Heterogeneous Organizational Arrangements in Agrifood Chains: A Governance Value Analysis Perspective on the Sheep and Goat Meat Sector of Italy
Abstract
:1. Introduction
2. Theoretical Background
3. Methodology
3.1. Sample and Methodology Description
- -
- general information (number of heads, rearing, autochthonous breeds, use of transhumance, etc.);
- -
- supplier and upstream relationships;
- -
- quality management (quality of product, labels, geographical indication, process quality management);
- -
- farm diversification.
- ○
- basic skills refer to the farmers’ competencies on farm management (professional and managerial skills). Accordingly, the presence of autochthonous breeds in the farm; to this end, the practice of wild, semi-wild, extensive, or intensive breeding, and the presence of the transhumance system, have been considered. To evaluate managerial competencies, we have considered the adoption of the S.A.T.A. system (Technical Assistance Service to Breeders), which provides breeders with specific experts with the purpose of encouraging the business organization and the achievement of management efficiency.
- ○
- entrepreneurial skills include: (a) opportunity skills (capability to exploit opportunities), (b) cooperation and networking skills, and (c) strategy skills. For the purpose of our paper, opportunity skills are synthesised by the capability of gaining access to a rural development policy (revealed by the farm’s application for rural policy funds). As far as strategy skills are concerned, investments in quality schemes (geographical indications, quality labels, and organic farming) and diversification into agricultural and non-agricultural activities are considered.
- -
- adhesion to the “Buongusto” brand (private and local brand of Regional Association of Breeders, ARA) label; it is a collective mark associated with a quality code of practices;
- -
- adhesion to the protected geographical indication (PGI “Agnello del Centro Italia”);
- -
- adhesion to both Buongusto and PGI labels;
- -
- no quality marks.
3.2. Characteristics of the Sample
4. Results
Multivariate Analysis
I cluster—Local quality oriented farms with coordinated mechanisms of governance
II cluster—farms with specific mark and dedicated mechanisms of governance
III cluster—farms without either quality strategies or specific governance mechanisms
5. Discussion and Conclusions
- The first one concerns the majority of farms with limited available resources: value creation and value claiming are a consequence of this. If the farm has no key resources (for example, in cases of farms located in the elderly phases of the life cycle), it has to opt out of differentiation strategies. As a matter of fact, value proposition is based on generic quality and on generic supply chains, where the product is sold through wholesaler or informal food networks. Accordingly, price becomes the most dominant and the most relevant variable in a competitive arena where imported (low price) meat is the reference.
- A second trajectory involves farms with a clear differentiation strategy based on a local regional brand (Buongusto). In this case, key resources can be put into play and imply a more coordinated mechanism of governance, which calls for resources to be adequate: to support this strategy, tangible, intangible, and human resources are involved. Accordingly, value creating and claiming implies the involvement of vertical systems of governance where the institutional role of the regional breeders’ association is fundamental. As a matter of fact, this association acts as a meso-institution [23], with the purpose of facilitating organizational arrangements in the meat value chain.
- Finally, a third trajectory adpots a deeper market strategy, based on the recognition of a geographical indication of central Italy, entailing a dedicated form of governance. Value creation is targeted to a deeper market and value claiming leads to specific governance.
