Industry, enforces this law. A c c o r d i n g to the law, contracts or associations w h o s e objectives are to establish exclusive advantages to one o f the e c o n o m i c agents are not legal. T h e advantages may be i n the f o r m o f i m p o s i n g prices or conditions o n producers to sell their goods. Alternatively, any other action w i t h effects w h i c h might arminish, damage, or hinder the free participation o f e c o n o m i c agents i n the market are forbidden to emanate f r o m contracts or associations (Mexican G o v e r n m e n t official information web-site, w w w . c d d h c u . g o b . m x . accessed O c t o b e r 27, 1999). Equivalent legislation and regulatory agencies are f o u n d i n India (Desai and B a i c h w a l , 1960), the U S A (Chen, 1984), and the E u r o p e a n U n i o n (Acocella, 1998). Simultaneously, w h e n trading their catches, cooperatives are obliged to c o m p l y w i t h a (not necessarily written) contract. I n general, contracts have to be bilateral (mutual agreement between the parties involved), reciprocal (both parties receive comparable benefits), and purposeful (benefits are certain f r o m the begmning o f the contract). H o w e v e r , due to market and environmental uncertainty, the contracts might also be contingent (benefits depend o n an uncertain event) (Mexican C i v i l C o d e , Articles 11792 to 1859). I n addition, the lack o f an efficient enforcement o f law has fostered the implementation o f two types o f contracts, w h i c h are not considered i n the current legislation. O n e o f these types is a verbal contract based o n mutual trust. I n this contract, conditions, due dates, and penalties for breaking the contract rely o n the customary laws prevailing i n the region. T h e other types o f contracts are adherence contracts that are based o n the c o n d i t i o n that there is n o previous agreement o n the object o f the contract and consent to its conditions. Since the d o m i n a n t agent (the intermediary) fixes these conditions, the o p t i o n for the producer is only to adhere to them. A d h e r e n c e contracts are characteristic o f m o n o p o l i s t i c markets, such as telephone service, credit cards and bank credits. T h e legal v a c u u m has made verbal and adherence contracts institutionalized i n the Y u c a t a n fishing market w i t h o u t the arbitration o f any official agency. T a x a t i o n o f cooperatives is the second legal issue that creates confusion. So far, cooperatives can apply for tax deductions for their constitution and general operations (General L a w o f Cooperative Societies) and for the purchase o f p r o d u c t i o n factors. Since the federal government has been trying to tax an increased n u m b e r o f sectors o f the p o p u l a t i o n and their activities, cooperatives are extremely secretive w i t h respect to their e c o n o m i c performance. T h i s is one o f the m a i n reasons w h y it is difficult to obtain reliable e c o n o m i c i n f o r m a t i o n f r o m them. T h e last f o r m o f market regulation is price control, w h i c h is a measure o f direct c o n t r o l that involves setting m a x i m u m and m i n i m u m prices, depending o n the objective o f the government. I f the objective is to guarantee a given i n c o m e to the producer o f a g o o d or service, the government may set a m i n i m u m price. I f the objective is to a v o i d the creation o f m o n o p o l i e s , a m a x i m u m selling 76  price may be set. B o t h mechanisms are instrurnents for increasing the allocative efficiency (Acocella, 1998). I n M e x i c o , however, the Federal L a w o f E c o n o m i c C o m p e t e n c e regulates only the setting of maximum prices (Mexican Government official information web-site, w w w . c d d h c u . g o b . m x . accessed October. 27, 1999). T h e lack o f regulation o n m i n i m u m prices has created e c o n o m i c dependency o f cooperatives o n fish buyers as the latter fix prices l o w enough to maintain the debt o f the former.  V.4.3  Fish marketing in Yucatan  T h e analysis o f the fish marketing system (FMS) is o f primary importance i n order to understand the e c o n o m i c , articulation o f fishing cooperatives to broader socio-economic systems, such as the national and international markets. Figure V . 2 shows the typical exchange arrangements operating i n the study area. Cooperatives connect to the national and international markets through the intermediaries because o f intermediaries' c o n t r o l o f the areas o f processing and marketing. T h e members o f the cooperatives, and at lower level non-members, determine the complete supply o f the cooperatives. Secrecy about catches bought f r o m non-members makes it almost impossible to assess the percentage o f the reported p r o d u c t i o n c o m i n g from outsiders. R e c o r d s f r o m one cooperative i n 1997, however, showed this percentage as 3 0 % o f its p r o d u c t i o n rate. Therefore, the e c o n o m i c behavior o f cooperatives allows v i e w i n g t h e m as intermediaries, b u y i n g catches f r o m fishermen and selling t h e m to other intermediaries. F i s h buyers and cooperatives are not the only intermediaries i n Y u c a t a n . T a b l e V . l shows the p o o l o f intermediaries that operate i n the overall F M S . T h e scale o f operations and the range o f activities is the base o f the hierarchization. T o have an idea o f the different scale at w h i c h private and social sectors operate, f r o m 1993 to 1997 the former caught 8 2 . 1 % o f the total catch, cooperatives caught 8.2%, while other organizations caught the remaining 9.7%. F i s h i n g firms concentrate almost the entire fish p r o d u c t i o n o f the state for commercialization. I n 1997 they processed about 41,500 tons o f fish-based products, representing a landing value close to $570 m i l l i o n pesos ( S E M A R N A P , 1998). A t the first level, private fishing firms are i n c o n t r o l o f the w h o l e fishing process. S o m e engage i n the supply o f necessary p r o d u c t i o n inputs and m o n e y lending to fishermen, specifically those firms whose fleets are reduced to a few boats that depend substantially o n the producers for their supply o f fish. O n the contrary, fishing firms o w n i n g large-scale fleets depend entirely o n their o w n harvesting assets, thus money-lending is u n c o m m o n and limited to the financing o f producers' fishing trips and recovered immediately after the catches are sold.  Table V . l Fishing intermediaries, and their range of activity, in Yucatan Level First  Second  Third  Type of intermediary  Activity range  Fishing firms  Harvesting, transporting, freezing,  •  Large fleet  processing, exporting; money-lending  •  Small fleet  Small buyers  Harvesting, ice-storing, transporting,  •  Individual buyers  trading; money-lending  •  Fishermen's organizations  Retailers • Public market vendors • Street vendors  Trading  77  E x t r a regional markets  F i s h buyers  Fishing organizations  _t  Nonmembers  ~ "  Members  Figure V.2. Typical fishing exchange arrangements in fishermen organizations in Yucatan Small fish buyers represent the second level and include individuals and social sector fishing organizations. I n b o t h cases, the range o f activities is reduced to money lending, ice storing, transporting and trading the catches w i t h first level intermediaries. T h e m a i n differences between individual and collective small buyers are that individual buyers w o r k alone and do not o w n their boats, engage i n trading for. capital accumulation, and lend m o n e y (charging an interest w h i c h is recovered through fixing the price o f the catches). Cooperatives and other fishing associations, o n the other hand, are organizations o w n i n g their boats and fishing equipment, engaging i n trading to finance the satisfaction o f the members' daily needs, and l e n d i n g m o n e y to members without charging any interest. Retailers constitute the third level and include p u b l i c markets and street vendors. T h e former buys fresh fish products every m o r n i n g and sells t h e m the same day. E a c h v e n d o r i n the p u b l i c market sells approximately 100 K g at most per day. Street vendors are an interesting p h e n o m e n o n whose presence has increased since the beginning o f the 1990s, and w h o s e origin can be traced back to the t w o westernmost fishing communities i n the coast o f Y u c a t a n . W o m e n f r o m these two communities buy different species o f fish direcdy from fishermen after their daily fishing trip. A l t h o u g h there is n o t a clear pattern o f kinship, it seems that the w o m e n engage i n a l o n g lasting relationship w i t h specific fishermen for ordering their supply. T h e fish are processed, stored, iced at the household level, and sold the next m o r n i n g i n the capital city. V e n d o r s transport the filets i n buckets by bus, and offer them d o o r by door. T h e scale o f these operations is obviously l o w , between fifteen a n d twenty kilo a day. T h e number, o f vendors w o r k i n g at this level is u n k n o w n , as this type o f activity still remains unregulated. T h e c o n n e c t i o n that intermediaries carry out between producers and consumers is different at each level (see Figure V . 3 ) . T h e role o f retailers is to connect individual fishermen to the local market; relative to the total p r o d u c t i o n , the sale through this type o f intermediary is insignificant, accounting for 1.7% o f the total. Small buyers and most social sector organizations relate to the national and international markets through first level m i d d l e m e n (fishing firms). A d d i n g their o w n p r o d u c t i o n , the latter concentrate 8 2 % o f the harvesting, and process and commercialize m o r e than 9 5 % o f the total p r o d u c t i o n . O n l y two cooperatives sell regularly and direcdy to the national market and sell a m i n o r p r o p o r t i o n to the local market.  78  Producers Individual fishermen  Intermediaries  Consumers  Retailers  Small buyers  Cooperative members  Cooperatives  I Private firms  Private firms  National  International  Figure V.3. Articulation between producers and consumers through intermediaries (thicker arrows concentrate production and commercialization) V.5  METHODOLOGY IV.5.1 Data collection  Information regarding the independent variable, market p o s i t i o n , was collected through a series o f face-to-face, semi-structured interviews w i t h members o f cooperatives' b o a r d o f directors. Questions focused o n what type o f relationship the cooperatives have established w i t h market agents, especially w i t h intermediaries. I was also interested i n k n o w i n g the market strategies developed by these groups. T h r o u g h the analysis o f secondary sources o f information, I wanted to identify the fishing marketing system operating i n Y u c a t a n . Regarding the dependent variable, performance, it was measured as the satisfaction o f members and as total average catch per cooperative. I designed a questionnaire to measure the level o f members' satisfaction, as described i n Chapter I. T h e design o f the questionnaires and interviews was done following F o w l e r Jr. (1995) and Czaja and Blair (1996). Information about the fish p r o d u c t i o n per cooperative was obtained direcdy from the offices that the Secretariat o f Fisheries has i n the seven communities where cooperatives are located. C a t c h records contained i n f o r m a t i o n o n the amount o f K g per species, p e r m o n t h for each cooperative, f r o m 1993 to 1997. I calculated an average annual catch per species for each cooperative.  IV.5.2 Qualitative data analysis T h e qualitative analysis o f the data is based o n a process o f reduction and interpretation. B y reduction and interpretation, I mean that I reduced a large a m o u n t o f information to few categories based o n the patterns o f appearance o f certain characteristics o f cooperatives regarding their position i n the fish market i n Y u c a t a n . I then analyzed and interpreted those categories to help answer the research questions.  79  T h e methodology for reducing and interpreting the i n f o r m a t i o n i n v o l v e d five basic steps: (1) grouping answers, (2) writing notes, (3) g r o u p i n g for conditions, (4) creating categories, and (5) creating levels. I n the first step, I read quickly the transcripts from the interviews to have first impressions from the data, and make major groups o f answers. G r o u p s were created after constandy c o m p a r i n g answers f r o m different respondents to specific questions. O n c e I have these groups o f answers, I wrote several notes to initiate the generation o f conditions that emerged f r o m the data, tracking them from the immediate answers from the respondents, to m y notes and to these conditions. C o n d i t i o n s are the situations required to i m p r o v e the performance o f the cooperatives, and were grouped into general categories. O n c e I had the categories, I read the transcripts o f the interviews again and compared t h e m w i t h the conditions created to accommodate the cooperatives presenting the same conditions into different levels. These levels represent groups o f cooperatives that have created similar types o f conditions to reach their objectives hence having different market position.  IV. 5.3 Statistical data analysis T h e statistical analysis o f the data collected i n v o l v e d the application o f correlation analysis to determine i f there is a relationship between market p o s i t i o n and performance, that is, i f the s e c o n d one increases as the first one does.  V.6  RESULTS  Different patterns o f exploitation o f marine resources, besides their distribution and abundance, depend o n the technological advancement o f the fishing equipment and the relationship established a m o n g e c o n o m i c agents w i t h i n the fishing industry (Medina, 1988). Fishers have played a reactive role that has eased the intermediaries influence, influencing the development o f the cooperatives as well as the fishing marketing system. D i f f e r e n t groups o f intermediaries dominate the relationship w i t h cooperatives i n particular fishing communities, determining patterns o f market exchange a n d fish market systems. T h i s section presents the assessment o f the level o f satisfaction and fishing performance for each cooperative according to four strategies for exchange association between first level intermediaries and fishing cooperatives i n Y u c a t a n . These strategies were equated to the market position o f the cooperatives. T w o marketing systems are described to frame these fishing exchange relations. T h e next subsection describes the role that, as intermediary, the M e x i c a n government h a d i n recent years, a c c o r d i n g to the leaders o f two cooperatives. T h e last part o f the section presents the statistical analysis o f the data.  V. 6.1 Data collection Information to analyze the independent variable was collected f r o m twenty-one interviews w i t h representatives o f the same n u m b e r o f cooperatives. I n the case o f the dependent variable, to measure the level o f satisfaction, 155 questionnaires were applied to members o f sixteen cooperatives. F i v e cooperatives i n t w o communities, representing two different types o f organizational structure, were not w i l l i n g to participate i n the survey. Therefore, results o n satisfaction should be considered with.caution. T h e total average catch per cooperative during 1993 to 1997 shows a^ssimilar levels o f p r o d u c t i o n , ranging from very few annual tons from barely operating cooperatives, to m o r e than four h u n d r e d and fifty tons from the most productive ones. Catches are arranged and s h o w n i n the statistical analysis section.  80  V.6.2  Qualitative data analysis  V.6.2.1. General characteristics of thefishmarket A n oligopsonistic market structure and the coexistence o f a group o f capital-intensive industries a n d many labor-intensive social organizations characterize the fishery sector i n Y u c a t a n . T h e industries are family-based o w n e d a n d different first level intermediaries manage each o f them. Rather than investing direcdy i n developing the state's fishing infrastructure, intermediaries have invested i n technologically a'dvanced p r o d u c t i o n factors to ensure their personal c o n t r o l over the w h o l e fishing process (see R o s a d o a n d R o s a d o , 1995). BuUding access roads, docks, fishing refuges, light houses, power lines and water pipelines has been the government's responsibility. Because the government built the infrastructure to facilitate the m o v e m e n t o f raw material to the capital city a n d to the m o s t developed coastal c o m m u n i t y , there is n o h o r i z o n t a l articulation a m o n g the other fishing communities (Villanueva, 1990). T h e c o m m e r c i a l orientation o f the fishery started i n the beginning o f the 1950s w i t h a series o f legal changes that sought to increase the c o n t r o l o f the fisheries by M e x i c a n individuals a n d enterprises. A s the demand increased, diversified, a n d expanded to extra-regional markets, the producers h a d to rely o n intermediaries to join those markets. Intermediaries emerged exogenously (government) a n d endogenously (local intermediaries) as a response to the lack o f articulation between the producers and extra-regional markets. T h e relationships established between intermediaries a n d cooperatives have been i n m o s t o f the cases unbalanced. Because o f their large-scale fleet, fishing firms catch larger fish inhabiting deeper waters. T h i s fact, c o u p l e d w i t h higher quality i n handling a n d processing, supports their externally oriented business. T h i s situation allows the intermediaries to manipulate market i n f o r m a t i o n a n d gives them advantage to m o n o p o l i z e pricing. T h e dominant position o f intermediaries i n the fishing market results i n an irrational exploitation scheme where only few species are exploited at high rates, whereas more that twenty-five species w i t h real or potential market value are under exploited. Intermediaries are m o r e interested i n satisfying foreign consumers demand (mosdy L a t i n and Asian) w h i c h have a strong preference for lobster, groupers, octopus a n d snappers (Rosado a n d R o s a d o , 1995). T h e demand, concentrated o n these species, is then transmitted to the fishermen. F r o m the early 1970s to the late 1980s, state-owned agencies practiced external intermediation to increase employment, allocate resources efficiently, a n d promote regional development, operating alongside local private fishing firms under a m i x e d oligopsony. P u b l i c intervention was thought to make possible the achievement o f an efficient allocation o f resources, w h i c h the local intermediaries were unable to guarantee. H o w e v e r , as I showed previously, public intermediation failed because it did not generate enough e c o n o m i c surplus to finance efficient cooperatives. T h i s misallocation o f resources was the result o f inefficient management caused b y constraints i m p o s e d b y policy makers (they were m o r e concerned w i t h profit m a x i m i z a t i o n through exportation), a n d i m p r o p e r relationships between outside managers a n d local producers (Pare a n d Fraga, 1994). Besides, none o f the official measures gave fishers the appropriate knowledge and experience to articulate direcdy to the markets. T h e orientation o f public enterprises as n o t seeking profit (and even operating at a loss) was n o t pursued (see A c o c e l l a , 1998). E n d o g e n o u s intermediation emerged during the 1950s a n d has continued u p to n o w for three reasons. T h e first reason is e c o n o m i c ; the intermediaries c o u l d economize o n the transaction costs associated to bilateral exchanges. Transaction costs most frequendy i n v o l v e d i n exchange relations are searching for the g o o d o r service, negotiating an