Are We Owners or Regular Customers? The Obscure Meaning of Ownership in Consumer Co-operatives

It is argued in literature on consumer co-operation that a distinctive feature of consumer co-operatives is the dual role of customers as owners and the associated strong linkage between customer-owners and their co-operative organization. However, some findings suggest that co-operative ownership is obscure, which might interfere with the development of the special bond between the customers and the organization they own. Thereby, there is need to investigate this issue further. This qualitative study focuses on analyzing customer-owners’ accounts of their role and particularly the meanings associated with ownership. This serves setting forth ideas useful for both future research and practice.


Introduction
While western business discourses are typically dominated by the investor-owned firm and an investor perspective (Hansmann, 1996), there are also other types of firms such as co-operatives in which for example, workers, producers, or consumers act as owners of the business (Jussila, Goel, & Tuominen, 2012).In some contexts, the consumer co-operatives have attempted to highlight the nature of business (the integration of the customer and owner roles) by referring to the owners as 'customer-owners' (Jussila, Tuominen, & Saksa, 2008).This could be seen as reflecting a special relationship with the consumers and their co-operative as compared to regular customers and the firms with which they transact (e.g., Normark, 1996;Giroux, 1992).In other words, in the context of customer-ownership, the customer and the owner are the same and there is not another party who has proprietary rights for the firm.Instead of maximizing profits to benefit investors, the purpose of the firm is "to provide and organise services for the 'customer-owners' and increase their wellbeing" (Jussila, et al., 2008: 30).According to Jussila and Tuominen (2010), recognition by the customers that they are in fact owners can be a 'startingshot' to their travel down to feelings of ownership towards the co-operative (through the exercise of control, the development of understanding on the meaning of the co-operative, and the investment of the self into the co-operative).The psychological state of ownership manifests a strong linkage between the owner and the co-operative in which the co-operative is experienced by the member as part of her/his extended self.Further, Jussila and Tuominen (2010) claim that on the one hand this intimate relationship can provide pleasure for the customer-owners, while on the other hand it can be a source of competitive advantage and resilience for the co-operative -for example through affective commitment as recently theorized by Jussila, Byrne, and Tuominen (2012).
The work of Jussila and Tuominen (2010) includes, however, some boundary conditions to the development of the special co-operative link (sense of ownership) between the customer-owners and the co-operative.That is, in order that a person may recognize some objects as part of oneself, s/he must recognize them as his/her own (Kline & France, 1899).Extant research on governance of consumer co-operatives (Tuominen, Jussila, & Kojonen, 2009) suggests that we should not take it for granted that members actually recognize or consider themselves as owners.
In their qualitative data it is stated: "I have been discussing with people a lot during the years and they do not perceive they own this business.. it is very few people who consider themselves as owners.. they say that they have the bonus card, but ownership is blurred".As the members have poor awareness of their ownership and the associated rights, they do not participate as owners (Vierheller, 1994) and, thereby, they never come to experience the kind of connection described above -one that is seen critical and beneficial to the entire co-operative system.
To our knowledge, previous studies on consumer co-operatives have not problematized this critical issue or given voice to ordinary members asking (1) "How do the customer-owners view their role in their co-operative?"and ( 2) "What kind of ownership discourses (if any) do customer-owners mobilize when making sense of their roles?"The paper at hand is set to fill this gap by analysing customer-owners' accounts with the specific focus on the above questions.The data consists of interviews with 100 customer-owners in one of S Group's member co-operatives in Finland.Answers to the above-questions allow us to draw conclusions useful to both researchers and practitioners of consumer co-operation.
The body of the paper is devoted to reporting the findings of our study and to showing the basis of our conclusions.First we describe the context of our research along with data and methods.Next we analyse our interviewees' accounts of their relationship with their co-operative.It should be noted that our focus is specifically on two related issues: (1) the meaning of the members' dual role as customers and as owners and (2) the meanings given to ownership.Finally, we discuss the novelty of the findings and their utility to research and practice.

