ORGANIZATIONAL TOLERANCE: EXPLAINING DIVERSITY OF COMPLEX INSTITUTIONAL ARRANGEMENTS [email protected] Apresentação Oral-Estrutura, Evolução e Dinâmica dos Sistemas Agroalimentares e Cadeias Agroindustriais DECIO ZYLBERSZTAJN; SILVIA MORALES DE QUEIROZ CALEMAN. UNIVERSIDADE DE SÃO PAULO, SÃO PAULO - SP - BRASIL. Organizational Tolerance: Explaining Diversity of Complex Institutional Arrangements1 (Unedited version-do not quote without permission) Grupo de pesquisa: Estrutura, Evolução e Dinâmica dos SAGs e Cadeias Agroalimentares Resumo Arranjos institucionais (IA) são mecanismos micro-institucionais de governança que são desenhados para oferecer incentivos de cooperação às firmas, sendo essas caracterizadas pela independência de suas estruturas de propriedade. Em qualquer indústria observam-se diferentes perfis de arranjos institucionais cuja explicação é ainda objeto de discussão entre os diferentes aportes teóricos. Este artigo explora a observada diversidade de arranjos institucionais e desenvolve uma análise comparativa das explicações oferecidas por diferentes teorias, principalmente dois ramos da “Economia dos Custos de Transação” (ECT) e a “Teoria Baseada em Recursos”. O artigo propõe o conceito de “tolerância organizacional” para tratar as razões da diversidade nos observados arranjos institucionais. O conceito é exemplificado e ilustrado por meio de casos do sistema agroindustrial. Estruturas institucionais complexas são a norma e não a exceção na literatura contemporânea da Economia das Organizações. Cada aporte teórico focaliza uma particular dimensão do problema para explicar tamanho, abrangência e estruturas internas dos arranjos observados. Com os mesmos constructos que embasam as teorias, pode-se explicar o fenômeno da diversidade organizacional e sugerir hipóteses testáveis. Mesmo na presença dos fortes argumentos oferecidos pela ECT – hipóteses de alinhamento – a observação do mundo real demonstra que é também necessário explorar outras razões explanatórias da diversidade. Se concordarmos que a Nova Economia Institucional é focada no “mundo real” então, o conceito de “tolerância organizacional” pode iluminar uma possível maneira de se explicar a diversidade. Palavras-chaves: diversidade, complexidade, arranjos institucionais, sistemas agroindustriais Abstract 1 This paper was prepared for the 2009 Congress of the Brazilian Association of Agricultural Economics. 1 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural Institutional arrangements (IA) are observed micro-institutional mechanisms of governance. Usually they are designed to offer incentives for cooperation of different firms, each one with independent ownership structure. In any industry we can observe different profiles of institutional arrangements which explanation is yet a motivation for debate among different theories. The article places attention on the observed degree of diversity of IA, and analyses comparatively the explanatory reasons offered by different theories, mainly two branches of Transaction Cost Economics and Resources Based View. The paper drafts the concept of organizational tolerance to explain the reasons of diversity in the observed IA. Agro-Industrial related cases are used to offer examples to illustrate the concept. Complex institutional structures are the norm and not the exception in modern organization economics literature. Each theory focuses on a particular explanatory dimension to explain size, scope and internal structure. With the same constructs that base the theories, one can find support to explain the phenomena of organizational variety and suggest testable hypothesis. Even in presence of strong arguments offered by TCEalignment hypothesis, the observation of the real world shows that we need to work more the explanatory reasons for diversity. If we agree that New Institutional Economics is focused in the “real world” of organizations then the concept of organizational tolerance can illuminate one possible way to explain diversity. Key Words: diversity, complexity, institutional arrangements, agri-chains 1. Introduction Agriculture based supply and marketing systems have been studied in the literature of complex or hybrid governance mechanisms. These systems comprehend the chains and networks of food, fiber and energy production2. A variety of empirical examples are reviewed in some cases serving to reinforce existing theories of vertical coordination, sometimes serving to challenge the existing knowledge. Seen as complex institutional arrangements it is relevant to shape our understanding on the reasons why we observe so much diversity in apparently similar agriculture based systems? Why do they differ? What are the causes of variability? Relevant for policy makers, practitioners and social scientists in agriculture based chain organization, is the knowledge about how chains are governed and how to identify and implement efficient mechanisms of coordination. The evolution in the field of economic organization applied to agriculture based vertical systems and networks, is very impressing. Important research centers have been dedicated to this topic in Europe (Wageningen University in The Netherlands, Copenhagen University in Denmark, University of Bonn in Germany, ATOM in France), in US (CORI at the University of Missouri), in Latin America (PENSA at the University of São Paulo), just to mention some cases. Different models have been devised, some based on more descriptive approaches (Trienekens,1999), others adopting an analysis of efficiency applied to the choice of alternative institutional arrangements in agriculture based systems as seen in Maze (1992), Menard (1999), Karantininis and Zylbersztajn (2007) and Hendrikse and Bijman (2002). 