agreeable price, m o n i t o r i n g the compliance o f the agreement, a n d enforcing the traders to c o m p l y w i t h the agreement (Clower et al., 1988). T h e 81  second reason is technical because intermediaries were m o r e efficient i n establishing contact w i t h consumers and producers, than consumers and producers were i n m a k i n g contact direcdy w i t h each other. Efficiency i n m a k i n g contact a m o n g traders was due i n part to the fact that all the resources o f intermediaries were concentrated o n intermediating, not i n p r o d u c i n g . T h e advantage o f the intermediaries i n the beginning was i n trading, not i n p r o d u c t i o n . I n fact, the intermediaries' profit f r o m selling at a higher price than the price they pay for the c o m m o d i t y i n exchange ( L i 1998). T h e third reason is the way the society is structured i n Y u c a t a n . T h e m a i n characteristic o f the social structure is the possibility o f creating highly personalized relationships that makes it easier to contact producers, especially i n isolated fishing communities.. Yucatan's society has a legal framework w h i c h is p o o r l y developed; hence, high transaction costs or externalities associated w i t h contract uncertainty impede o r make it difficult i n formal exchange. T h e answer to this i m p e r s o n a l socioe c o n o m i c structure, where bilateral exchange predominates, is personalism o r particularism. E n t e r i n g i n personalistic exchange relations w i t h those traders k n o w n as trustworthy or reliable i n h o n o r i n g contracts reduces uncertainty (Landa, 1979). Personal exchange relations are facilitated by the fact that individuals are embedded i n a social structure w i t h rules that serve to constrain their behavior. T h e social structure, thus, has p r o v i d e d a solid g r o u n d to the e c o n o m i c a n d technical factors for the emergence o f local intermediation. I n advanced economies w i t h well-developed legal frameworks for contract enforcement, the institutions o f contract law facilitate impersonal exchange because o f reducing contract uncertainty. These economies portray traders as egoistic individuals w h o are completely indifferent to the interest or identity o f their trading partners. Standard theories o f exchange depict competitive trade as an impersonal process o f exchange that sets aside the transmission o f altruistic impulses between traders (Landa, 1979, Befu, 1977). F o r example, Jevens has p r o p o s e d a. " l a w o f indifference" that states that it is indifferent to the buyer or the seller w i t h w h o m they d o business as l o n g as they obtain an homogeneous c o m m o d i t y at a customary price (Jevens, 1999). Furthermore, Wicksteed's principle o f " n o n - t r u i s m " states that altruism has n o place i n e c o n o m i c transactions (Landa, 1979). T h e social structure inherent to the market exchange i n Y u c a t a n implies the existence o f norms for regulating the behavior o f intermediaries and producers, taking elements f r o m their o w n sociocultural contexts to b u i l d this structure. Intermediaries, mainly from the Capital City a n d the primary coastal c o m m u n i t y , traveled along the coast to buy fresh fish. A s the exchange was consolidating, personal interactions started to be recurrent and regular, a n d n o r m s for regulating the behavior emerged. T h e cooperative and the fish buyers set the n o r m s o f reciprocity and rules for exchange. F o r organizational development purposes, cooperatives urged their trading partners to behave based o n a n o r m o f reciprocity, appealing to the fish buyers' m o r a l duty o f rerarning the preference o f cooperatives i n selling their p r o d u c t i o n to the fish buyers. Rules o f exchange were specifically set to govern what should be given i n return i n each particular situation between trade participants. H o w e v e r , according to the interviewees, fish buyers have always applied the n o n - t r u i s m principle w h e n accepting to increase the price o f the species. T h i s behavior is associated w i t h the seasonal availability o f the species. W h e n the cooperatives demand a higher price for the less abundant species at specific times o f the year, the fish buyers agree but simultaneously reduce the price o f the m o s t abundant species. W i l s o n (1980) documents a similar behavior o f fish buyers o n the E a s t Coast o f U S A . v  N o t all relations, however, were established i n the same way. It is reasonable to expect that traders used a discriminatory screening to reduce, from all possible partners, the ones regarded as the most trustworthy. Relations then evolved based o n the partners w h o reduced uncertainty and transactions costs, b u t increased m u t u a l trust, aid, a n d reciprocity. It d i d not impede, however, 82  some relations f r o m evolving to power-dependence associations, i n w h i c h usually the fish buyer had the p o w e r over the cooperatives. T h i s p o w e r has been used to force, influence or coerce compliance or agreement. T h e amount o f p o w e r is a function o f the availability o f alternative resources from w h i c h the dependent partner can obtain the resources needed (Befu, 1977). Alternative resources include opportunities o f employment, processing service, connections to and information from extraregional markets, capital, and other material resources o n w h i c h the subordinated are dependent but do not have direct access to. E v e n though the members o f the cooperatives had skills, experience and the exclusive right to catch the most valuable species, their degree o f dependence is high f r o m the beginning given their lack o f processing facilities and marketing experience, w h i c h made it easier the fish buyers to increase their market position. V.6.2.2. Market position of cooperatives After p e r f o r m i n g the qualitative analysis o f the data, I f o u n d that the major category regarding market issues was the position o f cooperatives w i t h i n this market (see T a b l e V . 2 ) . N o subcategories were created i n this case. I identified five conditions that contribute to the position o f the cooperatives i n the market. T h e first one is whether the cooperative has the capability to negotiate the price o f its catches. This means that some cooperatives have to accept the prices fixed by the intermediaries, whereas some others may fight for higher prices. M o r e over, some are capable o f fixing the price to their convenience. T h e next c o n d i t i o n is the signing o f a contract for selling the catch previous to the season o f a ' particular species. Some cooperatives c o m p r o m i s e their catches before the fishing season based o n verbal agreements, some others d o sign a contract for the m o s t valuable species, and even others expand the contract to all the species they catch. T h e pre-season contract or agreement is linked to the next t w o market conditions. O n e is that the contract or the verbal agreement often gives the fish buyer the exclusive right to buy the catch o f the cooperative; therefore, only some groups have complete freedom to sell to w h o ever offers the better conditions o f buying. T h e other related c o n d i t i o n is that the buyer or the cooperative and the buyer have the right to enforce the exchange agreement. I n some cases, this right is exclusive to the buyers, i n some others to b o t h parties. T o m y knowledge, there is n o situation i n w h i c h the cooperative has the exclusive right to enforce the agreement. Finally, there is a c o n d i t i o n i n w h i c h cooperatives may negotiate the price o f their catches collectively or individually. Ideal democratic cooperatives ( I D C ) are assumed to be those that exhibit the following market conditions: 1. 2. 3. 4.  Having Signing Having Having  the capability o f negotiating the price o f their catches a pre-season contract to sell all the species they catch the freedom to sell their catch to the buyers offering higher prices the right to enforce the contract i f the buyer does not c o m p l y w i t h it  5.  Collectively negotiating the price o f their catches  T h u s , cooperatives having equal sets o f conditions were grouped i n four different market positions. These are the same as the strategies for market exchange described i n the f o l l o w i n g subsection. V. 6.2.3. Cooperatives'strategiesfor market exchange In the D F M S the fish buyer relies o n social sector fishing organizations for his supply. H e has financed the cooperatives to acquire boats, engines, nets, and trucks for transporting the catches to the processing facilities located i n the capital city. T h r o u g h financing, the buyer has been able to establish dependence-power relations to various degrees w i t h different cooperatives, w h i c h i n turn have had to 83  develop non-reciprocal strategies to adapt to this type o f relations. In the two communities participating i n the I F M S , first level intermediaries o w n their fleets, so they self-supply their fishing firms, except for lobster, w h i c h is still caught exclusively by cooperatives. Patterns o f interaction w i t h social sector organizations and individual fishermen vary a m o n g the two communities. Cooperatives have also developed different non-reciprocal and reciprocal strategies. T h e following subsections describe these strategies, summarized i n Table V . 3 .  Table V.2 Summary of the conditions determining the market position of cooperatives, Yucatan IDC Price-negotiators PricePricefixers takers Strong Weak Category: Market position + +  N e g o t i a t i o n o f the catches' price Pre-seasonal selling contract  + +  + + +  + + + +  4+  + 5+  F r e e d o m to sell catches E n f o r c e m e n t o f exchange agreement Collective negotiation  Total  V.6.2.3..1  0+  2+  + 3+  Non-reciprocal exchange strategies  T h e r e are two non-reciprocal strategies, w h i c h are adopted by the majority o f cooperatives to adjust their market position. T h e first is k n o w n as the price-negotiator strategy. T h r e e characteristics distinguish price negotiators. First, b o t h parties negotiate the price o f all species, but the buyer has the exclusive right to buy the total catch o f each cooperative. Second, there is a pre-season contract only for the most valuable species, whereas the price o f other species is agreed verbally. T h i r d , the fish buyer has the right to enforce exchange agreements. E n f o r c e m e n t is interpreted as the p o w e r to provide rewards or apply punishments. T h e fish buyer usually manipulates rewards and punishments through rising and l o w e r i n g prices, and g i v i n g o r w i t h h o l d i n g loans. E i g h t cooperatives dealing w i t h the same fish buyer i n the D F M S described earlier have developed non-reciprocal strategies i n two different ways. T h e three non-directive cooperatives located i n (S) have the weaker bargaining position due to three m a i n factors. First, they deal individually w i t h the buyer, giving h i m the chance to manipulate rewards and punishments o n a one-to-one basis. Second, their annual level o f operations is lower, between thirty-seven and sixty-eight tons, w h i c h represent 1 2 % o f the p r o d u c t i o n this buyer gets f r o m the eight cooperatives. T h i r d , these cooperatives d o n o t o w n any infrastructure; catches are kept i n ice overnight i n one-ton capacity boxes. Consequendy, catches must be sold the next day from where they are landed. O t h e r four cooperatives, one participatory i n (SF), the t w o consultative i n ( R L ) and another consultative i n ( E C ) display a stronger non-reciprocal, price-negotiator strategy. T h e y handle their exchange relation w i t h the fish buyer as a group, as they are organized as a federation o f cooperatives. Negotiations are carried out between the intermediary, the management units o f the cooperatives, and the federation. T h e rewards system is more balanced because this group o f four cooperatives had caught 5 0 % o f the active cooperatives' average p r o d u c t i o n considered i n this study. T h i s high productivity is a resource base that allows these cooperatives to increase their bargaining power. T h e group is regarded as a supplier system. C h u r c h m a n (1968) describes a supplier system as a group o f components that interact w i t h each other to fulfill a set o f superior goals. Lilliecreutz (1998) notes that a supplier system is a survival strategy; however, i n this case the strategy has helped the cooperatives not only to survive, but also to advance their organizational 84  development. F o r example, all o f them have at least two trucks to transport the catches, offices, premises for social events, ice-storage facilities w i t h varying capacity up to five tons, and an icem a k i n g facility and one gas station. H o w e v e r , the buyer has pardy financed these assets.  Markets  Table V.3 Market strategies developed by cooperatives in different fishing market systems Non-reciprocal Reciprocal strategies Strategies  IFMS  Price-fixers (1)  Price-takers (4) Price-negotiators:  DFMS  (*)  Supplier's system (strong) (2) Individual supplier (weak) (3)  (*)No cooperative found with reciprocal strategy in this market system Numbers in parenthesis were used to apply the correlation analysis  F r o m the perspective o f the buyer, financing the advancement o f the stronger cooperatives is an advantageous investment. H e l p i n g these cooperatives to acquire p r o d u c t i o n factors guarantees h i m m o r e efficient and reliable suppliers. T h e fish buyer has built u p o n the organizing capabilities o f these cooperatives (which is not the case i n the three previous weaker cooperatives), by p r o v i d i n g them w i t h sufficient equipment and facilities to increase the quantity and quality o f their fishing performance. Finally, another participatory c o o p i n ( D B ) is also categorized as a strong pricenegotiator, although it has been able negotiate by itself w i t h the fish buyer. T h e reason w h y this cooperative is not i n c l u d e d i n the suppliers' system is that it is registered to another federation o f cooperatives. T h e second non-reciprocal exchange strategy is called price-taker, and is f o u n d i n the I F M S m o d e l , i n the five inactive autocratic cooperatives i n (P), and the three laissez-aller cooperatives barely operating i n (C). Characteristics o f price-takers are: a) the buyer fixes the price o f all species and has exclusive right to buy the catches; b) there is no contract to formalize any exchange agreement, and c) the buyer has the only power to enforce the agreements. E n f o r c e m e n t , rewards, and punishments are interpreted as before. T h e cooperatives i n (P) developed this strategy according to the leaders o f two o f those cooperatives because the intermediary was the government; for this reason, i n subsection V . 6 . 2 . 4 I explain their situation as a special case. O n the other hand, the laissez-aller cooperatives i n (C) seem to have the weakest market position; they have an even worse performance than the non-directive cooperatives. Besides dealing individually w i t h the buyer, their level o f operation is the lowest, reporting only 2.4% o f the total p r o d u c t i o n o f cooperatives. T h e y o w n practically n o assets and the boats that they operate b e l o n g to the fish buyer. U n l i k e the strong price-negotiators, price-takers have n o t developed a supplier system to strengthen their bargaining power, n o r do they have the support from the fish buyer to i m p r o v e their performance.  V.6.2.3..2  Reciprocal exchange strategies  Reciprocal strategies, i n a broad sense, refer to contingencies between functionally equivalent behaviors. T h u s , p r o v i d i n g rewards depends o n the partner's p r i o r rewarding. Similarly, applying punishment depends o n the partner's previous punishment ( M o l m , 1991). I n this study, fish buyers a n d three cooperatives i n the I F M S located i n (P) are functionally equivalent e c o n o m i c agents i n the  85 f  sense that their market p o s i t i o n is comparable w h e n trading catches. T h e resource o f the buyers (capital) is used to adjust their bargaining p o s i t i o n i n a similar way as the resource o f the suppliers (catches). A g a i n , since the contract law is underdeveloped, reciprocity is based o n m u t u a l respect, trust, and help. T h e cooperatives applying the reciprocal exchange strategy are called price-fixers, since they have the possibility to negotiate and fix the prices o f all the species they catch. Major characteristics o f price-fixers are: a) b o t h parties negotiate the prices o f all species; b) the intermediary has n o exclusive right to buy the total catch o f the cooperative; c) there is a pre-season contract or verbal agreement for all the species, and d) b o t h parties have the right to enforce exchange agreements. These cooperatives are the only ones that have the facilities to c o n t r o l the w h o l e fishing process, including direct trade w i t h either market (national and international), and can gain financial independence. I n fact, one supervisory cooperative ( R L P ) from its inception i n the late 1950s established its financial independence as a strategy for organizational development. T h e other two price-fixer cooperatives ( T P M and PS) set the same strategy at the beginning o f the 1990s w h e n they learned the fate o f other cooperatives i n the same c o m m u n i t y (P) due to their financial dependence o n fish buyers. O t h e r strategies have contributed to the financial independence o f these cooperatives as well. Some o f the strategies include keeping the fleet operating continuously, being receptive to technical innovations, seeking c o n t r o l o f all phases o f the fishery, and specializing i n catching one or two valuable species. T h e p r o d u c t i o n o f the three cooperatives, although representing only 16.8% o f the total catch o f the cooperatives, is w o r t h 12.7% o f the total landing value. T h e high value is due to the quality o f the handling and processing, m a k i n g the catches a gready appreciated c o m m o d i t y i n extra-regional markets. A c c o r d i n g to the interviewees, n o credit relation forces the cooperatives to accept prices fixed by the fish buyers, n o r have the fish buyers the right to mortgage the catches. Since these cooperatives o w n their o w n processing facilities, their financial situation seems to be the strongest amongst the cooperatives i n Y u c a t a n , although n o detailed i n f o r m a t i o n was disclosed to c o n f i r m this assumption. V.6.2.3.  Marketing systems  T h e fish marketing system ( F M S ) i n Y u c a t a n has deviant geographical patterns compared to an ideal market economy based o n the central place theory (see S m i t h , 1974). T w o models o f the F M S were identified i n the present study and were used to understand the (1) uneven channels o f commercialization, (2) grouped-trade relationships between fishing. communities and fishing firms located i n urbanized communities, and (3) limitations o n the articulation o f cooperatives to the market i m p o s e d by fish buyers and by the inherent development problems o f the fishing communities (see Chapter I). W i t h i n the two F M S models, there are three market centers where the production is concentrated and then distributed to extra regional markets.  V.6.2.3..1  Dendritic marketing system  T h e first m o d e l is called the dendritic fishing marketing system ( D F M S ) , after the dendritic m o d e l described by J o h n s o n (1970). D F M S involves five primary communities and a tertiary community. Figure V . 