Context and Data
Customer-owned co-operatives (such as S Group) have become one of the significant actors in Finnish society and economy over the past century and increasingly during the last two decades.As one might expect, the success of S Group has varied in different times in Finnish economy.S Group co-operatives faced serious problems for example in 1980s, as conflicts between social objectives and the need for efficiency became apparent.For the same reasons, the whole "co-operative movement" lacked legitimacy in Finland (e.g., Skurnik, 2005).S Group co-operatives aimed for efficiency by carrying out major structural changes.That is, S Group divided its organization structure into a network of 34 regional co-operatives, the central organization SOK and chains that penetrate the boundaries of the regional co-operatives (Neilimo, 2005).After these structural changes, S Group co-operatives managed to achieve major success.Managers of S Group have also highlighted 'going back to the co-operative roots' as one of the key factors in its comeback and success over the past quarter of century.To symbolize the going back to roots, about 20 years ago S Group introduced a new term 'customer-owner' (i.e., individual member that is part of the group's customer-owner system), which was believed to communicate the purpose of the co-operatives and the co-operative constellation (Jussila, 2007).
By the time of this study, S Group consists of 21 regional and 8 local co-operatives and SOK.In more detail, SOK operates as the central organization for the co-operatives and produces procurement, expert and support services for them.SOK is also in charge of S Group's strategic steering and the development of the various chains (for a study on S Group networks, see Uski, Jussila, & Saksa, 2007).S Group is the market leader, with over 40% share of the Finnish retail sector.Year 2011, the retail sales of S Group were around 11460 million euros.Businesses of the co-operative group include food and groceries, specialty goods, hotels and restaurants, hardware and agriculture, automobiles and service stations.Altogether S Group co-operatives have over 2 million customer-owners in 2012 (the population of Finland is around 5.4 million).This information and more can be found on the group's website: www.s-kanava.fi(accessed 11 th October, 2012).
The study was conducted in one of the regional retail co-operatives of S Group, Etelä-KarjalanOsuuskauppa ("South-Karelian Retail Co-operative").This co-operative known by the name "Eekoo" is the largest organization in the service industry in South-Karelia, operating in 11 cities in the province.Approximately 2/3 of the South Karelian citizens are customer-owners of Eekoo.To become a member (customer-owner) of Eekoo, an individual is required to pay an 85EUR co-operative contribution.In exchange for the contribution, the member gets the right to customer-owner benefits (which can be realized through use of Eekoo's services) and a vote in democratic representative body elections.According to the Co-operative Law in Finland, a co-operative can distribute surplus to the members either based on the total sum of transactions or returns on the co-operative contribution.Eekoo's rules allow both ways.The information is found on the co-operative's website: www.eekoo.fi(accessed 11 th October, 2012).
In our empirical research, we aimed at understanding the qualities of membership and, therefore, we chose qualitative analysis as the primary method for our study (see e.g., Denzin & Lincoln, 2003).The primary data consists of interviews, while some archival materials (including marketing brochures, websites, and regulation documents) are used, as done for example above, to describe and understand the research context.The interviews were done with randomly selected customer-owners.The objective was to generate a lot of accounts on particular issues, those related to the research questions of this study and other studies on close related issues.The instrument for data generation (see Appendix) was designed by a Master of Business Administration student based on previous works on ownership in the consumer co-operative context (e.g., Jussila & Tuominen, 2010;Jussila, 2007) and tested by her in pilot interviews.The instrument consists of basic information concerning the interviewees, separate claims on being an owner and customer and open questions on customer-ownership future development targets concerning it.The pilot interviews showed that the instrument works well in getting reactions and ideas from the interviewees in a short period of time, but in a manner that serves the purpose of the study.The primary interviews were carried out by two hired students in April, 2012, lasting about 5-10 minutes per interview.In more detail, interviewees were selected (approached in various stores of Eekoo) so that they represent all age-groups and both male and female customer-owners equally.
First, interviews were recorded and transcribed by the students responsible for data collection.Next, the qualitative data was studied systematically by the authors of this paper to gain preliminary understanding of emerging issues.Finally, the data was organized by themes and analyzed in detail.Noteworthy, most of the data serving this study was generated as reactions to statements four and six and questions seven and twelve.On the other hand, responses to other statements and questions provided proof of consistency in the data.The consistency in our data and findings is seen below in a more limited scope (as compared to the entire data) as we seek to find answers to the research questions of this particular study.