2 Nowadays the agro related systems also can consider the production of environmental as well as social services. 2 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural Replacing the models based on neo-classical economics, the institutional analysis has influenced most of the existing research. The characteristic of the predominant approach is the relevance of formal and informal institutions that have an effect on the choice of the institutional arrangement of production. The usual explanations for the existence of multiple arrangements are based on eventual failures of institutional, organizational or market nature, as well as transitory departures from the efficient alignment. Therefore arguments based on asymmetric information, market power, path dependence, existence of specific resources are common in the literature. Bounding our motivation in the present study are Coases´s motivation to study the real world instead to the models that exist in our minds (Coase, 1991)3. His arguments suggest the analysis of the institutional structure of production focusing the diversity of arrangements as a rule, instead of the exception. Being diversity the rule, the literature so far existent is rich in offering descriptive analysis of alternative institutional arrangements that coexists in time but it is not so conclusive to explain the reasons and the logic of such a large family of institutional arrangements. This paper does not intend to review the vast literature on the topic instead the objective is to base the analysis on the measurement cost approach, in some way neglected in the literature. In agriculture based systems the rule is the diversity of institutional arrangements that are observed and such diversity persists through time in many cases. Research efforts to understand the genesis and survival as multiple and diverse systems deserve to be followed. The aim of this paper is to introduce and explore the concept of “organizational tolerance” as it applies to the study of complex institutional arrangements involving multiple agents that share common strategies. The focus on agriculture related systems is due to our particular interest in the examples of complex or hybrid formats that can be detected in this area, which represents a fascinating research subject, however the concept should apply to other complex organizations as well. This paper intends to explore measurement costs of transaction dimensions as an explanatory reason of the coexistence of different arrangements in agriculture based systems. In order to reach this goal it is organized in five parts. Part two outlines some theories that are commonly adopted to explain complex institutional arrangements mainly vertical coordination mechanisms. Part three presents the concept of organizational tolerance based on the under explored measurement branch of transaction cost economics. Part four presents cases and evidences of different levels of organizational tolerance in agriculture related chains and networks. The chapter presents cases of persistent multiple complex institutional arrangements and cases of intolerant systems characterized by one single institutional arrangement. Part five concludes suggesting that the coexistence of alternative institutional arrangements depends on the proportion of rights that are protected by formal or informal mechanisms. Therefore solutions tend to be strongly affected by locally devised and informal mechanisms of interaction among players in the agriculture related systems. 2. Family of Theories 3 Roanld Coases´ precise citation is: “What is studied is a system that lives in the minds of economists and not on the heart”. 3 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural The literature of economics of organization as applied to agro related systems can be structured in three dimensions. First, the concepts based on technology, prices and costs that ignore the relevance of institutions and transaction costs to explain the observed arrangements. This is where most of the neoclassical economic analysis is grounded. Second the theories that do consider the relevance of institutions but that differ in terms of emphasis of the determinants of institutional arrangements. This literature presents several branches based on efficiency arguments that are rooted in the governance mechanisms and transaction cost incentives as presented in Williamson (1985) and Ménard (2004). The third is based on the existence of specific and non transferable knowledge, suggesting that other cognitive elements might set the reasons of observable multiple institutional arrangements (Foss,1996; Langlois,1991), and also the literature on Capabilities as presented in Foss, Brian and Loasby (1998). Both, transaction cost economics and resource based views are so far alternative explanations for the phenomena of simultaneous multiple institutional arrangements and also the literature on Resource Based Theory and Capabilities as presented in Foss, Brian and Loasby (1998). The governance branch of transaction cost economics is rooted in the efficient alignment hypothesis that suggests the existence of a correspondence between the institutional arrangement and two main determinants, namely: the transaction characteristics, mainly the asset specificity, and, second, the institutional environment. Given the assumption that institutions change