Academic journal article Journal of Small Business Management

Group Identification: The Influence of Group Membership on Retail Hardware Cooperative Members' Perceptions *

Academic journal article Journal of Small Business Management

Group Identification: The Influence of Group Membership on Retail Hardware Cooperative Members' Perceptions *

Article excerpt

Journal of Small Business Management 2004 42(2), pp. 155-173

Due to the increasing popularity of retail cooperatives in hardware retailing, a new competitive dynamic has emerged, a hybrid of intratype/intergroup competition. Individual members of one cooperative group now fight for market share with one or more members of competing cooperative groups, in an effort to attain individual goals, as well as group goals. A model of competition that includes both individual and group conditions was tested. Results of the structural equation model (SEM) show that the data fit the theoretical model well ([chi square] = 12.414, 8 df, p = 0.134, NFI = 0.990, NNFI = 0.993, CFI = 0.996). Our results indicate that, for members of cooperative groups, feelings of identification with the cooperative group resulted in increased perceptions of conflict with a rival who was a member of a competing cooperative and that feelings of group identification influenced beliefs about the importance of competitive behaviors relative to that rival.


Hardware stores, even though they face large-scale competition from Big Box retailers, are still viable independent retailers (Clark 2001). One reason for this ability to withstand the Big Box competition is the independent hardware retailers' associations with cooperatives (Darrow, King, and Helleloid 2001). Retail cooperative groups increase purchasing power and gain consumer awareness through advertising and promotional campaigns (Feder 1996; Quintanilla 1996; Schulz 1996a). However, hardware cooperative groups create the potential for a new competitive dynamic. Individual members of one cooperative group fight with members of competing cooperative groups for market share (Jackson and Smart 1997). Retail cooperatives require that members adhere to certain group norms. The goals of independent storeowners may be different from those of the cooperative, and this can create levels of conflict. When independents belong to a cooperative, they are operating to attain group goals as well as individual goals.

The challenge is to understand how membership in a retail cooperative group influences the perceptions and beliefs of small, independent retail storeowners about their competitors. A retail cooperative consists of independent retailers who voluntarily maintain joint ownership of a wholesale unit to benefit the group as a whole (Ghosh 1994). A large number of members participate in the ownership and operation of the group, and although a contractual, vertical relationship exists, lines of authority and power are not well defined (Dunne and Lusch 1999). Therefore, a retail cooperative is a unique type of group. It is a social system that can influence the attitudes, perceptions, and behaviors of members (McGrath 1984). At the most basic level, it is a voluntary organization, or association, of individuals who have common interests and who seek interaction regarding these common interests (McGrath 1984). However, as retail cooperative groups have grown, they have become more sophisticated. Members have become more interdependent, and groups have pursued more specific goals and have prescribed certain norms to help members and the group achieve results they could not achieve individually (McGrath 1984; Steiner 1972). Thus, the entity of each of the retail cooperatives as a whole has come to resemble an organization where members are assigned specific roles to achieve specific aims (McGrath 1984). Within this organizational structure, each member (store owner) is a subordinate who is operating a store to fulfill the goals of the larger organization (McGrath 1984).

However, despite being a subordinate in the cooperative group organization, each retail storeowner is, alone, the head of an organization, pursuing specific goals, recruiting individuals for specific roles, and prescribing certain norms (McGrath 1984). An independent retail storeowner who is a member of a retail cooperative therefore is balancing two roles: organization subordinate (cooperative group member) and organization leader (independent storeowner). …

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