4 shows that the geographical distribution o f the primary communities i n this m o d e l occupy mainly the easternmost side o f the coast ( D B , S F , R L , and E C ) . O n l y one c o m m u n i t y is located i n the west (S). These five communities are connected vertically to the concentrating, highlevel market center located i n the capital city. Transport routes l i n k i n g fishing communities to urban settings have developed i n a linear way, b e c o m i n g a separate branch-like system f r o m w h i c h the D F M S m o d e l takes its name. Cooperatives transport their catches to the processing facilities o f the single fishing firm i n the heardand, to be processed, packed, and distributed to the extra regional markets. T h e owner o f the firm gets complete i n f o r m a t i o n o n prices f r o m the fishing communities 86  and the national and international markets.On the other hand, cooperatives obtain regional price information f r o m a single source: the same intermediary. T h i s fish buyer controls the p r o d u c t i o n o f eight cooperatives' representing 7 0 % (in weight and landing value) o f the p r o d u c t i o n o f the cooperative sector. T a k e n at the state level, however, the p r o d u c t i o n o f these cooperatives represents only 6%. T h e advantage for this intermediary is that he concentrates the p r o d u c t i o n o f all small buyers and m a n y other fishing organizations i n the western c o m m u n i t y . H i s fishing firm has been considered as one o f the three fishing firms w i t h the highest level o f industrialization (processing capacity), out o f twenty two fishing firms registered i n the local F i s h i n g Industry C h a m b e r i n 1995 (Rosado and R o s a d o , 1995). Information obtained during the fieldwork i n 1998 suggests that its p o s i t i o n has not changed m u c h since then.  Figure V.4. Dendritic fishing marketing system  In-site marketing system T h e second F M S m o d e l i n w h i c h cooperatives are engaged i n is called the in-site fishery marketing system ( I F M S ) where producers and intermediaries are located i n the same c o m m u n i t y . Figure V . 5 shows that there are t w o communities w i t h this spatial distribution; one is a secondary c o m m u n i t y (C), and the other a tertiary c o m m u n i t y (P) (see Chapter I). I n this m o d e l , transportation costs are reduced to a m i n i m u m since the catches are practically landed at the processing facilities. H e n c e , the time spent between landing (supervised by employees o f the buyer) and processing is m i n i m i z e d , increasing the quality o f fish products. V.6.2.3..2  In the fishing c o m m u n i t y (P) closest to the capital city, first level intermediaries rely m o r e o n their o w n large-scale fleet for fish supplying than o n cooperatives. It is reflected i n the fact that cooperatives' p r o d u c t i o n that is channeled through fishing firms represents o n l y 1% o f the total produced by these organizations. E i g h t cooperatives out o f the twenty-one analyzed are located i n this community. F r o m those eight, three direcdy c o n t r o l their o w n exchange relations. T h e other five have established a financial dependency o n the fish buyers to complete their trips. T h e same c o n d i t i o n o f m o n o p o l i s t i c pricing and catch mortgage i n D F M S applies i n I F M S . However, cooperatives i n the latter have better access to market i n f o r m a t i o n either, v i a consulting direcdy to an official ttading agency or v i a Internet. T h e I F M S is also found i n the c o m m u n i t y (C). T h e most 87  important difference between the only three active cooperatives i n this c o m m u n i t y and those i n c o m m u n i t y (P) is that the former trade w i t h a single fish buyer only during July and A u g u s t w h e n they catch and sell lobster.  International  F i g u r e V . 5 . In-site fishing m a r k e t i n g system  First level intermediaries concentrate and trade 98.6% o f the total fishing p r o d u c t i o n i n Y u c a t a n ; the remaining 1.4% is traded by the cooperatives. T h a t is, they trade only 1 7 % o f the cooperatives' p r o d u c t i o n . A final c o m m e n t o n the marketing system is that intermediaries w i t h small fleets justify purchasing catches from fishing organizations because their p r o d u c t i o n is cheaper, because social sector capital is subsidized and has lower labor and technology costs. V.6.2.4.  Government as intermediary  T h e M e x i c a n government implemented several measures i n order to i m p r o v e the market p o s i t i o n o f the cooperatives. T h e most important measures were creating and sponsoring credit mstitutions to p r o v i d e soft credit loans, c o n d u c t i n g marketing operations by state-owned agencies, and p r o v i d i n g fish processing facilities to fishermen organizations. T h e infrastructure needed for the development o f the fishery as a relevant e c o n o m i c activity i n the state was built during the 1970s (Villanueva, 1990). A t the same time that freezing and processing facilities were completed and operated by social sector organizations, the construction o f roads, docks, fishing refuges, and the supply o f energy and water to those lodgings, benefited the w h o l e fishing sector i n general, m c l u d i n g the private firms. D u r i n g this time, t w o important statesponsored firms were i n charge o f commercializing catches. O n e specialized i n trading low-value species for domestic c o n s u m p t i o n , and the other focused o n exporting h i g h value species, such as shrimp and lobster, to international markets. Unforeseen problems such as incompatible w o r k i n g hours between fishermen and u n i o n i z e d plant workers, and the lack o f experience o n h o w to handle perishable products by managers hired by the government, a m o n g other things, led to an inefficient operation o f these two firms. B y the end o f the 80s the government finally decided to privatize the fishing firm (Sanchez 1995). T h e exporting firm, although still under state supervision, is barely operating i n Y u c a t a n , where it exports lobster to the U S A . A n example o f h o w this firm operates is  88  used here to demonstrate h o w state intervention indeed hampered  the development  o f the  cooperative sector, leading to the demise o f some groups. I n 1972 the government granted loans to cooperatives to purchase the (until then) private shrimp fleet (Vasquez-Leon, 1995). H o w e v e r , o l d a n d technologically inefficient shrimp trawlers, insufficient catches to cover trip costs, m o n o p o l y p r i c i n g b y the official agency, a n d h i g h interest rates made it impossible for the cooperatives to recover enough capital to pay the loans. T a b l e V . 4 shows the monthly distribution o f costs a n d benefits o f operating a shrimp trawler i n (P). A s a fishing trip lasted twenty days, it is assumed here that twelve trips were carried out each year. T h e average catch was 0.5 tons per trip. T h e l o w level o f p r o d u c t i o n plus the high operational costs and interest rates resulted i n a hardly payable deficit.  Table V.4 Distribution of costs and benefits per trip of a shrimp trawler in Yucatan, 1997 ($ pesos) Operation Discounts Item Costs M o n t h l y interest payment  n/a  14,000  T r a d i n g agency discounts  n/a  1,261  Exporting commission  n/a  1,102  Exchange commission  n/a  804  F i x e d costs V a r i a b l e costs  2,820  n/a  14,625  n/a  17,167  Subtotals  17,445  T o t a l (costs + discounts)  34,612  C a t c h value  14,500  n/a  M o n t h l y deficit  20,112  n/a  Annual deficit  241,344  n/a  n / a = n o t applicable O n l y after the exporting agency was able to sell the catch, was the payment to the cooperative made. T h e agency usually discounted between 7.6 a n d 8.7% o f the total value as an exporting c o m m i s s i o n . I f the trawler was purchased w i t h a loan f r o m the N a t i o n a l F i s h i n g B a n k , the check issued by the exporting firm c o u l d be cashed only at that bank, w h i c h charged a 6% exchange c o m m i s s i o n ; the bank controlled the exchange currency (from U S D into pesos). T h e bank also discounted 4 0 % o f the catch value for p r i n c i p a l and interest payments. Finally, i f the c o o p d i d n o t have processing facilities, it h a d to pay $0.55 U S D per p o u n d o f shrimp processed. U n d e r these circumstances, at least five cooperatives i n Progreso ceased operating as the results were totally opposite to the objectives o f the policy o f p r o v i d i n g p r o d u c t i o n factors sufficient for capital accumulation, reinvestment, and i m p r o v e m e n t o f the market p o s i t i o n o f the cooperatives.  V.6.3  Statistical data analysis  A s predicted, there is a significant positive correlation between the performance a n d the market position o f cooperatives (see Table V . 5 ) . T h e l o w e r coefficient value for satisfaction seems to be due to the h u m a n variability i n responding, differendy to the same stimuli, m a k i n g it difficult to find a higher correlation. 89  Table V . 5 . Spearman's correlation coefficients for market position with satisfaction and catch per cooperative Average catch Satisfaction  Per cooperative  0.663  0.879  Market position  Correlation was significant in both cases at the 0.01 level (1-tailed); sample size = 155 fishermen  T h e market p o s i t i o n i n this analysis reflects the strategy for exchange.  T h e bargaining p o w e r gained  through the market position is higher for price-fixers, whereas price-takers bargaining power.  have the weakest  I n an intermediate p o s i t i o n , price-negotiators are divided as weak a n d strong  negotiators, depending o n the way they negotiate, that is, as a system supplier o r individually. T a b l e V.6 shows the results derived f r o m the strategies followed by the cooperatives i n their exchange  Table V.6 Market position expressed by exchange strategies and their numeric value, and performance per cooperative AVERAGE SATISFACTION MARKET POSITION COOPERATIVES  AVERAGE CATCH(tons)  NUMERIC VALUE  STRATEGIES  RLP  1  Fixer  n/a  433.11  SF  2  Negotiator (s)  2.9  484.38  DB  2  Negotiator (s) .  2.0  318.39  TPM  1  Fixer  n/a  178.88  1  Fixer  n/a  133.33  3  Negotiator (w)  1.2  16.8  PS CA  1  PG  3  Negotiator (w)  1.7  100.50  CP  2  Negotiator (s)  2.0  343.48  EC  2  Negotiator (s)  1.7  217.51  RL  2  Negotiator (s)  1.9  337.10  CCB  3  Negotiator (w)  n/a .  PD  3  Negotiator (w)  n/a  37.15  CPP  3  Negotiator (w)  1.9  67.68  PT  4  Taker  5.0  4.90*  KKH  4  Taker  5.0  0.70*  JMC  4  Taker  5.0  18.73  PC  4  Taker  5.0  0.00  PCH  4  Taker  4.0  0.81*  NK  4  Taker  5.0  0.00  E  4  Taker  4.0  2.48  B  4  Taker  5.0  0  68.84  (s) = strong; (w) = weak; *=one-year production; n/a=not available  90  relations. A s predicted, members i n cooperatives w i t h a higher market p o s i t i o n tend to be m o r e satisfied and report higher average catches than members i n cooperatives w i t h weaker or n o bargaining power. H o w e v e r , due to the lack o f results for price-fixers cooperatives, it remains to be seen i f their members qualify for the highest value for satisfaction.  V.7  DISCUSSION  T h e following discussion draws from the previous description o f the different market systems f o u n d i n Yucatan. T h e first part deals w i t h the sources o f power o f intermediaries a n d h o w they influence the performance o f cooperatives. I n the second part, I analyze the performance according to the exchange strategy and the market system i n w h i c h cooperatives are operating. A final c o m m e n t is made o n the cultural context o f Y u c a t a n and h o w it influences exchange relations i n the fisheries.  V.7.1 The resource-power of the intermediaries T h e alternative resources that fish buyers most frequendy use to c o n t r o l the relationship are employment opportunities, information, and financing. F o r instance, regarding employment oppormnities, i n the westernmost communities (C) there is a large p o o l o f u n e m p l o y e d peasants living i n nearby rural communities. T h e y have litde experience and skills i n fishing, but a huge economic need. W h e n local fishermen are recalcitrant to the rules o f the intermediaries, they send a bus to the rural communities to hire more obedient workers w h o are w i l l i n g to go fishing longer a n d receive less payment. Since the boats and gear belong to the buyers, the peasants receive only a small c o m m i s s i o n o f the landed value. A s a result, local fishermen then are forced to accept the conditions o f the buyers i f they want to have a regular income. T h i s situation explains i n part the weakness o f the price-taker cooperatives and their inability to negotiate fair prices for their catches. Intermediaries play a special role i n the case o f market information. T h e y use their particular knowledge about d e m a n d and quality o f goods to buy and sell i n the market. T h e i r advantage is i n terms o f information, especially w h e n it is restricted to a few intermediaries. L i (1998) assumes that intermediaries i m p r o v e the efficiency w i t h i n a market by i n d u c i n g the producers to supply h i g h quality goods and b r i n g them to consumers, w h o might not realize the trading oppormnities w i t h o u t the intermediaries. W h e n i n f o r m a t i o n about fish-based product d e m a n d is not accessible to producers, a n d supply i n f o r m a t i o n is not available to consumers, it is difficult to carry out the trading o f these products. Intermediaries then, play a market-improvement role. However, intermediaries may also find it profitable to trade low-quality fish products and sell them to u n i n f o r m e d consumers w h e n market i n f o r m a t i o n is scarce and hence consumers and producers cannot play a disciplinary role to restrain the behavior o f the intermediaries. T h u s , the intermediaries may manipulate market i n f o r m a t i o n to profit from the selling o f a l o w quality c o m m o d i t y to consumers, a n d to induce producers to unfair agreements, reducing the freedom o f producers to seek m o r e fair exchange relations. T h e most important resource by w h i c h fish buyers dominate their relation w i t h cooperatives is their financial surplus. T h e benefits to the cooperatives f r o m the financial assistance o f the intermediaries include elirninating o r reducing the need for self-financing investments a n d insuring the producers against r a n d o m liquidity needs. B y screening and m o n i t o r i n g the investment behavior o f the producers, financial intervention certifies the producers and their investment quality, i m p r o v i n g the welfare o f the local market because it selects the most efficient and trustworthy producers to finance their p r o d u c t i o n factors that s h o u l d i m p r o v e the quantity and the quality o f their p r o d u c i n g  91  (Bencivenga and S m i t h , 1991; A c o c e l l a , 1998). Results o f financing cooperatives, however, have been m i x e d i n Y u c a t a n , and are discussed i n the next subsection.  V.7.2  Financial dependency and non-reciprocal exchange strategies in the IFMS and DFMS  T h e general characteristics o f non-reciprocal exchange strategies present i n the D F M S result i n a complete c o n t r o l o f the p r o d u c t i o n factors by the intermediaries i n (C, S, D B , S F , R L , and E C ) . A l t h o u g h fishermen have access to trucks, boats, engines, nets, and other fishing equipment, they are distributed through credit schemes. I n this way, the intermediaries c o n t r o l the technical level and the amount o f equipment distributed w i t h i n the cooperatives, giving the fishermen the faulty perception that they are the ones controlling the p r o d u c t i o n factors. U n d e r such circumstances, fishermen bear operation, maintenance, replacement, and insurance costs. A t the same time, through this arrangement, the fish buyers transfer the investment risks (sinking) to the fishermen and the depreciation o f the equipment. These types o f arrangements are not exclusive o f Y u c a t a n but have been described i n other areas ( N o r r , 1975). T h u s , there is a difference between real and perceived operation costs. T h e difference represents a surplus to the fish buyer and a deficit to the cooperatives; this implies that the latter are unable to pay back the loans and are continuously i n need o f re-financing. T h i s situation determines the l o n g lasting relationship between cooperatives and fish buyers. It makes it very difficult for the fishermen to save up and reinvest i n fixed assets (buildings, offices, processing facilities) or even to pay back their personal debts. T h e surplus capital o f the intermediaries ensures a continuous financing o f the fishermen as the lifespan o f the p r o d u c t i o n factors is short and because fish buyers and fishermen have different time h o r i z o n s to pay back the loans. T h e loan, or direct credit, is a financial instrument that fish buyers use to transfer purchasing p o w e r to fishermen w h o have deficits. T h e buyers seek to lengthen the maturity o f the l o a n by encouraging the fishermen to acquire gear w i t h a short lifespan and by fixing a l o w price for the catches. T h e price h o w e v e r has to be high enough to reduce the risk o f insolvency, but l o w enough to keep the fishermen i n need o f financing. T h u s , fishermen are still often i n debt w h e n they have to repair or replace their gear.. Fishermen, o n the contrary, prefer short maturities o f their loans and a h i g h price for their catches to a v o i d being re-financed under disadvantageous conditions. T h e fish buyers increase the price o f the loans by manipulating the price o f the catches until the loan's maturity expires. I n this case, credit becomes very cosdy for the fishermen. I n short, fish buyers use direct credit to hamper the market position o f the fishermen through mortgaging their catch thereby reducing their freedom to find m o r e fair exchange conditions. Similar situations o f c o e r c i o n by fish buyers are described by A l e x a n d e r (1979) i n Sri L a n k a , Faris (1972) i n N e w f o u n d l a n d , and L o f g r e n , 1979) i n Sweden. Furthermore, since all equipment is either built i n the capital city (boats) or has to be i m p o r t e d (engines, nets), fishermen are not only suppliers o f raw material but also dependent o n products manufactured outside their communities by members o f the same group o f intermediaries. Therefore, fish buyers concentrate capital w i t h i n this relationship by: a) b u y i n g catches at prices they fix, b) selling p r o d u c t i o n factors, c) charging interest by money-lending, and d) c o n t r o l l i n g the commercialization o f the catches. A t the same time, they save o n the organization and training costs, since these costs have become the responsibility o f the government. M o r e savings are due to the fact that contract law is underdeveloped and verbal agreement reduces m o n i t o r i n g and enforcing costs to their m i n i m u m value.  92  V.7.3 Financial dependency and reciprocal exchange strategies in the IFMS In this study I found that the exchange strategies i n the I F M S i n (P) are reciprocal since intermediaries and cooperatives have c o n t r o l o n the entire fishing activity. T h u s , intermediaries' dependence o n the p r o d u c t i o n o f the cooperatives is m i n i m a l . I n return, the cooperatives had had n o necessity o f asking for large financial support, except i n those cases where cooperatives engaged i n exchange relations w i t h state-owned trading agencies. T h o s e cooperatives, however, are n o w inactive. T h e three cooperative organizations ranked as price-fixers, that is, w i t h the best market position, are located i n this community. T h e most evident influence from intermediaries o n these operating cooperatives. is the 'business atmosphere' i n this c o m m u n i t y , w h i c h was ranked as displaying primary, secondary a n d tertiary activities. (P) is the most important fishing c o m m u n i t y o n the coast because the fishing infrastructure here is the most advanced and efficient i n the state. M o r e than 5 0 % o f the fishing companies are located here, all w i t h a m e d i u m or high level o f industrialization (processing capacity) (Rosado and R o s a d o , 1995). O f the three cooperatives mentioned, two o f them ( T P M and PS) were considered the most dynamic social organizations from 1993 to 1997, i n terms o f a high n u m b e r o f catches. Since the beginning o f the 1990s, they have reflected the structure o f a fishing firm. There is a supervisory leader w h o makes the strategic decisions, a manager w h o is i n charge o f the administrative tasks and is supported by professional bookkeepers, a group o f efficient skippers w h o direcdy administer the budget o f the vessels they operate, and a membership base that is highly skillful during the fishing season. T h i s situation provides empirical support to the previous evidence that people can learn by experience and by imitating the success o f others. T h e impact o f g o o d decision-makers (first level intermediaries) o n price-fixer cooperatives has been larger than the impact o f b a d decision-makers (leaders o f other cooperatives w i t h weaker market position). Organizations led by b a d decisionmakers are less successful and are m o r e likely to disappear from the market because these organizations go bankrupt. O n the contrary, organizations led by g o o d decision-makers are more successful and tend to survive and expand i n the market (Offerman and Sonnemans, 1998).  