Analysis of the Meaning of Customer-ownership
As introduced, co-operative scholars (e.g., Normark, 1996;Giroux, 1992) have argued that the association of the roles of customer and owner create a special 'co-operative link' between the customer-owners and their co-operative.In other words, "The cooperative form of organization has the potential to develop unusually strong linkages between the user and the focal enterprise" (Normark, 1996: 433).As put forward above, S Group introduced the term 'customer-owner' to highlight the dual role of customers as owners and to help emergence of a strong link between the members and their co-operatives.Thereby, it serves to ask: how do the customer-owners themselves view their role in their co-operative?We will dwell into this question in the following.

No Ownership: Just Regular Customership
During the data generation process, the interviewees were presented various ownership related statements and questions.An example statement is: "I have a strong sense of ownership for the co-operative".Interestingly, the interviewees are typically very specific about not seeing themselves as owners at all.As one of them states:

"I can't think of being an owner of anything…even if I am a member-owner"
In our data, this seems to be the prevalent reality even if the term customer-owner is in the heart of all Eekoo's marketing efforts.In other words, advertising the role duality seems to have not convinced the members of their role as owners.As one of the interviewees put it:

"I do not think that this (co-operative) is my own, but that (idea) is precisely what is being encouraged (by the co-operative)" (brackets added)
While the emergence of psychological ownership is beyond the scope of this paper, it serves to note that it could be hard for members to develop feelings of ownership for their co-operative and experience the co-operative as part of their selves, as they do not recognize the co-operative as their own (cf.Jussila & Tuominen, 2010;Kline & France, 1899).As the members typically do not see themselves as owners, what do they see their role is?
During the data generation process, the customer-owners were presented a statement according to which customer-ownership is simply about being a regular customer.The interviewees were also asked to describe what it means to be a customer-owner.While a there are some accounts conveying meanings of a broader concept associated for example with ownership related activities, the interviewees made it typically very clear (consistent with the above findings) that customer-ownership is precisely about being regular customer, not an owner: "I don't see myself as an owner, but a regular customer" "I think it is simply about being a regular" "Well, I see it as referring to being a regular customer" "I would say it is about being a regular" "being a regular customer.. that is definitely what it is about" "it is simply about being a regular customer" "being a regular.. that is all there is to it" "Well…customer-ownership is, isn't it being a regular customer..kind of?"Evidently, the dual role of members as customers and owners has not broken through in Eekoo.This is consistent with prior research conducted in this particular co-operative constellation in which the chairmen of regional (provincial) co-operatives' supervisory boards are rather critical about S Group's success in the domain of ownership (Tuominen et al., 2009).What is it that the dual role has to break through then?We answer this question in the following as we identify meanings associated by the members to ownership.

Investors Beat Users in the Claim for Ownership
Giroux (1992) maintains that "it is indeed the special member-user status of owners that constitutes the cooperative's specific nature" (p. 7).In other words, in co-operatives benefits of ownership are materialized through use and can relate to, for example, access to services otherwise not provided (Tuominen, et al., 2009) or to getting goods and services from the co-operative with better prices than from the competitors (Normark, 1996).In addition, Jussila et al. (2008) refer to bonuses that are according to Eekoo's marketing materials a progressive monthly returns to the customer-owners based on the household's monthly total purchases from the co-operative and its bonus partners.Jussila (2007) also identifies distribution of surplus (after an accounting period) in proportion to one's transactions with the co-operative as a way to highlight the nature of co-operative ownership.Thereby, it is (in part) the household's bottom line in which the benefits of customer-ownership, benefits through use, are to be realized (cf.Peterson & Anderson, 1996;Cook, 1994).
As the above paragraph defines, co-operative ownership is not about investor-ownership.In fact, it is about contributing to co-operative action and getting returns based on one's share of that action (not share of capital invested).Our data, however, typically conveys that such form of ownership (user-ownership) is not ownership at all.The justification for this view is found in the dominant discourses of business ownership.Hansmann (1996) points out in his book on the ownership of business enterprise, the investor-owned model has dominated the intellectual framings of modern business economics and our data suggests that this domination continues in the discourses of the public.In other words, the investor perspective is highlighted as the members clarify why they do not see themselves as owners and/or describe the circumstances under which they would consider themselves as owners.As two of our interviewees put it: "I do not have any stocks or such" "that would require like owning a share" As the interviewees associate the term ownership with capital contributions and the returns on them, they see that ownership is not a big deal in co-operatives -at least not anything that would justify the use of the term owner.As two of our interviewees put it: "well, there really is not too much of ownership there, 80 EUR and some… well you get 10% returns on it" "I do not see.