Acknowledgments
Author Contributions
Conflicts of Interest
Abbreviations
ARA | Regional Association of Breeders |
CUF | Control system quality of meat |
LAFs | Localised agrifood systems |
GVA | Governance value analysis |
PGI | Protected Geographical Indication |
RBV | Resources-based view |
SATA | Technical Assistance Service to Breeders |
VPMGA | Value Portfolio and Multifunctional Governance Analysis |
TCE | Transaction costs economics |
Appendix A
Date ___________________ Data collector ___________________
Farm name Municipality Address Identification Code Number of heads:....... Race... Type of tenure: Family farming ⎕ No. of workers........... With salaried workers ⎕ No. of workers......... Cooperative ⎕ No. of workers............. Other ⎕ No. of workers............ Certifications: CUF Milk ⎕ CUF Meat ⎕ SATA ⎕ “Buongusto Agnello d’Abruzzo” brand ⎕ “Agnello del Centro Italia” PGI ⎕ Organic farming certification (related to breeding crops) ⎕ In transition towards organic farming certification (related to breeding crops) ⎕ Organic livestock certification ⎕ In transition towards organic livestock certification ⎕ |
Breeding system Wild (without any building) ⎕ Semi-wild (with buildings but not stables) ⎕ Extensive (stabled and on pasture) ⎕ Grazing months per year Intensive (only stabled) ⎕ |
Transhumance towards mountain pastures: NO ⎕ YES ⎕
Municipality Place Distance |
Meat marketing Average weight of selling/slaughtering lambs ______ Average age of the lambs (days) _______ Selling to dealers ⎕ __ % of heads Direct selling within the farm shop ⎕ __ % of heads Other types of direct selling: ⎕ __ % of heads - Ethical Purchasing Groups ⎕ - Farmers’ markets ⎕ - Personal delivery ⎕ - Internet ⎕ - Other (specify) ⎕ Butchers' shops ⎕ __ % Retailers ⎕ __ % Restaurants ⎕ __ % Other (specify) ________________________ ⎕ __ % |
Milk production and selling Milking: NO ⎕ YES ⎕ Milk selling NO ⎕ YES ⎕ Dairy within the farm: NO ⎕ YES ⎕ |
Wool selling NO ⎕ YES ⎕ |
Distribution of farm land used for breeding Crops.......... Ha.......... |
References
- Torre, A.; Traversac, J.B. Territorial Governance. Local Development, Rural Areas and Agrofood Systems; Springer: Heidelberg, Germany; New York, NY, USA, 2011. [Google Scholar]
- Menard, C. Plural forms of organization: Where do we stand. Manag. Decis. Econ. 2013, 34, 124–139. [Google Scholar] [CrossRef]
- Stoker, G. Governance as theory: Five proposition. Int. Soc. Sci. J. 1998, 50, 17–28. [Google Scholar] [CrossRef]
- Hesterly, W.S.; Liebeskind, J.; Zenger, T.R. Organizational economics: An impending revolution in organization theory? Acad. Manag. Rev. 1990, 15, 402–420. [Google Scholar] [CrossRef]
- Hendrikse, G.W.J. Governance of chains and networks. A research agenda. J. Chain Netw. Sci. 2008, 3, 1–6. [Google Scholar] [CrossRef]
- Vihinen, H.; Kroger, L. The governance of markets. In Unfolding Webs; van der Ploeg, J.D., Marsden, T., Eds.; van Gorcum: Assen, The Netherlands, 2008. [Google Scholar]
- Williamson, O.E. The new institutional economics: Taking stock, looking ahead. J. Econ. Lit. 2000, 38, 595–613. [Google Scholar] [CrossRef]
- Ghosh, M.; John, G. Governance value analysis and marketing strategy. J. Mark. 1999, 63, 131–145. [Google Scholar] [CrossRef]
- Renting, H.; Vogelenzang, L.; Roep, D.; Oostindie, H.; van der Ploeg, J.D. Going backwards to find a way forward: The Netherland. In Driving Rural Development: Policy and Practice in Seven EU Countries; O’Connor, D., Renting, H., Gorman, M., Kinsella, J., Eds.; van Gorcum: Assen, The Netherlands, 2006; pp. 51–81. [Google Scholar]