V.7.3  Exchange relations and socio-cultural context  A special remark o n the emergence o f hierarchical relations w i t h i n p o w e r dependence associations refers to the socio-cultural context w i t h i n w h i c h a m o d e l o f exchange relations is built. N o exchange m o d e l can operate i n a cultural v a c u u m . Specification o f the cultural context is what brings life to the m o d e l (Befu, 1977). A s it was mentioned earlier, the social structure presupposes the existence o f social institutions that regulate and organize the behavior o f interacting individuals (Landa, 1979). T h e cultural context i n w h i c h social institations have emerged i n M e x i c o i n general, and i n Y u c a t a n i n particular, can be traced back to its c o l o n i a l legacy. A f t e r independence, the country inherited, f r o m the late medieval Spain, its centralized authoritarism, regional political bossism, and clientelism. T h i s legacy bestowed u p o n all L a t i n A m e r i c a n societies traditions o f vertical dependence and exploitation. P u t n a m (1992) states that historically derived social contexts present individuals w i t h a different set o f opportunities and incentives. A f t e r three h u n d r e d years o f Spanish d o m i n a t i o n and almost two hundred years o f centralized decision-making, it is not surprising that inhabitants o f fishing communities view their p o s i t i o n i n exchange relations as subordinated and dependent, first w i t h respect to the government and then to the fish buyers. It also makes it easier for people w i t h foreign origin to be a m o n g the most important fish buyers (Rosado and R o s a d o , 1995).  93  A decisive factor w i t h i n the post-colonial legacy that facilitated the emergence o f hierarchical structures is C a t h o l i c i s m , w h i c h is laden w i t h s y m b o l i s m and emotionalism ( E k e h , 1974). It predicts that social exchange w i l l develop u p o n h u m a n sentiment. N o r m s and institutions to interact w i t h others arouse f r o m individual behavior, and are maintained and supported only i f they are able to satisfy the 'spiritual' needs o f individuals (Befu, 1977). A c c o r d i n g l y , most o f the members o f the cooperatives m e n t i o n e d that they were satisfied w i t h the behavior o f the fish buyers because they had been able to develop a personal, even emotional, relationship w i t h t h e m i n contrast to the impersonal treatment received f r o m private banks and the government.  94  CHAPTER VI T H E CUMULATIVE E F F E C T OF INDEPENDENT VARIABLES O N PERFORMANCE  VI.l  INTRODUCTION  F i s h i n g cooperatives have been amply studied from different perspecdves. Some o f the topics o f interest i n these studies have included the socio-cultural aspects o f their members (Poggie and Fierro, 1986; Pollnac, 1985; A c h e s o n , 1981), the cooperatives' potential as promoters o f local development (Pollnac, 1988), emphasizing e c o n o m i c development (Lorendahl, 1996), or as channels to implement fisheries management regulations ( K u r i e n , 1988; Jentoft, 1989; P o l l a n c , 1994). H o w e v e r , m o s t o f these studies are descriptive and the analyses are qualitative. O n l y i n a few cases have the studies tried to explore the relationship o f several factors and their influence o n the performance o f the cooperatives by applying statistical analyses (Lubis, 1992; Poggie et al., 1988; Baticados, 1998). F o r example, Poggie et al. (1988) analyzed c o m m u n i t y services, cooperatives' assets, and cooperative membership and management as factors influencing the success, or failure, o f fishermen's cooperatives i n E c u a d o r . A l l these factors were analyzed through factor analysis w i t h orthogonal rotation. Major findings o f that study were that cooperative's facilities, assets, and social solidarity are the most important predictors o f cooperatives' success. O n the other hand, Baticados (1998) used such statistical analyses as correlation, A N O V A , factor analysis and multiple regression analysis to analyze their field data f r o m Central Phillipines. T h e y f o u n d that the major factors affecting the success o f cooperatives i n that area are background, membership, management, and e c o n o m i c factors. These examples show that statistical analyses may be a powerful analytical t o o l to understand the factors that affect the performance o f organizations i n general, and cooperatives i n particular. Multivariate statistical methods provide ways to analyze phenomena where many independent and dependent variables correlated w i t h one another to varying degrees. Multivariate statistical techniques reveal and assess complex interrelationships a m o n g variables i n statistical inference (Tabachnick and F i d e l l , 1996). I n this chapter, as I d i d i n previous ones, I have defined the independent variables but had n o c o n t r o l o n the assignment o f cooperatives to levels o f these variables. T h e independent variables were defined based o n naturally occurring differences a m o n g cooperatives, and such differences were used to predict some other non-experimental (dependent) variables, such as catch and satisfaction. T h e distinction between independent and dependent variables was arbitrary; therefore, I d i d not attempt to attribute causality to any independent variable.  VI.1.1 Purpose of the chapter T h e major purpose o f this chapter is to identify whether there is a cumulative effect o f the independent variables o n the performance o f Y u c a t a n cooperative organizations. I analyzed these variables separately i n the previous chapter and f o u n d that each o f them has at least a positive correlation w i t h the dependent variable. H o w e v e r , it is reasonable to expect that they have some k i n d o f additive effect o n the performance o f cooperatives. T h a t is, there may be a c o m b i n a t i o n o f effects between the n u m b e r o f rules, the ability to adapt, and the market strategies i n a way that performance is augmented i f the effect is positive, or d i m i n i s h e d i f the effect is deleterious.  95  VI.1.2 Research questions T h e research questions made i n this chapter are: Is there a c o m b i n e d effect o f the three independent variables o n the performance o f the cooperatives? I f so, w h i c h o f these variables is m o r e important i n predicting the variability o n performance?  VI.1.3 Hypothesis T h e more operational rules, higher ability to adapt and autonomous market position, the m o r e likely the cooperative w i l l be successful i n terms o f average catch.  VI.1.4 Conceptual framework T h e conceptual framework, Figure V I . 1, assumes that an increased n u m b e r o f operational rules relate to a higher organizational development that allows a cooperative to increase its ability to adapt to the changing external environment. These rules also facilitate the development and implementation o f m o r e effective market strategies that provide the cooperative w i t h enough autonomy to establish reciprocal relationships w i t h other market agents. T h u s , operational rules, ability to adapt, and market position together influence the performance o f the cooperatives.  VI.2 M E T H O D S T h e methods used to analyze the effect o f the three independent variables o n the performance o f cooperatives are multivariate methods. I chose multivariate analysis because I needed it to analyze several related variables simultaneously, considering each variable equally important at the beginning o f the analysis. Multivariate statistical methods allowed me to study the joint relationships o f variables that are positively correlated, as I showed i n previous chapters. I selected specific multivariate methods to classify and order the data f r o m the survey, and to predict and infer f r o m this information certain characteristics f r o m the sample to the p o p u l a t i o n o f cooperatives i n the study area. T h e methods are: correlation analysis to measure the strength o f a potential linear relationship between variables; cluster analysis to classify the cooperatives into hierarchical categories based o n their similarities; m u l t i d i m e n s i o n a l scaling to construct a ' m a p ' to show the relationships between the number o f cooperatives given only a table o f similarities a m o n g them (see M a n l y , 1992); and multiple regression to predict the response o f the dependent variable as the independent variables change their values. T a b l e V I . 1 shows the variables entered i n each multivariate m e t h o d .  VI.2.1 Data screening and correlation T h e first step I t o o k i n the multivariate analysis o f the variables influencing performance was screening the data f r o m the surveys and interviews. T h i s step consisted o f plotting a matrix o f bivariate scatter diagrams between independent and dependent variables and c h e c k i n g for normality, linearity and the presence o f out-liers. I used the values o f the variables summarized i n Table V I . 2. Since I d i d not find an intuitively reasonably linear association o f categorical variables (adaptive ability, market p o s i t i o n and average satisfaction), I transformed these variables into their natural l o g value, plotted t h e m and checked again for normality, linearity and out-liers. H o w e v e r , categorical variables can not be linearlized after transformation (Norusis 1997). Since ransformations d o not reorder the data values, the categories remain the same after transformation. F o r this reason, nonlinear methods were used to interpret the association between variables. F o r example, I chose Spearman's rho correlation analysis or rank correlation because its computation is not sensitive to asymmetrical distributions or to the presence o f outliers. T h i s analysis uses the rank order of each data value, and the assumption of normality is not required.  96  d  es  CU  >  •  15 LIU  a  •  •a ci •  u cs  £ t  cS  «  o  H3  a  £P O  Org  on  i-t  CU  <u S'  n cl CU  CO  3  CT  1  CU  CO  a  O  tu  •H  CO  H  d  <3  13  CS  n cs >  O  o  cU N S3  .G  CO  a,  a CU  G o  C3  a  CO  *— -* a  O  •is .a s  cu a,  °  •iH  •»-> CS  CU co  •Bg  l-H  <H  2  O  •(->  -d  G OS  r\ CO  CU co l-H  cs  •c >  u O  C  CO'  •B 0 ^  H  ci  <->  co >^  cj  CO  a a CU o a CU •d  CL, 15 CU  6fJ  CU  «  x tl  3  Q  •c  CO  -T-j  -*-»  ci  •iH  U  PH  ,4>  •iH  g  CO  o  Table V I . l . Summary of the multivariate methods used for statistical analysis Purpose  Method Correlation  Measurement scale  Introduced variables  Measure  •  Organizational structure  •  Ordinal  association  Cluster analysis  Ordination  • • •  Score o f rules A d a p t i v e ability Market position  • • •  Ratio Ordinal Ordinal  Multidimensional scaling  Ordination  •  Average catch  •  Ratio  Multiple regression  Inference  • • • •  Ordinal Ratio Ordinal Ordinal  •  Ratio  As • .• • •  IV: Organizational structure Score o f rules A d a p t i v e ability Market position  As D V : • Average catch  VI.2.2 Cluster analysis T h e next step was to disclose the grouping structure o f the cooperatives relative to each other basedo n their attributes. I used cluster analysis and m u l t i d i m e n s i o n a l analysis to place the cooperatives i n a graphic representation o f such positions. T h e goal o f applying cluster analysis was to identify homogeneous groups, or clusters, o f cooperatives. F o r g r o u p i n g i n cluster analysis, group membership for all cases is u n k n o w n , that is, k n o w i n g to w h i c h group a cooperative belongs is not a necessary c o n d i t i o n to perform the analysis. T h e r e are several methods for g r o u p i n g cases into clusters. I used a m e t h o d called 'agglomerative hierarchical cluster analysis', w h i c h groups cases (cooperatives) i n t o bigger and bigger clusters until all cooperatives are members o f a single, biggest cluster. T h e criterion I chose for deciding w h i c h cooperatives or clusters should be grouped at each step was a 'single linkage' or 'nearest neighbor technique' and is based o n a matrix o f similarities between pairs o f cooperatives. W i t h this technique, the first t w o cooperatives c o m b i n e d were those h a v i n g the largest similarity. The similarity between the new cluster and individual cooperatives is then calculated as the largest similarity between an individual cooperative and another cooperative i n the cluster. A t every step, the similarity between two groups o f cooperatives is the similarity between their two m o r e similar cooperatives (Norusis, 1997).  VI.2.3 Multidimensional scaling A s introduced earlier, multidimensional scaling ( M D S ) was also used to indicate the degree o f similarity between t w o or m o r e cooperatives, although i n this case a point i n a multidimensional space represents each cooperative. T w o points that are close together represent t w o similar cooperatives, and t w o points that are far apart represent t w o cussimilar cooperatives. T h e space is traditionally two- or three-dimensional space, but it can have m o r e dimensions. I considered several factors to decide w h i c h type o f M D S to use. T h e first factor was the scale o f measurement o f the data. Since I measured the independent variables i n an ordinal scale, I used a 'nonmetric M D S ' . A n o t h e r factor related to the data is their shape, w h i c h can be square' and rectangular. I n the first one, rows and columns refer to the same 98  cases or objects, whereas i n the second shape rows and columns represent different sets o f items. I used a 'rectangular shape' o f data because I have a single rectangular matrix i n w h i c h columns represented the cooperatives and the rows represented the variables. Different items i n the rows and columns lead to the next factor for c h o o s i n g a type o f M D S , that is, the conditionality o f the data. W h e n data are 'matrix conditional' the numbers w i d i i n the matrix are o n the same measurement scale; w h e n data are ' r o w conditional' these numbers are o n a different measurement scale. I used the matrix conditionality because the variables i n the rows represented the variables measured o n an ordinal scale, that is, the organizational structure, the ability to adapt, market strategies, and satisfaction.  VI.2.4 Multiple regression analysis Before attempting to apply multiple regression analysis to find an equation to predict the dependent variable values according to changes i n the independent variables, I made several transformations to the market p o s i t i o n and adaptive ability variables. Since these variables have only four categories or values, the dependent variable values concentrated i n four groups along the independent variable axis. Therefore, f r o m the original data, market p o s i t i o n and ability to adapt d i d not yield a linear association w i t h the performance o f the cooperatives. I transformed these variables into their logarithm, quadratic and weighted least square values to linearalize and re-examine them. I n every transformation, however, the coefficient o f determination (R ) was smaller than 0.5, that is, the resulting equations explained less than 5 0 % o f the dependent variable variability. T h a t is, transformations d i d not linearize the relationship between these variables. 2  Nevertheless, I applied multiple regression analysis to all the variables since I still strongly considered that all o f them have an influence o n the performance o f the cooperatives. I used a type o f regression k n o w n as statistical regression (stepwise) to b u i l d a m o d e l to predict the response o f the dependent variable. I n this type o f regression, the order o f entry o f variables is based o n statistical criteria to a v o i d subjective bias i n their selection (see (Tabachnick and Fidell, 1996). I n stepwise variable selection, after entering a new variable i n the m o d e l , any variable already i n it that is no longer a significant predictor is removed. T h a t is, variables whose importance diminishes are removed as additional predictors are added. H e n c e , there is one criterion to enter a variable and one to remove a variable. F o r entering a variable, first the two variables w i t h the highest R are selected. A t each additional step, the variable that results i n the largest increase i n multiple R is added. E n t e r i n g variables stop w h e n there are n o more variables that result i n a significant increase i n R . I n order to remove a variable, the variables i n the m o d e l are examined at each step to remove those variables that change R least. R e m o v i n g variables stops w h e n r e m o v a l o f any variable results i n a significant change. 2  2  2  2  VI.3 RESULTS VI.3.1 Correlation Table V I . 3 shows the non-parametric correlation between all variables. I excluded two cooperatives w i t h extreme values o f average catch (outliers), therefore the sample size is 19 cooperatives w h e n considering catch and 14 w h e n considering satisfaction. A l l correlation coefficients are statistically significant at 0.01 level (1-tailed). T h e table shows that the correlation between the independent variables and the average catch is stronger than w i t h the satisfaction, especially i n the case o f organizational structure and scores o f rules. F o r adaptive ability and market position, their correlation coefficients w i t h catch and satisfaction are m o r e similar. Because o f the correlation coefficient values, it is possible to say that small values o f the independent variables are, i n general, associated w i t h small values o f the dependent variable. T h e same applies to the larger values. 99  00  CO  o  00  1  00  cO CO  oo  CO CO  I C O oo 00  00  o  -3-  00  to  I  "1 r-CN  co  00 |vo  I oo 00  VO  cO  (O  -X-  o Cv  X o  <o oo  O  O  LO  LO  ivo  oo  00 o  o o o  00  ©  CN  •(-> B  CS O  a CS  u  0\  8 £  CS _Q  cS  CN  CN  CN  co  p  O  CN  CO  CM  CN  CN  CN  CN  CO  CO  CO  CO  CO  CN  CN  CN  CO  CO  CO  o -<s-  VO CO  LO CO  00 CN  i  LO  lo  o  LO  p  l o  o LO  LO  <4H  -° a  es cs  H  o CN  CN  CN  co  vo  LO  CN LO  a a> a  5T •a c  a cs  00  t--  cO  cO  CN ^h  CN  CN  CN  CO  CO  CU  CU  "3-  co  00  CO  CN  CN  CN  CO  vO  vo  CU  CU  HH  cs  a O V  cs N  1 CS  o-> o -* tS CS  CU  c 'u CJ 2  •d  u OS  w -  PH  u ,  ^  0  o  •4—'  CO  OS  a< O  •d  u  o  CU  CU  d  CU  cu  a,  leg  leg  OS  CJ  •d CS  o o a U u Uo  CS  PH  6J0 «  CS  cu  CU  CU  u o u •d •d •d •d •d •d u CS OS CS u CU t-i u u o u o 0 O  l# a  a  o  o -*-»  o. -w <!  1-3  o Z  u •d  CU .c«  N CU  CS u u o u o o  -W  cs  I MH I  N CU  N CU c<  t-1  i-l  CU  o<-> cs  S>  PH C/3  CH  H  C/3 PH  u  PH  U  u  CQ U Q U PH  PH PH  o  PH  u PH  CH  o o  u  o o  Table VI.3 Non-parametric correlation (Spearman's rho) between all variables (2)  (1)  (1) 1.00  (2)  0.94  1.00  Adaptive ability  (3)  0.98  0.93  1.00  Market position  (4)  0.97  0.91  0.98  Average satisfaction (5)  0.79  0.66  0.85  Total catch  0.86  0.90  0.87  (6)  (4)  (3)  Organizational structure Score of rules  (5)  (6)  1.00 .  