. even if I do have the fraction.. I do not view myself as an owner of the co-operative society… I do not consider that my 'fraction-ownership' as such is a sufficient symbol (justification) of (for) ownership" (brackets added)
As mentioned above, Jussila's (2007) work suggests that the nature of co-operative ownership could be clarified by distribution of surplus in proportion to the members' participation in co-operative action (i.e., transactions with their co-operative).So far this option has not been used in Eekoo.
Consistent with the above idea of ownership as being associated with one's share of the firm, it is put forward in the data that the use of the term owner in this context could be justified if one's share was greater due to small number of members or if one could buy more shares: "if there were fewer customer-owners, I might see ownership as a more powerful thing" "if one could.. kind of like get more of the ownership.. buy more.." It is worth noticing that the above manifested belief has also been beyond employee-stock-ownership-plans.In other words, it is believed that by offering employees a capital stake will create a special (and valuable) link between the employees and their employer organization; make the employees think and act like owners (Pierce, Rubenfeld, & Morgan, 1991).While shareholding is not sufficient to create a sense of ownership (see e.g., Jussila & Tuominen, 2010), our data suggests that the investor-based ownership discourses continue to be mobilized also outside the investor-owned context.
In fact, the dominant business ownership discourses (the 'proprietary right' of investors to refer to themselves as owners) hold so strong that some of the interviewees are anxious and even angry about Eekoo's use of the term ownership.This is well manifested as one of our interviewees gets defensive: "the word is misleading.. and a wrong term… I do not own anything, I mean I own zero percent of the stock…I am just a customer..there is no reason to emphasize that.. since customer-owners.. we own nothing of this.. if one owned one percent of the co-operative so one would be quite rich.

. you understand what I mean.. in conclusion customer-owner is a totally false term"
There were also those interviewees, who did not take a strong stand, but considered it confusing that the term ownership is combined with being a customer.As one of the interviewees contemplates: "I do not perceive as being an owner of the S-coop in any way, because I do not have a single 'whirligig' penny invested…why do they talk like that..(that customers own the co-operative)" (brackets added) To summarize the findings, above we have analyzed the meaning of customer-ownership in Eekoo co-operative society.Based on our data of a 100 interviews with customer-owners, it seems that the full meaning that is supposed (intended) to be invested in the term 'customer-owner' (as it has been introduced and used in marketing, see e.g., Neilimo, 2005) is typically not shared by the members of Eekoo.The members do not view themselves as owners.Instead, they strongly identify themselves regular customers that any consumer business could have (and do have) with nothing extra to it.Evidently, the nature of co-operative ownership is nothing but clear and more importantly it is considered that customers are not owners as it is believed -consistent with the dominant business ownership discourses -that is requires share-holding to be an owner.It is also emphasized that the term customer-owner is not only confusing, but false.Quite explicitly it is suggested that the term owner should be reserved for the investor-owned contexts only.

Discussion and Conclusion
While there is potential in consumer co-operatives to develop a strong linkage between the customers and the co-operative they own (Jussila & Tuominen, 2010;Normark, 1996;Giroux, 1992), the findings of this study suggest that there may be some challenges to it.If members identify themselves as regular customers and not as owners, the co-operative difference is unlikely to materialize.Further, it seems that simply using the term 'customer-owner' (Jussila et al., 2008) in member marketing is not sufficient the make the members recognize their ownership and identify themselves as owners.As the members do not understand the nature of co-operative ownership and lack the associated intellectual framings (cf.Tuominen et al., 2009;Jussila et al., 2008), they mobilize the dominant business ownership discourses to make sense of ownership (Hansmann, 1996) and, as they are not capital investors, they conclude that they are not owners.