slowly, the observance of the asset specific investments related to the production decision, should place a strong empirical potential to the theory. As expressed by Williamson (2000,2008), the transaction cost economics literature represent a vigorous branch of the literature on organizations but yet there are competing arguments. By saying that the transaction cost economics approach is a case of success, Williamson highlights the fact that economic agents are forward looking and define strategies considering the protection of the future value of the specific, nonredeployable investments. The literature presents empirical support to the alignment hypothesis based on transaction cost elements. This theoretical vein is being explored in the study of agri-systems extensively as in Menard (1996), in Zylbersztajn (1996) and many other that followed this path. On a parallel track, the arguments proposed by the Resource Based Approach have likewise been relevant. The focus is placed on arguments to explain diversity instead of convergence of mechanisms of governance. The alignment hypothesis as proposed in Williamson (1996,pp. 46-47) offers vigorous arguments to explain convergence and RBV as presented by Langlois (op. cit) offer arguments to explain persistent diversity in the observed institutional arrangements. These arguments are based on the specific knowledge or competences that evolve from very particular experiences and that are not tradable or transferable. Also a growing literature is observed in the complex agriculture based system analysis, based on this theoretical construct, however with less quantitative inspiration than the transaction cost literature. Complex Arrangements: Agriculture based systems present a variety of organizational arrangements. Also scholars adopt a variety of different lenses to study the same phenomena. The contractual approach to agrifood systems is a growing trend (MacDonald,2004; Zylbersztajn,2005). The focus on simultaneous transactions partially based on formal contracts and partially bounded by informal and relational motivations are also recognized (Menard & Klein 2004). The literature on chains and networks represent 4 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural the most important evolution in the post war literature on the economics of agricultural organizations. Since the path-breaking study of Goldberg (1968) that introduced the agribusiness system approach to the contemporaneous network analysis, we observe a relevant evolution on the way we deal with the phenomena of coordination of complex systems. Individual contracts have been the focus of studies, as seen in Allen & Lueck (2002). Chain analysis followed, suggesting that agrisystems could be approached as a set of simultaneous transactions where decision rights were allocated in an efficient manner. From chains to networks, we added more complexity and realism as well to the analysis. The basic question that pushes this research literature is to reveal the coordination mechanisms of such complex systems. Placing the analysis on a multiple transactions, Menard (2002) concludes that the empirical literature supports the existence of a relationship between transaction attributes and hybrid institutional arrangements. Some of the examples he discusses are agrifood system analysis and his view reinforces and expands Williamson´s main conclusion. The concept of strictly coordinated supply system proposed by Zylbersztajn (1999) stresses the existence of multiple observable arrangements for similar transactions in food related systems (figure 2). In any typical agriculture based system, we observe not one, but many sub-systems that have the same objective to reach a given market. Each represents specific institutional arrangement not always convergent. Competing with each other, the observed institutional arrangements might persist through time, or converge to a homogeneous system. The paper reinforces the need to further engage in efforts to explain its genesis and permanence. <place figure 2 here> On the one hand, Menard (op. cit.) offered a good synthesis of explanatory reasons for complexity of institutional arrangements, anchored in transaction cost arguments. His approach to hybrids is based on an expansion of transaction cost economics main argument, rooted in the deeper observation of different levels of asset specificity. He mentioned but did not elaborate on other relevant explanation, namely the resource based view approach. An alternative and largely under-utilized approach is the measurement branch of transaction cost economics, as presented by Barzel(op. cit.), which is the frame I’ll adopt in the next section. This branch of the theory adds to Resource Based View and to the governance alignment. In addition to specific routines and path dependence arguments, and in addition to the protection of quasi rents arguments, the measurement cost approach suggests a rational related to the existence of formal and informal mechanisms to protect property rights. The fundamental construct of the measurement cost branch of transaction cost economics is based on the existence of value related to the performance of transactions. In the presence of mechanisms that properly define and protect property rights, transactions will be performed at a lower cost. If property rights are not properly defined or enforced, then some value will remain in public domain, therefore subject to capture. From this approach it follows that the observed institutional arrangement represents a blend of formal