0.85  1.00  0.88  0.76  1.00  T h e correlation between independent variables is also strong, anticipating a potential m u l t i collinearity p r o b l e m for the multiple regression analysis. Multi-collinearity means that there are redundant variables that may not be needed because diey may weaken the analysis (they inflate the size o f the error terms). F o r most multivariate analysis, it is not recommendable to include variables w i t h a bivariate correlation o f 0.70 or higher i n the same analysis (Tabachnick and Fidell, 1996).  VI.3.2 Cluster analysis Since five cooperatives d i d not participate i n the survey to measure m e m b e r s ' satisfaction, and since the SPSS cluster analysis estimates the statistics using only cases w i t h n o missing values for any variable entered, I used only the average catch as a measure o f cooperatives' performance. I also decided to exclude t w o cooperatives w i t h extreme catch values, thus analyzing 19 out o f 21 cooperatives. I visually represented the results o f the cluster analysis w i t h a 'dendrogram' (Figure V I . 2 ) . T h i s display identifies the c o m b i n e d clusters and the values o f the coefficients (the squared E u c l i d e a n distance between two cooperatives) at each step. (Actually, the dendrogram i n Figure V I . 2 does not display the actual similarity estimates, but a scale f r o m 0 to 25. H o w e v e r , the ratio o f the similarities between steps is preserved). T h e dendrogram has to be interpreted from left to right, and the vertical lines join clusters at the distances indicated o n the scale. It is hard to tell the sequence i n w h i c h the first clusters are f o r m e d at the beginning because there are five clusters w i t h scale value equal to one. Starting from the top, the first i n c l u d e d cooperatives from 15 to 11. There are three m o r e clusters w i t h two cooperatives (5 and 6, 4 and 8, and 1 and 2), and one grouping three m o r e cooperatives. H o w e v e r , at the f o l l o w i n g stages the similarities between these groups are smaller thus it is easier to identify clusters. It seems that the analysis identifies three different groups o f cooperatives. U s i n g the label o f the cases, the first cluster (scale value = 1) groups ten cooperatives w i t h laissez-aller ( E , B and P C ) , n o n directive ( C C B , C P P a n d P D ) , and autocratic ( N K , P C H , P T , a n d K K H ) structures. T h e second cluster (scale value = 2) groups two supervisory (PS and T P M ) and t w o consultative ( P G and E C ) cooperatives. T h i s second cluster and the first one form a more (hssimilar cluster, w i t h a scale value o f 5. 1  T h e third cluster (scale value = 4) groups two more consultative cooperatives ( C P and R L ) w i t h the participatory cooperatives ( D B , R L P and SF). These five organizations are democratic and have the highest dissimilar value w i t h the rest o f the cooperatives. It seems that the factor that is influencing the way cooperatives cluster the most is the average catch reported i n the five-year p e r i o d under analysis. T h e order o f the cooperatives, from top to b o t t o m , o n the left o f the dendrogram goes f r o m the least to the most productive cooperatives i n Y u c a t a n . I n fact, the last five cooperatives are the ones that reported m o r e than 300 tons per year from 1993 to 1997. 101  CO  a, 3  O u  a  LT) CM CU  .3  W)  cS  a  o U u w H-> to  •  •r=i CU  . bjo cs  O CM  <-i  cU  u  SS  u  6*  a  a CA  T3 JO  in  acS  o CO  u W> O  <u  a Q  o i i i i  CC  'co  >v  i i i i in + i •• i  CS  a cS«-i cU  H-»  i i. i i i i  o  CO  j3 O  I I I I  i  +  cj  u o  in  u)  oo  m  m  in  CN iH  <£> ^  oo  r-  cr>  ro  CN  <-i  •<S •  H  CJ  w CO CU  Q) U XX as  J  u  « oCU  W  CQ  E-<  X  PQ U U  CU PH U  Q PH  CO PH  S  Cu  O C U U C U J C Q J P L ,  P n E H W U r n Q C c J c o  3  VI.3.3 Multidimensional scaling I checked three measures to determine h o w w e l l M D S describes the original data. T h e 'S-stress' is a measure o f fit that ranges f r o m 1 (worst possible fit) to 0 (perfect fit). T h e s-stress is calculated iteratively to check the i m p r o v e m e n t o f the s-stress value at each iterate. T h e calculations are based o n the estimated E u c l i d e a n squared distances between observations (see SPSS for m o r e detail i n calculating E u c l i d e a n distances). T h e s-stress value obtained i n this case is 0.021, w h i c h is m u c h closer to 0 than to 1, describing a very g o o d fit between the original data and the similarities created by the m o d e l ( K r u s k a l and W i s h , 1978). T h e next measure o f fit is the K r u s k a l ' s stress measure, w h i c h is defined i n the same fashion as the s-stress, except that distances are used instead o f squared distances. T h e criteria to define the worse a n d best fit are similar as i n s-stress measure. T h e Kruskal's stress value was 0.027, w h i c h is similar to the previous value leading to a similar conclusion o n the goodness o f fit. T h e last measure o f fit is the squared correlation coefficient (RSQ) w h i c h is the squared simple correlation between the original similarities a m o n g cooperatives and the distances a m o n g points calculated by the analysis. R S Q represents the best fit w h e n its value is equal to 1. T h e value obtained i n this study is R Q S = 0.999, w h i c h is'an almost perfect fit. T h e near perfect fit defined by the three fit measures is represented i n Figure V I . 3 , w h i c h is scatter plot o f the raw data i n the h o r i z o n t a l axis, against the calculated distances i n the vertical axis. T h e scatter plot shows some dispersion around the fit line that goes from the l o w e r left to the upper right, more precisely around n u m b e r 2 i n the h o r i z o n t a l axis. T h e near perfect fit occurs because the data have essentially n o error a n d also i m p l y that a two-dimensional space may be sufficient to explain the similarities a m o n g cooperatives.  6  i  1 •  a 5• tP •  4• CO CO  g  •  B  2 J  •  u •  1  m  1  2  |  3  4  5  6  Disparities  Figure V I . 3 . Scatter-plot of linear fit A s introduced earlier, the purpose o f M D S is to construct a m a p o f the positions o f cases o r objects relative to each other. T h e i r corresponding independent and dependent variables' values are the information used to specify h o w different they are. Figure V I . 4 represents the ' m a p ' o f the similarities a m o n g cooperatives, a p o i n t representing each cooperative. T h e distance f r o m one 103  point to another represents h o w similar or cUssimilar they are regarding operational rules, adaptive ability, market strategies, and performance. A s it happened w i t h cluster analysis, there are some 'neighborhoods' that group similar cooperatives. F o r example, i n the upper part o f the up-right quadrant the participatory cooperatives are concentrated, whereas some autocratic (only J M C is illustrated) and laissez-aller (only P C is illustrated) are located i n the up-left quadrant. Closer to participatory cooperatives are supervisory ( C A , T P M ) and consultative ( E C , C P ) cooperatives. N o n - d i r e c t i v e cooperatives ( C C B , C P P ) are grouped close to the zero line o f d i m e n s i o n 1. A l o n g this d i m e n s i o n , the position o f the cooperatives seems to reflect, from right to left, their level o f p r o d u c t i o n and organizational structure. T h a t is, the positioning goes f r o m the most productive and organized cooperatives to the leas 1.5sf 1.0  CM  •J  o  rip  t •  jmc  (fl  i  c cu  E Q  e  0.0  jxl_  pc cx I  cp dz'  pg  -1.0  tp- ec  Dimension 1  Figure VI.4. Multidimensional scaling 'map' of cooperatives Figure V I . 4 also shows a rather striking yet usual p h e n o m e n o n k n o w n as 'horseshoe'. A l t h o u g h the graph is two-dimensional, it is apparent that the data are arranged i n a very special configuration. It consists o f a nearly one-dimensional configuration w h i c h has been 'bent' around into a horseshoe shape. It seems that only one curvilinear d i m e n s i o n is sufficient to give a reasonable description o f the data, and m y interpretation is that this dimension represents cooperatives' performance expressed i n terms o f p r o d u c t i o n or average catch. T h e arrangement o f the points along the d i m e n s i o n 2 is less clear, and it may be a result o f the c o m b i n a t i o n o f the other variables. T h e horseshoe p h e n o m e n o n is not entirely understood, thus the only clue available for interpretation is the p o s i t i o n o f the cooperatives along the horseshoe curve (see K r u s k a l and W i s h , 1978).  104  VI.3.4 Multiple regression analysis T a b l e V I . 4 shows the summary o f the statistics f r o m the stepwise multiple regression. I n the r o w o f m o d e l 1 it shows that only one predictive variable (scores o f rules) meet the criteria for selection. T h i s variable explains 7 1 % o f the dependent variable variability, the average catch o f cooperatives. T h e regression coefficients for the m o d e l are s h o w n i n T a b l e V I . 5 . T h e observed significance level for the predictive variable is less than 0.01, whereas the significance level for the constant is less than 0.05.  ,  Table VI.4 Summary of the multiple regression model Model  Correlation coefficient (R)  Coefficient of determination (R )  Adjusted R  1  0.843  0.710  0.693  2  2  Table VI.5 Summary of regression coefficients of multiple regression analysis Collinearity Standard Model 1  B  Std. Error  Constant  -117.34  45.45  Score of rules  8.007  1.24  t  Sig.  -2.582  0.019  6.452  0.00  Coefficient  0.843  Tolerance  1.00  T h e other three variables (organizational structure, adaptive ability a n d market position)  were  excluded because they d i d n o t change R enough to be statistically significant (Table V I . 6 ) . 2  Table VI.6 Summary of the excluded variables from stepwise regression Collinearity  Model 1  Beta ln  T  Sig.  Partial correlation  Organiz ational structure  0.003  0.009  0.993  0.002  0.212  Adaptive ability  0.118  0.299  0.769  0.075  0.116  Market position  -0.183  -0.440  0.666  -0.109  0.104  Tolerance  T h e values for the standardized regression coefficients are s h o w n i n the c o l u m n labeled 'Beta In'. T h e / statistic for testing that the coefficients are 0 a n d their observed significance level, are s h o w n i n the columns / a n d Sig. T h e levels o f significance for the excluded variables are t o o small, indicating that there is a h i g h probability for those coefficients to be similar to 0. T h e partial correlation coefficients s h o w a very small absolute value, indicating that these variables have almost n o information to contribute to the m o d e l o r equation. Finally, i n the 'collinearity statistics' c o l u m n ,  105  the 'tolerance' is the smallest tolerance for any independent variable i n the m o d e l , that is, the m o d e l w i l l not enter a variable i f it results i n a very small tolerance for any independent variable. Tolerance measures the strength o f linear relationships a m o n g independent variables. F o r each independent variable, the tolerance is the p r o p o r t i o n o f variability o f that variable that is not explained by its linear relationship w i t h the other independent variables i n the m o d e l . T h u s , a value close to 1 indicates that an independent variable's variability is almost not explained by the other independent variables, as is the case o f score o f rules, w h i c h tolerance is r o u n d e d to 1. O n the other hand, a value close to 0 indicates that a variable is almost a linear c o m b i n a t i o n o f the other independent variables (see tolerance values for the other independent variables i n T a b l e V I . 6 ) . These variables are called multi-collinear. SPSS has default values for tolerance (rninimum tolerance) that protect against the inclusion o f multi-collinear independent variables. Independent variables that are very highly correlated w i t h independent variables already i n the equation are not entered. C h e c k i n T a b l e V I . 1 that correlations between score o f rules and organizational structure, market position and adaptive ability are higher than 0.90. Statistically, the three latter variables may inflate the regression coefficients, and logically they are not needed because o f their correlation w i t h scores o f rules (see T a b a c h n i c k and Fidell, 1996). T h e equation to predict performance o f cooperatives i n terms o f average catch is then defined by the following formula:  P = SR * (8.0) -117.34 W h e r e P = performance expressed as average catch, and S R = score o f operational rules for each cooperative. I obtained exacdy the same equation using a backward multiple regression. I also used a standard regression i n c l u d i n g all independent variables. A l t h o u g h R increased to 0.77 (independent variables explain 7 7 % o f the variability o f performance), the tolerance values were close to 0, indicating a strong collinearity between variables. These results show that operational rules seem to be the most influential variable o n the performance o f cooperatives i n this study. 2  VI.4 D I S C U S S I O N T o answer the research questions i n this chapter, T a b l e V I . 2 shows that there is a general tendency o f high scores o f rules, adaptive ability and market p o s i t i o n to be associated w i t h higher satisfaction and average catch. T h i s is especially true for participatory cooperatives, although stated satisfaction o f members was not the highest. T h e other democratic cooperatives, the consultative ones, are the next m o s t productive, but their market p o s i t i o n and ability to adapt are less developed. Supervisory cooperatives are an interesting case o f recendy adapted organizations that r e s p o n d m o r e effectively to their particular external environment. T h i s c o n d i t i o n has i m p r o v e d their market p o s i t i o n , that is, they have enough autonomy to sell their catches to the buyer and at prices m o s t convenient for them. Y e t , their p r o d u c t i o n is not as h i g h as i n democratic cooperatives. A possible explanation is that membership and, consequendy, fishing effort is smaller than i n supervisory cooperatives. A similar association a m o n g variables is evident for their l o w e r values, that is, l o w scores o f rules, market p o s i t i o n and adaptive ability are associated to l o w satisfaction and average catch. N o n directive, autocratic and laissez-aller cooperatives share these l o w values, being the less organized, w i t h the weakest market position, less able to adapt to the external environment, and consequendy, are the less productive a m o n g the cooperatives i n Y u c a t a n . 106  I n light o f these results, it is possible to say that the three independent variables are correlated to the performance o f the cooperatives. H o w e v e r , the results from the multi-variate statistical analyses show that the m o s t influential independent variable is the score o f operational rules. A t the same time, there does not seem to be a statistically significant influence o f the market and adaptation o n performance. H o w e v e r , I a m certain, because o f m y w o r k i n g experience i n the study area, that these variables have a significant influence o n the way fishing cooperatives perform. M y interpretation o f the results obtained here is that the scale o f measurement o f the variables influences these results. I used an ordinal scale to measure the level o f adaptive ability, market position, and satisfaction. I n the first two variables, I defined only four categories. T h i s fact concentrated the corresponding dependent variable values for each cooperative i n four groups, m a k i n g it difficult to find a linear association a m o n g independent and dependent variables. It makes it especially difficult to use multiple regression analysis to yield a linear relationship a m o n g variables, and it poses problems o f lack o f normality o f data and collinearity a m o n g variables. O r d i n a l data are the m o s t frequent, and sometimes the only reliable i n f o r m a t i o n available i n n o n experimental research. T h e ordering o f cases, although lacking a unit o f measurement, permits a comparison o f cases to identify w h i c h one is less or lower than the other(s) ( H i l d e b r a n d et al., 1977). In this study, the scale I devised defines, for instance, that supervisory cooperatives are m o r e able to adapt than consultative cooperatives, but it does not say h o w m u c h m o r e able. T o k n o w h o w m u c h , it is necessary to develop an interval or ratio scale o f measurement. I used an ordinal scale o f measurement because n o other type o f i n f o r m a t i o n was available to b u i l d another scale to measure market p o s i t i o n and adaptive ability. I n addition, for c o d i n g interview data, I felt that a small n u m b e r o f ordered categories were enough to describe the differences a m o n g cooperatives. I also believed that ordering the cooperatives i n a qualitative way was enough and that numerical values were not important. H o w e v e r , I recognize that it is useful to assign numerical values to different states o f an o r d i n a l variable, although these numbers are only to indicate the rank o f the variable state i n the ordering, without any other significance. In the case o f collinearity a m o n g the independent variables, it is because all o f the cooperatives have the same values for market position and adaptive ability. It w o u l d have been m o r e convenient to develop a ratio scale o f measurement by getting e c o n o m i c i n f o r m a t i o n i n the case o f market position and designing another scoring system to measure the factors that determine the ability o f cooperatives to adapt. I n b o t h cases, as I mentioned, I had to make the analysis w i t h the only information available. Cluster analysis and M D S complement each other since the groups o f cooperatives i n the first analysis and the 'neighborhoods' i n the second analysis group the cooperatives i n a very similar way. I n b o t h cases, m o s t productive cooperatives (participatory) are g r o u p e d together i n a cluster or neighborhood, w h i c h the highest similarity measures. N e x t , less productive but still w i t h large score o f rules are the consultative and supervisory cooperatives. B o t h analyses group together the least productive cooperatives as a separate cluster or neighborhood. I n this way, cluster analysis and M D S seem to c o n f i r m the results from the multiple regression analysis i n terms o f considering the scores o f rules as the most important factor underlying the g r o u p i n g o f the cooperatives. Nevertheless, I still strongly believe that the n u m b e r o f rules reflects the organizational level o f a cooperative, and that a higher organizational structure facilitates the necessary, ability o f the cooperative to r e s p o n d effectively to changes occurring i n the surroundings, either social, economic, political, technological or biophysical. A m i d s t this multi-factorial external environment, the 107  cooperative w i t h a well structured organization is m o r e likely to have more autonomy i n developing m o r e reciprocal exchange relationship w i t h other market agents (intermediaries). A u t o n o m y also means freedom to design and implement n e w rules or to modify traditional ones i n order to maintain and expand the cooperative's operations, by either increasing or diversifying its p r o d u c t i o n .  