- Van der Ploeg, J.D. Rural development and territorial cohesion in the new CAP. Detailed briefing note. In 2010 European Parliament, Directorate General for Internal Policies, Policy Department B: Structural and Cohesion Policies, Agriculture and Rural Development; European Parliament: London, UK, 2010. [Google Scholar]
- Raynaud, E.; Valceschini, E. Creation and capture of value in sectors of the agrifood industry: Strategies and governance. In Working Party on Agricultural Policies and Markets; OECD: Paris, France, 2007. [Google Scholar]
- Menard, C. The diversity of institutional rules as engine of change. J. Bioecon. 2014, 16, 83–90. [Google Scholar] [CrossRef]
- Williamson, O.E. The Economic Institutions of Capitalism; Free Press: New York, NY, USA, 1985. [Google Scholar]
- Menard, C. A new institutional approach to organization. In Handbook of New Institutional Economics; Menard, C., Shirley, M.M., Eds.; Springer: Berlin, Germany, 2008. [Google Scholar]
- Menard, C.; Valceschini, E. New institutions for governing the agri-food industry. Eur. Rev. Agric. Econ. 2005, 32, 421–440. [Google Scholar] [CrossRef]
- Raynaud, E.; Sauvée, L.; Valceschini, E. Aligning branding strategies and governance of vertical transactions in agri-food chains. Ind. Corp. Chang. Adv. 2009, 18, 1–34. [Google Scholar] [CrossRef]
- Rantamäki-Lahtinen, L. The success of the diversified farm—Resource-based view. Agric. Food Sci. 2009, 18, 1–134. [Google Scholar]
- Barney, J.; Wright, M.; Ketchen, D. The resource-based view of the firm: Ten years after 119. J. Manag. 2001, 27, 625–641. [Google Scholar]
- Eghtedari, N.; Hosseini, M.; Malek Mohammadi, I.; Chizari, M. Resource-Based View, Innovative Orientation and Performance In Iran’s Agricultural Advisory Services Corporations. J. Appl. Sci. Agric. 2014, 9, 68–76. [Google Scholar]
- Williamson, O.E. Strategy research: Governance and competence perspectives. Strateg. Manag. J. 1999, 20, 1087–1108. [Google Scholar] [CrossRef]
- Rindfleisch, A.; Antia, K.; Bercovitz, J.; Brown, J.R.; Cannon, J.; Carson, S.J.; Ghosh, M.; Helper, S.; Robertson, D.C.; Wathne, K.H. Transaction costs, opportunism, and governance: Contextual considerations and future research opportunities. Mark. Lett. 2010, 21, 211–222. [Google Scholar] [CrossRef]
- Bradach, J.L.; Eccles, R.G. Price, authority, and trust: From ideal types to plural forms. Annu. Rev. Sociol. 1989, 15, 97–118. [Google Scholar] [CrossRef]
- Menard, C. Embedding organizational arrangements: Towards a general model. J. Inst. Econ. 2014, 16, 567–589. [Google Scholar] [CrossRef]
- Ghosh, M.; John, G. Progress and prospects for governance value analysis in marketing: When Porter meets Williamson. In Handbook of Business-to-Business Marketing; Lilien, G.L., Grewa, R., Eds.; Edward Elgar: Northampton, MA, USA, 2012; pp. 54–726. [Google Scholar]
- Ghosh, M.; John, G. Strategic Fit in Industrial Alliances: An Empirical Test of Governance Value Analysis. J. Mark. Res. 2005, 42, 346–357. [Google Scholar] [CrossRef]
- Williamson, O.E. The Mechanisms of Governance; Oxford University Press: Oxford, UK, 1996. [Google Scholar]
- Raynaud, E.; Sauvée, L.; Valceschini, E. Governance of the agrifood chains as vector of credibility for quality signalisation in Europe. In Proceedings of the 10th EAAE Congress, Saragoza, Spain, 28–31 August 2002. [Google Scholar]
- Milgrom, P.; Roberts, J. Economics, Organization and Management; Prentice Hall: Upper Saddle River, NJ, USA, 1992. [Google Scholar]
- Nazzaro, C.; Marotta, G.; Pascucci, S. Creation and governance of value in agricultural cooperation: The role of policies. In Proceedings of the 126th EAAE Seminar, Capri, Italy, 27–29 June 2012. [Google Scholar]
