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Abstract
This study gives a theoretical explanation to why the slaughter
cooperative Swedish Meats demutualized in 2007. The hypothesis is that the
problems related to the vaguely defined property rights of the cooperative raised
the members’ agency costs to an extent that these costs exceeded the members’
perceived benefits from trading with the cooperative. To test this hypothesis,
interviews with key stakeholders in the former Swedish Meats were conducted.
The findings indicate that the problems of vaguely defined property rights made
it impossible for the members to improve the cooperative’s profitability. Due to
poor member governance, urgent long-term investments, for instance in
marketing and product development, were not undertaken. Additionally, the
persistently low profitability caused members to leave the cooperative, whereby
economies of scale in the production could not be attained.