Managing Common Goods in Supply Chain: Case of Agricultural Cooperatives

Abstract

This paper synthesizes research findings on managing common goods with an application on the agricultural supply chain. Effective management of common goods highly depends on the effort and contributions of each member of the group and the equitable sharing of the added value. However, this contribution is not automatically guaranteed as some members tend to behave opportunistically, which leads to operations inefficiency and higher costs along the supply chain, resulting in lower benefits for the whole group, and ultimately, in the failure of the business. The objective of the paper is to analyze members ‘behaviors in an attempt to understand their dynamics within the supply chain. In this regard, we rely on the social dilemmas perspective to suggest a resolution mechanism to reduce opportunism and improve the management of common goods within the supply chain, highlighting the importance of communication, group identity, group size, and informal sanctions. The data collected for the case study accounts for nearly 1500 farmers belonging to 147 cooperatives, each one having to manage a common good. The results of this analysis allow us to confirm the relevance of recognizing and resolving social dilemmas in supply chain. We also discuss implications for the sustainable development of agricultural supply chain.