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A Policy Change at Producers Cooperative Association Free essay! Download now

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A Policy Change at Producers Cooperative Association

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Downloads to date: N/A | Words: 469 | Submitted: 01-Oct-2011
Spelling accuracy: 53.5% | Number of pages: 2 | Filetype: Word .doc

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Policy change in beef


A Policy Change at Producers Cooperative Association

There is a quote from the passage that really stands out in this passage. Deatherage states, “There are some product lines we cannot be in. I will not match price just to sell something. We have no pass-through products. No loss leaders.” If this is the overall attitude of the company then I think the new policy is exactly what they need. This comment seems to convey the ideal that if the product doesn’t produce they will not keep it around just to have it. However their dividend payments before the change do not match that attitude. They were paying less successful sectors of their company the same rate as the successful. If they want to stand by their words then they need to let the profit making ability of the department speak for itself. Having “no pass through products “ means that only the strong survive. This is very similar to the economic “invisible hand” theorem that basically states that the market will push out inefficient market participants. This is the basis for how businesses are ran, and if they want to run this co-op like a business this is part of it.
I believe that Deatherage was trying to accomplish exactly what his business philosophy was. Run the coop like a business and they will be more successful. There is the fact that it might drive some members away because of the lower dividends. However the ones that are affected the most are the customers who just purchase the lowest profit margin product anyways. In relation with this, it will increase customers demand for the high profit products because of the increase in potential dividends. I think in the end producers lost profit will more than be made up by the increased profit they will receive. Overall this policy should raise the overall strength of Producers. If the members and board want to run it like a business then a certain mindset is required. Businesses are ran on the perception that everything must be done for the good of the company, not necessarily the individual. This means that regardless of the personal effects they must push towards a goal that will help the business. This means that you cannot just simply lower the price to decrease the amount of personal money is tied to the coop. This could possibly be good for some individuals but overall the company would suffer. Thinking like a business and not a coop is a different mindset and all members need to have this attitude. This also needs to be the attitude all the way from the top to the brand new member. ...

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