- Sotte, F.; Arzeni, A. Imprese e non-imprese nell’agricoltura Italiana. Agriregionieuropa 2013, 32, 65. [Google Scholar]
- Bartoli, L.; De Rosa, M. Family farm business and access to rural development policies: A demographic perspective. Agric. Food Econ. 2013, 1, 12. [Google Scholar] [CrossRef]
- Rudman, C.; Vesala, K.M.; Jäckel, J. Synthesis and recommendations. In Entrepreneurial Skills and their Role in Enhancing the Relative Independence of Farmers. Results and Recommendations from the Research Project Developing Entrepreneurial Skills of Farmers; Rudmann, C., Ed.; Research Institute of Organic Agriculture: Frick, Switzerland, 2008. [Google Scholar]
- Greenacre, M.J. Canonical correspondence analysis in social science research. In Studies in Classification, Data Analysis, and Knowledge Organization; Locarek-Junge, H., Weihs, C., Eds.; Springer: Berlin/Heidelberg, Germany, 2010. [Google Scholar]
- Lebart, L.; Piron, M.; Morineau, A. Statistique Exploratoire Multidimensionnelle; Dunod: Paris, France, 2006. [Google Scholar]
- Maimon, O.; Rokach, L. Clustering methods. In Data Mining and Knowledge Discovery Handbook; Maimon, O., Rokach, L., Eds.; Springer: New York, NY, USA, 2010. [Google Scholar]
- Benzècri, J.P. L’analyse des Données—Leçons sur L’analyse Factorielle et Reconnaissance des Formes et Travaux; Dunod: Malakoff, France, 1982. [Google Scholar]
- Quiñones-Ruiz, X.F.; Penker, M.; Belletti, G.; Marescotti, A.; Scaramuzzi, S. Why early collective action pays off: Evidence from setting Protected Geographical Indications. Renew. Agric. Food Syst. 2016, 32, 179–192. [Google Scholar] [CrossRef]
- Verwaal, E.; Commandeur, H.; Verbeke, W.; Wilem, J.M.I. Value creation and value claiming in strategic outsourcing decisions: A resource contingency perspective. J. Manag. 2009, 35, 420–444. [Google Scholar] [CrossRef]
The Spot Market Contract | A Contract for the Immediate Exchange of Goods or Services at Current Prices. The Identity of the Parties is Irrelevant |
The relational bilateral governance (also implicit contract). | A non-written (not legally enforceable) contract that specifies only the general terms and objectives of the relationship. This governance introduce the idea of repeated relations with the same agents |
The relational bilateral governance with “qualified partner(s)”. | This structure is similar to the previous one. However, agents are not free to choose their partners, but have to select a “qualified” transactor (accredited for example by a collective organization) |
The formal (written) bilateral contract. | A legally enforceable set of promises that defines all or part of each party obligations |
The financial participation in the ownership of the partner(s). | In this case, buyer (respectively seller) is a stockholder of the other but stay legally independent from the seller (respectively buyer). Joint-venture is a canonical example of this type of governance structure |
Vertical integration. | Bringing two or more successive stages of the supply chain under common ownership and management |
Active Variables | Categories of Variables | Category Description |
---|---|---|
Adoption of rural development policies | 2 | Yes/no |
CUF-MEAT certification | 2 | Yes/no |
SATA certification | 2 | Yes/no |
Organic farming/transition | 2 | Yes/no |
Supply chain governance | 8 | - Wholesalers managed by the regional breeding association. - Specialised wholesalers for PGI products. - Other wholesalers - Short food supply chain |
Label | 4 | Buongusto, Protected Geographical Indication (PGI), Buongusto and PGI, no quality sign |
