Pay policy and organizational design of French cooperatives : questioning incentive theory

In this article we study the organizational structure of cooperatives (Jensen and Meckling, 1992), in particular the way in which pay incentives may encourage employees to adopt the strategy of their firm. Based on the findings of a field study we assert that pay plays a minor role in cooperatives, although these organizations perform efficiently, even in a period of economic crisis. Organization theory leads us to conclude that pay incentives are not effective in cooperatives whereas delegation is a strong pillar. As for control, its use varies; indeed it is sometimes resisted by managers. Complementary approaches have enabled us to identify new ways of understanding the institutional complexity of cooperatives.