108  C H A P T E R VII GENERAL CONCLUSIONS In this chapter, I advance a number o f conclusions f r o m the preceding chapters regarding the influence o f the operational rules, adaptive ability and market p o s i t i o n o n the performance o f cooperative organizations. . I also discuss the implications o f such influence o n fisheries management. T h e n , I discuss w h i c h o f m y results may be considered as contribution to the theories used i n m y analysis, emphasizing potential new approaches for the study o f this type o f organization. I found a general positive correlation between number o f rules implemented by the cooperatives, their adaptive ability, their market strategies, and their.performance. Besides the statistical evidence, I drew the following conclusions incorporating m y previous knowledge o f the study area.  VII.1.1 Operational rules, organizational structures and performance T h e operational rules implemented by the cooperatives define their organizational design, w h i c h i n turn influences their performance. T h i s cause-effect relation is established as follows. Clearly defined and well-understood operational rules and organizational structures allow major participation o f all cooperatives' members. Several benefits may arise from increased participation. T h e first one is consistent agreement o n proposals reached by the majority. T h e next one is c o m m i t m e n t to the decision reached (see Fisher, 1974), expressed either by compliance or internalization. Compliance refers to the fact that a person follows the rest o f the group without being convinced by the decision made by the group. Several fishermen mentioned that sometimes they agreed w i t h regulations because o f loyalty to the group, not because they were convinced that that was the best choice. O n the other hand, internalization means that a person is convinced that the group has adopted the best solution. M e m b e r s internalize w h e n the decision reflects their initial position or the fact that they have been convinced by other members' arguments (see Brigham, 1986, o n compliance and internalization). Increased participation o f all members also expands the legitimacy o f the agreements. I f members feel that decision-making takes into account their inputs, they may increase their c o m m i t m e n t to respect and comply w i t h resulting agreements more readily. A s a concurrent consequence, communication improves because all members k n o w the problems the cooperative is facing and because they can express their concerns. C o m m u n i c a t i o n facilitates the transit o f ideas, w h i c h , i f done properly, can improve understanding and may result i n the generation o f innovative alternatives for decision-makers. V i e w i n g organizations as networks o f information processing units, where decision-making is determined by the organization's communication structure, has been studied by-Visser (2000). This author, found out that a hierarchy tends to perform better (make better decisions) i n tough environments, and that a polyarchy makes better decisions i n friendly environments. B o r r o w i n g his terminology, authoritative cooperatives may be seen as hierarchies where the top level o f the organization makes final decisions, and the tough environment is characterized by highly competitive rival organizations, as it occurs i n the community where these cooperatives are located. O n the contrary, polyarchies w o u l d be represented by democratic cooperatives where decisions are reached by majority, and their environment is friendly i n terms that i f they d o not undertake an action, it is not undertaken by rival cooperatives because they are the only social organizations i n their communities or because other cooperatives cannot take either such action. T h e communication structure o f authoritative cooperatives makes it unnecessary for all members to be informed i n order to make 109  decisions, whereas i n democratic cooperatives it is essential that all members are informed before making a collective decision.  -  Participation o f all members also simplifies the delegation o f authority to councils and committees. Members i n these w o r k i n g units are committed to accept responsibility for performing specific tasks and to be accountable for their actions. T o delegate authority i n an efficient way, lines o f authority must be well defined and understood. There is an authority rariking inside any cooperative and each level has specific responsibilities to the next higher rank. W h e n authority hierarchies are clear to everyone, the delegation o f authority is more efficient because everybody knows what to do and what is expected from them. I n participatory cooperatives, all members participate i n the definition o f objectives and strategies, so they are certain about what the cooperative is after. H e n c e , fishermen w i l l devote their efforts and energy to the achievement o f such objectives by following die defined strategies. T h e resulting overall structure increases performance w h e n it links to the cooperatives' goals. It is also true that the structure, w h e n it becomes too rigid, decreases success i f it prevents the cooperative from perceiving more efficient ways o f production and organization. Democratic c o n t r o l is less evident i n consultative and supervisory cooperatives, so do patterns o f participation. Since consultative cooperatives have a similar structure to participatory ones, it w o u l d be easier to increase their level o f participation by p r o m o t i n g solidarity and democratic control.  V I I . 1 . 2 Adaptive ability and performance Cooperative organizations design different structures to operationalize their mediating role between their members and larger systems such as communities, the market or the government (see V a n Wart, 1998). T h u s , cooperatives may adapt to create a segmented organizational structure to protect technical activities, such as fishing, as it happens i n autocratic and non-directive cooperatives. O r to create an organic structure to adapt successfully to the environment, like i n supervisory groups (see H o u g l a n d and Shepard, 1980). T h e design o f cooperatives' organizational structure i n Y u c a t a n has had m i x e d results since some structures are comparatively more efficient for adaptation than others. A c c o r d i n g to the survey's results, all cooperatives are associations o f persons united voluntarily, for w h i c h the m a i n purpose is to meet at least economic needs, plus cultural and social ones. H o w e v e r , devising an 'autonomy continuum', I can accommodate the cooperatives from the least to the most autonomous as follows: laissez-aller, autocratic, non-directive, consultative, participatory, and supervisory. N o n e o f the first five ones is completely autonomous from other market agents, and all o f the six depend o n government agencies at least to be legally recognized and to have a fishing permit. There is an empirical relationship between the level o f autonomy and the ability to adapt. T h e m o r e independent an organization is, the more adaptability it has. There are several types o f structural adjustments induced by the environment. F o r example, laissez-aller cooperatives have n o autonomy and they have to adjust totally to the intermediaries' demands, concentrating their fishing effort only o n one or two species despite the fact that other cooperatives catch at least six other valuable species i n the same fishing area. These cooperatives exist only i n the official records, since their members never carry out any collective action; they have n o assets, no liability, and they fish and sell their catches independendy from each other. I n a similar way, non-directive cooperatives, having a m o r e structured organization than laissez-aller, respond to a similar extra-organizational element to determine what species to catch. In both types o f cooperatives, satisfying the demand for particular species makes it unnecessary for these cooperatives to make any further adaptation to survive. A t the same time, other cooperatives stricdy respect more intra-organizational and community norms, seeking to counterbalance hindering market and legal influence. F o r instance, consultative and participatory cooperatives strongly c o m p l y w i t h traditional arrangements emerged from long-lasting 110  local patterns o f personal interaction. In these democratic cooperatives, the influence f r o m the decision unit to adjust varies and gives them m o r e autonomy from the external environment. Consultative cooperatives are more influenced by the environment than participatory ones. I n the latter, the members have m o r e voice i n determining the development o f the whole group, and their inputs are considered during the adjustment process. T h i s situation allows the cooperative to resist environmental influence. Participatory cooperatives are those i n w h i c h ownership is o n a mutual basis and decisions are reached by consensus more often. T h i s fact has strengthened them since are a m o n g the most productive cooperatives i n the state. Regarding authoritative cooperatives, the leaders have substantial influence to adjust their cooperatives i n the way it is required. T h e difference between autocratic and supervisory cooperatives is that i n the former the centralized c o n t r o l i n decision-making led leaders' personal interests to overcome collective interests. A s these leaders are financially dependent o n intermediaries, their cooperatives lose independence to adjust. O n the contrary, supervisory cooperatives regard their collective objectives as m o r e important than leader's personal goals although he has substantial influence i n adjusting the cooperative to disruptions. T h i s factor increases their adaptive ability. Supervisory cooperatives are located i n the fishing c o m m u n i t y where most o f the stronger fishing companies are located as well. O n e o f the most remarkable realizations o f these cooperatives is the necessity o f being an organized enterprise operating i n the market. T h i s recognition was the starting point to adapt their structure to control the production, processing, packing, distribution and export o f fish products f r o m the begmning o f the 1990s.  VII.1.3 Intermediaries and performance A m o n g the external environmental conditions that constrain cooperatives' performance, one o f the most important is the role o f local intermediaries: T h e over-exploitation o f a small n u m b e r o f species and the under exploitation o f many others is the result o f the specialization i n the catch c o m p o s i t i o n demanded by the intermediaries i n Yucatan.  Intermediaries have previous compromises with* the  international market, and these compromises translate into an irrational demand o n local resources from extra-regional e c o n o m i c agents. That is, fish resources do not satisfy local needs and the lack o f diversification applies not only i n the catch but also i n the way fish-based products are processed. T h e major demand is for fresh raw material with r n i n i m u m processing, impeding added value and hence economic benefit to the  fishermen.  Fishes are reduced to fillets and lobsters to 'tails', assigning zero  added value to the rest o f the organisms' body. O n e o f the most important conclusions o f this study is that most o f the cooperatives lack autonomy to various degrees. T h e i r financial dependency o n intermediaries has determined the catch composition, their investment policies and capital accumulation patterns. T h e intermediaries' influence has expanded to non-related fishing activities, such as personal and familial issues, adding m o r a l obligation to financial dependency. T h e intermediaries assure loyalty o f fishermen and the supply o f valuable raw material at l o w prices. T h e dependency has made cooperatives miss opportunities to enter new, more profitable markets, to seek technological innovation, and to diversify and expand their production.  VII.2 IMPACTS O F T H E F A C T O R S A F F E C T I N G C O O P E R A T I V E S ' P E R F O R M A N C E T O FISHERIES M A N A G E M E N T T h e general objectives o f fisheries management are o p t i m i z i n g the biological and e c o n o m i c yield, mamtaining a particular level o f population level, protecting the marine and coastal environments, and p r o v i d i n g various social and economic benefits to the fishing communities ( K i n g , 1995). Ill  H o w e v e r , some o f these objectives have been incompletely satisfied w h e n considering fishing cooperatives i n Yucatan. Instead o f optimization o f biological yield, there are a few overexploited species, whereas many others are under exploited and they could potentially increase the provision o f food for local people and other fish-based products for exportation. M o s t cooperatives concentrate between 8 0 % and 9 0 % o f their catches o n t w o or three species. E x t r e m e cases are represented by cooperatives exclusively catching one species. Besides the disparities o f biological yield by specific resources, overexploitation o f few species may necessarily affect the composition and structure o f the marine communities. W h e n overexploitation decreases the population number o f few species, the natural balance o f marine communities may be altered i n unpredictable ways, especially because predation and competition relationships a m o n g species have insufficiendy been studied i n the Yucatan. U n d e r these conditions, it is hard to say i f the objective o f maintaining particular levels o f fish populations has been reached A l o n g the same line, it is also hard to estimate whether optimization o f economic yield has been reached. A r g u i n g 'business strategy', private enterprises have never been willing to disclose their total investment i n fisheries. T h e general perception is that fisheries are overcapitalized, but under current conditions it is not possible to assess by h o w m u c h . I n this context, cooperatives have contributed a very small percentage to the overall economic rent o f the Yucatan fishing resources. T h e contribution o f cooperatives has been, o n average f r o m 1993 to 1997, about 1 0 % o f the total landed value ( S E M A R N A P , 1998). A t the fishermen level, economic information is not available from cooperatives. Based o n information provided by fishermen i n coundess i n f o r m a l conversations and media reports, the c o m m o n statement is that the capture per fishing effort has constandy been diminishing since the beginning o f the 1960s w h e n commercial orientation o f the fisheries intensified. A t the same time, production costs have been steadily increasing, but catch prices have increased only slighdy. A s a result, net incomes have been dropping, hence dirnimshing the economic rent o f the fishery, at least for cooperatives' members. Regarding protection o f resources and environment, participatory and supervisory cooperatives, the ones with higher adaptability to the changing environment, have proposed several measures to support the protection o f marine resources. A m o n g these measures are the implementation o f a marine protected area and the extension o f closed seasons for some species i n identified nursing areas. Surveillance o n members' behavior is a regular practice among these cooperatives. Unfortunately, less that one third o f the cooperatives analyzed have adopted these protective measures. Simultaneously, other cooperatives have been unwilling or incapable to adapt to more successful and compromised organizations. T h e idea o f cooperatives as an ideal vehicle to deliver fishing policies (Baticados, 1998) is not fulfilled by laissez-aller, autocratic, and non-directive cooperatives, since these lack respect f o r c l o s e d seasons, m i n i m u m legal size, legal fishing gear, and fishing reports. E c o n o m i c and social benefits for the communities are rninimal since many cooperatives' objectives are concentrated o n the economic benefit o f their members. T h i s situation results i n part from the imposition o f formal,, rigid and homogeneous structures for the delivery and implementation o f fisheries development programs. Problems include loss o f traditional knowledge accumulated through generations by fishermen, loss o f innovative management practices since the decision-making is centralized, controlled and bounded by governmental agencies, reduction or loss o f stability o f resource utilization, and loss o f economic benefits to the community (see D y e r and L e a r d , 1994). There are, however, some benefits to complementing traditional and official schemes. F o r instance, some traditional practices have 'conservative' effects, whereas formal regulations may prevent the continuation o f 'bad' traditional practices, such the lack o f strict enforcement o f regulations. Therefore, i f implemented correcdy, b o t h types o f regulations have the potential for generating more  112  sustainable production than the government or the community w o u l d generate individually (Dyer and Leard, 1994). A t the onset o f the cooperative sector, the government promoted, among their members, collective action, diversification o f the catch composition, and the satisfaction o f social concerns i n their communities. H o w e v e r , because o f the lack o f managerial skills and freedom for market exchange, cooperatives entered dependence power relations h o l d i n g subordinated positions. Consequendy, the general behavior o f fishermen has been shifting towards individualization i n their personal interaction, specialization o f fishing i n a small number o f species, and maximization o f profit to pay financial debts. D u e to their financial dependency, paying the loans to the intermediaries has become one the most important priorities to fishermen. T h e dependency is so strong that they have n o saving capabilities, hence having to fish practically every day to have capital to support their families. Ignoring this reality has reduced the impact o f fishing policy objectives. F o r instance, training goals have often not been achieved due to l o w attendance by fishermen because they have n o savings to stop fishing for one single day.  VII.2.1 Position of cooperatives vis-a-vis intermediaries arid the government T h e autonomy o f action o f local fishing firms as intermediaries also has an effect o n the way cooperatives comply w i t h fishing regulations. Intermediaries main market strategy is collusion for pricing and keeping other buyers from entering the local market. T h e i r organization makes a; remarkable contrast to the lack o f coordination between municipal, state and federal agencies. Whereas the federal Ministry o f N a t u r a l Resources, E n v i r o n m e n t and Fisheries has been reducing and even canceling the issuing o f fishing permits to reduce the fishing effort, the state Ministry o f ' Industrial D e v e l o p m e n t has p r o m o t e d the operation o f more high-technology processing and packing facilities. T h e rational conclusion o f fishermen is that i f there are new fishing plants, there is still someone w h o w i l l buy their catches; thus, new and traditional fishermen w i l l maintain or even increase the fishing pressure over targeted marine resources. Bureaucratically designed fishery management policies are centralized and traditionally their implementation is 'top-down', without considering local characteristics o f resources and users. Policymakers, and consequendy policies, have a simplistic image o f fishermen because they expect fishermen to react automatically to the official regulations, without considering sociak econotnic and cultural conditions o f cooperatives, their members and communities. Moreover, fishermen are the simplistic representation o f resource depletion. Policy-makers have blamed fishermen coundess times for the decrease i n biological yield. H o w e v e r , there is not explicit recognition o f the irrational definition o f . the demand made by the market, and consequendy, the government has not proposed measures to reduce the impact o f such demand. * Contradictory laws worsen this situation, so does the fact that often field officers and administrative personnel i n official agencies d o not understand these laws. A s an illustrative example, the .General L a w o f Cooperative Organizations was enforced by the Ministry o f E m p l o y m e n t and the Ministry o f Natural Resources, sometimes i n a discretionary way, creating too m u c h confusion for fishermen and delaying the permission for operating a.new cooperative by up to a year. T h e lack o f coordination a m o n g agencies, their lack o f qualified personnel, and the misunderstanding and misapplication o f the fishing law among field officers arid fishermen cause inefficient and unfair enforcement. It is inefficient because it does not properly address the set o f market incentives that induce non-compliance (the financial dependence o f cooperatives and their lack o f freedom to engage i n equitable market exchange). Enforcement is unfair as well because it targets mosdy low-income 113  fishermen, but simultaneously facilitates the intermediaries to trade practically any marine resource. In view o f the insufficient number o f field inspectors, it seems to be more efficient to exert surveillance o n the fishing firms because m o s t o f the catch are concentrated at the end (see Sutinen et al., 1990). If the government agencies d o not effectively assume their regulatory role and allow the emergence and continuance o f oligopsonistic practices; i f they do not enforce evenly and fairly the fishing regulations, and i f they d o not recognize the economic, social, and cultural motivation o f the cooperatives, it is more likely that the participation o f intermediaries w i l l continue to determine the subordinated market position o f the cooperatives, impeding their integral development as economic and social agents.  