institutional protection associated with legal rights, and informal institutional protection, 5 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural associated with economic rights (figure 1). Formal and informal mechanisms provide the set of incentives that shape organization. <place figure 1 here> Measurement Costs and Diversity of Institutional Arrangements: The existence of one or multiple efficient arrangements is approached by measurement cost arguments in the following way: First, transactions can be decoupled in many dimensions, each related to specific rights that are exchanged. In food chains they can be related with a particular food attribute. Second, the measurement of the exchanged attribute varies between dimensions that are exchanged. One can observe a range of easy to measure attributes, or difficult to measure attributes. In food chains some attributes are easy to measure, as weight, color and other attributes are difficult to measure, as religious characteristics or fat content. Third, easy to measure attributes are protected by formal institutions and are aligned with legal rights. Difficult to measure attributes are protected by informal institutions, mostly relational and reputation mechanisms and are aligned with economic rights. The main argument for the degree of diversity of institutional arrangements we present here follows from the proportion of formal and informal mechanisms to protect property rights. Easy to measure attributes, as related to legal rights represent incentives for convergence since the legal system induces more homogeneous solutions when disputes arise. Alternatively, difficult to measure attributes places incentives for diversity, since informal arrangements are more prone to local and topic solutions, usually build based on mutual trust that is difficult to replicate. This argument adds to the traditional resource based approach, which relies on specific knowledge based on non transferable routines. 3. Organizational Tolerance Considering the model of property rights index presented in figure 1, if PR1 = 1, then it represents a world with zero transaction costs and therefore markets will prevail, as expressed in Williamson (op. cit). As we have the PR1<1, then the structure of formal and informal modes to protect the value associated with the transaction becomes relevant. As expressed by Dixit (2004, p.1): “problems arise if no mechanisms – governmental or non governmental – exist to deter theft, then any one person can wait for someone else to create property or produce output and then steal it…” . The family of theories of the firm4 rooted in the new institutional economics framework agrees that the design and structure of governance of transactions is the result of efforts to protect property rights. We rely on the concept of institutional structure of production proposed by Coase (op. cit). Our aim is to discuss the variability of observed institutional arrangements. Departing from technological determinism, in most of cases several institutional arrangements are observed. What determines the variety of possible arrangements? Why not just one single superior mechanism? 4 We adopt the concept of family of theories of the firm as presented in Barzel (xx) 6 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural This question has been discussed in every branch of the family of theories of the firm. Path dependence explanations, specific and non transferable knowledge, monopoly explanations, all share some room in the literature. The question becomes yet more relevant when we deal with hybrid or complex forms, where simultaneous transactions are performed simultaneously by economic agents located in a given network organization. The concept introduced in Barzel (op. cit) is relevant for our purposes. Given an institutional environment, the legal system protects property rights in some degree. Legal rights are associated with easy to measure transaction attributes. The proportion of property rights under the legal protection determines more homogeneous institutional arrangements. On the contrary, the proportion of rights protected by alternative and informal mechanisms, are much more variable, since it results from very specific mechanisms anchored in cultural profile of agents. We propose that reputation mechanisms are associated with more variable modes of organization. Testable hypothesis can be derived from the following proposition: Proposition: The larger the proportion of rights protected by formal institutions, the smaller the variability of institutional arrangements in a given hybrid form. The concept of organizational tolerance is defined as the variety of institutional arrangements observed for similar transactions. A unique solution represents the observance of one and just one institutional arrangement. A fundamental hypothesis follows. The larger the proportion of legal rights related to a given transaction, the smaller the variety of institutional arrangements observed. Otherwise, dispersion of institutional arrangements is associated with the predominance of informal and specific institutional mechanisms to protect property rights. Very tolerant organizational systems are represented by multiple observable arrangements due to specific relational rules not adapted to the same system but with different players. <place figure 3 here> 4. Agri-Systems Related Cases The recent literature of hybrid forms and complex contracts places considerable focus on agricultural related transactions. Since the introduction of the agribusiness