Structural change in agribusiness: The case of Potgietersrusse Tabak Kooperasie (PTK)

In response to the structural changes in the South African agricultural sector, Potgieterusse Tabakkoöperasie (PTK) extended its operations to include marketing activities. This article introduces the theme of structural change/industrialisation in the South African agricultural sector and explores the complexity of structural options and decision-making variables that managers have to face when considering vertical expansion. A case study approach is followed at the hand of new institutional economics to explain strategic choices by PTK management. The results from organisational theory and transaction cost theory, as applied to the same problem, yields complimentary and robust results.