Farmer Cooperatives Conference
Creating Effective Alliances
St. Louis, MO
December 14, 2002
Brian M. Henehan, Sr. Extension Associate &
Bruce Anderson, Assoc. Professor
Department of Applied Economics and Management
Cornell University
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
1
Cornell Cooperative Enterprise
Program
 Long
standing relations with Ag.
Cooperatives in region and U.S.
 Teach undergraduate course on
cooperative enterprise
 Conduct applied research
 Deliver extension and outreach program
 Coordinate with the NE Cooperative
Council, (NECC)
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
2
OBJECTIVES
 Review
Critical Factors in Developing
Alliances and Joint Ventures
 Highlight
Ingredients for Success
 Stimulate
Discussion
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
3
ECONOMICS OF “TRUST”

High Level of Confidence and Trust in Leaders
& Management:
• Integrity, Avoid Conflicts of Interest
• Clear, Shared Vision, Common Culture

Group Access to Appropriate Information:
• Strategies, Financials

Transparency:
• Clear, Easily Understood Pricing and Cost Allocation
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
4
ECONOMICS OF TRUST
 High
Degree of Probability That:
• The Venture Will Be Able to Deliver
Expected Results
• Meet Mutual Goals
 A Business
Philosophy That:
• Focuses on Generating Earnings
• Emphasizes Sound Marketing Plan
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
5
UNDERSTAND RISKS
 Marketing
 Financial
 Reputational
 Organizational
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
6
SOLID DECISION MAKING
STRUCTURE
 Shared
Control:
• Players Can Exert Necessary Influence
• Clearly Defined Management System
 Well
Developed Goals & Decision
“Rules”:
• Outline Measurable and Attainable Goals
• Rules Are Fairly Applied
 Ability
to Change Course or Exit
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
7
Farmer Cooperatives 2002
Creating Successful Alliances
and Joint Venures
Cornell
Cooperative
Enterprise
Program
Cornell
Cooperative
Enterprise
Program
8