systems analysis by Godberg (op. cit.), the study of agriculture related phenomena departed from the isolated analysis of the farm, and moved towards the system of complex transactions. Zylbersztajn (1996) placed the analysis of agri systems in a transaction cost framework, being nowadays a predominant approach. Later on, the concept of strictly coordinated supply systems (Zylbersztajn, 1999) has been shaped considering the variability of institutional arrangements observed within the agribusiness systems. What Goldberg considered as having a homogeneous profile, in fact is composed by several specific arrangements that differ in the way authority is allocated within the chain or network, in other words, the rules to solve disputes and the mechanisms to distribute value. Now we move one step further by considering that the variety of arrangements observed in the agro-system result from the structure of property rights and the different ways that are available to control transaction costs. The agriculture based system, is 7 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural presented as the series of interconnected transactions, bounded on one side by the institutional environment, and on the other side by the organizations. Since institutions are structured formal and informally, the proportion of informal institutions play a role to explain diversity The following examples are relevant to support our hypothesis: a) Ethanol Chain: Recent study done by Pedroso Jr. (2008) describes the institutional arrangements on the ethanol system in Brazil. He shows that institutional arrangements differ strongly in areas of traditional production of sugar cane and the new areas recently converted in sugar-cane production. He presents arguments that the differences in the contracts are associated with informal relations between the processing industry and the land owners. Under the same formal institutional environment, a large part of the transaction dimensions are ruled by informal and relational contracts, leaving room for variability and transaction specific variability. b) Orange Juice Industry: The supply chain of orange juice industry is characterized by a small number of processors. About 10 companies process the total Brazilian production. Studies of the Brazilian orange industry show the vertical integration profile where industries own 30% of the production area and contract under a very homogeneous contractual mechanism the remaining supply needs. Conflicts are observed and the judiciary is playing the expected role, in dispute resolution needs. Informal relations are very rare and most of the contracts are very impersonal. The observed arrangements are very homogeneous. c) Timber Contracts: The Brazilian pulp and paper industry is moving from an integrated profile towards an increase of proportion of supply contracts with farmers. Companies inform that between 10-15% of total supply of wood for cellulose is done under contracts. Examining the profile of contracts, study done by Fisher (2007) suggests that a very homogeneous profile of institutional arrangements is observed. Since the transaction is characteristically of a long term, different generations of farmers might be involved. Therefore one expects that formal rights are predominant in determining the observed institutional arrangement. d) Contracts in the meat processing industry: Regarding the Brazilian meat processing industry, a distinction must be made to the beef chain. Whereas for poultries and hogs the coordination is predominantly done by standardized contracts of supply, the beef is characterized by its diversity and complexity. Different subsystems are observed, ranging from spot market governance to strategic alliances which accomplish to specific market niches like those represented by organic beef. There are multiple forms of coordination evidenced by the existence of Quality Programs, formal contracts among feedlot producers and meat processing industry, beyond an increasing trend of vertical integration exemplified by industry investment in feedlot structures for animal termination. In some subsystems transactions are based on one attribute, for example, animal weigh, being the spot market the coordination mode. In other subsystems, the relation involves contracting a set of attributes that indicates the quality of the product – weight, age of the animal, fat cover thickness, gender and condition of the carcass - what results in hybrid forms of governance, even with informal contracts. Meanwhile, specific organizational arrangements, just like Marketing Alliances, establish its own standards in 8 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural accordance with the consumer demands. Summing up, a diversity of governance forms coexists. Institutionally speaking, the Brazilian bovine carcass classification is an ancient demand, however, its regulations and effective application is still under discussion. In the same way, traceability is ordered exclusively to those animals oriented to European market. The approach as applied to agri-systems shows that at each system different Strictly Coordinated Sub Systems are observed. Each characterized by a different mechanism of governance. Formal institutions work in the direction of inducing more homogeneous arrangements, provided that we keep technology controlled. When differences are identified, the informal mechanisms of protection of property rights play a role to induce diversity in the observed institutional arrangements. 