Implications to Management and Governance
There are some development targets for co-operative managers based on this study.First, co-operative managers need to develop their member communication and marketing to clarify the meaning of customer-ownership.An evident challenge is to differentiate customer-ownership from being a regular customer.A change in members' thinking is likely to take place only if the co-operatives succeed in making the co-operative difference visible and concrete.Second, a related issue is the challenge created by dominant business ownership discourses.In their communication strategies oriented towards the public and their members (all stakeholders), the managers of co-operatives need to find a way to shed light on co-operative ownership (it being about owning a piece of co-operative action rather than a piece of financial property) and associated benefits (returns on participation rather than capital investment).It is likely that only by raising the overall understanding of the co-operative model (so that all stakeholders get a hold of it) and, thereby, supporting the construction, maintenance, and mobilization of co-operative (user) ownership discourses, can co-operative ownership find its justification as a form of ownership.Once this takes place, it is more likely that members of co-operatives can come to consider themselves as owners.This will probably help them develop the kind of interest in their co-operative that serves to tempt them towards the journey to a more intimate connection between themselves and their co-operative -not only recognition of ownership, but a sense of ownership.
A governance implication related to the above discussion concerns the distribution of surplus.Eekoo needs to reconsider its practice.As regular customer programs have similar kind of reward systems for loyal customers (even if not as rewarding) it could be hard for the customer-owners to identify the rewards that are based on being a customer and what is the additional reward that comes from being an owner.As traditional knowledge about consumer co-operation suggests, distributing surplus based on member participation in the co-operative value creation is a clear signal of the nature of ownership that helps the members comprehend the nature of ownership and become motivated to co-operate.

Limitations and Future Research
Our focus is on adding understanding on the analytical level rather than generalizability on a population level.While we believe that the results can be to some extent generalized to concern customer-owners of Eekoo more broadly (because the data reached the saturation before our data collection was complete), we believe that the administration of a questionnaire to a larger group of Eekoo's members and, more importantly, to the members of S Goup co-operatives more broadly could be useful.Overall, it would be interesting to study the issues at hand in other contexts of consumer-ownership; in different countries and industries.Future qualitative research should on the other hand be directed towards studying the meanings of worker-ownership and producer-ownership, which also represent user-ownership, to find out if similar challenges (e.g., the domination of the investor-perspective) exist in those contexts as well.
Further, it is worth suggesting that researchers engage in collaboration with co-operative managers and members of governing bodies to help come up with their challenges as it relates to the above issues and others as well.More precisely, it would be useful to study what kinds of communications (contents and methods) are most effective in creating a shift in members' thinking of ownership and eliminating the obscurity associated with co-operative ownership.Both research and practice of consumer co-operation would also benefit of developing measures of the 'co-operative difference' that serve to communicate it.The authors are aware of practice oriented attempt of such kind, but profoundly developed measures useful to the academia should also be published in scientific journals.
As it continues to relate to something addressed in the managerial implications above, it should be investigated what exactly is the role of the nature of recognized ownership as a boundary condition to the experiencing a target of ownership as part of the self (cf.Kline & France, 1899).More precisely, while Jussila and Tuominen (2010) suggest that formal ownership is not sufficient to create psychological ownership for the co-operative, nor is it necessary for the development of ownership for any material or immaterial target, it should be investigated if in some way (how?) the development of psychological ownership is hindered or hampered by the individual explicitly thinking based on the nature of formal business ownership that the form itself is not generally accepted form (i.e., it does not justify referring to oneself as an owner).
In a context in which customer-owners do not see themselves as owners, but simply customers, it is worth asking: Who owns the co-operative?Where does the power lie?Of course the very idea of control through representation suggests that the power is delegated to the representative body and further to supervisory board, board, etc.However, it would be useful to empirically investigate what kind of implications it has for the use of power by, determindedness of, and ambition in the governing bodies, if the typical owner does not provide a solid foundation to build on.
On a more general level, it is questionable if the international business academia (researchers and educators) have really done their job, as one single model dominates discourses of business ownership.Do we simply assume that all businesses are the same or that there is only one kind of ownership?Should we take it for granted that investor equals owner and vice versa?Or should we critically examine the intellectual framings we construct and maintain?Our work is from one co-operative and the findings cannot be generalized to any populations, but on the analytical level the findings do raise these questions that should be asked.Not only should we be critical of our own constructs and assumptions, but of those dominating business discourses in the western societies as a whole.A change maybe taking place, we will see -but to shed light on it we should conduct studies on our framings and their use in business schools and the society by large.The authors hope that such research will follow.