VII.3 C O N T R I B U T I O N S T O T H E O R Y It is expected that this study w i l l stimulate further discussion o n cooperatives by comparing their structure and decision-making processes. M o r e precisely, it w i l l be an empirical contribution to the adaptive and interpretative models o f decision-making (Chaffee, 1984). T h e adaptive m o d e l interprets the organization as an entity w i t h its o w n goals and coherent, goal-oriented actions. D e m o c r a t i c and supervisory cooperatives fit more i n this m o d e l to a varying degree, w i t h the supervisory ones at the extreme o f adapting themselves to changes i n the environment to maintain or increase the flow o f resources into the cooperatives. Permissive and autocratic cooperatives fit more i n the interpretative model. It portrays the organization as a network o f participants w h o use their association to pursue their individual goals, w i t h the laissez-aller cooperatives at the extreme o f comprising a network o f highly self-interested members.  VII.3.1The measurement of success In Chapter I, I introduced i n the idea that success, as an expression o f performance, is the achievement o f objectives. T h e only objectives that were explicidy recognized and used to measure the performance o f the cooperatives were satisfaction and production (average catch). These two represent mdirect and direct indicators and methods for measuring the achievement o f objectives by cooperatives. T h e mdirect or person-related approach is useful and necessary to measure imprecise, non-operational elements f r o m a set o f objectives. T h e direct or performance-related methods o f success measurement, are used to determine an objective achievement o f objectives (Blumle, 1985). It is important for studies o n cooperatives to define from the beginning h o w performance is going to be measured, because it affects the k i n d o f information needed and the methodology used to collect such information. Besides, depending o n the approach, cooperatives may be successful or not. T h u s , it is recommended to integrate b o t h methods o f measurement to support a comprehensive evaluation o f success The basic difference between direct and indirect indicators is that they measure operational and n o n operational elements o f the system o f objectives. Indirect indicators are helpful i n cases where members o f cooperatives are not aware, most o f the time, o f operational elements, such as profitability, sales or costs. I found that most o f the members i n Y u c a t a n cooperatives are concerned with non-operational elements, such as attitude to the cooperative, willingness to participate i n the setdement o f conflicts, and agreement about the principles o f management. In this study, I used satisfaction as an mdirect measure o f success. T h e measurement is based o n evaluating the subjectively perceived fulfillment o f objectives by cooperative members. Satisfaction was ascertained by direcdy asking fishermen to express their level o f subjectively perceived objective's achievement through their o p i n i o n o n the general adrninistration o f their cooperatives.. A t the same time, within this indirect measurement o f success, there are indirect indicators as well. I evaluated 114  these by observing the behavior o f members as members (willingness to participate i n assemblies and get involved i n the management o f the cooperative), and as clients (using die basic cooperative's services). I used observation o f behavior to confirm stated satisfaction o f members o f different cooperatives. T h e most useful direct indicators o f success are those that show the achievement direcdy, as profit, market share, and turnover. In this study, the direct indicator o f success is the average catch per cooperative. O t h e r indicators that provide indirect information o n objective's achievement are adaptability and market position, although I used them as independent variables measured with categorical scales. T h e system or set o f objectives I have been referring to includes those stated i n the cooperative's chart and those expressed by the members  during the interviews.  T h e general objectives that the  cooperatives should aim for are: a)  Ensure the preservation or survival o f the cooperative. T h i s means that the cooperative should be able to preserve and increase its assets i n the long-term. F o r this, they need to maintain or increase their level o f i n c o m e or profitability.  b)  Increase profitability, w h i c h means increase productivity and competitiveness i n the market and, at the same time, reduce costs o f production through economies o f scale.  c)  Provide services tailored to the members' needs. T h e cooperative must offer services to members so they can meet their economic, social and cultural aspirations.  It seems that the use o f one direct and one indirect m e t h o d / i n d i c a t o r to measure performance o f Yucatan cooperatives is adequate to make a comprehensive assessment o f their performance.  VII.3.2 O n the organizational framework T h e major hurdle seems to be the p r o b l e m o f building a suitable organizational framework, w h i c h is viable and dependable i n the face o f the competitive environment. T h i s p r o b l e m stems largely from the very nature o f the cooperative organization. A s a business organization, it should attain operational efficiency like any other private enterprise. A s a social organization, it has to be designed to function for the social and economic improvement o f its members. In the case o f Y u c a t a n cooperatives, those with a supervisory organizational structure have oriented their management to increase their competence i n running the cooperative as an economically viable unit. Leaders had understood the economies o f scale o f cooperation a n d had been able to exploit the oppormnities i n the environment for the development o f the members and the cooperatives. F o r example, they are the only leaders that have adopted the new official regulation that allows them to be up to five years o n the board o f directors. There is also the possibility o f reelection. Supervisory cooperatives have been able to adapt their structure to face greater challenges f r o m the market environment. T h e i r new structure has been built up to meet the emerging needs, and can be thought o f as a hybrid structure that seeks to m i x a business culture w i t h democratic values. O n e important consideration is that g r o w t h and diversification o f the range o f activities to be competitive is closely linked to risk-prone, systematic diinking, motivated leaders (see Seetharaman and M o h a n a n , 1985). In the case o f participatory, consultative, and non-directive cooperatives, the board o f directors keeps a constant interaction w i t h the members. T h i s interaction is favored by the rotation i n managerial functions, that is, the board o f directors and committees change every three years. A l t h o u g h this fact 115  increases interaction between management and members, and enhances awareness o f organizational and individual goals, it hinders management because members gaining experience and knowledge at the board level have to leave their position to other members that may not have any experience i n management. Participatory, consultative, and non-directive cooperatives kept more attached to the cooperative development policy o f the state. T h e policy created a single structure and forced cooperatives to adopt it (institutional isomorphism). T h e state offered cheap credits, privileges i n the distribution o f the catches, exclusive rights to exploit scarce, valuable species, managerial subsidy, and asked cooperatives for shared capital participation, recognition o f the members' general meeting as the supreme body o f the cooperative, and majority rules for participatory decision-making. T h e original stated purpose o f the cooperative development policy was to implement governmental social and economic programs. H o w e v e r , the evolution o f these cooperatives shows that only participatory groups have continued with the original structure and an increased level o f participation and democratic c o n t r o l o f their operations. D e m o c r a t i c practices and participatory patterns o f members' behavior are less apparent i n consultative cooperatives. In the case o f non-directive cooperatives, their operations mostly help a few leaders w h o take the benefits that accrue from the cooperatives (autocratic leaders have taken this situation to its extreme expression). M o s t o f the members seldom participate i n a democratic decision-making process, and the cooperatives have become a mere instrument i n the hands o f the intermediaries.  VII.3.3 O n theoretical frameworks These contrasting differences between supervisory and democratic cooperatives make it difficult to define a suitable strategy i n the search for the right type o f cooperative organizational framework. T h e search may be an elusive task i f concern focuses only o n finding the right type o f organizational structure. It is probably more promising i n the short term to use as many suitable perspectives from organization theory as needed to explain the reality o f the cooperatives i n Yucatan. W i t h these perspectives, more knowledge may be generated though further studies and one may then develop a more suitable framework for the analysis o f cooperatives. Therefore, there is a need for considerable theoretical development and experimentation for identifying alternative types o f organizations to properly. analyze cooperatives. T h e mainstream o f organization theory has generated paradigms and hypothesis for other organizational forms, mainly b i g corporations and official sectors (Stryjan, 1989). It has been hard to prove the democratic nature o f cooperatives due to the strong influence o f the ' I r o n L a w o f Oligarchy' (Michels, 1915 i n M a y , 1985), w h i c h points out that even organizations w i t h the highest cornmitment for democracy end up controlled by a few members. A l s o most o f the cooperatives i n M e x i c o had followed, through institutional i s o m o r p h i s m , the Weber's bureaucratic m o d e l , w h i c h emphasizes rational decisionmaking, job appointment by merit, reliance u p o n written rules, and graded hierarchies. T h e m o d e l has been dominant i n part because cooperatives have made almost n o attempt to create innovative organizational designs for more membership involvement and control. M y standpoint is that self-managed organizations need special designs to conduct i n different ways, apart from 'classical' organizations. A t the same time, researchers may develop a new theory that may enrich current organization theory. Therefore, a theory o f cooperatives and other self-managed organizations should proceed from organizational practice to theory. T h e starting point is to recognize that established organizational theory cannot entirely explain cooperatives. F o r instance, to m y knowledge, there is n o approach that can explain the unique characteristic o f cooperatives consisting o f all members at the top, aclministrative and operational levels sharing the supreme authority for strategic decision-making. A l s o , it is necessary to acknowledge that is rather impossible to find a unitary m o d e l o f organizational design to describe all types o f cooperatives' structure, or to w h i c h all 116  organizations should aim. It is necessary to recognize the complexity o f reality and to avoid focusing all research efforts o n the philosophical traditions o f reification, reductionism, and hierarchization. T h e propensity to convert abstract concepts into hard entities for measurement purposes, the desire to explain r a n d o m and irreductible complex phenomena by deterministic behavior o f small constituent parts, and the inclination to order items by ranking them into a linear series o f increasing worth, are useful ways to help explain reality.. H o w e v e r , its interpretation.should go beyond analytical tools to accommodate theory' to reality, not the other way around. In this study, I have used an eclectic approach i n the sense o f using as many organizational 'theories' as needed to understand the real situation o f cooperative organizations i n a rather small region. I used this approach because I identified at least six structural designs that may need different approaches to explain w h y the cooperatives are performing differentiy. 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"Challenges and opportunities i n the evolution o f Canadian cooperative structures." Cooperatives, i n the clash between m e m b e r participation, organizational development and bureaucratic tendencies, E . D u l f e r and W . H a m m , E d s . Quiller Press, L o n d o n , 401-424. Michels, R . (1915). Political parties, N e w Y o r k . Seetharaman, S. P . , and M o h a n a n , N . (1985). " O r g a n i z a t i o n building i n cooperatives- A framework." Cooperatives, i n the clash between m e m b e r participation, organizational development and bureaucratic tendencies, E . D u l f e r and W . H a m m , E d s . Quiller Press, L o n d o n , 201-215. ' . • . Stryjan, Y . (1989). Impossible organizations. Self-management and organizational reproduction, G r e e n w o o d Press, N e w Y o r k / L o n d o n .  130  Sutinen, J . G . , Rieser, A . , and G a u v i n , J . A . (1990). " M e a s u r i n g and explaining noncompliance i n . federally managed fisheries." Ocean Development and International Eniv, 21, 335-372. V a n W a r t , M . (1998). C h a n g i n g public sector values. G a r l a n d P u b l i s h i n g Inc., N e w Y o r k & L o n d o n . Visser, B . (2000). "Organizational c o m m u n i c a t i o n structure and performance." Journal of Economic Behavior and Organisation, 42, 231 -252.  131  APPENDIX A Guide questions to interview cooperatives' board of directors.  O P E R A T I O N A L R U L E S . Rules g o v e r n i n g the social relationships w i t h i n cooperatives  Eligibility. Characteristics to participate o r n o t as m e m b e r o r as manager 1.  W h a t are the conditions to be accepted as m e m b e r o f this cooperative?  2.  W h a t are the conditions to expel a member?  3.  D o e s a m e m b e r have any o p p o r m n i t y to appeal w h e n he has been expelled? .Yes  4.  No.  I f yes, please explain the appealing process  Decision. T h e formulas used for decision-making i n collective actions 5. . 6.  W h a t are the general assembly duties? H o w are agreements undertaken w i t h i n this cooperative?  7.  H o w are the cooperative incomes a n d costs distributed a m o n g the members?  8.  H o w is the annual yield distributed a m o n g the members?  Position. W h a t p o s i t i o n members m a y h o l d w i t h i n the cooperative. 9.  W h a t are the boards and commissions i n w h i c h members o f this cooperative can participate?  10. H o w l o n g can a member be i n the boards?  years  11. W h a t are the conditions to keep being m e m b e r o f the committee?  Payoff. T h e rewards o r penalties w h i c h may be assigned to actions o r outcomes 12. W h a t are the reasons for being m e m b e r o f a cooperative? 13. H o w is the m e m b e r s ' b e h a v i o r constrained? 14. H o w is the members' behavior induced? Authority. T h e authorized action participants can take independendy.  15. W h a t k i n d o f action members can take w i t h o u t approval o f the cooperative? 16. I n case o f independent actions generate problems, is there any conflict-solving mechanism? 17. H o w is considered the highest authority w i t h i n the cooperative?  Information. T h e i n f o r m a t i o n that participant may reveal to others. 18. H o w are the agreements i n f o r m e d w i t h i n the cooperative? 19. W h a t kind o f i n f o r m a t i o n members must share witiiin the cooperative?  RELATIONSHIP WITH T H E COMMUNITY 20. W h a t are the existing local property-rights arrangements o n fishing resources between the cooperative and the n o - m e m b e r  fishers?  21. I n w h i c h community's special occasions does die cooperative actively participate? 22. W h a t are the linkages between cooperative's managerial staff and local authorities? 23. A r e there conflicts i n the fishing activity a n d use o f other marine resources between the cooperative and n o - m e m b e r fishers? 24. I f yes, what is the nature o f the conflicts? 25. H o w those conflicts are resolved?  Ecological attitudes 26. H o w do members o f y o u r cooperative perceive the future o f the fishery resources? 27. W h a t are the corresponding attitudes t o these perceptions? 28. H o w is the ecological knowledge passed through generations? 29. W h a t are the different activities that this cooperative carries out a n d / o r participate? 30. W h a t are the relevant factors y o u consider have driven y o u r cooperative to its current level o f organization and production? Please rank arid check them as positive (+) o r negative (-), being . 1 the most important. 31. W h y do y o u consider those factors as being important? Please explain.  133  32. H a v e all members o f the cooperative discussed these factors to understand its current level o f organization and production? Please explain. 33. W h a t other factors d o y o u think s h o u l d be considered to i m p r o v e the level o f organization and p r o d u c t i o n o f your cooperative?  RELATIONSHIP WITH T H E INTERMEDIARIES 34. W h a t are the arrangements for supplying marine species to the intermediaries? 35. H o w are the different species priced? 36. H o w is the price agreement formalized? 37. H o w is the price agreement enforced? 38. W i t h h o w many intermediaries this cooperative trades? 39. I f m o r e than one, W h y ? Please explain 40. W h e r e are the intermediaries from? 41. Is there a credit-marketing relationship between cooperative/fishers and intermedairies? 42. I f yes, please explain. 43. W h a t is the role o f the cooperative w h e n the credit relationship is established direcdy w i t h its members?  134  APPENDIX B Questionnaire for measuring satisfaction among members First section: cooperative attributes. In the following questions, circle the number that best expresses your views about each attribute. Management style. Question 1: How satisfied are you about the general way your cooperative has been managed in the last 6 years? 1. 2. 3. 4. 5.  