5. Conclusions Theoretical developments that focus on some form of rigid alignment between transaction characteristics and institutional arrangements do not cover but a strict range of cases. A large number of situations present very specific ad-hoc solutions, always that economic rights play a predominant role in determining the institutional structure of production. We also observe that the observed arrangements might be classified based on a nested structure. The traditional governance approach o transaction cost economics is consistent to make a first level typology classifying transactions in terms of markets, hierarchies or contracts. At a second level of precision we are surprised with the variety of specific arrangements that we classify as “contracts”. The organization scientist might be interested in revealing the details of the particular institutional arrangements. Then the measuring cost approach plays a relevant role. For very practical purposes, we observe a motivated audience formed by policy makers and non-governmental organizations trying to transplant institutional arrangements in agriculture based systems. The present study points to the need to identify the specific informal institutions that in many cases are on the main vein to explain the success of particular institutional arrangements. The same applies to strategies of supply chain and marketing channels in food, fiber and bio-energy products. The details of specific informal institutions must be recognized by private strategists, in order to reach the desired goals. As a final consideration, I point to the fact that the impressing evolution of the field of economic organization, particularly applied to agri-systems, is still at the initial stage. From the neoclassical production function to the agri-chains and networks approach, we move very fast. Now we must dig into the details and provoke the debate on the theoretical approach to be adopted. It is clear to me that an audience of organization scientists will be interested in the results. 6. References Allen,D., Lueck,D.2002. The Nature of the Farm: Contracts, Risk, and Organization in Agriculture. MIT Press. 9 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural 258pp. Barzel,Y.1989. Economic Analysis of Property Rights. Cambridge, UK. Cambridge University Press. Coase,R.1991. The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel. Swedish Academy of Science. Dixit,A.K.2004. Lawlessness and Economics: Alternative Modes of Governance. Princenton University Press.167pp. Fisher,A. 2007. Incentivos em Programas de Fomento Florestal na Indústria de Celulose. PhD Dissertation presented at the Business School of the University of São Paulo. Foss,N.J.1996. Capabilities and the Theory of the Firm. Revue D´Économie Industrielle. N. 77. Foss,J.N., Loasby,B.J.1998. Economic Organization, Capabilities, and Coordination: Essays in honour of G.B. Richardson. Routledge Studies in Business Organization. Routledge, London. Goldberg,R.1968. Agribusiness Coordination: A Systems Approach to the Wheat, Soybean, and Florida Orange Economies. Graduate School of Business Administration. Harvard University. Boston. Hendrikse,G., Bijman,J.2002. Ownership Structure in AGRi-Food Chains: The Marketing Cooperative. AJAE, 84(1), p.194-119. Karantininis, K and Zylbersztajn,D. 2007. The Global Farmer: typology, institutions and organization. Journal of Chain and Network Science 7. Langlois,R.N.1991. Transaction Cost Economics in Real Time. Industrial and Corporate Change. Vil 1, n. 2. Maze,A.2002. Retailer´s Branding Strategy: Contract Design, Organization Change, and Learning. Journal of Chain and Network Science 2:33-45. MacDonald,J. at al. 2004. Contracts, Markets, and Prices. Organizing the Production and use of US Agricultural Commodities. USDA Economic Research Service. Report 837. Menard,C.1996. On clusters, Hybrids and other Strange Forms: The Case of French Poultry Industry. Journal of Institutional and Theoretical Economics, 152:154-183. Menard,C. Klein,P.2004. Organizational Issues in the Agrifood Sector: Toward a Comparative Approach. American Journal of Agricultural Economics 86(3), august: 746751. 10 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural Ménard,C. 2004. The Economics of Hybrid Organizations. Journal of Institutional and Theoretical Economics, p.345-376. Trienekens,J. 1999. Management of Processes in Chains: A research framework. Thesis Wageningen University. 173pp. Williamson,O.E..1985. The Economic Institutions of Capitalism.New York. The Free Press. Williamson,O.E. 2000. The New Institutional Economics: Taking Stock, Looking Ahead. Journal of Economic Literature. Vol XXXVIII, September,pp.595-613. Williamson,O.E.2008. Transaction Cost Economics: The Precursors. Institute of Economic Affairs. Blackwell, Oxford. Zylbersztajn,D. 1996. Governance Structures and Agribusiness Coordination: A transaction cost economics based approach. In Research in Domestic and Internatinal Agribusiness Management. Vol 12. Ed. Ray Goldberg. JAI Press. Zylbersztajn,D.2005. O Papel dos Contratos na Coordenação Agroindustrial: um olhar além dos mercados. Revista de Economia e Sociologia Rural. Vol 43, n. 3, p. 385-420. Zylbersztajn,D.1999. Strictly Coordinated Food Systems: Exploring the Limits of the Coasian Firm. International Food and Agribusiness Management Review, 2(2):249-265. 11 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural 12 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural 13 Porto Alegre, 26 a 30 de julho de 2009, Sociedade Brasileira de Economia, Administração e Sociologia Rural