Family type | 7 | Young phase Young farmer and a not young assistant Young farmers with other (assistant may be young or may be not) Mature phase Mature farmer and a young assistant (assistant may be old, mature or may be not) Old phase Older farmer and a young assistant Older farmers with other (assistant may be mature, old or may be not) |
No Certification | PGI + Buongusto | PGI | Buongusto | TOT. | |
---|---|---|---|---|---|
Quality certification (%) | 51.5 | 14.8 | 22.8 | 10.9 | 100 |
Number of heads per farm (mean) | 299 | 329 | 453 | 331 | |
Std. Deviation | 284.5 | 296.4 | 244.1 | 172.9 | |
Min | 30 | 90 | 115 | 160 | |
Max | 1600 | 1152 | 910 | 800 | |
Organic (%) | 13.5 (100%) | 20.0 (100%) | 26.1 (100%) | 27.3 (100%) | |
Autochthonous breeds (%) | 32.8 (100%) | 67.7 (100%) | 29.4 (100%) | 47.5 (100%) | |
Transhumance system (%) | 42.3 (100%) | 86.7 (100%) | 82.6 (100%) | 72.7 (100%) | |
Average weight of animals (kg) | 21 | 16 | 19 | 13 | |
Average age of animal (days) | 65 | 55 | 56 | 57 | |
Transhumance system (km) | |||||
Mean | 11.9 | 13.1 | 29.0 | 15.5 | |
Std. Deviation | 25.6 | 11.2 | 31.8 | 11.3 | |
Max | 120 | 30 | 130 | 35 | |
CUF-MEAT (%) | 50.0 (100%) | 60.0 (100%) | 78.3 (100%) | 81.8 (100%) | |
SATA (%) | 63.5 (100%) | 93.3 (100%) | 60.8 (100%) | 90.9 (100%) | |
Average UAA (hectare) | 70 | 171 | 105 | 132 | 97 |
Average standard output | 108,170 | 190,398 | 145,811 | 117,001 | 128,787 |
Average use of policy instruments | 0.4 | 0.6 | 0.7 | 0.8 | 0.6 |
Supply chain * | |||||
Short foods supply chain (%) | 36.5 | 13.3 | 4.4 | 36.4 | |
Retailer (directly) (%) | 100 | 18.2 | |||
Wholesaler (%) | 76.9 | 93.3 | 54.5 |
Total Inertia: 2.25000 | |||||
---|---|---|---|---|---|
Factors Extracted | Eigen Values | Inertia % | Cumulated % | Reassessed Inertia % | Cumulated % |
1 | 0.2671 | 11.87 | 11.87 | 38.4577 | 38.4577 |
2 | 0.2483 | 11.03 | 22.90 | 28.9436 | 67.4014 |
3 | 0.2084 | 9.26 | 32.16 | 13.2409 | 80.6423 |
4 | 0.2012 | 8.94 | 41.11 | 11.0741 | 91.7163 |
5 | 0.1772 | 7.88 | 48.98 | 5.1914 | 96.9078 |
6 | 0.1595 | 7.09 | 56.07 | 2.2645 | 99.1722 |
7 | 0.1456 | 6.47 | 62.54 | 0.8084 | 99.9806 |
8 | 0.1282 | 5.70 | 68.24 | 0.0194 | 100.0000 |
9 | 0.1110 | 4.93 | 73.17 | ||
10 | 0.1053 | 4.68 | 77.85 | ||
11 | 0.0977 | 4.34 | 82.19 | ||
12 | 0.0872 | 3.88 | 86.07 | ||
13 | 0.0856 | 3.81 | 89.88 | ||
14 | 0.0750 | 3.33 | 93.21 | ||
15 | 0.0633 | 2.81 | 96.02 | ||
16 | 0.0521 | 2.31 | 98.34 | ||
17 | 0.0258 | 1.15 | 99.48 | ||
18 | 0.0116 | 0.52 | 100.00 |
Test Values | |||
---|---|---|---|
First Factor | Second Factor | Third Factor | |
I cluster | 6.1 | 3.6 | 1.5 |
II cluster | 2.5 | −7.0 | 1.2 |
III cluster | −6.9 | 3.0 | 1.5 |
© 2017 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
Share and Cite
Perito, M.A.; De Rosa, M.; Bartoli, L.; Chiodo, E.; Martino, G. Heterogeneous Organizational Arrangements in Agrifood Chains: A Governance Value Analysis Perspective on the Sheep and Goat Meat Sector of Italy. Agriculture 2017, 7, 47. https://doi.org/10.3390/agriculture7060047
Perito MA, De Rosa M, Bartoli L, Chiodo E, Martino G. Heterogeneous Organizational Arrangements in Agrifood Chains: A Governance Value Analysis Perspective on the Sheep and Goat Meat Sector of Italy. Agriculture. 2017; 7(6):47. https://doi.org/10.3390/agriculture7060047
Chicago/Turabian StylePerito, Maria Angela, Marcello De Rosa, Luca Bartoli, Emilio Chiodo, and Giuseppe Martino. 2017. "Heterogeneous Organizational Arrangements in Agrifood Chains: A Governance Value Analysis Perspective on the Sheep and Goat Meat Sector of Italy" Agriculture 7, no. 6: 47. https://doi.org/10.3390/agriculture7060047