Completely satisfied Mosdy satisfied Mixed -equally satisfied and dissatisfied Mosdy dissatisfied Completely dissatisfied  Question 2: In a few words, could you explain why are you (dis)satisfied? Question 3: Flow do you evaluate the performance of your cooperative in the following situations? Very good  Goo  a) Dealing with fish buyers  2  3  4  5  6  7  b) Dealing with local authorities  2  3  4  5  6  7  c) Dealing with federal authorities  2  3  4  5  6  7  d) Asking for technical assistance  2  3  4  5  6  7  e) Dealing with finance sources  2  3  4  5  6^  7  f) Members carrying management  2  3  4  5  6  7  g) Managing savings plan  2  3  4  5  6  7  h) Applying internal rules  2  3  4  5  6  7  i) Solving internal conflicts  2  3  4  5  6  7  Situations Excellen  Don't know Poo  Ver y Terribl poo e  Solidarity among members. Question 4: How satisfied are you about the solidarity that is perceived in your cooperative? 1. Completely satisfied 135  2. 3. 4. 5.  M o s t l y satisfied M i x e d —equally satisfied and dissatisfied M o s t i y dissatisfied Completely dissatisfied  Question 5: I n a few words, c o u l d y o u explain w h y are y o u (dis)satisfied? Question 6: H o w d o y o u evaluate the performance  o f the members o f your cooperative i n the  following situations? Situations  Very Excellen good  Goo d  Don' Ver t Poo y kno r poo  Terribl e  a) C o m p l i a n c e w i t h regulations  2  4  5  6  7  b) Selling catches only to the c o o p  2  4  5  6  7  c) Participation i n meetings  2  4  5  6  7  d) G o o d personal relations  2  4  5  6  7.  e) F o l l o w i n g internal rules  2  4  5  6  7  f) Sharing information o n fishing  2  4  5  6  •7  Equipment and facilities. Question 7: In general, h o w satisfied are y o u w i t h your cooperative's equipment and facilities? 1. Completely satisfied 2. 3. 4. 5.  M o s t l y satisfied M i x e d -equally satisfied and dissatisfied M o s d y dissatisfied Completely dissatisfied  Question 8: I n a few words, c o u l d y o u explain w h y are y o u (dis)satisfied?  Question  9: H o w d o y o u evaluate the way your cooperative acquire a n d maintain equipment a n d  facilities? E q u i p m e n t and facilities Excellen t  Very good  Good  Don't know  Poor  Very poor  Terrible  a) F i s h i n g equipment  2  3  4  5  6  7  b) V e h i c l e s  2  3  4  5  6  7  136  c) Office furniture  1  2  3  4  5  6  7  d) Buildings  1  2  3  4  5  6  7  e) F i s h storage faculties  1  2  3  4  5  6  7  f) Ice making facilities  1  2  3  4  5  6  7  g) F i s h processing facilities  1  2  3  4  5  6  7  Question 10:  H o w satisfied are y o u w i t h the access y o u have to the equipment and facilities  provided by your cooperative? 0. 1. 2. 3. 4. 5.  Question 11:  D o not apply C o m p l e t e l y satisfied M o s d y satisfied M i x e d —equally satisfied and dissatisfied M o s d y dissatisfied Completely dissatisfied  I n a few words, c o u l d y o u explain w h y are y o u (dis)satisfied?  Question 12: H o w  satisfied are y o u w i t h the access y o u have to the technical assistance requested by  your cooperative? 0. D o not apply 1. Completely satisfied 2. M o s t l y satisfied 3. M i x e d —equally satisfied and dissatisfied 4. M o s d y dissatisfied. 5. Completely dissatisfied  Question 13: H o w  satisfied are y o u w i t h the access y o u have to the financial resources requested by  your cooperative? 0. D o not apply 1. Completely satisfied 2. M o s d y satisfied 3. M i x e d —equally satisfied and dissatisfied 4. M o s d y dissatisfied 5. Completely dissatisfied  Second section: social and fishing services.  137  In the following questions, circle the number that best expresses your.views about each attribute. Social services. Question 14:  I n general, h o w satisfied are y o u w i t h the social services (medical services, water  supply) provided by your community? 1. 2. 3. 4. 5.  Completely satisfied M o s d y satisfied M i x e d —equally satisfied and dissatisfied M o s d y dissatisfied Completely dissatisfied  Question 15:  I n a few words, c o u l d y o u explain w h y are y o u (dis)satisfied?  Question 16:  H o w do y o u evaluate the p r o v i s i o n o f the following services by your community?  Social services Excellent  Very good  Good  Don't apply  Poor  Very poor  Terrible  a) Access roads  1  2  3  4  5  6  7  b) Postal service  1  2  3  4  5  6*  7  c) Telephone service  1  2  3  4  5  6  7  d) T V , radio, newspapers  1  2  3  4  5  6  7  e) Electricity supply  1  2  3  4  5  6  7  f) Water supply  1  2  3  4  5  6  7  g) M e d i c a l services  1  2  3  4  5  6  7  h) F o o d markets  1  2  3  4  5  6  7  i) Schools  1  2  3  4  5  6  7  '  Fishing services. Question 17:  In general, h o w satisfied are y o u w i t h the fishing services (dry dock, lighthouse)  p r o v i d e d by your community? 1. C o m p l e t e l y satisfied 2. M o s d y satisfied 3. M i x e d -equally satisfied and dissatisfied 4. M o s d y dissatisfied 5. Completely dissatisfied  Question 18: I n  a few words, c o u l d y o u explain w h y are y o u (dis)satisfied? 138  Question 19:  H o w d o y o u evaluate the p r o v i s i o n o f the following services by y o u r community?  F i s h i n g services Excellen  Very good  t  Goo d  Don' t a  Poor  Very poor  Terribl  ppiy  e  a) D r y docks  1  2  3  4  5  6  7  b) Lighthouse  1  2  3  4  5  6  7  c) Ice m a k i n g facilities  1  2  3  4  5  6  7  d) Gasoline and o i l supply  1  2  4  5  6  7  e) G e a r and equipment supply  1  2  3  4  5  6  7  f) E q u i p m e n t maintenance  1  2  3  4  5  6  7  g) F i s h storage facilities  1  2  3  4  6  7  h) F i s h processing facilities  1  2  3  4  6  7  .  3  .  5 5  Third section: relationship cooperative-community. In the following questions, circle the number that best expresses your views about each attribute. Question 20:  I n general, h o w satisfied are y o u w i t h the relationship that your cooperative  has  established w i t h your community? 0. D o not apply 1. 2. 3. 4.  Completely satisfied M o s t l y satisfied M i x e d -equally satisfied and dissatisfied M o s d y dissatisfied  5. Completely dissatisfied  Question 21:  I n a few words, c o u l d y o u explain w h y are y o u (dis)satisfied?  Question 22:  H o w d o y o u evaluate the way your cooperative support or sponsor the f o l l o w i n g  events i n your community?  139  Excellent  good  Good  Don't apply  Poor  Very poor  a) Social  1  2  3  4  5  6  7 .  b) C u l t u r a l  1  2  3  4  5  6  7  c) Religious  1  2  3  4  5  6  7  d) Sport  1  2  3  4  5  6  7  e) Social projects  1  2  3  4  5  6  7  Very  Events  Terrible  Question 23: H o w  do y o u evaluate, i n turn, the su pport your c o m m u n i t y provides to events p r o m o t e d by your cooperadve?  Excellent  Very good  Good  apply  Poor  Very poor  a) Social  1  2  3  4  5  6  .7  b) C u l t u r a l  1  2  3  4  5  6  7  c) Religious  1  2  3  4  5  6  7  d) Sport  1  2  3  4  5  6  7  e) F i s h i n g projects  1  2  3  4  5  6  7  Events  Don't  Terrible  Fourth section: relationship cooperative-fish buyers. In.the following questions, circle the number that best expresses your views about each attribute. Question 24: H o w  satisfied do y o u feel about the relationship your cooperative has established w i t h  the m a i n fish buyer(s) that operate i n your community? 0. D o not apply 1. 2. 3. 4.  Completely satisfied M o s d y satisfied M i x e d -equally satisfied and dissatisfied M o s d y dissatisfied  5. Completely dissatisfied  Question 25: I n  a few words, c o u l d y o u explain w h y are y o u (dis)satisfied?  140  Question 26: Is the fish buyer(s) behavior fair and consistent regarding the following activities w i t h your cooperative? Activities Don't know  Mildly disagre e  Moderatel  Strongl  y disagree  3  4  5  6  y disagre e 7  2  3  4  5  6  7  1  2  3  4  5  6  7  d) D e t e r m i n i n g demand  1  2  3  4  5  6  7  e) Sharing market information  1  2  3  4  5  6  7  2  3  •4 .  5  6  7  Strongl y agree  Moderatel  Mildl  y • agree  y agree  a) F i x i n g prices  1  2  b) P r o v i d i n g loans  1  c) E n f o r c i n g contract  f) B u y i n g legal catches  1  Question 27: H o w do y o u evaluate, i n turn, your c o o lerative's performance regarding the following activities w i t h the fish buyer(s)? Activities Strongl y agree  Moderatel  Mildl  y agree  y agree  Don' t kno w  ?  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"co « 1>s  CO  LH CO  S3  :_•.„£•  g  >  44  OJ c/i  2  T3 S3 -P CO 43 O 60 CO  CD  cu 43  T3  per  3 O  o oo  CO  I  CD  o £  T 3  c  col 43  o X CD  43  |T3  >  <u  If  00 cu S3  -a o  43 co" cu >. Un  CA  J3 U  pe  ca es u o  C/3 ©  00  <u  •s  o  CP  o CU  CN CN  CU -w •rt  •H  O cj  11 . u  Sf* c  U • cj  u u  ,  G O  ••M i-H •  I CX  o  cj cj •cs *-»  U  I CN I CN  JO O  ov  h-1  u  OO CN  CN CN  3  oo CN  o o  ON CN  oo co  CN VO  00 oo  CO CN  O  Of w OM  o o u  0.  -1  «  §  APPENDIX E Typical decision situations at different levels of organizational structure of cooperatives Strategic individual decision-making There are some differences i n the decision-making process described i n Chapter III, section III.6.4 w h e n considering authoritative cooperatives. A s the leaders make the strategic decisions m o s t o f the time, these persons do not need to call for a meeting. T h e n , w h e n facing a situation decision, they skip the information stage because they c o n t r o l all o f it. T h e y may discuss the p r o b l e m w i t h the general administrator i n supervisory cooperatives, or they can decide by themselves i n the case o f autocratic cooperatives. O n c e the leader makes the decision, he can delegate the responsibility o f i m p l e m e n t i n g a specific action depending o n the importance o f the p r o b l e m . T h e difference between supervisory and autocratic leaders is that the former undertakes a learning process to gain knowledge f r o m the p r o b l e m solved, and to take preventive actions for avoiding the same or similar problems i n the future, whereas the autocratic leader does not embrace this learning process. T h e examination o f some personal characteristics o f supervisory leaders helps the analysis o f strategic decision-making i n these types o f cooperatives. T h e first characteristic is that these leaders understand w h e n problems are c o m p l e x and that the solutions may affect the w h o l e organization. T h e y evaluate solutions i n h o w they solve the p r o b l e m (intended results) and h o w they affect the w h o l e organization (unintended results). Supervisory leaders are aware that problems and solutions change over time, and that solutions may create new situations that w i l l need a different solution i n turn. T h i s characteristic is k n o w n as systematic way o f thinking ( M o n t a n a and C h a r n o v , 1993). A n o t h e r characteristic is that supervisory leaders sometimes plan i n advance w i t h the help o f the general administrator, innovative alternatives to achieve strategic objectives. T h e y attempt to deal w i t h problems before they emerge as major difficulties because, as m e n t i o n e d earlier, it is easier and m o r e efficient to deal w i t h small problems before they grow. I f there is need for a change, they try to change i n the right direction to survive to the rapidly m o d i f y i n g environment, accepting the associated risk and uncertainty. Supervisory leaders make decisions i n t w o basic ways. T h e first way is descriptive or l o o k i n g at historical analogies to find h o w other cooperatives have solved either similar or o^ssimilar problems i n the past. T h e second way is prospective or trying to imagine a future scenario to solve the p r o b l e m and then acting as needed to enable the desired scenario. T h e y can use either way or a c o m b i n a t i o n o f both. T h e n , they gather i n f o r m a t i o n to construct a conceptual m o d e l to represent the p r o b l e m i n a manageable way. N e x t , they try different decision rules to select the best alternative. T h e best approach they have devised is using i n f o r m a l decision rules. That is, they base their decision o n experience and c o m m o n sense.  Administrative group decision-making G r o u p decision-making i n non-directive and consultative cooperatives is m o r e concerned w i t h administrative decisions. T h i s is because the boards o f directors o f those cooperatives transfer the strategic decision-making to the intermediary, operating as a technical department o f a larger fishing firm. Administrative decisions are m o r e suitable to committees or staff members, and are m o r e concrete and action oriented. A n important characteristic o f aclrninistrative decisions is that they are made w i t h regards to routine problems that lead to systematic procedures that affect specific areas o f the cooperative. Because o f this, directors m a k i n g administrative decisions exhibit a m o r e 147  simplistic way o f trunking. Usually, directors assume that each p r o b l e m has a single solution and that it w i l l affect only the p r o b l e m area, not the rest o f the cooperative. O n c e the solution is implemented, it remains v a l i d and should only be evaluated o n h o w well it solves the p r o b l e m . T h e disadvantage w i t h this way o f t h i n k i n g is that i g n o r i n g the interrelationships a m o n g organizational levels may lead to a simplistic solution that does n o t solve the larger problem. Directors o f consultative cooperatives do not hesitate i n m a k i n g changes w h e n there is an indication that such changes are necessary. H o w e v e r , there is n o p r i o r c o m m i t m e n t to change. A l t h o u g h they recognize the need to change i n an uncertain environment, they do not create alternatives i n advance. N o n - d i r e c t i v e and consultative directors use more intuitive and traditional methods for decision-making. These methods are highly idiosyncratic, leading. the p r o b l e m solving i n these cooperatives to be m o r e personalized than institutionalized and based o n stipulated rules. Some idiosyncratic methods include the 'security m e t h o d ' or choosing the least risky o p t i o n , the 'delay method' or choosing to postpone the decision as m u c h as possible, and the 'repetition m e t h o d ' or choosing the same alternative as i n a previous decision situation. Figure E . l shows the catch price setting, one o f the m o s t frequent decision situations that the board o f directors o f non-directive and consultative cooperatives, and members at the administrative level i n supervisory and participatory cooperatives, has to carry out. Decisions made by administrative staff during price setting are rather simple, since the decision rule is either the members have a debt w i t h the cooperative. A t the beginning, depending o n the level o f the bargaining p o w e r o f the cooperative, this and the fish buyer fix the catch's price. Before paying, the buyer discounts any debt that the cooperative has w i t h h i m . I f there is n o debt, the original price is maintained. N e x t , the cooperative fixes the price that is going to be p a i d to the member. T h e first step i n price setting f r o m the cooperative to the member is m a k i n g three types o f discounts based o n percentages f r o m the members' catch. O n e discount is a contribution to the cooperatives' administrative costs, the second one contributes to the federation administrative costs, and the third one is directed to the savings fund each m e m b e r has w i t h i n the cooperative. T h i s is a p a y o f f rule establishing that all members are granted w i t h such savings depending o n their individual catches along the fishing season. These savings are paid to the fisher at the end o f the year. I n the second step, from the remaining amount o f money after the three discounts, the aclministrative staff has to check i f the member has a debt w i t h the cooperative. I f there is a debt, another percentage is discounted and the price is reduced again. I n the case where there is n o debt, the final price is paid to the fisher. Prices w i t h and without discount' contribute to the annual member's incomes.  Operational individual decision-making T h e members o f laissez-aller and autocratic cooperatives m o s d y make operational decisions because they are only concerned w i t h the course o f the daily operations oriented to reach p r o d u c t i o n objective. It was m e n t i o n e d that these cooperatives have n o structural units. A s adrninistration is not needed, the usual situations that members m o r e frequendy confront are routine and repetitive because they include fishing activities that have been performed for many years. F o r these members, most p r o b l e m s affect only their daily operations, but not the w h o l e organization's structure. T h u s , solutions are specific to isolated problems that affect them direcdy. O n c e the solution is implemented, they believe there is n o impact o n other members or organizational elements, and that the p r o b l e m w i l l be valid for a l o n g period. M e m b e r s i n these cooperatives are fundamentally p r o b l e m avoiders, that is, they try to refrain f r o m m a k i n g changes. D e p e n d i n g o n their personal goals, some o f them may resist changing even w h e n 148  Catch trading  Price setting  w  Price to cooperative  w  Price to fisherman  Price w i t h discount  Annual fisherman incomes  Cooperative set the price  Cooperative adrriinistrative costs  Yes  Federation administrative costs  No  + Fisherman savings  Figure E . l . A schematic catch price setting at administrative level changes are obviously i n their best interest. I n this c o n d i t i o n , members keep their organizations, w h i c h depend highly o n their technical operations, o n a c a l m and even course. T h i s is the most effective decision-making style i n an environment i n w h i c h the intermediary buffers the effect o f external changes hence there is litde need for adaptation. D e c i s i o n s are made trusting more o n intuition, w h i c h is helpful because members obtain g o o d approximations to the o p t i m a l decision made w i t h formal methods. T h e drawback o f heuristics as decision-making m e t h o d is that it may lead to biases and discrepancies f r o m reality (Pious, 1993). \  Figure E . 2 depicts the three most c o m m o n decision situations that every m e m b e r o f all cooperatives has to deal w i t h every day at the operational level. There are at least three decisions that a  fisherman  has to make everyday, and they are influenced by a number o f variables that he has to consider before m a k i n g the decision. T h e first decision, 'Fishing today?' considers weather conditions, social and cultural events, fisheries management constraints, and market variations. Socio-cultural events are related to specific traditional rules to each fishing c o m m u n i t y , whereas  fisheries  regulations have to be c o m p l i e d w i t h according to government regulations.  I f these variables are  management  unfavorable, it is m o r e likely that the fisherman w i l l not catch the target species that particular day and decide to carry out alternative activities. Otherwise, he w i l l prepare his equipment and boat to travel to the fishing g r o u n d he k n o w s is m o r e productive. T h e second decision, ' K e e p fishing i n the same area?,' depends o n weather conditions and the abundance o f the target species. T h e fisherman has to decide at this p o i n t i f there is a need to search for another fishing g r o u n d or i f it is m o r e convenient to return to the c o m m u n i t y . Searching for new fishing grounds may be based o n information rules, i f these allow members to share information o n the location o f productive fishing spots. O n c e the m e m b e r is back, and the catch is 149  weighed and frozen, he receives a ticket that has to be cashed w i t h the administrative staff. T h e same variables considered at the beginning are weighed for the third decision, ' F i s h i n g tomorrow?'; i f the answer is yes, the member has to buy the gasoline to be ready the following morning. T h e alternative activities may comprise fixing the equipment, washing the nets, visiting relatives i n other communities, attending social or religious events, and the like.  W , S, M g ,  Figure E.2. Schematic decision situations at the operational level  150  

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